Hytera Communications Corp. Ltd. Offer for Sepura plc (0515S)

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Sepura	LSE:SEPU	London	Ordinary Share	GB00B1ZBLD47	ORD GBP0.0005

Industry Sector	Turnover	Profit	EPS - Basic	PE Ratio	Market Cap
	0	0		N/A	0

Sepura (LSE:SEPU)
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TIDMSEPU

RNS Number : 0515S

Hytera Communications Corp. Ltd.

16 December 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

For immediate release

This announcement contains inside information

16 December 2016

RECOMMED CASH OFFER

for

SEPURA PLC

Project Shortway Limited, an indirect wholly-owned subsidiary of

HYTERA COMMUNICATIONS CORPORATION LIMITED

to be effected

by way of a scheme of arrangement

under Part 26 of the Companies Act 2006

Summary

-- The boards of Hytera Communications Corporation Limited ("Hytera") and Sepura plc ("Sepura") are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Project Shortway Limited ("Bidco") (an indirect wholly-owned subsidiary of Hytera) for the entire issued and to be issued ordinary share capital of Sepura (the "Acquisition"). It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.

-- Under the terms of the Acquisition, each Sepura Shareholder will be entitled to receive:

20 pence in cash per Sepura Share

-- The Acquisition values the entire issued and to be issued ordinary share capital of Sepura at approximately GBP74 million.

   --              The Acquisition Price represents a premium of approximately:

- 35.6 per cent. to the Closing Price of 14.75 pence per Sepura Share on 3 November 2016 (being the last Business Day prior to the announcement that Hytera and Sepura were in discussions and the commencement of the Offer Period); and

- 30.5 per cent. to the average Closing Price of 15.33 pence per Sepura Share for the one month period to 3 November 2016 (being the last Business Day prior to the announcement that Hytera and Sepura were in discussions and the commencement of the Offer Period).

-- Sepura represents an excellent strategic fit with Hytera's existing operations and the Acquisition will broaden the range of products and services Hytera is able to offer to its customers.

-- The Sepura Directors, who have been so advised by Lazard as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Sepura Directors, Lazard has taken into account the commercial assessments of the Sepura Directors.

-- Accordingly, the Sepura Directors intend to recommend unanimously that Sepura Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting (or, if Hytera exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer), as the Sepura Directors have irrevocably undertaken to do in respect of their own beneficial holdings of 10,483,434 Sepura Shares (representing, in aggregate, approximately 2.83 per cent. of the Sepura Shares in issue on 15 December 2016 (being the last Business Day prior to this Announcement)). Gordon Watling, who has been on extended leave of absence since 12 September 2016, has not participated in any board or committee meetings of the Sepura Directors (including in respect of the Acquisition) since 27 July 2016.

-- In addition to the irrevocable undertakings from the Sepura Directors, Hytera and Bidco have received irrevocable undertakings to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting (or, if Hytera exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) from Liontrust Fund Partners LLP, Miton Asset Management and Skandinaviska Enskilda Banken, Danmark in respect of 93,641,985 Sepura Shares (representing, in aggregate, approximately 25.30 per cent. of the Sepura Shares in issue on 15 December 2016 (being the last Business Day prior to this Announcement)).

-- In addition to the irrevocable undertakings, Hytera and Bidco have received a letter of intent to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting (or, if Hytera exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) from Alphagen Capital Limited in respect of 36,423,615 Sepura Shares (representing, in aggregate, approximately 9.84 per cent. of the Sepura Shares in issue on 15 December 2016 (being the last Business Day prior to this Announcement)).

-- Therefore, as at the date of this Announcement, Hytera and Bidco have received irrevocable undertakings and a letter of intent with respect to a total of 140,549,034 Sepura Shares (representing approximately 37.98 per cent. of the Sepura Shares in issue on 15 December 2016 (being the last Business Day prior to this Announcement)). Full details of the irrevocable undertakings and letter of intent received by Hytera and Bidco are set out in Appendix III to this Announcement.

-- Hytera is a leading provider of Professional Mobile Radio ("PMR") communication solutions, providing complete and customised communication solutions to clients in government, public security, utility, transportation and enterprise sectors across more than 120 countries and regions across the world.

-- Sepura is a leading global provider of critical communications solutions for the PMR market, with particular focus on users of the Terrestrial Trunked Radio ("TETRA") PMR standard. Sepura designs, develops and supplies digital radio solutions, complementary accessories, support tools and devices that are used by a wide range of public safety and commercial organisations.

-- It is intended that the Acquisition be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (or, if Hytera so elects and with the consent of the Takeover Panel, a Takeover Offer). The purpose of the Scheme is to provide for Bidco to become the owner of the whole of the issued and to be issued ordinary share capital of Sepura. The Scheme will be put to Sepura Shareholders at the Court Meeting and at the General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the Sepura Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted. The implementation of the Scheme must also be approved by Sepura Shareholders at the General Meeting.

-- The Acquisition is subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document. The Conditions include the receipt of various regulatory and anti-trust approvals as further described in this Announcement. Sepura Shareholders should take note of the Regulatory Clearances, which include the PRC Regulatory Clearances, contained in Part A of Appendix I (see paragraph 6 below).

-- The Scheme Document will include full details of the Acquisition, together with notices of the Court Meeting and General Meeting and the expected timetable and will specify the action to be taken by Sepura Shareholders. The Scheme Document will be despatched to Sepura Shareholders within 28 days of the date of this Announcement, unless Hytera and Sepura otherwise agree, and the Takeover Panel consents, to a later date.

-- The Acquisition is expected to complete in the first quarter of 2017, subject to the satisfaction or waiver of the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document.

Commenting on the Acquisition, Alan Lovell, Chairman of Sepura, said:

"This transaction with Hytera recognises the underlying strengths of Sepura's technology and customer base despite the difficulties of the last 12 months. It will provide certainty for our shareholders, and secure the future of the business. There will be additional opportunities and benefits for the business and its employees as part of a larger group."

Commenting on the Acquisition, Chen Qingzhou, Chairman and Chief Executive Officer of Hytera, said:

"We are very pleased to reach this agreement with Sepura. The industry in which we operate is undergoing significant changes and Sepura represents an excellent strategic fit for Hytera and will allow us to expand the range of products and services we provide to our clients around the world."

This summary should be read in conjunction with, and is subject to, the full text of this Announcement and its Appendices. In particular, the Acquisition is subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document. Appendix II contains details of sources of information and bases of calculation contained in this Announcement. Appendix III contains certain details relating to the irrevocable undertakings and letter of intent referred to in this Announcement. Appendix IV contains definitions of certain terms used in this Announcement.

Enquiries:

 
 Hytera 
 Nuo Xu (Chief Investment Officer)       Tel: +86 755 2697 
  Zhiyong Tian (Securities Affairs                    2999 
  Representative) 
 Smith Square Partners (Financial 
  adviser to Hytera and Bidco) 
 Jonathan Coddington                  Tel: +44 (0) 20 3696 
  Jade Jack                                           7260 
 Sepura 
 David Barrass (Interim Chief            Tel: +44 (0) 1223 
  Executive Officer)                               876 000 
  Richard Smith (Chief Financial 
  Officer) 
  Peter Connor (Investor Relations) 
 
 Lazard (Financial adviser 
  to Sepura) 
 Cyrus Kapadia                        Tel: +44 (0) 20 7187 
  Nicholas Page                                       2000 
 
 Liberum (Corporate broker 
  to Sepura) 
 Steve Pearce                         Tel: +44 (0) 20 3100 
                                                      2224 
 Instinctif Partners (Public 
  relations adviser to Sepura) 
 Adrian Duffield                      Tel: +44 (0) 20 7457 
  Kay Larsen                                          2020 
  Chantal Woolcock

Smith Square Partners LLP, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Hytera and Bidco and no one else in connection with the Acquisition and other matters set out in this Announcement and will not be responsible to anyone other than Hytera and Bidco for providing the protections afforded to clients of Smith Square Partners, or for providing advice in connection with the Acquisition or any matter referred to herein. Neither Smith Square Partners nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Smith Square Partners in connection with this Announcement, any statement contained herein or otherwise.

Lazard & Co., Limited, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Sepura and no one else in connection with the Acquisition and will not be responsible to anyone other than Sepura for providing the protections afforded to clients of Lazard nor for providing advice in relation to the Acquisition or any other matters referred to in this Announcement. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this Announcement, any statement contained herein or otherwise.

Liberum, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively as corporate broker to Sepura and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than Sepura for providing the protections afforded to clients of Liberum nor for providing advice in relation to the matters referred to in this Announcement.

This Announcement is for information purposes only and is not intended to and does not constitute, or form any part of, an offer to sell or subscribe for or any 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. The Acquisition will be made solely through the Scheme Document and the accompanying Forms of Proxy, which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any approval, decision or other response to the Acquisition should be made only on the basis of the information in the Scheme Document. Scheme Shareholders are strongly advised to read the formal documentation in relation to the Acquisition once it has been despatched.

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

The statements contained in this Announcement are made as at the date of this Announcement, unless some other time is specified in relation to them, and service of this Announcement shall not give rise to any implication that there has been no change in the facts set forth in this Announcement since such date.

Overseas shareholders

The laws of the relevant jurisdictions may affect the availability of the Acquisition to persons who are not resident in the United Kingdom. Persons who are not resident in the United Kingdom, or who are subject to laws of any jurisdiction other than the United Kingdom, should inform themselves about, and observe any applicable requirements. Any person (including, without limitation, nominees, trustees and custodians) who would, or otherwise intends to, forward this Announcement, the Scheme Document or any accompanying document to any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate professional advice before taking any action. In particular, the ability of persons who are not resident in the United Kingdom to vote their Sepura Shares at the Court Meeting or the General Meeting, or to execute and deliver Forms of Proxy appointing another to vote their Sepura Shares in respect of the Court Meeting or the General Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located.

Any failure to comply with the applicable legal or regulatory requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility and liability for the violation of such restrictions by any person.

