Charteris PLC Offer by Sword Soft Limited (2071T)

TIDMCAE

RNS Number : 2071T

Charteris PLC

15 November 2013

Not for release, publication or distribution, in whole or in part, directly or indirectly in, into or from the united states, australia, canada, the republic of south africa or japan or any other jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction

15 November 2013

RECOMMENDED CASH offer by

SWORD SOFT LIMITED ("sword soft")

FOR THE ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL OF

CHARTERIS PLC ("CHARTERIS")

Summary

The Charteris Board and the Sword Soft Board are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Sword Soft for the entire issued and to be issued share capital of Charteris (the "Offer").

Defined terms used in this Announcement have the meanings set out in Appendix IV.

Highlights

   --      The Offer is being made at a price of 4.5 pence in cash for each Charteris Share. 

-- The Offer values the entire issued and to be issued share capital of Charteris at approximately GBP2.26 million (and GBP2.31 million taking into account vested options which may be exercised).

-- The Offer Price represents a premium of approximately 89.47 per cent. to the Closing Price of 2.375 pence per Charteris Share on 30 September 2013 (being the last Business Day prior to the commencement of the Offer Period) and a premium of 50 per cent. to the Closing Price of 3 pence per Charteris Share on 14 November 2013 (being the last Business Day prior to making this Announcement).

-- The cash consideration payable under the terms of the Offer will be funded using existing cash resources of the Sword Group. Full acceptance of the Offer would result in a maximum cash payment by Sword Soft of approximately GBP2.31 million in cash.

-- Sword Soft has received Irrevocable Undertakings from those Charteris Directors (and their associates) who have an interest in the Charteris Shares to accept the Offer together with Cliff Preddy in respect of their entire holdings of Charteris Shares, representing approximately 58.84 per cent. of Charteris' existing issued ordinary share capital.

-- In aggregate, therefore, immediately prior to the making of this Announcement, Sword Soft had received Irrevocable Undertakings in respect of 29,571,520 Charteris Shares, representing approximately 58.84 per cent. of the existing issued ordinary share capital of Charteris. Further details of the Irrevocable Undertakings are set out in Appendix III to this Announcement.

-- Sword Soft Limited is a wholly owned subsidiary of Sword Group SE. Sword Group SE is a NYSE-Euronext Paris listed international IT services group operating in 15 countries globally with over 1000 staff, and providing its customers with high added-value advisory and integration services.

-- On 1 October 2013, the Charteris Directors announced that the Charteris Board intended to work with Steve Vaughan, the newly appointed Charteris Chairman, to carry out an in-depth review of the business with a view to maximising value for all Shareholders. This strategic review has concluded with the Offer.

-- The Charteris Directors, who have been so advised by Beaumont Cornish, consider the terms of the Offer to be fair and reasonable. In providing advice to the Charteris Directors, Beaumont Cornish has taken into account the commercial assessments of the Charteris Directors. Beaumont Cornish is providing independent financial advice to the Charteris Directors for the purposes of Rule 3 of the Code.

   --      The Charteris Directors intend to recommend that Charteris Shareholders accept the Offer. 

-- The Offer is conditional upon, amongst other things, valid acceptances being received in respect of not less than 90 per cent. (or such lower percentage as Sword Soft may, subject to the Code, decide) of the Charteris Shares to which the Offer relates. Further details are set out in Appendix I to this Announcement.

-- Sword Soft will despatch the Offer Document and the Form of Acceptance to Charteris Shareholders and, for information only, to holders of share options in Charteris, and publish it on Sword Soft's website (http://sword-group.com) and the Charteris website (www.charteris.com), as soon as practicable and in any event within 28 days of this Announcement.

-- The conditions and certain terms of the Offer are set out in the attached Announcement together with information on Sword Soft and Charteris.

Commenting on the Offer, Steve Vaughan, Chairman of Charteris said:

"On behalf of the Board of Charteris and its staff, we are pleased with the agreement reached with Sword Soft. We consider this a good result for shareholders and look forward to a stronger future as a combined business."

Enquiries

 
 
   Sword Group SE/Sword Soft Limited     Tel: +352 26 
                                         112 611 
 Jacques Mottard 
 Phil Norgate 
 
 Charteris plc                         Tel: [phone] 
                                        9199 
 Allan Barr 
 
 Beaumont Cornish, Rule 3 Adviser      Tel: [phone] 
  to Charteris plc                      3396 
 Roland Cornish 
 
 

This summary should be read in conjunction with, and is subject to, the following full Announcement and the appendices. In particular the Offer will be subject to the terms and conditions set out in Appendix I to this Announcement and to the further terms and conditions of the Offer to be set out in the Offer Document and the Form of Acceptance. Appendix II of this Announcement contains further details of the sources of information and bases of calculations set out in this summary and the Announcement. Appendix III includes details of Irrevocable Undertakings received from Charteris Shareholders to accept the Offer in respect of their holdings of Charteris Shares and Appendix IV to this Announcement contains definitions of certain expressions used in this summary and in this Announcement.

Beaumont Cornish, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting exclusively for Charteris and no one else in connection with the Offer and this Announcement and will not be responsible to anyone other than Charteris for providing the protections afforded to clients of Beaumont Cornish nor for providing advice in connection with the Offer or any matter referred to herein.

This Announcement is for information purposes only and is not intended to and does not constitute or form part of an offer to sell or an invitation to purchase or otherwise subscribe for any securities or the solicitation of any offer to purchase, subscribe for, sell or issue any securities pursuant to the Offer or otherwise. The Offer will be made solely by means of the Offer Document, and where appropriate, the related Form of Acceptance which together will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.

Charteris Shareholders who accept the Offer may only rely on the Offer Document and, where appropriate, the related Form of Acceptance for all the terms and the conditions of the Offer. In deciding whether or not to accept the Offer in relation to their Charteris Shares, Charteris Shareholders should rely only on the information contained, and procedures described, in the Offer Document and the accompanying Form of Acceptance. Charteris Shareholders are strongly advised to read the Offer Document being posted to them shortly, and in any event within 28 days of this Announcement, which contains important information with respect to the Offer.

Please be aware that addresses, electronic addresses and certain other information provided by Charteris Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Charteris may be provided to Sword Soft during the Offer Period as required under Section 4 of Appendix 4 of the Code.

This Announcement has been prepared for the purpose of complying with English law, the Code and the AIM Rules 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.

Overseas shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

Unless otherwise determined by Sword Soft or required by the Code and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and the Offer will not be capable of acceptance from or within a Restricted Jurisdiction. Accordingly, copies of this Announcement and all documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions as doing so may invalidate any purported acceptance of the Offer.

The availability of the Offer to Charteris Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the UK that may not be comparable to the financial statements of US companies.

