a4487x
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the
Month of: August 2022
Commission
File Number: 001-38187
MICRO FOCUS INTERNATIONAL PLC
(Exact name of registrant as specified in its charter)
|
The Lawn, 22-30 Old Bath Road
Newbury, Berkshire
RG14 1QN
United Kingdom
+44 (0) 1635-565-459
(Address of principal executive office)
Indicate
by check mark whether this registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form
20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule
101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule
101(b)(7): ☐
CONTENTS
Exhibit No.
|
Exhibit Description
|
99.1
|
Offer
for Micro Focus International plc, dated 26 08 2022
|
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 OR REGULATIONS OF SUCH
JURISDICTION
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
25 August 2022
RECOMMENDED CASH ACQUISITION
of
MICRO FOCUS INTERNATIONAL PLC (“MICRO
FOCUS”)
by
OPEN TEXT CORPORATION (“OPENTEXT”)
through its wholly-owned subsidiary, Open Text UK Holding Limited
(“Bidco”)
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary
●
The boards of
OpenText and Micro Focus are pleased to announce that they have
reached agreement on the terms of a recommended cash acquisition to
be made by OpenText, through its wholly-owned subsidiary, Bidco, of
the entire issued and to be issued share capital of Micro Focus
(the “Acquisition”).
●
Under the terms of
the Acquisition, each Micro Focus Shareholder will be entitled to
receive:
532 pence in cash per Micro Focus Share (the “Acquisition
Price”).
●
The Acquisition
Price represents a premium of approximately:
●
98.3 per cent. to
the Closing Price of 268 pence per Micro Focus Share on 24 August
2022 (being the last Business Day before the date of this
Announcement);
●
79.1 per cent. to
the volume-weighted average price of 297 pence per Micro Focus
Share for the three-month period ended 24 August 2022 (being the
last Business Day before the date of this Announcement);
and
●
60.5 per cent. to
the volume-weighted average price of 331 pence per Micro Focus
Share for the six-month period ended 24 August 2022 (being the last
Business Day before the date of this Announcement).
●
The Acquisition
values the entire issued and to be issued ordinary share capital of
Micro Focus at approximately £1.8 billion on a fully diluted
basis and values Micro Focus at approximately £5.1 billion on
an enterprise value basis.
●
The Acquisition
Price implies an enterprise value multiple of
approximately:
●
2.1 times Micro
Focus’s revenues for the year ended 31 October 2021 and 2.2
times for the 12 months ended 30 April 2022; and
●
5.9 times Micro
Focus’s Adjusted EBITDA for the year ended 31 October 2021
and 6.3 times for the 12 months ended 30 April 2022.
●
The Micro Focus
Shares underlying the Micro Focus ADSs will be included in the
Acquisition. Micro Focus ADS Holders will receive the Acquisition
Price under the terms of the Acquisition in respect of the Micro
Focus Shares underlying their Micro Focus ADSs in accordance with
the terms of the Micro Focus ADR Programme deposit agreement upon
surrender of their Micro Focus ADSs. The depositary of the Micro
Focus ADR Programme, Deutsche Bank Trust Company Americas, will
contact Micro Focus ADS Holders with further details in due
course.
●
The Acquisition is
expected to be effected by means of a Court-sanctioned scheme of
arrangement between Micro Focus and Scheme Shareholders under Part
26 of the Companies Act, although OpenText and Bidco reserve the
right, subject to the terms of the Co-operation Agreement and the
consent of the Panel, to effect the Acquisition by way of a
Takeover Offer.
Background to and reasons for the Acquisition
●
OpenText is the
leader in a growing US$92 billion Information Management market,
delivering a compelling suite of hybrid solutions that help
customers power and protect their critical information, enable
their digital transformation and automate business workflows.
OpenText elevates individuals and organisations to gain the
information advantage through Content Services, Business Network,
Digital Experiences, Security, and Developer APIs. With deeply
integrated hybrid solutions that bring openness and agility,
OpenText enables customers to bring scalable and secure solutions
to grow in a digital world. Through its investments in cloud
combined with its proven track record of execution, OpenText
continues to deliver total growth, cloud organic growth, upper
quartile adjusted EBITDA and strong free cash flow
generation.