The Acquisition will not be made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, telephonic or electronic) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, a Restricted Jurisdiction, and the Acquisition will not be capable of acceptance by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement and formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded or distributed in, into or from a Restricted Jurisdiction and persons receiving this Announcement (including custodians, nominees and trustees) must not distribute or send it into or from a Restricted Jurisdiction. In the event that the Acquisition is implemented by way of a Takeover Offer and extended into the US, Hytera will do so in satisfaction of the procedural and filing requirements of the US securities laws at that time, to the extent applicable thereto. The Acquisition relates to the shares of a UK company and it is proposed to be made by means of a scheme of arrangement provided for under the laws of England and Wales. The Scheme will relate to the shares of a UK company that is a "foreign private issuer" as defined under Rule 3b-4 under the US Exchange Act. A transaction effected by means of a scheme of arrangement is not subject to the shareholder vote, proxy solicitation and tender offer rules under the US Exchange Act. Accordingly, the Scheme is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements and practices of US shareholder vote, proxy solicitation and tender offer rules. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the UK and may not be comparable to the financial statements of US companies. However, if Hytera were to elect to implement the Acquisition by means of a Takeover Offer, such Takeover Offer shall be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such Takeover Offer would be made in the US by Hytera and no one else. In addition to any such Takeover Offer, Hytera, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Sepura outside such Takeover Offer during the period in which such Takeover Offer would remain open for acceptance. If such purchases or arrangements to purchase are made they would be made outside the United States in compliance with applicable law, including the US Exchange Act.

Forward-looking statements

This Announcement may contain certain "forward-looking statements" with respect to Hytera, Bidco or Sepura. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words or terms of similar meaning or the negative thereof. 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 the Hytera Group or the Sepura Group and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on the business of the Hytera Group or the Sepura Group.

These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or developments to differ materially from those expressed in or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding present and future strategies and environments. You are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. All subsequent oral or written forward-looking statements attributable to Hytera, Bidco or Sepura or any person acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Announcement. Hytera, Bidco and Sepura assume no obligation to update publicly or revise forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per ordinary share for Hytera or Sepura respectively for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per ordinary share for Hytera or Sepura respectively.

Right to switch to a Takeover Offer

Hytera reserves the right to elect, with the consent of the Takeover Panel, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued ordinary share capital of Sepura as an alternative to the Scheme. In such an event, the Takeover Offer will be implemented on the same terms or, if Hytera so decides, on such other terms being no less favourable (subject to appropriate amendments), so far as applicable, as those which would apply to the Scheme and subject to the amendment referred to in Appendix I to this Announcement.

Publication on website and availability of hard copies

In accordance with Rule 26.1 of the Code, a copy of this Announcement will be made available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions), free of charge, on Hytera's website at www.hytera.com and Sepura's website at www.sepura.com by no later than 12:00 noon on the Business Day following this Announcement. Neither the contents of these websites nor the content of any other website accessible from hyperlinks on such websites is incorporated into, or forms part of, this Announcement.

In accordance with Rule 30.3 of the Code, a person so entitled may request a hard copy of this Announcement, free of charge, by contacting Smith Square Partners on +44 (0) 20 3696 7260 or Lazard on +44 (0) 20 7187 2000. For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested. In accordance with Rule 30.3 of the Code, a person so entitled may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.

Information relating to Sepura Shareholders

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

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Disclosure requirements of the Code

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 on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm 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, 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 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 Takeover Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

For immediate release

This announcement contains inside information

16 December 2016

RECOMMED CASH OFFER

for

SEPURA PLC

Project Shortway Limited, an indirect wholly-owned subsidiary of

HYTERA COMMUNICATIONS CORPORATION LIMITED

to be effected

by way of a scheme of arrangement

under Part 26 of the Companies Act 2006

 
 
 
   1.            Introduction

The boards of Hytera Communications Corporation Limited ("Hytera") and Sepura plc ("Sepura") are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Project Shortway Limited ("Bidco") (an indirect wholly-owned subsidiary of Hytera) for the entire issued and to be issued ordinary share capital of Sepura (the "Acquisition"). It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.

   2.            The Acquisition

Under the terms of the Acquisition, which will be subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document, each Sepura Shareholder will be entitled to receive:

20 pence in cash per Sepura Share

-- The Acquisition values the entire issued and to be issued ordinary share capital of Sepura at approximately GBP74 million.

   --              The Acquisition Price represents a premium of approximately:

The Sepura Shares will be acquired by Bidco with full title guarantee, fully paid and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and any other third party rights or interests whatsoever and together with all rights existing at the date of this Announcement or thereafter attaching thereto, including (without limitation) the right to receive and retain, in full, all dividends and other distributions (if any) declared, made or paid or any other return of capital (whether by way of reduction of share capital or share premium account or otherwise) made on or after the date of this Announcement in respect of the Sepura Shares.

If any dividend or other distribution in respect of the Sepura Shares is declared, paid or made on or after the date of this Announcement, Hytera reserves the right to reduce the consideration payable for each Sepura Share under the terms of the Acquisition by the amount per Sepura Share of such dividend or distribution.

   3.            Recommendation

The Sepura Directors, who have been so advised by Lazard as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Sepura Directors, Lazard has taken into account the commercial assessments of the Sepura Directors.

Accordingly, the Sepura Directors intend to recommend unanimously that Sepura Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting, as the Sepura Directors have irrevocably undertaken to do in respect of their own beneficial holdings of 10,483,434 Sepura Shares (representing, in aggregate, approximately 2.83 per cent. of the Sepura Shares in issue on 15 December 2016 (being the last Business Day prior to this Announcement)). Gordon Watling, who has been on extended leave of absence since 12 September 2016, has not participated in any board or committee meetings of the Sepura Directors (including in respect of the Acquisition) since 27 July 2016.

   4.            Background to and reasons for the Acquisition

Hytera believes that Sepura's business represents an excellent strategic fit with Hytera and will broaden the range of products and services the Combined Group is able to offer to its customers, as well as giving Hytera better access to geographic markets in which it currently has limited exposure.

Hytera considers Sepura to have a well-established presence in the markets in which it operates, with a strong brand image and recognition in the private network industry. Through the Acquisition, Hytera will gain access to a blue-chip customer base and to the broader high-end public security sector market.

Hytera believes that Sepura's dedicated research and development function, which oversees and develops the core patents and technologies relevant to the TETRA protocol, is of very high quality. However, given the very significant technological changes and challenges that are likely to characterise the PMR market in the years to come, Hytera believes that Sepura will be better positioned with the extensive research and development and financial support of Hytera.

The Hytera Directors consider that a combination of the two businesses will further develop the Combined Group's technology, expanding functionality of product base and allowing both companies to broaden their range of customised products and services with more diversified overall solutions.

A strong technological offering and blue-chip customer base will enhance both Hytera's and Sepura's position as leading global providers of communications solutions. Hytera believes that the Acquisition represents a compelling valuation proposition for Sepura Shareholders and is a logical step in the consolidation of the PMR market.

   5.            Background to and reasons for the recommendation

Sepura is a highly respected and leading brand in the global TETRA communications market. It is a market leader in multiple geographies, including Germany (the world's largest TETRA market), the UK, and nascent markets in Brazil and North America. The analogue to digital migration in PMR continues to deliver long-term growth, with independent forecasts predicting 11 million new digital PMR devices by 2018, and Sepura is well-positioned to capitalise on these developments.

In 2015, Sepura acquired Teltronic, incorporating another strong brand and robust, diversified product-base into its business. Teltronic has successfully executed 350 TETRA networks across 50 different countries, and has a significant pipeline in both established and nascent TETRA markets. Sepura has already realised synergies and cross-selling opportunities since the acquisition of Teltronic, such as the New York Transit Authority's combined TETRA systems and devices contract, and the combined businesses have a strong pipeline of opportunities.

However trading during the last 12 months has been particularly challenging for Sepura. Underperformance of its DMR business, delayed refresh cycles and uncertainty over the Emergency Services Network in the UK, among other things, have generated significant headwinds in some of Sepura's markets. In addition, the business has undergone a major change in its business model to improve sales phasing, align manufacturing timescales with customer delivery schedules, and reduce the credit risk profile, in order to allow Sepura to benefit from working capital improvement and a better alignment of profitability to cash flows over the longer term, but which result in a one-off shift of revenue for the current financial year.

On 22 November 2016 Sepura announced a pre-tax loss of EUR62.1 million for the six months ended 30 September 2016, principally as a result of the challenges described above. It also announced that it had reached an agreement to defer certain debt repayments with its lenders, enabling Sepura to meet its forecast liquidity requirements for at least the next 12 months, but that it does also expect to require a waiver of some of its covenants by its lenders from March 2017.

Sepura has a strategy in place to address the headwinds it faces and return Sepura to more normal levels of profitability. It has announced in recent months the appointment of an interim Chief Executive and a new non-executive Chairman. The new leadership team is focused on positioning the business for a stronger performance in the financial year to March 2018. As part of this work the new leadership is preparing Sepura to deliver new products, expand its presence within the North American market, penetrate other emerging TETRA markets and focus on servicing its installed customer base, in addition to driving cost savings and efficiencies across its business segments and geographies.

The Sepura Directors believe that Sepura has a well-developed strategy in place to address the issues it faces and that executing this strategy successfully could significantly improve the business's standalone performance over the medium term and thereby deliver value for Sepura Shareholders.

However, the Sepura Directors are also aware that Sepura continues to face significant headwinds in a highly competitive environment and that it is likely to require further cooperation from its lending banks, in addition to alternative sources of funding. Consequently, success in achieving this strategy will be influenced by the significant future risks and uncertainties.

Therefore, after careful consideration, the Sepura Directors have concluded that the proposal from Hytera substantially recognises Sepura's prospects whilst also recognising the considerable challenges facing the business on a standalone basis. The proposal provides certainty in cash to Sepura Shareholders at a 35.6 per cent. premium to the Closing Price on 3 November 2016 (being the Business Day prior to the announcement that Hytera and Sepura were in discussions). Following careful consideration of the above factors, the Sepura Directors intend unanimously to recommend that Sepura Shareholders vote in favour of the Acquisition, as the Sepura Directors have irrevocably undertaken to do in respect of their entire respective beneficial holdings of Sepura Shares.

The Sepura Directors further believe that Hytera represents a highly attractive acquirer of the business as they believe Hytera will support and enhance Sepura's ability to capitalise on the PMR market opportunity and that Hytera's strategic vision for the Combined Group fits well with Sepura's existing strategy and culture.