Forward looking statements

This Announcement, any oral statements made by Sword Soft or Charteris in relation to the Offer and other information published by Sword Soft or Charteris may contain statements about Sword Soft and Charteris that are or may be forward looking statements. All statements other than statements of historical facts included in this Announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Sword Soft's or Charteris' operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Sword Soft's or Charteris' business.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements. Sword Soft and Charteris disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

Not a profit forecast

No statement in this Announcement is intended as a profit forecast or profit estimate. No statement in this Announcement should be interpreted to mean that the profits or earnings per share of: (i) the Sword Group as enlarged by the Offer; (ii) Sword Soft; and/or (iii) Charteris for current or future financial years will necessarily match or exceed the historical or published profits or earnings per share of Sword Group, Sword Soft or Charteris, as the case may be.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any paper 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 paper 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 paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 p.m. (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the tenth Business Day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper 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 one per cent. or more of any class of relevant securities of the offeree company or of any paper offeror during the Offer Period must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper 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 paper offeror, save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 p.m. 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 paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

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 of the Code).

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. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on [phone].

Rule 2.10 Disclosure

In accordance with Rule 2.10 of the Code, Charteris confirms that on 14 November 2013 it had 50,254,411 ordinary shares of 1 penny each in issue and admitted to trading on AIM with ISIN GB0001663557.

Publication on websites and availability of hard copies

A copy of this Announcement and the Offer Document, is and will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on Sword Group's website at http://sword-group.com and the Charteris website www.charteris.com, by no later than 12 noon (London time) on 18 November 2013 in the case of this Announcement and in the case of the Offer Document by 12 noon (London time) on the Business Day following its publication and will remain so during the course of the Offer.

Neither the content of the websites referred to in this Announcement nor the content of any website accessible from hyperlinks on Charteris' website (or any other website) is incorporated into, or forms part of, this Announcement.

You may request a hard copy of this Announcement by contacting Richard Tall on 020 3465 4200 or Caroline Urban on 020 3465 4124, or by submitting a request by email to [e-mail] or [e-mail] or in writing to Richard Tall/Caroline Urban, TLT LLP, 20 Gresham Street, London, EC2V 7JE. You may also request that all future documents, announcements and information to be send to you in relation to this Offer shall be in hard copy form.

Not for release, publication or distribution, in whole or in part, directly or indirectly in, into or from the united states, australia, canada, the republic of South Africa or Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction

15 November 2013

RECOMMENDED CASH offer by

SWORD SOFT LIMITED ("SWORD SOFT")

FOR THE ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL OF

Charteris PLC ("Charteris")

1. Introduction

The Charteris Board and the Sword Soft Board are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Sword Soft for the entire issued and to be issued share capital of Charteris at a price of 4.5pence per Charteris Share (the "Offer").

2. The Offer

Sword Soft is offering to acquire, subject to the conditions set out below and in Appendix I to this Announcement, and to the full terms and conditions to be set out in the Offer Document and accompanying Form of Acceptance, the entire issued and to be issued share capital of Charteris, on the following basis:

   for each Charteris Share                                                          4.5 pence in cash 

The Offer values the entire issued and to be issued share capital of Charteris at approximately GBP2.26 million (and GBP2.31 million taking into account vested options which may be exercised).

The Offer Price represents a premium of approximately 89.47 per cent. to the Closing Price of 2.375 pence per Charteris Share on 30 September 2013 (being the last Business Day prior to the commencement of the Offer Period) and a premium of 50 per cent. to the Closing Price of 3 pence per Charteris Share on 14 November 2013 (being the last Business Day prior to the publication of this Announcement).

The Offer is conditional upon, amongst other things, valid acceptances being received in respect of not less than 90 per cent. (or such lower percentage as Sword Soft may, subject to the Code, decide) of the Charteris Shares to which the Offer relates. Full details of the conditions to which the Offer is subject are set out in Appendix I to this Announcement.

The Offer extends to any Charteris Shares which are unconditionally allotted or issued fully paid (or credited as fully paid) pursuant to the exercise of options granted under the Charteris Share Option Scheme while the Offer remains open for acceptance (or such earlier date as Sword Soft may, subject to the Code, and in accordance with the conditions and further terms of the Offer decide).

The Charteris Shares will be acquired by Sword Soft, pursuant to the Offer, fully paid and free from all liens, equities, charges, encumbrances, rights of pre-emption and any other interest of any nature whatsoever and together with all rights now or hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after 15 November 2013 (being the date of this Announcement).

Sword Soft will despatch the Offer Document and the Form of Acceptance to Charteris Shareholders and, for information only, to Charteris Optionholders and publish it on its website (http://sword-group.com) and the Charteris website (www.charteris.com) as soon as practicable and in any event within 28 days of this Announcement.

The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable legal or regulatory requirements.

The Offer is being made in accordance with the requirements of the Code and is subject to the terms and conditions to be set out in the Offer Document and, where applicable, the Form of Acceptance.

3. Background to and reasons for the Offer

The Sword Soft Directors believe that the Offer will allow the Enlarged Group to:

-- leverage the development of the Charteris Group to date through the application of the wider financial resources available to the Sword Group;

-- enable the pooling of know-how currently available within the Charteris Group and the Sword Group, giving rise to synergistic benefits;

-- provide scale in the market for Charteris Group services, and provide cross-selling opportunities for both Charteris Group and Sword Group services and products; and

   --        achieve revenue, cost and operational synergies. 

4. The recommendation

The Charteris Directors, who have been so advised by Beaumont Cornish, consider the terms of the Offer to be fair and reasonable. In providing advice to the Charteris Directors, Beaumont Cornish has taken into account the Charteris Directors' commercial assessment of the Offer.

Accordingly, the Charteris Directors intend to recommend that Charteris Shareholders accept the Offer. Sword Soft has received Irrevocable Undertakings from those Charteris Directors who have an interest in Charteris Shares under which they have irrevocably undertaken to accept the Offer in respect of their entire holdings of 14,653,309 Charteris Shares, representing, in aggregate, approximately 29.16 per cent. of the existing issued share capital of Charteris.

5. Irrevocable undertakings

Sword Soft has received the following Irrevocable Undertakings to accept the Offer:

-- Those Charteris Directors who have an interest in Charteris Shares have irrevocably undertaken to accept the Offer in respect of their entire holdings of 14,653,309 Charteris Shares. These Charteris Share interests, represent, in aggregate, approximately 29.16 per cent. of the existing issued share capital of Charteris.

-- Sword Soft had received Irrevocable Undertakings from those Charteris Directors (and their associates) who have an interest in the Charteris Shares to accept the Offer together with Cliff Preddy in respect of their entire holdings of Charteris Shares, representing approximately 58.84 per cent. of the existing issued ordinary share capital of Charteris.

-- In aggregate, therefore, immediately prior to the making of this Announcement, Sword Soft had received Irrevocable Undertakings in respect of 29,571,520 Charteris Shares, representing approximately 58.84 per cent. of the existing issued ordinary share capital of Charteris. Further details of the Irrevocable Undertakings are set out in Appendix III to this Announcement.

6. Background to and reasons for the recommendation to Charteris Shareholders

Charteris remains a relatively small AIM company, with a market capitalisation (based on the Closing Price of 3 pence per Charteris Share on 14 November 2013) of GBP1.51 million. Charteris' small market capitalisation reduces the universe of potentially interested investors in Charteris Shares which in turn keeps trading liquidity low, in general making it difficult for existing Charteris Shareholders to sell shares. The average daily trading volume in Charteris Shares for the 12 months to 14 November 2013 was 31,149 shares, representing just 0.062per cent. of the existing issued ordinary share capital of Charteris.