●
Micro Focus is one
of the world’s largest enterprise software providers
addressing the technology needs and challenges of its customers
globally. Micro Focus’s solutions help organisations leverage
existing IT investments, enterprise applications and emerging
technologies to address complex, rapidly evolving business
requirements while protecting corporate information at all times.
Micro Focus’s broad set of technology for security, IT
operations, applications delivery, governance, modernisation and
analytics provides innovative solutions that the world’s
largest organisations need to run and transform concurrently. Micro
Focus serves tens of thousands of customers globally, including
many of the largest companies in the Fortune Global 500, across a
number of key sectors, and had annual revenue of approximately
US$2.7 billion for the 12 months ended 30 April 2022.
●
The proposed
acquisition of Micro Focus represents a compelling opportunity for
OpenText. Micro Focus’s leadership positions in key
complementary markets will expand OpenText’s strategic
presence in high value segments. OpenText will benefit from Micro
Focus’s valuable intellectual property and the combined
software portfolio will allow for significant innovation and
product integration across modern cloud and hybrid computing
environments. Additionally, Micro Focus’s marquee customer
base will strengthen and deepen OpenText’s presence in the
Global 10,000 and expand OpenText’s geographic footprint in
North America, EMEA, APAC and Japan which is highly complementary
to OpenText’s geographical presence today. OpenText, with
Micro Focus, will possess one of the largest global customer bases
and broadest solution suites in enterprise software, addressing a
market opportunity of approximately US$170 billion. The Acquisition
will create further opportunities through accelerating the
transition of Micro Focus’s install base to cloud,
modernising its applications and improving customer
renewals.
●
The acquisition of
Micro Focus represents an opportunity for significant value
creation for OpenText. The proposed acquisition will allow Micro
Focus to benefit from OpenText’s leadership in shifting to
cloud services and best-in-class renewals to accelerate growth
while enhancing and protecting customer investments off cloud.
Through the application of OpenText best practices, elimination of
duplicative costs, development of an integrated go-to-market
roadmap and modernisation and migration of Micro Focus applications
to OpenText’s cloud platform, OpenText expects Micro Focus to
return to organic growth and uplift Adjusted EBITDA and free cash
flow to OpenText standards.
●
The Enlarged Group
is expected to generate approximately US$6.2 billion in annualised
revenue and approximately US$2.2 billion annualised Adjusted
EBITDA, while maintaining OpenText’s aspirations of Adjusted
EBITDA margin of 37-39% in fiscal year 2025. The Enlarged
Group’s cash generating profile will enable de-levering,
targeting a net debt ratio of less than 3x within eight
quarters and consequently position it for future growth
opportunities.
Recommendation
●
The
Micro Focus Directors, who have been so advised by Goldman Sachs
and Numis as to the financial terms of the Acquisition, consider
the terms of the Acquisition to be fair and reasonable. In
providing advice to the Micro Focus Directors, Goldman Sachs and
Numis have taken into account the commercial assessments of the
Micro Focus Directors. Goldman Sachs and Numis are providing
independent financial advice to the Micro Focus Directors for the
purposes of Rule 3 of the Code.
●
Accordingly,
the Micro Focus Directors intend to recommend unanimously that
Micro Focus Shareholders vote in favour of the Scheme at the Court
Meeting and the Resolutions to be proposed at the General Meeting
(or in the event that the Acquisition is implemented by way of a
Takeover Offer, that Micro Focus Shareholders accept or procure
acceptance of such Takeover Offer) as the Micro Focus Directors who
hold Micro Focus Shares have irrevocably undertaken to do in
respect of their own beneficial holdings of Micro Focus Shares,
amounting in aggregate to 1,183,378 Micro Focus Shares representing
approximately 0.352 per cent. of the issued share capital of Micro
Focus as at 24 August 2022 (being the last Business Day before the
date of this Announcement).
Irrevocable undertaking
●
In addition to the
irrevocable undertakings received from Micro Focus Directors
described above, OpenText has received an irrevocable undertaking
to vote in favour (or procure a vote in favour) of the Scheme at
the Court Meeting and the Resolutions to be proposed at the General
Meeting from Dodge & Cox in respect of, in aggregate,
54,654,085 Micro Focus Shares (including 31,090,071 Micro Focus
Shares represented by Micro Focus ADSs), representing approximately
16.27 per cent. of the issued share capital of Micro Focus as at 24
August 2022, being the last Business Day before the date of this
Announcement.