   6.            Conditions

The Acquisition is conditional, amongst other things, upon:

(a) the approval of the Scheme by a majority in number representing not less than 75 per cent. in value of the Sepura Shareholders entitled to vote and present and voting, either in person or by proxy, at the Court Meeting (or at any adjournment, postponement or reconvention of such meeting) on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date as may be agreed between Hytera and Sepura and the Court may allow);

(b) the passing of the Resolutions by the requisite majority at the General Meeting or at any adjournment, postponement or reconvention of that meeting to be held on or before the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document (or such later date, if any, as Hytera and Sepura may agree and the Court may allow);

(c) the sanction of the Scheme on or before the 22nd day after the expected date of the Court Hearing to be set out in the Scheme Document in due course (or such later date as may be agreed between Hytera and Sepura and the Court may allow) and the delivery of an office copy of the Court Order to the Registrar of Companies; and

(d) the Regulatory Clearances being received by Hytera and/or Bidco, including each of the PRC Regulatory Clearances being received, and competition approval being received in Spain and Germany.

The attention of Sepura Shareholders is drawn to the fact that the Acquisition is also conditional on other Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document.

Sepura Shareholders should take note of the Regulatory Clearances set out in the Conditions in Appendix I, which include the PRC Regulatory Clearances. Sepura acknowledges the very high level of importance and the materiality of the PRC Regulatory Clearances to Hytera, Bidco and the Acquisition.

   7.            Irrevocable undertakings and letter of intent for Sepura and Hytera

Hytera and Bidco have received irrevocable undertakings from each of the Sepura Directors to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting (or, if Hytera exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) from all of the Sepura Directors who hold Sepura Shares (in a personal capacity or through a nominee) in respect of their entire beneficial holdings of Sepura Shares, amounting, in aggregate, to 10,483,434 Sepura Shares (representing, in aggregate, approximately 2.83 per cent. of the Sepura Shares in issue on 15 December 2016 (being the last Business Day prior to this Announcement).

Hytera and Bidco have also received irrevocable undertakings to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting (or, if Hytera exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) from Liontrust Fund Partners LLP, Miton Asset Management and Skandinaviska Enskilda Banken, Danmark in respect of 93,641,985 Sepura Shares (representing, in aggregate, approximately 25.30 per cent. of the Sepura Shares in issue on 15 December 2016 (being the last Business Day prior to this Announcement)).

In addition to the irrevocable undertakings, Hytera and Bidco have received a letter of intent to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting (or, if Hytera exercises its right to implement the Acquisition by way of a Takeover Offer, to accept such offer) from Alphagen Capital Limited in respect of 36,423,615 Sepura Shares (representing, in aggregate, approximately 9.84 per cent. of the Sepura Shares in issue on 15 December 2016 (being the last Business Day prior to this Announcement)).

Therefore, as at the date of this Announcement, Hytera and Bidco have received irrevocable undertakings and a letter of intent with respect to a total of 140,549,034 Sepura Shares (representing, in aggregate, approximately 37.98 per cent. of the Sepura Shares in issue on 15 December 2016 (being the last Business Day prior to this Announcement)). Further details of these irrevocable undertakings (including details of the circumstances in which they cease to be binding) and letter of intent are set out in Appendix III to this Announcement.

Sepura has also received an irrevocable undertaking from the Chairman of Hytera, Mr Chen Qingzhou, who is a 52 per cent. shareholder in Hytera and thus the majority voting rights holder, to vote in favour of the Acquisition at Hytera's general meeting pertaining to the Acquisition.

   8.            Information on Hytera, Bidco and Mr Chen Qingzhou

Hytera

Hytera is a leading provider of PMR communications solutions, providing complete and customised communication solutions to clients in government, public security, utility, transportation and enterprise sectors across more than 120 countries and regions across the world. Hytera's global sales network includes 30 branches in, amongst others, the USA, UK, Germany, Australia and Brazil, over 600 partners across the world and a research and development team of over 1,200 engineers in five research centres. Hytera's shares are listed on the Shenzhen Stock Exchange (ISIN reference CNE1000013B1). Mr Chen Qingzhou, the Chairman, CEO and founder of Hytera (see further below), holds 52 per cent. of the issued share capital of Hytera. The remaining shares are held by non-governmental institutional investors and private investors.

For the 12 months ended 31 December 2015, Hytera's revenues were approximately RMB 2.5 billion (approximately GBP286.3 million) and its profit before tax was approximately RMB 291.9 million (approximately GBP33.7 million).

For the nine months ended 30 September 2016, Hytera's revenues were approximately RMB 2.1 billion (approximately GBP247.0 million) and its profit before tax was approximately RMB 100.9 million (approximately GBP11.7 million).

Bidco

Bidco is a newly incorporated English company which is an indirect wholly-owned subsidiary of Hytera established to effect the Acquisition. Bidco has not traded prior to the date of this Announcement nor has it entered into any obligation other than in connection with the Acquisition.

Mr Chen Qingzhou

Mr Chen is the Chairman, CEO and founder of Hytera. Prior to founding Hytera in Shenzhen in 1993, Mr Chen was a Deputy General Manager of Weixun Electronics Co., Ltd in Fujian Province. He started his career working at a mobile radio communications factory in Fujian Province as a sales manager from 1984.

   9.            Information on Sepura

Sepura is a leading global provider of critical communications solutions for the PMR market. Sepura designs, develops and supplies digital radio solutions, complementary accessories, support tools and devices that are used by a wide range of public safety and commercial organisations. Operating globally, and with revenues of approximately EUR190 million for the year ended 1 April 2016, Sepura has a product portfolio with the unique ability to offer TETRA, P25 and Long Term Evolution (LTE) system solutions. The Sepura Shares are listed on the London Stock Exchange (ISIN reference GB00B1ZBLD47).

For the 12 months ended 1 April 2016, Sepura's revenues were approximately EUR189.7 million, adjusted operating profit was approximately EUR12.4 million and its loss before tax was approximately EUR19.0 million.

For the half year ended 30 September 2016, Sepura's revenues were approximately EUR43.3 million, adjusted operating losses were approximately EUR13.0 million and its loss before tax was approximately EUR62.1 million.

   10.          Sepura Share Schemes

Appropriate proposals, including a cash cancellation proposal, will be made to participants in the Sepura Share Schemes, taking into account that (i) in the case of options outstanding under the Sepura Sharesave Plan, the Acquisition Price is lower than the applicable exercise prices, and (ii) in the case of certain nil-cost rights outstanding under the Sepura Long-term Incentive Plan, the performance conditions have not been met.

   11.          Financing

The consideration payable under the terms of the Acquisition will be funded from Hytera's existing cash resources; Hytera has also entered into a guarantee, issued by the Bank of China, in support of Hytera's funding obligations under the Acquisition.

Smith Square Partners, financial adviser to Hytera and Bidco, is satisfied that sufficient cash resources are available to Bidco to enable it to satisfy in full the consideration payable to Sepura Shareholders in connection with the Acquisition.

   12.          Management, employees and locations of the Sepura Group

Hytera recognises that Sepura is a people-based business and, as such, attaches great importance to retaining the skills, knowledge and industry expertise of Sepura's existing management and employees in order to best continue to serve Sepura's customers. Hytera believes that Sepura's management and employees will be important to the success of, and will benefit from enhanced opportunities as part of, the Combined Group.

Following completion of the Acquisition it is intended that the Sepura business will be integrated into the Hytera Group. Hytera has not yet had any detailed discussions with Sepura regarding the integration of Sepura. However, preliminary analysis carried out by Hytera to date has indicated the potential to maintain the existing operations of Sepura whilst realising some limited cost savings for the Combined Group through the removal of administrative costs associated with Sepura's current status as a listed company, which will cease to be required following the Acquisition, and in areas where there is an overlap of function (for example head office and central functions). This may involve some limited headcount reduction, although no plans have been formulated by Hytera to date.

Hytera is aware of Sepura's planned cost reduction programme, which was referred to in the announcement of Sepura's interim results on 22 November 2016. These plans have not been discussed in detail with Hytera during the due diligence process. Hytera intends to review these plans, should the Scheme become Effective.

Hytera has given assurances to the Sepura Directors that the existing contractual and statutory employment rights, including in relation to employer contributions into Sepura pension plans, of Sepura's existing management and employees will be safeguarded in accordance with applicable law and that Hytera does not currently envisage any material change in the conditions of employment of Sepura employees following the Scheme becoming Effective.

It is expected that Alan Lovell, Sion Kearsey, Nigel Smith, Andrew Leeser and Gordon Stuart (being Sepura's non-executive directors), and David Barrass (Sepura's interim Chief Executive Officer), will cease to be directors of Sepura immediately following the Effective Date.

Save as referred to above and subject to finalisation of the integration plans, Hytera confirms that it has no plans currently to (i) change the principal locations of Sepura's business, or (ii) redeploy any of Sepura's fixed assets.

   13.          Offer-related arrangements

Confidentiality Agreement

Hytera and Sepura entered into a confidentiality agreement dated 11 October 2016 (the "Confidentiality Agreement") pursuant to which Hytera has undertaken to keep confidential information relating to Sepura and not to disclose it to third parties (other than to permitted disclosees) unless required by law or regulation. These confidentiality obligations shall remain in force for a period of 18 months from the date of the Confidentiality Agreement. The Confidentiality Agreement further includes customary non-solicitation and standstill provisions.

   14.          Structure of the Acquisition

Scheme

The Acquisition will be effected by a Court-sanctioned scheme of arrangement between Sepura and the Scheme Shareholders under Part 26 of the Companies Act. The purpose of the Scheme is to provide for Bidco to become the owner of the whole of the issued and to be issued ordinary share capital of Sepura. Under the Scheme, the Acquisition is to be achieved by the:

-- transfer of the Scheme Shares held by Scheme Shareholders to Hytera in consideration for which the Scheme Shareholders will receive cash consideration pursuant to the Scheme; and

-- passing of the Resolutions at the General Meeting (including amendments to Sepura's Articles to ensure that any Sepura Shares issued between approval of the Scheme at the Court Meeting and the Scheme Record Time will be subject to the Scheme and that any Sepura Shares issued after the Scheme Record Time will automatically be acquired by Bidco).

Approval by Court Meeting and General Meeting

To become Effective, the Scheme requires, amongst other things, the:

a) approval of a majority in number of the Scheme Shareholders who vote, representing not less than 75 per cent. in value of the Scheme Shares voted, either in person or by proxy, at the Court Meeting; and

b) approval by the requisite majority of the Resolutions at the General Meeting (to be held directly after the Court Meeting) necessary in order to implement the Scheme.