On 26 October 2012, Charteris announced its preliminary results for the year ended 31 July 2012, reporting a 23.5 per cent. fall in year on year revenues and trading at a loss. On 27 March 2013, interim results for the six months ended 31 January 2013 indicated that revenue had stabilised compared to the first half of the preceding year and that, although still losing money, Charteris had seen some improvements in the level of business won. The announcement also highlighted that the sales pipeline of weighted prospects for new business led to cautious optimism that further improvement in revenue could be delivered during the remainder of the year.

The recent transfer of the Dynamics business, which had been loss-making for some time, to Hitachi Solutions Limited brought some relief to the Charteris Group. However, the announcement of this transfer on 27 September 2013 also highlighted that: trading in the other parts of Charteris continued to be difficult; while customer demand for services remained quite strong, delays in projects and customer decisions made achievement of financial objectives challenging.

The Charteris Directors believe that Charteris has one of the strongest Microsoft Systems integration businesses in the UK and the ongoing relationship with Microsoft as a supportive partner provides Charteris with a pipeline of opportunities to solve customer issues. In addition, Charteris has a long-standing consultancy business with strong relationships in both public and private sector. There are particular strengths in the local government and retail sectors, recurring project management contracts with government agencies, and a successful Expert Witness practice.

However, the Charteris Directors also recognise that as a small company with a limited balance sheet and illiquid shares, Charteris is not ideally positioned to drive value for Charteris Shareholders from these opportunities. Charteris' size constrains the number of commercial opportunities it is able to pursue because potential clients, which are predominantly large organisations, often demand minimum scale or balance sheet criteria as a prerequisite to doing business. In addition, for the reasons explained above, Charteris does not have the access to capital or the financial strength to undertake acquisitions which would diversify its product portfolio, nor to invest fully in the development of its own service lines and routes to market.

As a result, the Charteris Directors announced on 1 October 2013 that the Charteris Board intended to work with Steve Vaughan, the newly appointed Charteris Chairman, to carry out an in-depth review of the business with a view to maximising value for all Charteris Shareholders. This strategic review has concluded with the Offer.

The Charteris Directors note Sword Soft's reasons for the Offer, as set out in paragraph 3 above, and recognise the value that Charteris' business could bring to the Sword Group's businesses. The Charteris Directors recognise that there would be advantages from being part of a larger group with greater diversity of product and a stronger balance sheet. The Charteris Directors believe that this is reflected in the terms of the Offer, which provide Charteris Shareholders with an opportunity to realise their entire shareholding in cash at a substantial 50 per cent. premium to the Charteris Share price prevailing on 14 November 2013 (being the last Business Day prior to this Announcement). The Charteris Directors note that there can be no guarantee that Charteris Shareholders would otherwise be able to realise their shareholdings in Charteris at a price of 4.5 pence per Charteris Share or higher in the short to medium term.

Taking these factors into account, the Charteris Directors intend unanimously to recommend that Charteris Shareholders accept the Offer.

7. Information on Sword Soft and Sword Group

Sword Soft, a limited liability company, is a wholly owned subsidiary of Sword Group and was incorporated in England and Wales on 22 February 2007. Sword Soft's registered office is at 1000 Great West Road, Brentford, Middlesex TW8 9DW.

Sword Group shares have been traded on NYSE-Euronext Paris since 13 March 2002. Based on the Closing middle market price of EUR15 per Sword Group share on 14 November 2013 (being the latest Business Day prior to this Announcement), Sword Group SE has a market capitalisation of approximately EUR139.3 million.

The Sword Group operates in 15 jurisdictions and has over 1,000 employees. It was formed in 2000 through the acquisition of the assets of Decan Group, a company specialising in secure payment and payment automation via the SWIFT network. Sword Group SE became the holding company of the Sword Group on 22 June 2001. On 30 January 2009, Sword Group became a societas europaea.

The audited consolidated accounts of Sword Group for the financial period ended 31 December 2012 showed revenue and profit before tax of EUR118 million (2011: EUR156 million) and EUR20 million (2011: EUR6.5 million) respectively, and net assets of EUR267 million (2011: EUR301 million).

The Sword Group is headquartered at 105 Route d'Arlon, L-8009, Strassen, Luxembourg.

The Sword Group has two major business sectors:

Software Products

Sword Group's software products business stream is centred on the governance, risk and compliance sector for more strongly regulated markets. Sword Achiever, a risk management and compliance solution allowing for the management of corporate reporting, controls and measurements is supplied to over 600 clients.

Sword Apak offers financial systems specialising in asset management and retail banking, and the back and front office management of debits and credits, handling transactions of values in the region of EUR15 billion per annum.

Solutions

Sword Group's solutions business, an IT services and communications technologies offering, centres on risk management and compliance solutions.

Sword Group's solutions business strengthens its governance, risk and compliance management offering through delivery of, amongst other things, enterprise portals, customer relationship management solutions and enterprise content management. Sword Group's solutions business operates primarily in the Benelux region of France and Switzerland.

8. Information on Charteris

Charteris was founded in October 1996. It is headquartered in the City of London with an office in Scotland.

Charteris delivers IT integration solutions to clients by providing expert IT advice, business consulting services and implementation of Microsoft technologies products. These services are delivered to blue chip international companies as well as homeland security, local government and retail clients.

As set out in its annual report for the year ended 31 July 2012, Charteris reported revenues of GBP9.57 million (2011: GBP12.51 million) and a loss before tax of GBP0.418 million (2011: GBP3.456 million). As at 31 July 2012, total assets were GBP6.56 million (31 July 2011: GBP7.75 million) and net assets were GBP4.19 million (31 July 2011: GBP4.41 million).

9. Charteris current trading and prospects

On 27 March 2013, the following statement was contained within Charteris' announcement of unaudited interim results for the six months ended 31 January 2013:

"The gradual improvement in the performance of Charteris continued in the six-month period ended 31 January 2013. Given the general economic backcloth, markets are likely to remain a challenge for the rest of the financial year. However, the general stabilisation of the Company's revenue over an eighteen month period and the current sales pipeline of weighted prospects for new business lead to cautious optimism that further improvement in trading can be delivered during the remainder of the financial year".

On 27 September 2013, Charteris announced the transfer of its loss-making Dynamics business to Hitachi Solutions Ltd. That announcement contained the following statement:

"Trading in the other parts of Charteris continues to be difficult. While customer demand for services remains quite strong, delays in projects and customer decisions makes achievement of financial objectives challenging".

10. Management, employees and locations

The Sword Soft Directors have confirmed to the Charteris Directors that the existing employment rights, including pension rights, of all Charteris employees will be fully safeguarded on completion of the Acquisition.

Each of the Charteris Directors, Steve Vaughan, David Mann, Allan Barr and Chris Rees has agreed with Sword Soft to resign from the board of Charteris upon the Offer becoming, or being declared, unconditional in all respects.

Sword Soft intends to create further value for its shareholders following completion of the Acquisition by the organic growth of its existing IT consulting business, supplemented by the addition of the Charteris offering. In particular Sword Soft intends its strategy to be to:

-- continue to increase its IT consultancy market share through a wider offering of IT consultancy services, including those provided by Charteris;

-- utilise the cash resources available to Sword Soft to accelerate the growth of the existing Sword Soft and Charteris IT consultancy business; and

-- consider further acquisitions in the IT consultancy sector to further enhance the combination of the Sword Soft and Charteris IT consultancy businesses.