●
Therefore, in
total, OpenText has received irrevocable undertakings to vote in
favour (or procure a vote in favour) of the Scheme at the Court
Meeting and the Resolutions to be proposed at the General Meeting
in respect of 55,837,463 Micro Focus Shares (including 31,090,071
Micro Focus Shares represented by Micro Focus ADSs), representing
approximately 16.62 per cent. of the issued share
capital of Micro Focus as at 24 August 2022, being the last
Business Day before the date of this Announcement.
●
Further details of
these irrevocable undertakings are set out in Appendix 3 to this
Announcement.
Information on OpenText and Bidco
●
OpenText is a
publicly-listed company incorporated under the laws of Canada and
its shares are traded on NASDAQ and the Toronto Stock Exchange,
with a market capitalisation of approximately US$10 billion.
OpenText is a leading provider of information management products
and services that help companies all over the world manage the
creation, capture, use, analysis and lifecycle of structured and
unstructured data. OpenText has a long history of successful
transactions executed with focus and speed, both in its traditional
and adjacent market segments, and a proven track record of
effectively integrating acquired businesses.
●
Bidco is a
wholly-owned subsidiary of OpenText, incorporated in England and
Wales. Bidco has been formed for the purpose of implementing the
Acquisition. Save for activities undertaken in connection with its
incorporation and the Acquisition, Bidco has not traded before the
date of this Announcement.
Information on Micro Focus
●
Micro Focus is one
of the world’s largest enterprise software providers
addressing the technology needs and challenges of its customers
globally. Micro Focus’s solutions help organisations leverage
existing IT investments, enterprise applications and emerging
technologies to address complex, rapidly evolving business
requirements while protecting corporate information at all times.
Micro Focus’s broad set of technology for security, IT
operations, applications delivery, governance, modernisation and
analytics provides innovative solutions that the world’s
largest organisations need to run and transform
concurrently.
●
Micro Focus
software provides the tools that its tens of thousands of customers
need to build, operate, secure and analyse their enterprises. The
Micro Focus product portfolio comprises a broad and diverse
portfolio of products organised into five product groups with each
group containing multiple products - Application Modernisation
& Connectivity, Application Delivery Management, IT Operations
Management, CyberRes, Information Management &
Governance.
●
Micro Focus is
headquartered in the United Kingdom, with significant operations in
the United States and India where the majority of its workforce is
based. Micro Focus is listed on the London Stock Exchange and is a
member of the FTSE 250 index. The Micro Focus ADSs are listed on
the New York Stock Exchange.
Timetable and Conditions
●
The Acquisition is
subject to, among other things, the approval of the relevant Micro
Focus Shareholders, the sanction of the Scheme by the Court and the
receipt of certain antitrust and foreign investment approvals. The
Acquisition is also subject to the other terms and Conditions set
out in Appendix 1 to this Announcement, and to the full terms and
conditions to be set out in the Scheme Document.
●
The Acquisition
will be put to Micro Focus 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 Scheme Shareholders (or
the relevant class or classes thereof, if applicable) voting at the
Court Meeting and at any separate class meeting which may be
required by the Court or at any adjournment of such meeting, either
in person or by proxy, representing at least 75 per cent. in value
of the Micro Focus Shares voted. In addition, a special resolution
implementing the Scheme must be passed by Micro Focus Shareholders
representing at least 75 per cent. of votes cast at the General
Meeting.
●
It is expected that
the Scheme Document, containing further information about the
Acquisition and notices of the Court Meeting and the General
Meeting, together with the Forms of Proxy, will be provided to
Micro Focus Shareholders as soon as practicable and in any event
within 28 days of this Announcement (unless a later date is agreed
between OpenText, Micro Focus and the Panel). An expected timetable
of principal events relating to the Acquisition will be included in
the Scheme Document.
●
The Acquisition is
expected to complete during the first quarter of 2023, subject to
the satisfaction (or, where applicable, waiver) of the Conditions
set out in Appendix 1 to this Announcement.