Application to Court to sanction the Scheme

Once the approvals have been obtained at the Court Meeting and the General Meeting and the other Conditions have been satisfied or (where applicable) waived, the Scheme must be sanctioned by the Court at the Court Hearing.

The Scheme will become Effective in accordance with its terms on delivery of the Court Order to the Registrar of Companies. 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 General Meeting, or whether they voted in favour of or against the Scheme.

Full details of the Scheme to be set out in the Scheme Document

The Scheme Document will include full details of the Scheme, including the expected timetable and the action to be taken by Scheme Shareholders. The Scheme will be governed by the laws of England and Wales. The Scheme will be subject to the applicable requirements of the Code, the Takeover Panel, the London Stock Exchange and the FCA.

The Scheme Document, along with the notice of the Court Meeting and the General Meeting and the Forms of Proxy will be despatched to Sepura Shareholders within 28 days of the date of this Announcement, unless Hytera and Sepura otherwise agree, and the Takeover Panel consents, to a later date. Subject to certain restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document will also be made available on Hytera's website at www.hytera.com and Sepura's website at www.sepura.com.

At this stage, subject to the satisfaction or waiver of the Conditions and certain further terms set out in Appendix I, Hytera and Sepura expect the Acquisition to become Effective during the first quarter of 2017.

If the Scheme does not become Effective on or before the Long Stop Date (or such later date as Hytera, Bidco and Sepura may, with the consent of the Takeover Panel and, if required, the Court, agree) it will lapse and the Acquisition will not proceed (unless the Takeover Panel otherwise consents).

Right to switch to a Takeover Offer

   15.          De-listing and re-registration

It is intended that an application will be made to (i) the UK Listing Authority to cancel the listing of the Sepura Shares on the Official List, and (ii) the London Stock Exchange to cancel trading of the Sepura Shares on the Main Market of the London Stock Exchange to take effect on or shortly after the Effective Date. The last day of dealings in Sepura Shares on the Main Market of the London Stock Exchange is expected to be the Business Day immediately prior to the Court Hearing and no transfers will be registered after 6.00 p.m. on that date.

On the Effective Date, Sepura will become a wholly-owned subsidiary of Bidco and share certificates in respect of the Sepura Shares will cease to be valid and should be destroyed. In addition, entitlements to Sepura Shares held within the CREST system will be cancelled on the Effective Date.

As soon as practicable after the Effective Date, it is intended that Sepura will be re-registered as a private limited company under the relevant provisions of the Companies Act.

   16.          Disclosure of interests in Sepura

As at the close of business on 15 December 2016, being the last Business Day prior to this Announcement, save for the irrevocable undertakings and letter of intent referred to in paragraph 7 (Irrevocable undertakings and letter of intent) above, none of Bidco or any director of Bidco or, so far as Bidco is aware, any person acting, or deemed to be acting, in concert with Bidco:

   a)            had an interest in, or right to subscribe for, relevant securities of Sepura;

b) had any short position in (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, relevant securities of Sepura;

c) had procured an irrevocable commitment or letter of intent to accept the terms of the Acquisition in respect of relevant securities of Sepura; or

   d)            had borrowed or lent any Sepura Shares.

Furthermore, save for the irrevocable undertakings and letter of intent described in paragraph 7 (Irrevocable undertakings and letter of intent) above, no arrangement exists between Bidco or Sepura or a person acting in concert with Bidco or Sepura in relation to Sepura Shares. For these purposes, an "arrangement" includes any indemnity or option arrangement, any agreement or any understanding, formal or informal, of whatever nature, relating to Sepura Shares which may be an inducement to deal or refrain from dealing in such securities.

   17.          General

The Acquisition will be subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document. The Scheme Document, along with the notice of the Court Meeting and the General Meeting and the Forms of Proxy will be despatched to Sepura Shareholders within 28 days of the date of this Announcement, unless Hytera and Sepura otherwise agree, and the Takeover Panel consents, to a later date.

In deciding whether or not to vote or procure votes in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting, Sepura Shareholders should rely on the information contained, and follow the procedures described, in the Scheme Document.

Smith Square Partners and Lazard have each given and not withdrawn their consent to the inclusion in this Announcement of the references to their names in the form and context in which they appear.

Appendix II contains details of sources of information and bases of calculation contained in this Announcement. Appendix III contains certain details relating to the irrevocable undertakings and letter of intent referred to in this Announcement. Appendix IV contains definitions of certain terms used in this Announcement.

   18.          Documents on display

Copies of this Announcement and the following documents will, by no later than 12 noon on the Business Day following the date of this Announcement, be made available on Hytera's website at www.hytera.com and Sepura's website at www.sepura.com until the end of the Offer Period:

   --              the Confidentiality Agreement;

-- the irrevocable undertakings and letter of intent referred to in paragraph 7 (Irrevocable undertakings and letter of intent) above and described in Appendix III to this Announcement; and

   --              the guarantee from the Bank of China referred to in paragraph 11 (Financing) above.

Enquiries:

 
 Hytera 
 Nuo Xu (Chief Investment Officer)       Tel: +86 755 2697 
  Zhiyong Tian (Securities Affairs                    2999 
  Representative) 
 Smith Square Partners (Financial 
  adviser to Hytera and Bidco) 
 Jonathan Coddington                  Tel: +44 (0) 20 3696 
  Jade Jack                                           7260 
 Sepura 
 David Barrass (Interim Chief            Tel: +44 (0) 1223 
  Executive Officer)                               876 000 
  Richard Smith (Chief Financial 
  Officer) 
  Peter Connor (Investor Relations) 
 
 Lazard (Financial adviser 
  to Sepura) 
 Cyrus Kapadia                        Tel: +44 (0) 20 7187 
  Nicholas Page                                       2000 
 
 Liberum (Corporate broker 
  to Sepura) 
 Steve Pearce                         Tel: +44 (0) 20 3100 
                                                      2224 
 Instinctif Partners (Public 
  relations adviser to Sepura) 
 Adrian Duffield                      Tel: +44 (0) 20 7457 
  Kay Larsen                                          2020 
  Chantal Woolcock

Overseas shareholders

The laws of the relevant jurisdictions may affect the availability of the Acquisition to persons who are not resident in the United Kingdom. Persons who are not resident in the United Kingdom, or who are subject to laws of any jurisdiction other than the United Kingdom, should inform themselves about, and observe, any applicable requirements. Any person (including, without limitation, nominees, trustees and custodians) who would, or otherwise intends to, forward this Announcement, the Scheme Document or any accompanying document to any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate professional advice before taking any action. In particular, the ability of persons who are not resident in the United Kingdom to vote their Sepura Shares at the Court Meeting or the General Meeting, or to execute and deliver Forms of Proxy appointing another to vote their Sepura Shares in respect of the Court Meeting or the General Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located.

The Acquisition relates to the shares of a UK company and it is proposed to be made by means of a scheme of arrangement provided for under the laws of England and Wales. The Scheme will relate to the shares of a UK company that is a "foreign private issuer" as defined under Rule 3b-4 under the US Exchange Act. A transaction effected by means of a scheme of arrangement is not subject to the shareholder vote, proxy solicitation and tender offer rules under the US Exchange Act. Accordingly, the Scheme is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements and practices of US shareholder vote, proxy solicitation and tender offer rules. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the UK and may not be comparable to the financial statements of US companies. However, if Hytera were to elect to implement the Acquisition by means of a Takeover Offer, such Takeover Offer shall be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such Takeover Offer would be made in the US by Hytera and no one else. In addition to any such Takeover Offer, Hytera, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Sepura outside such Takeover Offer during the period in which such Takeover Offer would remain open for acceptance. If such purchases or arrangements to purchase are made they would be made outside the United States in compliance with applicable law, including the US Exchange Act.

Forward-looking Statements

No profit forecasts or estimates

Right to switch to a Takeover Offer

Publication on website and availability of hard copies

Information relating to Sepura Shareholders

Rounding

Disclosure requirements of the Code

APPIX I

CONDITIONS OF THE ACQUISITION AND CERTAIN FURTHER TERMS

Part A: Conditions of the Scheme and the Acquisition

The Acquisition is conditional upon the Scheme becoming unconditional and effective, subject to the Code, by not later than the Long Stop Date:

   1.            The Scheme shall be subject to the following conditions:

(a) its approval by a majority in number of the Sepura Shareholders who are on the register of members of Sepura at the Voting Record Time and who are present and vote, whether in person or by proxy, at the Court Meeting (and at any separate class meeting which may be required by the Court) and who represent 75 per cent. in value of the Sepura Shares voted by those Sepura Shareholders on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document (or such later date, if any, as Bidco, Hytera and Sepura may agree and the Court may allow);

(b) the passing of the Resolutions by the requisite majority at the General Meeting to be held on or before the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document (or such later date, if any, as Hytera and Sepura may agree and the Court may allow);

(c) the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to Hytera and Sepura) on or before the 22nd day after the expected date of the Court Hearing to be set out in the Scheme Document (or such later date, if any, as Hytera and Sepura may agree and the Court may allow);

   (d)           delivery of a copy of the Court Order to the Registrar of Companies; and

(e) the approval of the Acquisition by a simple majority of the shareholders of Hytera at a general meeting. Hytera's Chairman, Mr Chen Qingzhou has irrevocably committed to vote in favour of the Acquisition in respect of his entire shareholding which represents 52 per cent. of Hytera's issued share capital.