The Sword Soft Directors consider that their strategic plans for Charteris will have no repercussions on the employment of Charteris employees or the location of Charteris' places of business. Additionally the Sword Soft Directors do not intend to redeploy any of Charteris' fixed assets.

The Charteris Directors have given due consideration to Sword Soft's stated intentions for the management, employees and locations of Charteris when deciding to recommend acceptance of the Offer.

11. Charteris Share Option Scheme

The Offer will extend to any Charteris Shares which are unconditionally allotted or issued fully paid (or credited as fully paid) pursuant to the exercise of options granted under the Charteris Share Option Scheme or otherwise while the Offer remains open for acceptance (or such earlier date as Sword Soft may, subject to the Code, and in accordance with the conditions and further terms of the Offer decide). To the extent that such options are not exercised in full, Sword Soft will make appropriate proposals to Charteris Optionholders in due course.

12. Compulsory acquisition and cancellation of Charteris Shares trading on AIM

If the Offer becomes or is declared unconditional in all respects and sufficient acceptances are received and/or sufficient Charteris Shares are otherwise acquired, Sword Soft intends to apply the provisions of sections 974 to 991 (inclusive) of the Act to acquire compulsorily any outstanding Charteris Shares to which the Offer relates and which have not been acquired or agreed to be acquired pursuant to the Offer or otherwise.

If the Offer is declared unconditional in all respects with 75 per cent. or more acceptances, Sword Soft intends to procure the making of an application by Charteris to the London Stock Exchange for the cancellation of the admission of the Charteris Shares to trading on AIM. It is anticipated that such cancellation of trading will take effect no earlier than 20 Business Days after the Offer becomes or is declared unconditional in all respects.

The cancellation of the trading of the Charteris Shares will significantly reduce the liquidity and marketability of any Charteris Shares not assented to the Offer and their value may be affected in consequence.

It is also intended that, following the Offer becoming or being declared unconditional in all respects, Charteris will be re-registered as a private company.

13. Financing of the Offer

Full acceptance of the Offer, assuming the exercise of all outstanding options under the Charteris Share Option Scheme with an exercise price of less than 4.5 pence per Charteris Share under the Charteris Share Option Scheme before the Offer closes, will result in the payment of approximately GBP2.31 million in cash. The Offer will be financed entirely from existing cash resources available to the Sword Group.

TLT LLP confirms that it is satisfied that the necessary financial resources are available to Sword Soft sufficient to satisfy in full the cash consideration payment by Sword Soft under the Offer.

Further information on the financing of the Offer will be set out in the Offer Document.

14. Disclosures of interests in Charteris Shares

Other than pursuant to the Irrevocable Undertakings referred to in paragraph 5 above, Sword Soft confirms that, as at close of business on 14 November 2013, being the last Business Day prior to this Announcement, none of Sword Soft or any of its directors or any person acting or deemed to be acting in concert with Sword Soft hold any interests in Charteris Shares.

15. Offer related arrangements

On 18 October 2013, Charteris and Sword Group SE entered into a confidentiality agreement in a customary form in relation to the Offer, pursuant to which Sword Group SE undertook, subject to certain exceptions, to:

-- keep confidential information relating to Charteris and not to disclose it to third parties;

-- for a period of 2 years from the date of the confidentiality agreement, not use, and procure that no other member of the Sword Group use, confidential information directly or indirectly to:

o solicit or entice away or endeavour to solicit or entice away any person employed by Charteris or by any member of the Charteris Group at any time during the course of discussions regarding the Offer; or

o solicit or entice away or endeavour to solicit or entice away any distributor, agent, customer, supplier of Charteris or of any other member of the Charteris Group; or

o encourage, procure or assist any distributor, agent, customer or member of the Charteris Group to restrict, vary or cease that relationship.

The obligations in the confidentiality agreement terminate 2 years from the date of Sword Group SE's acceptance of the terms of the confidentiality agreement.

16. Overseas shareholders

The availability of the Offer or the distribution of this Announcement to Charteris Shareholders who are not resident in the UK may be affected by the laws of their relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. Charteris Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

This Announcement does not constitute an offer for sale for any securities or an offer or an invitation to purchase any securities. Charteris Shareholders are advised to read carefully the Offer Document and related Form of Acceptance once these have been despatched.

17. Structure of the Offer

The Offer is an offer for cash on the basis described in paragraph 2 above.

The Offer is proposed to be implemented by way of takeover offer within the meaning of Part 28 of the Act.

Sword Soft will despatch the Offer Document and the Form of Acceptance to Charteris Shareholders and, for information only, to Charteris Optionholders as soon as practicable and, in any event, within 28 days of the date of this Announcement.

18. Other

Sword Soft confirms that it will, as soon as possible following the release of this Announcement be making an Opening Position Disclosure which discloses the details required to be disclosed by Rule 8.1(a) of the Code.

19. Documents on display

Copies of this Announcement and the Irrevocable Undertakings referred to in paragraph 5 above and summarised in Appendix III to this Announcement will be made available, subject to certain restrictions relating to persons resident in any Restricted Jurisdiction, on Charteris' website (www.charteris.com) by no later than 12 noon on the day following the date of this Announcement until the end of the Offer Period.

20. General

The Offer Document, containing the full terms of the Offer, will be posted to Charteris Shareholders and, for information only, to Charteris Optionholders, as soon as possible, but in any event, within 28 days of today's date. The Offer will be made subject to the Conditions and further terms out in Appendix I to this Announcement which will, together with certain further terms of the Offer, also be set out in full in the Offer Document and, in the case of certificated Charteris Shares, in the Form of Acceptance. In deciding whether to accept the Offer, Charteris Shareholders should rely on the information contained in, and follow the procedures described in, the Offer Document and, if applicable, the Form of Acceptance.

The Offer will be governed by English law and will be subject to the jurisdiction of the courts of England and Wales. The Offer will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the FCA.

The bases and sources of certain financial information contained in this Announcement are set out in Appendix II to this Announcement. A summary of the Irrevocable Undertakings is contained in Appendix III to this Announcement. Certain terms used in this Announcement are defined in Appendix IV to this Announcement.

This Announcement is for information purposes only and does not constitute, or form part of, an offer or an invitation to purchase, subscribe, sell or issue for any securities or a solicitation of any offer to purchase, subscribe for, sell or issue any securities. The Offer will be made solely by way of the Offer Document and, where appropriate, the related Form of Acceptance which together will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.

Charteris Shareholders who accept the Offer may only rely on the Offer Document and, where appropriate, the related Form of Acceptance for all the terms and the conditions of the Offer. In deciding whether or not to accept the Offer in relation to their Charteris Shares, Charteris Shareholders should rely only on the information contained, and procedures described, in the Offer Document and the accompanying Form of Acceptance. Charteris Shareholders are strongly advised to read the Offer Document being posted to them shortly, and in any event within 28 days of this Announcement, which contains important information with respect to the Offer.