Comments on the Acquisition
Commenting
on the Acquisition, Mark J. Barrenechea, the CEO of OpenText,
said:
“We
are pleased to announce our firm intention to acquire Micro Focus,
and I look forward to welcoming Micro Focus customers, partners and
employees to OpenText. Upon completion of the acquisition, OpenText
will be one of the world’s largest software and cloud
businesses with a tremendous marquee customer base, global scale
and comprehensive go-to-market. Customers of OpenText and Micro
Focus will benefit from a partner that can even more effectively
help them accelerate their digital transformation efforts by
unlocking the full value of their information assets and core
systems.
Micro Focus brings meaningful revenue and operating scale to
OpenText, with a combined total addressable market (TAM) of US$170
billion. With this scale, we believe we have significant growth
opportunities and ability to create upper quartile adjusted EBITDA
and free cash flows. We expect Micro Focus to be immediately
accretive to our adjusted EBITDA. Micro Focus will benefit from the
OpenText Business System to create stronger operations and
significant cash flows, and Micro Focus customers will benefit from
the OpenText Private and Public Clouds.
OpenText values Micro Focus's strong brands and culture and
attaches great importance to the skills and experience of Micro
Focus's management team and employees.
We are committed to providing investors with enhanced visibility
into our high-value business areas, delivering a net leverage ratio
of below 3x within eight quarters, continuing our dividend program,
and we expect to have Micro Focus on our operating model within six
quarters of closing the transaction.”
Commenting on the
Acquisition, Greg Lock, the Chairman of Micro Focus,
said:
“I
am pleased to be recommending OpenText’s offer to our
shareholders. The premium offered demonstrates the significant
progress we have made transforming the business. OpenText not only
shares our values but will offer new opportunities for both our
customers and employees. On behalf of the Board I would like to
thank Stephen and his team for their hard work and continued
contribution to the success of the
group.”
This summary should be read in conjunction with, and is subject to,
the full text of this Announcement and its Appendices.
The Acquisition will be subject to the Conditions and certain
further terms set out in Appendix 1 to this Announcement and to the
full terms and conditions to be set out in the Scheme Document. The
bases and sources for certain financial information contained in
this Announcement are set out in Appendix 2 to this Announcement.
Details of irrevocable undertakings received by OpenText
are set out in Appendix 3 to this
Announcement. The defined terms used in this Announcement are set
out in Appendix 4 to this Announcement.
OpenText will hold a conference call for analysts and investors at
10.00 p.m. (London time) / 5.00 p.m. (Eastern time) on 25 August
2022 with a dial-in facility available on 1-800-319-4610
(toll-free) or +1-604-638-5340 (international).
Enquiries
Micro Focus International plc
|
|
Micro
Focus International plc
|
|
Stephen
Murdoch, CEO
Matt
Ashley, CFO
Ben
Donnelly, Investor Relations
|
+44 (0)
1635 32646
Investors@microfocus.com
|
Goldman
Sachs International (Lead financial adviser to Micro
Focus)
|
Jung
Min
Nicholas
van den Arend
Nick
Harper
|
+44 (0)
20 7774 1000
|
|
|
Numis
Securities Limited (Financial adviser and corporate broker to Micro
Focus)
|
Simon
Willis
Joshua
Hughes
Havish
Patel
|
+44 (0)
20 7260 1000
|
|
|
Jefferies
International Limited (Financial adviser and corporate broker to
Micro Focus)
|
Sam
Barnett
Philip
Noblet
|
+44 (0)
20 7029 8000
|
|
|
Brunswick
(PR advisor to Micro Focus)
|
|
Sarah
West
Jonathan
Glass
|
+44 (0)
20 7404 5959
microfocus@brunswickgroup.com
|
|
|
|
|
OpenText
|
|
OpenText
|
|
Harry
Blount, SVP, Investor Relations
|
+1 415
963 0825
|
Barclays
(sole financial adviser to OpenText and Bidco)
|
Omar
Faruqui
|
+44 (0)
20 7623 2323
|
Bruce
Rothney
Steven
Markovich
Michael
Keslosky
Darren
Johnson
|
|
|
|
Allen
& Overy LLP and Cleary Gottlieb Steen & Hamilton LLP are
acting as legal advisers to OpenText and Bidco. Slaughter and May
and Cravath, Swaine & Moore LLP are acting as legal advisers to
Micro Focus.