2. In addition, subject as stated in Part B below and to the requirements of the Takeover Panel, the Acquisition shall be conditional upon the following Conditions and, accordingly, the Court Order shall not be delivered to the Registrar of Companies unless such Conditions (as amended, if appropriate) have been satisfied (and continue to be satisfied pending the commencement of the Court Hearing) or, where relevant, waived in writing prior to the Scheme being sanctioned by the Court:

Regulatory Clearances

   (a)           PRC Regulatory Clearances:

(i) the issuance of a notice from the Development & Reform Commission of Shenzhen Municipality in respect of the filing notice made in connection with the Acquisition;

(ii) the issuance of a record filing notice from the Economy, Trade and Information Commission of Shenzhen Municipality in respect of the Acquisition; and

(iii) the approval for the remittance of foreign exchange out of China from the State Administration of Foreign Exchange of China in respect of the Acquisition;

(b) in so far as the Acquisition is required to be notified under the Spanish merger control regime, the National Markets and Competition Commission (Comisión Nacional de los mercados y la competencia) having approved the Acquisition either without conditions or subject to conditions all of which are reasonably satisfactory to Hytera or the Acquisition being deemed to have been approved due to the expiry of the relevant waiting periods under the Spanish Act Competition Act 15/2007 on the Defence of Competition (the "Spanish Condition");

(c) in so far as the Acquisition is required to be notified under the German merger control regime, the German Bundeskartellamt deciding that the prohibition criteria in German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen) are not satisfied, or being deemed to have made such a decision;

(d) in relation to the United Kingdom, in the event that the Competition and Markets Authority (the "CMA") commences an own-initiative investigation by way of an enquiry letter, it being established, in terms reasonably satisfactory to Hytera, that neither the CMA nor the Secretary of State intends to refer the Acquisition for a CMA Phase 2 Reference;

(e) no Third Party having decided, threatened or given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to (in any case to an extent or in a manner which is material in the context of the Acquisition, the Wider Sepura Group or the Wider Hytera Group, as the case may be, in each case, taken as a whole):

(i) require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by any member of the Wider Hytera Group or by any member of the Wider Sepura Group of all or any part of their respective businesses, assets, property or any shares or other securities (or the equivalent) in any member of the Wider Sepura Group or any member of the Wider Hytera Group or impose any limitation on the ability of all or any of them to conduct their respective businesses (or any part thereof) or to own, control or manage any of their respective assets or properties (or any part thereof);

(ii) except pursuant to Chapter 3 of Part 28 of the Companies Act in the event that Hytera elects to implement the Acquisition by way of a Takeover Offer, require any member of the Wider Hytera Group or the Wider Sepura Group to acquire or offer to acquire any shares, other securities (or the equivalent) or interest in any member of the Wider Sepura Group or any asset owned by any Third Party (other than in connection with the implementation of the Acquisition);

(iii) impose any material limitation on, or result in a material delay in, the ability of any member of the Wider Hytera Group, directly or indirectly, to acquire, hold or exercise effectively all or any rights of ownership in respect of shares or loans or securities convertible into shares or other securities (or the equivalent) in Sepura or on the ability of any member of the Wider Sepura Group or any member of the Wider Hytera Group, directly or indirectly, to hold or exercise effectively all or any rights of ownership in respect of shares or loans or any other securities (or the equivalent) in, or to exercise voting or management control over, any other member of the Wider Sepura Group;

(iv) except as Disclosed, result in any member of the Wider Sepura Group or any member of the Wider Hytera Group ceasing to be able to carry on business under any names under which it currently carries on business;

(v) make the Acquisition, its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Sepura by any member of the Wider Hytera Group void, unenforceable and/or illegal under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, prevent or prohibit, restrict, restrain or delay or otherwise interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge, impede, interfere or require material amendment to the terms of the Acquisition or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Sepura by any member of the Wider Hytera Group;

(vi) impose any material limitation on, or result in material delay in, the ability of any member of the Wider Hytera Group or any member of the Wider Sepura Group to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider Hytera Group and/or the Wider Sepura Group;

(vii) require any member of the Wider Sepura Group to relinquish, terminate or amend in any material way any material contract to which any member of the Wider Sepura Group or the Wider Hytera Group is a party;

(viii) result in any member of the Wider Sepura Group or any member of the Wider Hytera Group ceasing to be able to carry on business under any name under which it currently does so in any jurisdiction;

(ix) require any member of the Wider Hytera Group or any member of the Wider Sepura Group or any of their respective affiliates to: (A) invest, contribute or loan any capital or assets to; or (B) guarantee or pledge capital assets for the benefit of any member of the Combined Group, which in each such case or together is material and adverse in the context of the Combined Group or in the context of the Acquisition;

(x) otherwise materially adversely affect all or any of the business, assets, liabilities, profits, financial or trading position or prospects of any member of the Wider Sepura Group or any member of the Wider Hytera Group; or

(xi) and all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction in respect of the Acquisition or the acquisition or proposed acquisition of any Sepura Shares or other securities in, or control or management of, Sepura or otherwise intervene having expired, lapsed or been terminated;

Other regulatory approvals

(f) each Governmental Entity, which regulates or licences any member of the Sepura Group or any other body corporate in which any member of the Sepura Group has an interest in shares, and whose prior approval, consent or non-objection to any change in control, or acquisition of (or increase in) control in respect of that or any other member of the Sepura Group is required, or any Governmental Entity, whose prior approval, consent or non-objection of the Acquisition is otherwise required, or from whom one or more material licences or permissions are required in order to complete the Acquisition, having given its approval, non-objection or legitimate deemed consent or consent in writing thereto and, as the case may be, having granted such licences and permissions (in each case where required and on terms reasonably satisfactory to Hytera), and in each case the impact of which would materially adversely affect the Wider Sepura Group or the Wider Hytera Group, taken as a whole;

Notifications, waiting periods and authorisations

(g) all notifications, filings or applications which are necessary or considered appropriate or desirable by Hytera having been made in connection with the Acquisition and all necessary waiting and other time periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with, in each case, in respect of the Scheme and the Acquisition and all Authorisations deemed reasonably necessary or appropriate by Hytera in any jurisdiction for or in respect of the Acquisition and, except pursuant to Chapter 3 of Part 28 of the Companies Act, the Acquisition or the proposed acquisition of any shares or other securities in, or control or management of, Sepura or any other member of the Wider Sepura Group by any member of the Wider Hytera Group having been obtained in terms and in a form reasonably satisfactory to Hytera from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider Sepura Group or the Wider Hytera Group has entered into contractual arrangements and all such Authorisations necessary, appropriate or desirable to carry on the business of any member of the Wider Sepura Group in any jurisdiction having been obtained and all such Authorisations remaining in full force and effect at the time at which the Acquisition becomes otherwise wholly unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such

Authorisations;

Sepura Shareholder resolution

(h) except with the consent or the agreement of Hytera, no resolution of Sepura Shareholders in relation to any acquisition or disposal of assets or shares (or the equivalent thereof) in any undertaking or undertakings (or in relation to any merger, demerger, consolidation, reconstruction, amalgamation or scheme) being passed at a meeting of Sepura Shareholders other than in relation to the Acquisition or the Scheme and, other than with the consent or the agreement of Hytera, no member of the Wider Sepura Group having taken (or agreed or proposed to take) any action that requires, or would require, the consent of the Takeover Panel or the approval of Sepura Shareholders in accordance with, or as contemplated by, Rule 21.1 of the Code;

Certain matters arising as a result of any arrangement, agreement, etc.

(i) except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, franchise, permit or other instrument to which any member of the Wider Sepura Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or subject, or any event or circumstance which, as a consequence of the Acquisition or the acquisition or the proposed acquisition by any member of the Wider Hytera Group of any shares or other securities (or the equivalent) in Sepura or because of a change in the control or management of any member of the Wider Sepura Group or otherwise, would or might reasonably be expected to result in (in each case to an extent or in a manner which is material in the context of the Wider Sepura Group or the Wider Hytera Group, as the case may be, in each case, taken as a whole):

(i) any monies borrowed by, or any other indebtedness or liabilities, actual or contingent, of, or any grant available to, any such member being or becoming repayable, or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

(ii) the creation, save in the ordinary and usual course of business, or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of such member or any such mortgage, charge or other security interest (whenever created, arising or having arisen) becoming enforceable;

(iii) any such arrangement, agreement, lease, licence, franchise, permit or other instrument or the rights, liabilities, obligations or interests of any such member in or with any other person (or any arrangement or arrangements relating to any such interests or business) being adversely modified or adversely affected or any obligation or liability arising or any adverse action being, or becoming capable of being terminated taken or arising thereunder;

(iv) any liability of any such member to make any severance, termination, bonus or other payment to any of its directors or other officers;

(v) the rights, liabilities, obligations, interests or business of any such member or any member of the Wider Sepura Group under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any such member or any member of the Wider Sepura Group in or with any other person or body or firm or company (or any arrangement relating to any such interests or business) being or becoming capable of being terminated, or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken thereunder;

(vi) any such member ceasing to be able to carry on business under any name under which it presently carries on business;

(vii) the financial or trading position or prospects of, any such member being prejudiced or adversely affected; or

(viii) the creation or acceleration of any liability (actual or contingent) by any such member other than trade creditors or other liabilities incurred in the ordinary course of business,

(ix) and no event having occurred which, under any provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider Sepura Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might result in any of the events or circumstances as are referred to in Conditions (i)(i) to (viii) above;

Certain events occurring since 1 April 2016

   (j)            except as Disclosed, no member of the Wider Sepura Group having since 1 April 2016:

(i) issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue, of additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of Sepura Shares out of treasury (except, where relevant, as between Sepura and wholly-owned subsidiaries of Sepura or between the wholly-owned subsidiaries of Sepura and except for the issue or transfer out of treasury of Sepura Shares on the exercise of employee share options or vesting of employee share awards in the ordinary course under the Sepura Share Schemes);

(ii) recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution (whether payable in cash or otherwise) other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of Sepura to Sepura or any of its wholly-owned subsidiaries;

(iii) other than pursuant to the Acquisition (and except for transactions between Sepura and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of Sepura and transactions in the ordinary course of business) implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or acquisition or disposal of assets or shares or loan capital (or the equivalent thereof) in any undertaking or undertakings in any such case to an extent which is material in the context of the Wider Sepura Group taken as a whole or in the context of the Acquisition;

(iv) except for transactions between Sepura and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of Sepura and transactions in the ordinary course of business, disposed of, or transferred, mortgaged or created any security interest over any material asset or any right, title or interest in any material asset or authorised, proposed or announced any intention to do so;

(v) except for transactions between Sepura and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of Sepura issued, authorised or proposed or announced an intention to authorise or propose, the issue of or made any change in or to the terms of any debentures or become subject to any contingent liability or incurred or increased any indebtedness which in any such case is material in the context of the Wider Sepura Group taken as a whole or in the context of the Acquisition;

(vi) entered into or varied or authorised, proposed or announced its intention to enter into or vary any material contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) except in the ordinary course of business which is of a long term, unusual or onerous nature or magnitude or which is or which involves or could involve an obligation of a nature or magnitude;

(vii) entered into or varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary to a material extent the terms of any contract, service agreement, commitment or arrangement with any director or senior executive of any member of the Wider Sepura Group, otherwise than in the ordinary course of business;

(viii) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any employee of the Wider Sepura Group, otherwise than in the ordinary course of business;