Beaumont Cornish, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Charteris and no one else in connection with the Offer and will not be responsible to anyone other than Charteris for providing the protections afforded to customers of Beaumont Cornish or for providing advice in relation to the Offer or any other matter referred to herein. The principal place of business of Beaumont Cornish is Second Floor, Bowman House, 29 Wilson Street, London EC2M 2SS.

The Sword Soft Directors accept responsibility for the information contained in this document, save for the information for which the Charteris Directors accept responsibility in accordance with the following paragraph. Save as aforesaid, to the best of the knowledge and belief of the Sword Soft Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

The Charteris Directors accept responsibility for the information contained in this document relating to Charteris, themselves and their immediate families, related trusts and connected persons. To the best of the knowledge and belief of the Charteris Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

Forward looking statements

This Announcement, any oral statements made by Sword Soft or Charteris in relation to the Offer and other information published by Sword Soft or Charteris may contain statements about Sword Soft and Charteris that are or may be forward looking statements. All statements other than statements of historical facts included in this Announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Sword Soft's or Charteris' operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Sword Soft's or Charteris' business.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements. Sword Soft and Charteris disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

Not a profit forecast

No statement in this Announcement is intended as a profit forecast or profit estimate. No statement in this Announcement should be interpreted to mean that the profits or earnings per share of: (i) the Sword Group as enlarged by the Offer; (ii) Sword Soft; and/or (iii) Charteris for current or future financial years will necessarily match or exceed the historical or published profits or earnings per share of Sword Soft or Charteris, as the case may be.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any paper 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 paper 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 paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 p.m. (London time) on the tenth Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the tenth Business Day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper 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 one per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper 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 paper offeror, save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 p.m. (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 paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

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 of the Code).

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. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on [phone].

Information relating to Charteris Shareholders

Please be aware that addresses, electronic addresses and certain information provided by Charteris Shareholders, persons with information rights and other relevant persons for the receipt of communications from Charteris may be provided to Sword Soft during the Offer Period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.12 (c) of the Code.

Publication on website

A copy of this Announcement and the Offer Document, is and will be made available, free of charge subject to certain restrictions relating to persons in Restricted Jurisdictions, for inspection at Sword Soft's website at http://sword-group.com and the Charteris website at www.charteris.com by no later than 12 noon (London time) on the Business Day following the date of this Announcement.

Neither the content of these websites nor the content of any website accessible from hyperlinks on Charteris' website (or any other website) is incorporated into, or forms part of, this Announcement.

You may request a hard copy of this Announcement by contacting Richard Tall on 020 3465 4200 or Caroline Urban on 020 3465 4124, or by submitting a request by email to [e-mail] or [e-mail] or in writing to Richard Tall/Caroline Urban, TLT LLP, 20 Gresham Street, London, EC2V 7JE. You may also request that all future documents, announcements and information to be sent to you in relation to this Offer shall be in hard copy form.

APPENDIX I

CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER

The Offer, which will comply with the applicable rules and regulations of the London Stock Exchange and the Code and will be governed by English law and subject to the jurisdiction of the courts of England, will be subject to the terms and conditions set out below, in the Offer Document and (in respect of certificated Charteris Shares) in the Form of Acceptance:

a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by not later than 3.00 p.m. (London time) on the First Closing Dateor such later time(s) and/or date(s) as Sword Soft may, with the consent of the Panel or subject to the Code, decide in respect of not less than 90 per cent. (or such lower percentage as Sword Soft may decide) in nominal value of the Charteris Shares to which the Offer relates and not less than 90 per cent. (or such lower percentage as Sword Soft may decide) of the voting rights carried by the Charteris Shares to which the Offer relates, provided that this condition will not be satisfied unless Sword Soft and/or any of its wholly-owned subsidiaries shall have acquired or agreed to acquire whether directly or indirectly (whether pursuant to the Offer or otherwise), Charteris Shares carrying, in aggregate, more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Charteris (including for this purpose, to the extent (if any) required by the Panel, any voting rights attaching to any Charteris Shares which may be unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding conversion or subscription rights or otherwise). For the purpose of this condition:

(i) the expression "Charteris Shares to which the Offer relates" shall be construed in accordance with sections 974 to 991 (inclusive) of the Act;

(ii) Charteris Shares which have been unconditionally allotted but not issued before the Offer becomes or is declared unconditional, whether pursuant to the exercise of any outstanding subscription or conversion right or otherwise, shall be deemed to carry the voting rights which they will carry on being entered into the register of members of Charteris; and

(iii) valid acceptances shall be treated as having been received in respect of any Charteris Shares that Sword Soft shall, pursuant to section 979(8) of the Act and, if applicable, section 979(9) of the Act, be treated as having acquired or unconditionally contracted to acquire by virtue of acceptances of the Offer;

   b)       no central bank, government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body, or any court, institution, investigative body, association, trade agency or professional or environmental body or any other similar person or body in any jurisdiction (each, a "Relevant Authority") having taken  instituted, implemented or threatened (and, in each case, not having withdrawn the same) any action, proceeding, suit, investigation, enquiry or reference or enacted or made any statute, regulation, decision or order (and, in each case, not having withdrawn the same) which would or might reasonably be expected to be material in the context of the Charteris Group or the wider Sword Group in each case when taken as a whole to: 

(i) restrict or restrain, prohibit, delay, impose additional adverse conditions or obligations with respect to, or otherwise interfere with the implementation of, the Offer or the acquisition of any Charteris Shares by Sword Soft or any matters arising therefrom;

(ii) result in a delay in the ability of Sword Soft, or render Sword Soft unable, to acquire some or all of the Charteris Shares;

(iii) require, prevent or delay the divestiture by any member of the wider Sword Group or any member of the Charteris Group of all or any portion of their respective businesses, assets or properties or impose any limitation on the ability of any of them to conduct their businesses or own their respective assets or properties or any part thereof;

(iv) impose any limitation on, or result in a delay in, the ability of any member of the wider Sword Group to acquire or hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities of any member of the Charteris Group or on the ability of any member of the Charteris Group to hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities or to exercise management control over any other member of the Charteris Group;

(v) require any member of the wider Sword Group or the Charteris Group (other than Charteris) to offer to acquire any shares or other securities or rights thereover in any member of the Charteris Group owned by any third party other than as required by the Code;

(vi) make the Offer or its implementation or the proposed acquisition by Sword Soft of any shares or other securities in Charteris or the acquisition or control of Charteris or any member of the Charteris Group, illegal, void or unenforceable in or under the laws of any jurisdiction or directly or indirectly restrict or delay, prohibit or otherwise interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge, the Offer or the acquisition of any shares in Charteris, or control of Charteris, by Sword Soft;

(vii) result in any member of the Charteris Group ceasing to be able to carry on business under any name under which it presently does so;

(viii) impose any limitation on the ability of any member of the wider Sword Group to conduct or co-ordinate or integrate its business, or any part of it, with the business of any other member of the wider Sword Group or the Charteris Group; or