The
person responsible for arranging the release of this Announcement
on behalf of Micro Focus is Janet McCarthy, Chief Legal
Officer.
Important notices relating to financial advisers
Barclays, which is authorised by the PRA and regulated in the
United Kingdom by the FCA and the PRA, is acting exclusively for
OpenText and Bidco and no one else in connection with the matters
described in this Announcement and will not be responsible to
anyone other than OpenText and Bidco for providing advice in
relation to the Acquisition or any other matter referred to in this
Announcement.
In accordance with the Code, normal United Kingdom market practice
and Rule 14e-5(b) of the U.S. Securities Exchange Act of 1934, as
amended (the “U.S. Exchange
Act”), Barclays and its affiliates will continue to
act as exempt principal trader in Micro Focus securities on the
London Stock Exchange. These purchases and activities by exempt
principal traders which are required to be made public in the
United Kingdom pursuant to the Code will be reported to a
Regulatory Information Service and will be available on the London
Stock Exchange website at www.londonstockexchange.com. This
information will also be publicly disclosed in the United States to
the extent that such information is made public in the United
Kingdom.
Goldman Sachs International (“Goldman Sachs”), which is
authorised by the PRA and regulated by the FCA and the PRA in the
United Kingdom, is acting exclusively for Micro Focus and no one
else in connection with the Acquisition and will not be responsible
to anyone other than Micro Focus for providing the protections
afforded to clients of Goldman Sachs or for providing advice in
connection with the matters referred to in this Announcement. No
representation or warranty, express or implied, is made by Goldman
Sachs as to the contents of this Announcement.
Numis Securities Limited (“Numis”), which is authorised and
regulated by the FCA in the United Kingdom, is acting exclusively
for Micro Focus and no one else in connection with the Acquisition
and the contents of this Announcement and will not be responsible
to anyone other than Micro Focus for providing the protections
afforded to clients of Numis nor for providing advice in relation
to the Acquisition, the contents of this Announcement, or any
matters referred to herein. Neither Numis 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 Numis in
connection with this Announcement, any statement contained herein
or otherwise.
Jefferies International Limited (“Jefferies”), which is regulated in
the United Kingdom by the FCA, is acting as financial adviser
exclusively for Micro Focus and no one else in connection with the
matters set out in this Announcement. In connection with such
matters, Jefferies will not regard any other person as its client
and will not be responsible to anyone other than Micro Focus for
providing the protections afforded to clients of Jefferies or for
providing advice in relation to the contents of this Announcement
or any other matter referred to herein. Neither Jefferies nor any
of its subsidiaries, affiliates or branches owes or accepts any
duty, liability or responsibility whatsoever (whether direct,
indirect, consequential, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of
Jefferies in connection with this Announcement, any statement
contained herein or otherwise.
Further information
This Announcement is for information purposes only and is not
intended to, and does not, constitute or form part of any offer or
invitation to purchase, otherwise acquire, subscribe for, exchange,
sell or otherwise dispose of, 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 decision in respect of the Acquisition should be
made only on the basis of the information in the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer,
the Takeover Offer document).
This Announcement does not constitute a prospectus or a prospectus exempted
document.
This Announcement has been prepared for the purpose of complying
with English law and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions outside the UK.
Overseas Shareholders
The release, publication or distribution of this Announcement in
jurisdictions other than the UK may be restricted by law and
therefore any persons who are not resident in the UK or who are
subject to the laws of any jurisdiction other than the UK
(including Restricted Jurisdictions) should inform themselves
about, and observe, any applicable legal or regulatory
requirements. In particular, the ability of persons who are not
resident in the UK or who are subject to the laws of another
jurisdiction to participate in the Acquisition or to vote their
Micro Focus Shares in respect of the Scheme at the Court Meeting,
or to execute and deliver Forms of Proxy appointing another to vote
at the Court Meeting on their behalf, may be affected by the laws
of the relevant jurisdictions in which they are located or to which
they are subject. Any failure to comply with applicable legal or
regulatory requirements of any jurisdiction may constitute a
violation of securities laws or regulations in that jurisdiction.
To the fullest extent permitted by applicable law or regulations,
the companies and persons involved in the Acquisition disclaim any
responsibility or liability for the violation of such restrictions
by any person.