(ix) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or made any other change to any part of its share capital (except, in each case, where relevant, as between Sepura and wholly-owned subsidiaries of Sepura or between the wholly-owned subsidiaries of Sepura and except for the issue or transfer out of treasury of Sepura Shares on the exercise of employee share options or vesting of employee share awards under the Sepura Share Schemes as Disclosed);

(x) waived, compromised or settled any claim which is material in the context of the Wider Sepura Group as a whole or in the context of the Acquisition;

(xi) terminated or varied the terms of any agreement or arrangement between any member of the Wider Sepura Group and any other person in a manner which would or might have a material adverse effect on the financial position of the Wider Sepura Group taken as a whole;

(xii) save as required in connection with the Acquisition, made any material alteration to its memorandum, articles of association or other incorporation documents or any material alteration to the memorandum, articles of association or other incorporation documents of any other member of the Wider Sepura Group;

   (xiii)       made or agreed or consented to any significant change to:

(A) the terms of the trust deeds and rules constituting the pension scheme(s) established by any member of the Wider Sepura Group for its directors, employees or their dependants;

(B) the contributions payable to any such scheme(s) or to the benefits which accrue, or to the pensions which are payable, thereunder;

(C) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or

(D) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued, made, agreed or consented to,

to an extent which is in any such case material in the context of the Wider Sepura Group taken as a whole or in the context of the Acquisition;

(xiv) except as Disclosed, been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, 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 which is material in the context of the Wider Sepura Group taken as a whole;

(xv) (other than in respect of a member of the Wider Sepura Group which is dormant and was solvent at the relevant time) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any material part of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed;

(xvi) (except for transactions between Sepura and its wholly-owned subsidiaries or between the wholly-owned subsidiaries) made, authorised, proposed or announced an intention to propose any change in its loan capital;

(xvii) entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of business or corporate entities, which in any such case is material in the context of the Wider Sepura Group as a whole or in the context of the Acquisition; or

(xviii) entered into any agreement, arrangement, commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition (j);

No adverse change, litigation, regulatory enquiry or similar

   (k)           except as Disclosed, since 1 April 2016 there having been:

(i) no adverse change and no circumstance having arisen which would reasonably be expected to result in any adverse change in, the business, assets, liabilities, shareholders' equity, financial or trading position or profits, operational performance or prospects of any member of the Wider Sepura Group which is material in the context of the Wider Sepura Group taken as a whole or in the context of the Acquisition;

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Sepura Group is or may become a party (whether as a claimant, defendant or otherwise) having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of, any member of the Wider Sepura Group, in each case which would reasonably be expected to have a material adverse effect on the Wider Sepura Group taken as a whole or in the context of the Acquisition;

(iii) no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Sepura Group (or any person in respect of which any such member has or may have responsibility or liability) having been threatened, announced, implemented or instituted or remaining outstanding by, against or in respect of any member of the Wider Sepura Group, in each case, which would reasonably be expected to have a material adverse effect on the Wider Sepura Group taken as a whole or in the context of the Acquisition;

(iv) no contingent or other liability having arisen or become apparent to Hytera or increased other than in the ordinary course of business which is reasonably likely to affect adversely the business, assets, financial or trading position or profits of any member of the Wider Sepura Group to an extent which is material in the context of the Wider Sepura Group taken as a whole or in the context of the Acquisition; and

(v) no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Sepura Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which would reasonably be expected to have a material adverse effect on the Wider Sepura Group taken as a whole or in the context of the Acquisition;

No discovery of certain matters regarding information and liabilities, corruption and intellectual property

   (l)                            except as Disclosed, Bidco or Hytera not having discovered that:

(i) any financial, business or other information concerning the Wider Sepura Group announced publicly and delivered by or on behalf of Sepura through a RIS prior to the date of this Announcement or publicly disclosed to any member of the Wider Hytera Group by or on behalf of any member of the Wider Sepura Group prior to the date of this Announcement is misleading, contains a misrepresentation of any fact, or omits to state a fact necessary to make that information not misleading, in any such case which is material in the context of the Wider Sepura Group taken as a whole or in the context of the Acquisition;

(ii) any member of the Wider Sepura Group or any partnership, company or other entity in which any member of the Wider Sepura Group has a significant economic interest and which is not a subsidiary undertaking of Sepura, otherwise than in the ordinary course of business, is subject to any liability, contingent or otherwise, and which is material in the context of the Wider Sepura Group taken as a whole or in the context of the Acquisition;

(iii) any past or present member, director, officer or employee of the Wider Sepura Group, or any other person for whom any such person may be liable or responsible, has not complied with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and any laws implementing the same, the UK Bribery Act 2010 and/or the US Foreign Corrupt Practices Act of 1977;

(iv) any past or present member, director, officer or employee of the Wider Sepura Group, or any other person for whom any such person may be liable or responsible, has engaged in any business with or made any investment in, or made any payments to: (A) any government, entity or individual with which US or EU persons are prohibited from engaging in activities or doing business by US or EU laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control, or (B) any government, entity or individual targeted by any of the economic sanctions of the United Nations or the European Union or any of their respective member states;

(v) any asset of any member of the Wider Sepura Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition); or

(vi) since 1 April 2016, no circumstance having arisen or event having occurred in relation to any intellectual property owned, used or licensed by the Wider Sepura Group or to any third parties, including: (A) any member of the Wider Sepura Group losing its title to any intellectual property or any intellectual property owned by the Wider Sepura Group being revoked, cancelled or declared invalid, (B) any agreement regarding the use of any intellectual property licensed to or by any member of the Wider Sepura Group being terminated or varied, or (C) any claim being filed suggesting that any member of the Wider Sepura Group infringed the intellectual property rights of a third party or any member of the Wider Sepura Group being found to have infringed the intellectual property rights of a third party, in each case which is material in the context of the Wider Sepura Group taken as a whole or in the context of the Acquisition.

Part B: Certain further terms of the Acquisition

1. Subject to the requirements of the Takeover Panel, Hytera reserves the right in its sole discretion to waive (if capable of waiver) in whole or part:

(i) any of the Conditions set out in the above Condition 1 of Part A relating to the timing of the Court Meeting, the General Meeting and the sanctioning of the Scheme. If any of the deadlines for those events are not met, Hytera shall make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition or agreed with Sepura to extend the deadline in relation to the relevant Condition; and

(ii) all or any of the above Conditions 2(a) (Regulatory Clearances) to (l) (No discovery of certain matters regarding information and liabilities, corruption and intellectual property) of Part A (inclusive).

2. Condition 1(e) (Hytera shareholder approval) must be fulfilled by, and Conditions 2(a) (Regulatory Clearances) to (l) (No discovery of certain matters regarding information and liabilities, corruption and intellectual property) of Part A (inclusive) must be fulfilled or waived by no later than 11:59 p.m. on the date immediately preceding the date of the Court Hearing, failing which the Scheme will lapse or, if the Acquisition is implemented by way of a Takeover Offer, no later than as permitted by the Takeover Panel. Hytera shall be under no obligation to waive or treat as fulfilled any of the Conditions which are capable of being waived by a date earlier than the latest date specified above for the fulfilment or waiver thereof, notwithstanding that any such Condition or other Conditions of the Scheme and the Acquisition 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.

3. Under Rule 13.5 of the Code, Hytera may not invoke a Condition so as to cause the Scheme not to proceed, or to lapse, or so as to cause any Takeover Offer to lapse or be withdrawn, unless the circumstances which give rise to the right to invoke the Condition are of material significance to Hytera in the context of the Acquisition. Condition 1 of Part A (and, if applicable, any acceptance condition adopted on the basis specified in paragraph 5 below in relation to any Takeover Offer) are not subject to this provision of the Code.

4. If Hytera is required by the Takeover Panel to make an offer for Sepura Shares under the provisions of Rule 9 of the Code, Hytera may make such alterations to the Conditions and certain further terms of the Acquisition as are necessary to comply with the provisions of that Rule.

5. Hytera reserves the right to elect (with the consent of the Takeover Panel) to implement the Acquisition by making, directly or indirectly through a subsidiary or nominee of Hytera, a Takeover Offer as an alternative to the Scheme. In such event, the Takeover Offer will be implemented on the same terms or, if Hytera so decides, on such other terms being no less favourable, subject to appropriate amendments, as far as applicable, as those which would apply to the Scheme. The acceptance condition would be set at 90 per cent. of the shares to which such Takeover Offer relates (or such lesser percentage, being more than 50 per cent., as Hytera may decide with the consent of the Takeover Panel). Further, if sufficient acceptances of the Takeover Offer are received and/or sufficient Sepura Shares are otherwise acquired, it is the intention of Hytera to apply the provisions of the Companies Act to compulsorily acquire any outstanding Sepura Shares to which such Takeover Offer relates.

   6.            The Acquisition will lapse (unless otherwise agreed with the Takeover Panel) if:

(i) in so far as the Acquisition or any matter arising from or relating to the Scheme or Acquisition constitutes a concentration with a Community dimension within the scope of the Regulation, the European Commission either initiates proceedings under Article 6(1)(c) of the Regulation or makes a referral to a competent authority of the United Kingdom under Article 9(1) of the Regulation and there is then a CMA Phase 2 Reference; or

(ii) in so far as the Acquisition or any matter arising from the Scheme or Acquisition does not constitute a concentration with a Community dimension within the scope of the Regulation, the Scheme or Acquisition or any matter arising from or relating to the Acquisition becomes subject to a CMA Phase 2 Reference;

in each case, before the date of the Court Meeting.

7. Hytera reserves the right for any other member of the Hytera Group from time to time to implement the Acquisition.

8. The Sepura Shares shall be acquired by Bidco with full title guarantee, fully paid and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and any other third party rights and interests whatsoever and together with all rights existing at the date of this Announcement or thereafter attaching thereto, including (without limitation) the right to receive and retain, in full, all dividends and other distributions (if any) declared, made or paid or any other return of capital (whether by way of reduction of share capital or share premium account or otherwise) made on or after the date of this Announcement in respect of the Sepura Shares.

9. The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom and any Sepura Shareholders who are not resident in the United Kingdom will need to inform themselves about and observe any applicable requirements.

10. Unless otherwise determined by Hytera or required by the Code and permitted by applicable law and regulations, the Acquisition is not being, and will not be, made, directly or indirectly, in, into or by the use of the mails of, or by any other means or instrumentality (including, but not limited to, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any Restricted Jurisdiction and will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction.

11. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

12. This Announcement and any rights or liabilities arising hereunder, the Acquisition, the Scheme and the Forms of Proxy will be governed by English law and will be subject to the jurisdiction of the English courts. The Acquisition shall be subject to the applicable requirements of the Code, the Takeover Panel, the London Stock Exchange and the FCA.

APPIX II

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this Announcement:

(i) Unless otherwise stated, financial information relating to Sepura has been extracted from the audited consolidated financial statements of Sepura for the financial year ended 1 April 2016 or Sepura's unaudited half-year report for the six months ended 30 September 2016.

(ii) Unless otherwise stated, financial information relating to Hytera has been extracted from the audited consolidated financial statements of Hytera for the financial year ended 31 December 2015 or Hytera's unaudited third quarter results for the nine months ended 30 September 2016.

   (iii)         The value of the Acquisition is based upon the following:

(i) 370,082,470 Sepura Shares in issue (excluding 815,707 Sepura Shares held in treasury) on 15 December 2016 (being the last Business Day prior to this Announcement);

(ii) up to 1,155,000 Sepura Shares will be either transferred out of treasury or newly issued to satisfy certain rights outstanding under the Sepura Long-term Incentive Plan;

(iii) a cash cancellation proposal will be offered to satisfy rights outstanding over 198,756 Sepura Shares under the Sepura plc Deferred Bonus Plan;

(iv) no options will be exercised under the Sepura Sharesave Plan because the Acquisition Price is lower than the applicable exercise price; and

(v) all other rights outstanding under the Sepura Long-term Incentive Plan will lapse because the relevant performance conditions have not been met.

   (iv)          Chinese Renminbi has been translated to GBP sterling at a rate of 0.1156.

(v) Unless otherwise stated, all prices for Sepura Shares are the Closing Price for the relevant date.

   (vi)          The Closing Prices of Sepura Shares are taken from the Daily Official List.

APPIX III

DETAILS OF IRREVOCABLE UNDERTAKINGS and letter of intent

Hytera has received irrevocable undertakings and a letter of intent to accept the Acquisition Price in respect of a total of 140,549,034 Sepura Shares (representing, in aggregate, approximately 37.98 per cent. of Sepura's Shares in issue on 15 December 2016 (being the last Business Day prior to this Announcement)), comprised as follows:

Sepura Directors' (and certain of their immediate family members) irrevocable undertakings

 
                                     Per cent. of Sepura 
                  Number of Sepura                Shares 
 Name                       Shares              in issue 
---------------  -----------------  -------------------- 
 Sion Kearsey           10,433,657                 2.82% 
 Nigel Smith                28,444                 0.01% 
 Gordon Stuart              21,333                 0.01% 
 Total                  10,483,434                 2.83%

The irrevocable undertakings from the Sepura Directors will only cease to be binding if:

-- the Scheme Document is not sent to Sepura Shareholders within 28 days (or such longer period as Hytera and Sepura may agree with the consent of the Takeover Panel) after the date of this Announcement;

-- the Scheme or a Takeover Offer announced in implementation of the Acquisition has not become Effective or been declared unconditional in all respects in accordance with the requirements of the Code (as the case may be) prior to the Long Stop Date; or

-- the Scheme or a Takeover Offer (as the case may be) has lapsed or been withdrawn in accordance with its terms (for the avoidance of doubt, this shall not apply where the Scheme lapses or is withdrawn solely as a result of Hytera exercising its right to implement the Acquisition by way of a Takeover Offer rather than a Scheme) and no new, revised or replacement Scheme or Takeover Offer has been announced by Bidco or its affiliates in accordance with Rule 2.7 of the Code at the same time.

Other Sepura Shareholders' irrevocable undertakings

 
                                               Per cent. of Sepura 
                            Number of Sepura                Shares 
 Name                                 Shares              in issue 
-------------------------  -----------------  -------------------- 
 Liontrust Fund Partners 
  LLP                             42,755,220                11.55% 
 Miton Asset Management 
  Limited                         23,058,946                 6.23% 
 Skandinaviska Enskilda 
  Banken, Danmark                 27,827,819                 7.52% 
 Total                            93,641,985                25.30%

The irrevocable undertakings from the other Sepura Shareholders will only cease to be binding if:

-- the Scheme or a Takeover Offer (as the case may be) has lapsed or been withdrawn in accordance with its terms (for the avoidance of doubt, this shall not apply where the Scheme lapses or is withdrawn solely as a result of Hytera exercising its right to implement the Acquisition by way of Takeover Offer rather than a Scheme) and no new, revised or replacement Scheme or Takeover Offer has been announced by Bidco or its affiliates in accordance with Rule 2.7 of the Code at the same time; or

-- in the case of Liontrust Fund Partners LLP, Miton Asset Management Limited and Skandinaviska Enskilda Banken, a third party makes a competing offer at a value which (in Hytera's reasonable opinion on the advice of Smith Square Partners, or, in the case of Liontrust Fund Partners LLP, in the board of Sepura's reasonable opinion) exceeds the value of the cash consideration per Sepura Share under the Acquisition by 15 per cent. or more per Sepura Share (provided that, if no later than 5.00 p.m. on the fifth Business Day after the day on which the third party's offer is made, the cash consideration per Sepura Share under the Acquisition is increased such that its value (in Hytera's reasonable opinion on the advice of Smith Square Partners, or, in the case of Liontrust Fund Partners LLP, in the board of Sepura's reasonable opinion) is equal to or exceeds the third party's offer, these deeds shall not lapse and all obligations under them shall remain in full force and effect).

Letter of intent

 
                                                Per cent. of Sepura 
                             Number of Sepura                shares 
 Name                                  shares              in issue 
--------------------------  -----------------  -------------------- 
 Alphagen Capital Limited          36,423,615                 9.84% 
 
 Total                             36,423,615                 9.84%

Hytera Shareholder irrevocable undertaking

Sepura has received an irrevocable undertaking from the Chairman of Hytera, Mr Chen Qingzhou, who is a 52.00 per cent. shareholder in Hytera and thus the majority voting rights holder, to vote in favour of the Acquisition at the Hytera general meeting pertaining to the Acquisition.

 
                                        Per cent. of Hytera 
                     Number of Hytera                shares 
 Name                          shares              in issue 
------------------  -----------------  -------------------- 
 Mr Chen Qingzhou         898,838,050                52.00% 
 
 Total                    898,838,050                52.00%

APPIX IV

DEFINITIONS

In this Announcement, the following words and expressions have the following meanings, unless the context requires otherwise:

 
 Acquisition                   the recommended offer to be made by Bidco to acquire the entire issued and to be issued 
                               ordinary 
                               share capital of Sepura to be effected by means of the Scheme (or, if Hytera so elects 
                               and 
                               subject to the Takeover Panel's consent, a Takeover Offer) on the terms and subject to 
                               the 
                               conditions set out in the Scheme Document; 
 Acquisition Price             20 pence per Scheme Share; 
 Announcement                  this announcement of the Acquisition made in accordance with Rule 2.7 of the Code; 
 Authorisations                authorisations, orders, recognitions, grants, consents, clearances, confirmations, 
                               certificates, 
                               licences, permissions, determinations, exemptions or approvals; 
 Bank of China                 Bank of China Limited acting through its London Branch, situated at 1 Lothbury, London 
                               EC2R 
                               7DB; 
 Bidco                         Project Shortway Limited, a company incorporated in England and Wales with company 
                               number 
                               10515575; 
 Business Day                  a day, other than a Saturday, Sunday, public holiday or bank holiday, on which banks 
                               are generally 
                               open for normal business in the City of London and Shenzhen; 
 Closing Price                 the closing middle market quotation for a Sepura Share as derived from the Daily 
                               Official 
                               List on that day; 
 CMA                           the independent body which conducts inquiries into mergers, markets and the regulation 
                               of 
                               the major regulated industries in the United Kingdom (or any successor body or bodies 
                               carrying 
                               out the same functions in the United Kingdom from time to time); 
 CMA Phase 2 Reference         a reference of the Acquisition to the chair of the Competition and Markets Authority 
                               for the 
                               constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 
                               2013; 
 Code                          the City Code on Takeovers and Mergers; 
 Combined Group                the enlarged group following the acquisition, comprising the Hytera Group and the 
                               Sepura Group; 
 Community                     the European Community; 
 Companies Act                 the United Kingdom Companies Act 2006; 
 Conditions                    the conditions to the implementation of the Scheme and the Acquisition, which are set 
                               out 
                               in Appendix I to this Announcement and to be set out in the Scheme Document; 
 Confidentiality Agreement     the confidentiality agreement entered into by Hytera and Sepura on 11 October 2016; 
 Court                         the High Court of Justice, Chancery Division (Companies Court) in England and Wales; 
 Court Hearing                 the hearing by the Court to sanction the Scheme and, if such hearing is adjourned, 
                               references 
                               to the commencement of any such hearing shall mean the commencement of the final 
                               adjournment 
                               thereof; 
 Court Meeting                 the meeting (or any adjournment, postponement or reconvention thereof) of the holders 
                               of Scheme 
                               Shares (or the relevant class or classes thereof) to be convened by order of the Court 
                               pursuant 
                               to section 896 of the Companies Act to consider and, if thought fit, approve the Scheme 
                               (with 
                               or without modification); 
 Court Order                   the order of the Court sanctioning the Scheme under Part 26 of the Companies Act; 
 CREST                         the relevant system (as defined in the Regulations) in respect of which Euroclear UK & 
                               Ireland 
                               Limited is the Operator (as defined in the Regulations); 
 Daily Official List           the Daily Official List of the London Stock Exchange; 
 Dealing Disclosure            has the same meaning as in Rule 8 of the Code; 
 Disclosed                     (i) matters fairly disclosed in the information made available to Hytera (or Hytera's 
                               advisers) 
                               in the data room established by Sepura for the purposes of the Acquisition; (ii) 
                               information 
                               fairly disclosed in writing by or on behalf of Sepura to Hytera prior to the date of 
                               this 
                               Announcement in relation to the Acquisition; (iii) information included in the annual 
                               report 
                               and accounts of the Sepura Group for the financial year ended 1 April 2016; (iv) 
                               information 
                               included in Sepura's half-year report for the six months ended 30 September 2016; (v) 
                               information 
                               disclosed in a public announcement to a RIS made by Sepura prior to the date of this 
                               Announcement; 
                               or (vi) disclosed in this Announcement; 
 Disclosure Table              the disclosure table on the Takeover Panel's website at www.thetakeoverpanel.org.uk;