(ix) otherwise adversely affect the business, assets or profits of any member of the wider Sword Group or the Charteris Group,

and all applicable waiting and other time periods during which any such Relevant Authority could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or otherwise intervene having expired, lapsed or been terminated;

c) all authorisations, orders, grants, recognitions, consents, confirmations, clearances, licences, permissions and approvals ("authorisations") required by law in any jurisdiction for or in respect of the Offer and the proposed acquisition of any shares or securities, directly or indirectly, in, or control of, Charteris or any member of the Charteris Group by any member of the wider Sword Group having been obtained in terms and/or form reasonably satisfactory to Sword Soft from all appropriate Relevant Authorities or (without prejudice to the generality of the foregoing) from any persons or bodies with whom any member of the Charteris Group has entered into contractual arrangements and such authorisations remaining in full force and effect and there being no notice of any intention to revoke, suspend, materially modify or not to renew the same in each case where the absence of such authorisations would have a material adverse effect on the Charteris Group or the wider Sword Group in each case when taken as a whole;

d) save as Disclosed, there being no provision of any agreement, permit, lease, licence or other instrument to which any member of the Charteris Group is a party or by or to which it or any of its assets may be bound or subject which, as a consequence of the making or implementation of the Offer or the acquisition by Sword Soft directly or indirectly of Charteris or because of a change in the control of Charteris or any member of the Charteris Group, would or might reasonably be expected to result, to an extent in each case which would be material in the context of the Charteris Group taken as a whole, in:

(i) any monies borrowed by, or other indebtedness (actual or contingent) of, or grant available to, any member of the Charteris Group becoming repayable or capable of being declared repayable immediately or earlier than the stated maturity or repayment date or the ability of any member of the Charteris Group to borrow moneys or incur indebtedness being or becoming capable of being withdrawn or inhibited;

(ii) any such agreement, arrangement, permit, lease, licence or other instrument or any right, interest, liability or obligation of any member of the Charteris Group therein, being terminated or adversely modified or affected or any adverse action being taken or any onerous obligation or liability arising thereunder that is material in the context of the Offer;

(iii) any mortgage, charge or other security interest being created over the whole or any part of the business, property or assets of any member of the Charteris Group or any such security (whenever arising) becoming enforceable;

(iv) the value of any member of the Charteris Group or its financial or trading position being prejudiced or adversely affected to an extent which is material in the context of the Offer;

(v) any assets or interests of any member of the Charteris Group being or falling to be charged or disposed of or any right arising under which any such asset or interest could be required to be disposed of or charged;

(vi) the rights, liabilities, obligations or interests of any member of the Charteris Group in or with any other person, firm or company (or any arrangement relating to such interest or business) being terminated or adversely modified or affected;

(vii) any member of the Charteris Group ceasing to be able to carry on business under any name under which it currently does so; or

(viii) the creation of any material liability, actual or contingent, by any member of the Charteris Group other than to trade creditors or other liabilities incurred in the ordinary course of business;

e) since 31 July 2012, being the date of Charteris' last audited financial statements, save as Disclosed, no member of the Charteris Group having:

(i) (save for Charteris Shares issued pursuant to the exercise of options granted under the Charteris Share Option Scheme or as between Charteris and wholly-owned subsidiaries of Charteris ("Intra-Charteris Group Transactions")) issued or agreed to issue or authorised the issue of additional shares of any class or securities convertible into or rights, warrants or options to subscribe for or acquire any such shares or convertible securities;

(ii) other than to another member of the Charteris Group, recommended, declared, paid or made or proposed to recommend, declare, pay or make any dividend, bonus or other distribution (whether payable in cash or otherwise) other than dividends lawfully paid to Charteris or wholly-owned subsidiaries of Charteris;

(iii) save for Intra-Charteris Group Transactions, merged or demerged with or acquired any body corporate, partnership or business;

(iv) save for Intra-Charteris Group Transactions, (other than in the ordinary course of business) acquired, or disposed of, transferred, mortgaged or charged or created any security interest over any asset or any right, title or interest in any asset (including shares and trade investments) or authorised or announced any intention to do so which, in any such case, is material in the context of the Charteris Group taken as a whole;

(v) save for Intra-Charteris Group Transactions, issued or authorised the issue of any debentures or incurred or increased any indebtedness (other than in the ordinary course of business and which is material in the context of the Charteris Group) or made, authorised or announced an intention to propose any change in its share or loan capital;

(vi) entered into or varied or announced its intention to enter into or vary any contract, transaction, commitment or arrangement (whether in respect of capital expenditure or otherwise) which is of a long term (that is of 12 months or more) or which involves expenditure other than in the ordinary course of business of GBP100,000 or more or which involves or could involve an obligation of a nature or magnitude which, in any such case, is material in the context of the Charteris Group taken as a whole;

(vii) save for transactions in the ordinary course of business entered into, implemented or authorised any reconstruction, amalgamation, scheme of arrangement or other transaction or arrangement or announced any intention to do so to an extent in each case which is material in the context of the Charteris Group taken as a whole;

(viii) entered into, or varied in any material respect the terms of, any contract or agreement with any of the directors of Charteris or any of its subsidiaries;

(ix) taken any corporate action or had any legal proceedings started or threatened in writing against it or had any petition presented for its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets and/or revenues or any analogous proceedings in any jurisdiction;

(x) other than in respect of claims between Charteris and its wholly owned subsidiaries, waived or compromised any claim other than in the ordinary course of business;

   (xi)    made any material amendment to its memorandum or articles of association; 

(xii) in relation to pension schemes established for its directors and/or other employees and/or their dependants, made or agreed or consented to any change to: (a) the terms of the trust deeds constituting such pension schemes or to the benefits which accrue; (b) the pensions which are payable under them; (c) the basis on which qualifications for or accrual of or entitlement to such benefits or pensions are calculated or determined; (d) the basis upon which the liabilities (including pensions) of such pension schemes are funded or made; or (e) the trustees of such pension schemes;

(xiii) purchased, redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital;

(xiv) been unable or admitted in writing that it is unable to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business; and

(xv) entered into any contract, commitment or agreement with respect to any of the transactions, matters or events referred to in this condition (h) or announced an intention to do so in each case which is not in the ordinary course of business and is material in the context of the wider Charteris Group;

f) since 31 July 2012, being the date of Charteris' last audited financial statements, save as Disclosed:

(i) no litigation, arbitration, prosecution or other legal proceedings having been instituted, announced or threatened in writing or remaining outstanding by or against any member of the Charteris Group or to which any member of the Charteris Group is or may become a party (whether as claimant, respondent or otherwise) which, in any such case, would or might reasonably be expected adversely to affect any member of the wider Charteris Group to an extent which is material in the context of the Charteris Group taken as a whole;

(ii) no adverse change having occurred in the business, assets, financial or trading position or profits of the Charteris Group in each case which is material in the context of the Charteris Group taken as a whole;

(iii) no contingent or other liability of any member of the Charteris Group having arisen which might reasonably be expected to materially and adversely affect the Charteris Group taken as a whole;

(iv) other than as a result of the Offer no investigation by any Relevant Authority having been threatened in writing, announced, implemented or instituted or remaining outstanding which in any case would be likely to have a material adverse effect on the financial position of the Charteris Group taken as a whole;

   g)       save as Disclosed, Sword Soft not having discovered that: 

(i) any business, financial or other information concerning any member of the Charteris Group publicly disclosed at any time by or on behalf of any member of the Charteris Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading which, in any such case, is material in the context of the Charteris Group taken as a whole; or

(ii) any member of the Charteris Group is other than in its ordinary course of business subject to any liability, actual or contingent, which is not Disclosed and which is material in the context of the Charteris Group taken as a whole.