Unless otherwise determined by OpenText or required by the Code,
and permitted by applicable law and regulation, the Acquisition
shall not be made available, directly or indirectly, in, into or
from a Restricted Jurisdiction where to do so would violate the
laws in that jurisdiction and no person may vote in favour of the
Acquisition by any such use, means, instrumentality or form within
a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that
jurisdiction.
The Acquisition will be subject to the applicable requirements of
English law, the Code, the Panel, the London Stock Exchange and the
FCA.
Copies of this Announcement and any formal documentation relating
to the Acquisition are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from any Restricted Jurisdiction or any jurisdiction where
to do so would constitute a violation of the laws or regulations of
such jurisdiction and persons receiving such documents (including
custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported
vote in respect of acceptance of the Acquisition.
Further details in relation to Micro Focus Shareholders in overseas
jurisdictions will be contained in the Scheme
Document.
Additional information for U.S. investors
U.S. shareholders (and Micro Focus ADS Holders) should note that
the Acquisition relates to an offer for the shares of a UK company
that is a “foreign private issuer” as defined under
Rule 3b-4 of the U.S. Exchange Act and is being made by means of a
scheme of arrangement provided for under English company law. The
Acquisition, implemented by way of a scheme of arrangement, is not
subject to the tender offer rules or the proxy solicitation rules
under the U.S. Exchange Act, as amended. Accordingly, the
Acquisition is subject to the procedural and disclosure
requirements, rules and practices applicable to a scheme of
arrangement involving a target company in the UK listed on the
London Stock Exchange, which differ from the requirements of the
U.S. tender offer and proxy solicitation rules. If, in the future,
OpenText exercises its right to implement the Acquisition by way of
a Takeover Offer and determines to extend the Takeover Offer into
the United States, the Acquisition will be made in compliance with
applicable U.S. securities laws and regulations, including Sections
14(d) and 14(e) of the U.S. Exchange Act and Regulation 14D and 14E
thereunder. Such a Takeover Offer would be made in the United
States by OpenText and/or Bidco (a wholly-owned subsidiary of
OpenText) and no one else.
The financial information with respect to Micro Focus included in
this Announcement and the Scheme Document has been or will have
been prepared in accordance with IFRS and thus may not be
comparable to financial information of U.S. companies or companies
whose financial statements are prepared in accordance with U.S.
GAAP.
It may be difficult for U.S. shareholders and Micro Focus ADS
Holders to enforce their rights and any claims they may have
arising under the U.S. federal securities laws in connection with
the Acquisition, since Micro Focus, OpenText and Bidco are each
located in a country other than the United States, and some or all
of their respective officers and directors may be residents of
countries other than the United States. U.S. shareholders and Micro
Focus ADS Holders may not be able to sue Micro Focus, OpenText,
Bidco or their respective officers or directors in a non-U.S. court
for violations of the U.S. securities laws. Further, it may be
difficult to compel Micro Focus, OpenText or Bidco and their
respective affiliates to subject themselves to the jurisdiction or
judgment of a U.S. court.
The receipt of cash pursuant to the Scheme by U.S. shareholders
(and Micro Focus ADS Holders) as consideration for the cancellation
of its Micro Focus shares pursuant to the Scheme may be a taxable
transaction for U.S. federal income tax purposes and under
applicable U.S. state and local, as well as foreign and other, tax
laws. Each Micro Focus Shareholder (including U.S. shareholders)
and Micro Focus ADS Holder is urged to consult their independent
professional adviser immediately regarding the tax consequences of
the Acquisition applicable to them, including under applicable U.S.
federal, state and local, as well as foreign and other, tax
laws.
Micro Focus is currently subject to
the informational requirements of the U.S. Exchange Act and, in
accordance therewith, files reports and other documents with the
SEC. Reports and other information filed by Micro Focus with the
SEC may be obtained free or charge from the SEC’s website
at www.sec.gov.
Neither the SEC nor any U.S. state securities commission has
approved, disproved or passed judgment upon the fairness or the
merits of the Acquisition or determined if this Announcement is
adequate, accurate or complete. Any representation to the contrary
is a criminal offence in the U.S.