 Effective                     in the context of the Acquisition: (a) if the Acquisition is implemented by way of a 
                               Scheme, 
                               the Scheme having become effective in accordance with its terms, upon the delivery of 
                               the 
                               Court Order to the Registrar of Companies; or (b) if the Acquisition is implemented by 
                               way 
                               of a Takeover Offer, the Takeover Offer having been declared or become unconditional in 
                               all 
                               respects in accordance with the requirements of the Code; 
 Effective Date                the date upon which: (a) the Scheme becomes Effective; or (b) if Hytera elects and the 
                               Takeover 
                               Panel consents to implement the Acquisition by way of a Takeover Offer, the Takeover 
                               Offer 
                               becomes Effective; 
 Excluded Shares               (a) any Sepura Shares legally or beneficially held by any member of the Hytera Group; 
                               or (b) 
                               any Treasury Shares; 
 FCA                           the UK Financial Conduct Authority or its successor from time to time; 
 Forms of Proxy                the forms of proxy for use at the Court Meeting and the General Meeting respectively, 
                               which 
                               will accompany the Scheme Document; 
 FSMA                          the Financial Services and Markets Act 2000, as amended; 
 General Meeting               the general meeting (or any adjournment, postponement or reconvention thereof) of 
                               Sepura Shareholders 
                               to be convened in connection with the Scheme; 
 Governmental Entity           any supranational, national, state, municipal, local or foreign government, any 
                               instrumentality, 
                               subdivision, court, arbitrator or arbitrator panel, regulatory or administrative agency 
                               or 
                               commission, or other authority thereof, or any regulatory or quasi-regulatory 
                               organisation 
                               or private body exercising any regulatory, taxing, importing or other governmental or 
                               quasi-governmental 
                               authority; 
 Hytera                        Hytera Communications Corporation Limited, a Chinese company listed on the Shenzhen 
                               Stock 
                               Exchange or, if the context so requires, its indirect wholly-owned subsidiary Bidco; 
 Hytera Directors              the directors of Hytera from time to time; 
 Hytera Group                  Hytera and its subsidiaries and subsidiary undertakings; 
 ISIN                          International Securities Identification Number; 
 Lazard                        Lazard & Co., Limited; 
 London Stock Exchange         London Stock Exchange Plc; 
 Long Stop Date                30 June 2017 or such later date (if any) as Hytera and Sepura may, with the consent of 
                               the 
                               Takeover Panel, agree and (if required) the Court may allow; 
 Liberum                       Liberum Capital Limited, the corporate broker to Sepura in relation to the Acquisition; 
 Listing Rules                 the rules and regulations made by the UK Listing Authority under the Financial Services 
                               and 
                               Markets Act 2000 (as amended) and contained in the UK Listing Authority's publication 
                               of the 
                               same name, as amended from time to time; 
 Main Market                   the main market of the London Stock Exchange; 
 Official List                 the official list maintained by the FCA pursuant to Part VI of FSMA; 
 Offer Period                  the period which commenced on 4 November 2016 and ending on the date on which the 
                               Acquisition 
                               becomes Effective, lapses or is withdrawn (or such other date as the Takeover Panel may 
                               decide); 
 PRC Regulatory Clearances     means the Regulatory Clearances described in the Conditions set out in paragraph 2(a) 
                               of Part 
                               A of Appendix I of this Announcement; 
 Opening Position Disclosure   has the same meaning as in Rule 8 of the Code; 
 Registrar of Companies        the Registrar of Companies in England and Wales; 
 Regulations                   the Uncertificated Securities Regulations 2001 (SI 2001/3755); 
 Regulatory Clearances         means the clearances set out in the Conditions set out in paragraphs 2(a) to 2(e) of 
                               Part 
                               A of Appendix I of this Announcement; 
 Resolutions                   the resolutions to be proposed by Sepura at the General Meeting in connection with, 
                               amongst 
                               other things, the approval of the Scheme, the amendment of Sepura's Articles and such 
                               other 
                               matters as may be necessary to implement the Scheme; 
 Restricted Jurisdiction       any jurisdiction where local laws or regulations may result in a significant risk of 
                               civil, 
                               regulatory or criminal exposure if information concerning the Acquisition is sent or 
                               made 
                               available in that jurisdiction; 
 RIS                           a service approved by the London Stock Exchange for the distribution to the public of 
                               announcements 
                               and included within the list maintained on the London Stock Exchange's website; 
 RMB                           Chinese renminbi, the lawful currency of China; 
 Scheme                        the proposed scheme of arrangement under Part 26 of the Companies Act to effect the 
                               Acquisition 
                               between Sepura and the Scheme Shareholders (the full terms of which will be set out in 
                               the 
                               Scheme Document), with or subject to any modification, addition or condition which 
                               Hytera 
                               and Sepura may agree, and, if required, the Court may approve or impose; 
 Scheme Document               the document to be despatched to (amongst others) Sepura Shareholders containing, 
                               amongst 
                               other things, the terms and conditions of the Scheme, the notices convening the Court 
                               Meeting 
                               and the General Meeting and the particulars required by section 897 of the Companies 
                               Act; 
 Scheme Record Time            the time and date to be specified in the Scheme Document, expected to be 6:00 p.m. on 
                               the 
                               Business Day immediately prior to the Effective Date; 
 Scheme Shareholders           holders of Scheme Shares; 
 Scheme Shares                 the Sepura Shares: 
                               (i) in issue at the date of the Scheme Document; 
                               (ii) (if any) issued after the date of the Scheme Document and prior to the Voting 
                               Record 
                               Time; and 
                               (iii) (if any) issued at or after the Voting Record Time but at or before the Scheme 
                               Record 
                               Time in respect of which the original or any subsequent holder thereof is bound by the 
                               Scheme 
                               or shall by such time have agreed in writing to be bound by the Scheme 
                               in each case other than any Excluded Shares; 
 Sepura                        Sepura plc; 
 Sepura's Articles             Sepura's Articles of Association currently adopted and filed with the Registrar of 
                               Companies; 
 Sepura Directors              the directors of Sepura from time to time, but excluding Gordon Watling, who has been 
                               on extended 
                               leave of absence since 12 September 2016 and has not participated in any board or 
                               committee 
                               meetings of the Sepura Directors (including in respect of the Acquisition or the 
                               recommendation 
                               referred to at paragraph 3 of this Announcement) since 27 July 2016; 
 Sepura Group                  Sepura and its subsidiaries and subsidiary undertakings; 
 Sepura Share Schemes          the Sepura Sharesave Plan, the Sepura Long-term Incentive Plan and the Sepura plc 
                               Deferred 
                               Bonus Plan; 
 Sepura Shareholders           the holders of Sepura Shares; 
 Sepura Shares                 ordinary shares of 0.05 pence each in the capital of Sepura; 
 Smith Square Partners         Smith Square Partners LLP; 
 Substantial Interest          in relation to an undertaking, a direct or indirect interest of 10 per cent. or more of 
                               the 
                               total voting rights conferred by the equity share capital (as defined in section 548 of 
                               the 
                               Companies Act) of such undertaking;

 Takeover Offer                should the Acquisition be implemented by way of a takeover offer as defined in Chapter 
                               3 of 
                               Part 28 of the Companies Act, the offer to be made by or on behalf of Hytera to acquire 
                               the 
                               entire issued and to be issued ordinary share capital of Sepura and, where the context 
                               requires, 
                               any subsequent revision, variation, extension or renewal of such offer; 
 Takeover Panel                the UK Panel on Takeovers and Mergers; 
 Third Party                   each of a central bank, government or governmental, quasi-governmental, supranational, 
                               statutory, 
                               regulatory, professional or investigative body or authority (including any antitrust or 
                               merger 
                               control authority), court, trade agency, professional association, institution, works 
                               council, 
                               employee representative body or any other similar body or person whatsoever in any 
                               jurisdiction; 
 Treasury Shares               any Sepura Shares which are for the time being held by Sepura as treasury shares 
                               (within the 
                               meaning of the Companies Act); 
 United Kingdom or UK          the United Kingdom of Great Britain and Northern Ireland; 
 United States or US           the United States of America, its territories and possessions, all areas subject to its 
                               jurisdiction 
                               or any subdivision thereof, any state of the United States of America and the District 
                               of 
                               Columbia; 
 US Exchange Act               the United States Securities Exchange Act of 1934 and the rules and regulations 
                               promulgated 
                               thereunder; 
 Voting Record Time            the date and time specified in the Scheme Document by reference to which entitlements 
                               to vote 
                               on the Scheme will be determined, expected to be 6.00 pm on the day which is two days 
                               before 
                               the date of the Court Meeting or, if the Court Meeting is adjourned, 6.00 pm on the 
                               second 
                               day before the date of such adjourned meeting; 
 Wider Hytera Group            Hytera, its subsidiary undertakings, associated undertakings and any other undertaking, 
                               body 
                               corporate, partnership, joint venture or person in which Hytera and/or such 
                               undertakings (aggregating 
                               their interests) have a direct or indirect Substantial Interest or the equivalent; 
 Wider Sepura Group            Sepura, its subsidiary undertakings, associated undertakings and any other undertaking, 
                               body 
                               corporate, partnership, joint venture or person in which Sepura and/or such 
                               undertakings (aggregating 
                               their interests) have a direct or indirect Substantial Interest or the equivalent; and 
 GBP or pence                  pounds sterling or pence, the lawful currency of the UK.

In this Announcement:

   (a)           all times referred to are to London time unless otherwise stated;

(b) references to the singular include the plural and vice versa, unless the context otherwise requires;

(c) "subsidiary", "subsidiary undertaking" and "undertaking" have the meanings given by the Companies Act and "associated undertaking" has the meaning given to it by paragraph 19 of Schedule 6 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, other than paragraph 1(b) thereof which shall be excluded for this purpose; and

(d) all references to statutory provision or law or to any order or regulation shall be construed as a reference to that provision, law, order or regulation as extended, modified, replaced or re-enacted from time to time and all statutory instruments, regulations and orders from time to time made thereunder or deriving validity therefrom.

This information is provided by RNS

The company news service from the London Stock Exchange

END

OFFEAXAKFFPKFEF

(END) Dow Jones Newswires

December 16, 2016 02:22 ET (07:22 GMT)

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