Sword Soft reserves the right to waive all or any of conditions (b) to (g) (inclusive) above, in whole or in part. Conditions (b) to (g) (inclusive) must be fulfilled or waived by midnight on the 21(st) day after the later of the First Closing Date and the date on which condition (a) is fulfilled (or such later date as the Panel may agree). Sword Soft shall be under no obligation to waive or treat as fulfilled any of conditions (b) to (g) (inclusive) by a date earlier than the latest date specified above for the fulfilment thereof notwithstanding that the other conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.

If Sword Soft is required by the Panel to make an offer for Charteris Shares under the provisions of Rule 9 of the Code, Sword Soft may make such alterations to the conditions as are necessary to comply with the provisions of that Rule of the Code.

The Offer will lapse and will not proceed if the OFT refers the Offer or any part of it to the Competition Commission and/or if the European Commission either indicates to Sword Soft that it has decided to initiate proceedings under Article 6(1)(c) of Council Regulation (EC) 139/2004 or to make a referral to a competent authority of the United Kingdom under Article ((1) of that Regulation in each case before 3 p.m. on the First Closing Date or on the date on which the Offer becomes or is declared unconditional as to acceptances, whichever is the later.

If the Offer lapses, it will cease to be capable of further acceptance and accepting Charteris Shareholders and Sword Soft will cease to be bound by acceptances submitted on or before the time when the Offer lapses.

APPENDIX II

SOURCES OF INFORMATION AND BASES FOR CALCULATIONS

In this Announcement, unless otherwise stated or the context otherwise requires, the following bases and sources have been used:

a) Unless otherwise stated, financial information relating to Charteris has been extracted or derived (without material adjustment) from the audited financial statements of Charteris for the years ended 31 July 2011 and 31 July 2012and the unaudited interim results for the six months ended 31 January 2013.

b) On 14 November 2013 (being the last Business Day prior to making this Announcement), Charteris had in issue 50,254,411 ordinary shares of 1 penny each.

c) On 14 November 2013 (being the last Business Day prior to making this Announcement), there were 1,340,000 outstanding options granted under the Charteris Share Options Scheme and likely to be exercised, excluding any options which are covered by the Charteris EBT.

d) The value of the entire issued share capital of the Company of approximately GBP2.26million is calculated on the basis of the existing issued share capital of Charteris as set out in (b) above multiplied by the Offer Price.

e) The value of the total cash payment of GBP2.31 million payable by Sword Soft assumes full acceptance of the Offer of the existing issued share capital of Charteris as set out in (b) above multiplied by the Offer Price and the exercise of all vested and outstanding Charteris Share Options with an exercise price of less than 4.5 pence per Charteris Share (being 1,340,000 Charteris Shares) under the Charteris Share Option Scheme before the Offer closes multiplied by the Offer Price.

f) Unless otherwise stated, financial information relating to Sword Soft has been extracted or derived (without material adjustment) from the audited consolidated accounts of Sword Soft for the period ended 31 December 2012.

g) The prices of Charteris Shares on a particular date are derived from the Closing Price for that date.

APPENDIX III

IRREVOCABLE UNDERTAKINGS

Charteris Directors

The Charteris Directors have given Irrevocable Undertakings accept the Offer as follows:

 
 
                                  % of 
                Number of    Charteris 
                Charteris       Shares 
 Name              Shares     in issue 
 Allan Barr       166,667         0.33 
 David Mann     7,864,431        15.65 
 Chris Rees     6,622,211        13.18 
 
 Total         14,653,309        29.16 
 
 
 

Steve Vaughan does not hold any Charteris Shares.

These Irrevocable Undertakings anticipate that any offer will be made at the Offer Price.

Each of the above Irrevocable Undertakings has been entered into by the relevant director only as a shareholder of Charteris and not in their capacity as a director; nothing contained in the undertakings requires any of the Charteris Directors to take or not to take any decision or action in their capacity as a Charteris Director.

These Irrevocable Undertakings include undertakings from the Charteris Directors in respect of their entire holdings of Charteris Shares to accept or procure the acceptance of the Offer.

These Irrevocable Undertakings will cease to be binding if:

   (i)      this Announcement is not published by 6.00 p.m. on 15 November 2013; 

(ii) the Offer Document is not published and the Form of Acceptance is not posted within 28 days of the date of the publication of this Announcement or such later time as may be agreed by the Panel;

(iii) the Offer does not become or is not declared wholly unconditional on or before the date being 185 days following the date of this Announcement; or

   (iv)    the Offer lapses or is withdrawn. 

Other Irrevocable Undertakings

Sword Soft has received Irrevocable Undertakings to accept the Offer as follows from the following holders or controllers of Charteris Shares:

 
 
                                         % of 
                       Number of    Charteris 
                       Charteris       Shares 
 Name                     Shares     in issue 
 Cliff Preddy         11,222,211        22.33 
 Richard Mann          1,848,000         3.68 
 Edward Mann           1,848,000         3.68 
 
 Total                14,918,211        29.69 
 
 
 
 

These Irrevocable Undertakings include undertakings from the holders or controllers in respect of their entire holdings of Charteris Shares:

   (i)      to accept or procure the acceptance of the Offer. 

These Irrevocable Undertakings will cease to be binding if:

   (i)      this Announcement is not published by 6.00 p.m. on 15 November 2013; and 

(ii) the Offer Document is not published and the Form of Acceptance is not posted within 28 days of the date of the publication of this Announcement or such later time as may be agreed by the Panel with the consent of Charteris; and

(iii) the Offer does not become or is not declared wholly unconditional on or before the date being 185 days following the date of this Announcement;

   (iv)     the Offer lapses or is withdrawn; or 

(iv) a person other than Sword Soft or any person acting in concert with Sword Soft makes or announces (in accordance with Rule 2.7 of the Code) an offer (within the meaning of the Code) to acquire issued and to be issued share capital of Charteris, other than that already owned by the person making such offer (or persons acting in concert with it), on terms which represent, in the reasonable opinion of the relevant holder or controller of Charteris Shares, an improvement of 15 per cent. on the value of represented by the Offer.