In accordance with normal United Kingdom practice and pursuant to
Rule 14e-5(b) of the U.S. Exchange Act (if applicable), OpenText,
Bidco, certain affiliated companies and their nominees or brokers
(acting as agents), may from time to time make certain purchases
of, or arrangements to purchase, shares or other securities of
Micro Focus outside of the United States, other than pursuant to
the Acquisition, until the date on which the Acquisition and/or
Scheme becomes effective, lapses or is otherwise withdrawn. If such
purchases or arrangements to purchase were to be made, they would
occur either in the open market at prevailing prices or in private
transactions at negotiated prices and would comply with applicable
law, including the U.S. Exchange Act. Any information about such
purchases or arrangements to purchase will be disclosed as required
in the UK, will be reported to a Regulatory Information Service and
will be available on the London Stock Exchange website at
www.londonstockexchange.com.
Forward-looking statements
This Announcement (including information incorporated by reference
in this Announcement), oral statements made regarding the
Acquisition, and other information published by OpenText, Bidco and
Micro Focus contain statements which are, or may be deemed to be,
“forward-looking statements”. All statements, other
than statements of historical fact are, or may be deemed to be,
forward-looking statements. Forward-looking statements are
prospective in nature and are not based on historical facts, but
rather on assumptions, expectations, valuations, targets,
estimates, forecasts and projections of OpenText, Bidco and Micro
Focus about future events, and are therefore subject to risks and
uncertainties which could cause actual results, performance or
events to differ materially from those expressed or implied by the
forward-looking statements. The forward-looking statements
contained in this Announcement include statements relating to the
expected effects of the Acquisition on the OpenText Group, the
Micro Focus Group and the Enlarged Group, the expected timing and
scope of the Acquisition and other statements other than historical
facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as
“plans”, “expects”, “budget”,
“targets”, “aims”, “scheduled”,
“estimates”, “forecast”,
“intends”, “anticipates”,
“seeks”, “prospects”,
“potential”, “possible”,
“assume” or “believes”, or variations of
such words and phrases or statements that certain actions, events
or results “may”, “could”,
“should”, “would”, “might” or
“will” be taken, occur or be achieved. OpenText, Bidco
and Micro Focus give no assurance that such expectations will prove
to be correct. By their nature, forward-looking statements involve
risks (known and unknown) and uncertainties (and other factors that
are in many cases beyond the control of OpenText, Bidco and/or
Micro Focus) because they relate to events and depend on
circumstances that may or may not occur in the future.
There are a number of factors that could affect the future
operations of the OpenText Group, the Micro Focus Group and/or the
Enlarged Group and that could cause actual results and developments
to differ materially from those expressed or implied by such
forward-looking statements. These factors include the satisfaction
(or, where permitted, waiver) of the Conditions, as well as
additional factors, such as: domestic and global business and
economic conditions; the impact of the Covid-19 pandemic or other
pandemics, asset prices; market-related risks such as fluctuations
in interest rates and exchange rates, industry trends, competition,
changes in government and regulation, changes in the policies and
actions of governments and/or regulatory authorities (including
changes related to capital and tax), changes in political and
economic stability (including exposures to terrorist activities,
the UK’s exit from the European Union, Eurozone instability,
the Russia-Ukraine conflict, disruption in business operations due
to reorganisation activities, interest rate, inflation, deflation
and currency fluctuations), the timing impact and other
uncertainties of future or planned acquisitions or disposals or
offers, the inability of the Enlarged Group to realise successfully
any anticipated synergy benefits when the Acquisition is
implemented (including changes to the board and/or employee
composition of the Enlarged Group), the inability of the OpenText
Group to integrate successfully the Micro Focus Group’s
operations and programmes when the Acquisition is implemented, the
Enlarged Group incurring and/or experiencing unanticipated costs
and/or delays (including IT system failures, cyber-crime, fraud and
pension scheme liabilities), or difficulties relating to the
Acquisition when the Acquisition is implemented. Other unknown or
unpredictable factors could affect future operations and/or cause
actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors.
Each forward-looking statement speaks only as of the date of this
Announcement. Neither OpenText Group nor Micro Focus Group, nor any
of their respective associates or directors, officers or advisers,
provides any representation, warranty, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this Announcement will actually
occur. Forward-looking statements involve inherent risks and
uncertainties. All forward-looking statements contained in this
Announcement are expressly qualified in their entirety by the
cautionary statements contained or referred to in this section.