APPENDIX IV

DEFINITIONS

 
 The following definitions apply throughout 
  this Announcement, unless the context requires 
  otherwise: 
 "Acquisition"                the proposed acquisition of 
                               Charteris by Sword Soft pursuant 
                               to the Offer 
 "Act"                        the Companies Act 2006, as 
                               amended from time to time; 
 "acting in concert"          has the same meaning given 
                               by the Code 
 "AIM Cancellation"           the proposed cancellation of 
                               the Charteris Shares to trading 
                               on AIM 
 "AIM Rules"                  the rules governing the admission 
                               to, and operation of, AIM as 
                               set out in the AIM Rules for 
                               Companies published by the 
                               London Stock Exchange from 
                               time to time 
 "Announcement"               this announcement 
 "Australia"                  the commonwealth of Australia, 
                               its, states, territories or 
                               possessions 
 "Beaumont Cornish"           Beaumont Cornish Limited, which 
                               is authorised and regulated 
                               in the UK by the Financial 
                               Conduct Authority to carry 
                               on investment business, the 
                               independent financial adviser 
                               under the Code to Charteris 
 "Business Day"               a day on which banks are open 
                               for business in London (excluding 
                               Saturdays, Sundays and public 
                               holidays) 
 "Canada"                     Canada, its possessions, provinces 
                               and territories and all areas 
                               subject to its jurisdiction 
                               or any political sub-division 
                               thereof 
 "Charteris" or               Charteris plc 
  "Target" 
 "Charteris Directors"        the directors of Charteris 
  or "Charteris                at the date of this Announcement 
  Board"                       being Steve Vaughan, Allan 
                               Barr, David Mann and Christopher 
                               Rees 
 "Charteris EBT"              the Charteris Ltd General Employee 
                               Benefit Trust created under 
                               a trust deed dated 21 March 
                               2000 
 "Charteris Group"            Charteris and its subsidiary 
                               undertakings at the date of 
                               this Announcement 
 "Charteris Optionholders"    holders of options in the Charteris 
                               Share Option Scheme 
 "Charteris Shareholders"     the holders of Charteris Shares 
 "Charteris Shares"           the existing unconditionally 
                               allotted or issued and fully 
                               paid (or credited as fully 
                               paid) ordinary shares of 1 
                               penny each in the capital of 
                               Charteris and any further shares 
                               which are unconditionally allotted 
                               or issued fully paid or credited 
                               as fully paid before the date 
                               on which the Offer ceases to 
                               be open for acceptance (or 
                               such earlier date as Sword 
                               Soft may, subject to the Code, 
                               decide) but excluding any such 
                               shares held or which become 
                               held in treasury 
 "Charteris Share             Charteris Share Option Scheme 
  Option Scheme" 
 "certificated"               not in uncertificated form 
  or "in certificated 
  form" 
 "Closing Price"              the closing middle market quotation 
                               of a Charteris Share on the 
                               relevant date as derived from 
                               the AIM Appendix to the Daily 
                               Official List 
 "Code"                       the City Code on Takeovers 
                               and Mergers (as amended or 
                               interpreted from time to time 
                               by the Panel) 
 "CREST"                      the relevant system (as defined 
                               in the Regulations) in respect 
                               of which Euroclear UK & Ireland 
                               Limited is the operator 
 "Daily Official              the Daily Official list of 
  List"                        the London Stock Exchange 
 "Disclosed"                             (i) as disclosed in Charteris' 
                                          report and accounts for the 
                                          year ended 31 July 2012; (ii) 
                                          as publicly announced by Charteris 
                                          (by the delivery of an announcement 
                                          to an authorised Regulatory 
                                          Information Service) prior 
                                          to 15 November 2013; (iii) 
                                          as disclosed in this Announcement; 
                                          or (iv) as otherwise disclosed 
                                          in writing, or in the documentation 
                                          or written information provided 
                                          (including in the electronic 
                                          data room established by Charteris 
                                          in connection with the Offer), 
                                          to Sword Soft or its advisers 
                                          by or on behalf of Charteris 
                                          prior to 15 November 2013 in 
                                          the context of the Offer 
 "Enlarged Group"             the Sword Group and the Charteris 
                               Group following completion 
                               of the Acquisition 
 "First Closing               the date which is 21 days after 
  Date"                        the day of posting of the Offer 
                               Document 
 "Form of Acceptance"         the form of acceptance and 
                               authority for use by holders 
                               of Charteris Shares in certificated 
                               form in connection with the 
                               Offer 
 "FCA"                        the Financial Conduct Authority 
 "FSMA"                       the Financial Services and 
                               Markets Act 2000, as amended 
                               from time to time 
 "Irrevocable Undertakings"   the irrevocable undertakings 
                               given by certain Charteris 
                               Shareholders as described in 
                               Appendix III of this Announcement 
 "Japan"                      Japan, its cities, prefectures, 
                               territories and possessions 
 "London Stock                London Stock Exchange PLC 
  Exchange" 
 "Offer"                      the recommended cash offer 
                               of not less than 4.5 pence 
                               per Charteris Share to be made 
                               by Sword Soft to acquire the 
                               entire issued and to be issued 
                               ordinary share capital of Charteris 
                               on the terms and subject to 
                               the conditions to be set out 
                               in the Offer Document and the 
                               Form of Acceptance (including, 
                               where the context so requires, 
                               any subsequent waiver, revision, 
                               variation, extension or renewal 
                               thereof) 
 "Offer Document"             the document to be sent to 
                               Charteris Shareholders containing 
                               the terms of the Offer 
 "Offer Period"               the period commencing 1 October 
                               2013, the date of announcement 
                               by Charteris of its strategic 
                               review, until whichever of 
                               the following shall be the 
                               later of (a) the First Closing 
                               Date; (b) the date on which 
                               the Offer lapses or is withdrawn; 
                               and (c) the date on which the 
                               Offer becomes unconditional 
                               as to acceptances 
 "Offer Price"                4.5 pence per Charteris Share 
 "OFT"                        Office of Fair Trading 
 "Panel"                      the Panel on Takeovers and 
                               Mergers 
 "Regulations"                the Uncertificated Securities 
                               Regulations 2011 (S.I. 2001 
                               No. 3755) as amended from time 
                               to time 
 "Relevant Authorities"       government or governmental, 
                               quasi-governmental, supranational, 
                               statutory or regulatory body, 
                               or any court, institution, 
                               investigative body, association, 
                               trade agency or professional 
                               or environmental body or (without 
                               prejudice to the generality 
                               of the foregoing) any other 
                               person or body in any jurisdiction 
                               (each, a "Relevant Authority") 
 "Restricted Jurisdiction"    the United States, Canada, 
                               Australia, the Republic of 
                               South Africa or Japan or any 
                               other country or jurisdiction 
                               if making the Offer in such 
                               jurisdiction would constitute 
                               a violation of the relevant 
                               laws of, or require registration 
                               of the Offer in, such jurisdiction 
 "Sword Group"                Sword Group SE and its subsidiary 
                               undertakings at the date of 
                               this Announcement 
 "Sword Soft"                 Sword Soft Limited 
 "Sword Soft Board"           the directors of Sword Soft 
  or "Sword Soft               at the date of this Announcement, 
  Directors"                   being Jacques Mottard and Stuart 
                               Anthony Allen 
 "uncertificated"             recorded on the relevant register 
  or "in uncertificated        of the share or security concerned 
  form"                        as being held in uncertificated 
                               form in CREST, and title to 
                               which, by virtue of the Regulations, 
                               may be transferred by means 
                               of CREST 
 "United Kingdom"             the United Kingdom of Great 
  or "UK"                      Britain and Northern Ireland 
 "United States"              the United States of America, 
  or "US"                      its territories and possessions, 
                               any states of the United States 
                               and the District of Columbia 
 "GBP", "p", "pence"          the lawful currency for the 
  or "sterling"                time being in the UK 
 

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", associated undertaking" and "undertaking" has the meaning given by the Act.

In this Announcement, the singular includes the plural and vice versa, unless the context otherwise requires.

All times referred to are London time, unless otherwise stated.

END

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The company news service from the London Stock Exchange

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