Readers are cautioned not to place undue reliance on these
forward-looking statements. Other than in accordance with their
legal or regulatory obligations (including under the Code, the UK
Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules), neither the OpenText Group nor the Micro Focus
Group is under or undertakes any obligation, and each of the
foregoing expressly disclaims any intention or obligation, to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
No profit forecasts or estimates or quantified financial benefits
statements
Nothing in this Announcement is intended, or is to be construed, as
a profit forecast, profit estimate or quantified financial benefits
statement for any period and no statement in this Announcement
should be interpreted to mean that earnings or earnings per share
for OpenText or Micro Focus for the current or future financial
years, will necessarily match or exceed the historical published
earnings or earnings per share for OpenText or Micro Focus, as
appropriate.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in one
per cent. or more of any class of relevant securities of an offeree
company or of any 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 p.m. on the tenth business day following the commencement
of the offer period and, if appropriate, by no later than 3.30 p.m.
on the tenth 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 before the deadline for making an
Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in one per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person’s interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. on
the business day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
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 Panel’s website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel’s Market Surveillance Unit on
+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.
Electronic communications
Please be aware that addresses, electronic addresses and certain
information provided by Micro Focus Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Micro Focus may be provided to OpenText and/or
Bidco during the Offer Period as required under
section 4 of Appendix 4 to the Code to comply with Rule 2.11(c) of
the Code.
Publication on a website and availability of hard
copies
This Announcement and the documents required to be published
pursuant to Rule 26 of the Code will be available, subject to
certain restrictions relating to
persons resident in Restricted Jurisdictions, on OpenText’s
website at https://investors.opentext.com/
and on Micro Focus’s website
at https://www.microfocus.com/en-us/investors
by no later than 12 noon (London time)
on the Business Day following the publication of this
Announcement. Neither the content of any of the websites
referred to in this Announcement nor the content of any website
accessible from hyperlinks in this Announcement is incorporated
into, or forms part of, this Announcement.
Micro Focus Shareholders may,
subject to applicable securities laws, request a hard copy of this
Announcement (and any information incorporated into it by reference
to another source) by contacting Micro
Focus’s registrars, Equiniti, between 8.30 a.m. to 5.30 p.m. (London time)
Monday to Friday (excluding public holidays in England and Wales)
on 0371 384 2734 (textphone for shareholders with hearing
difficulties 0371 384 255) within the United Kingdom or on +44
(0)121 415 0804 from overseas, or by submitting a request in
writing to Aspect House, Spencer Road, Lancing, West Sussex BN99
6DA, United Kingdom, with an address to which the hard copy may be
sent. Calls are charged at the standard geographic rate and will
vary by provider. 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. Micro Focus Shareholders may, subject to
applicable securities laws, also request that all future documents,
announcements and information to be sent in relation to the
Acquisition should be in hard copy form.
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.
Non-GAAP Financial Measures
This Announcement includes certain financial measures that the SEC
defines as “non- GAAP measures.” For a reconciliation
of Micro Focus’s Adjusted EBITDA to the most directly
comparable measure calculated and presented in accordance with IFRS
and a discussion of their limitations, please refer to Micro
Focus’s Annual Report and Accounts for the year ended October
31, 2021 on Form 20-F under “Segmental Reporting” and
Micro Focus’s Interim Results for the six-months ended April
30, 2022 on Form 6-K under “Alternative Performance
Measures.”
Financial Projections
Any depiction of future revenue is based on predictions by
OpenText’s and Micro Focus’s management and is a
forecasted projection only. A reconciliation of expected Adjusted
EBITDA, a forward-looking non-GAAP measure, would not be feasible
without unreasonable efforts because of the unpredictability of the
items that would be excluded from non-GAAP measures for the
resulting company.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Code, Micro Focus confirms that
as at the date of this Announcement, it had in issue 336,020,900
ordinary shares (excluding ordinary shares held in treasury) of 10
pence each. The International Securities Identification Number
(ISIN) for the ordinary shares is GB00BJ1F4N75.
In addition, as at the date of this Announcement there are unlisted
warrants issued to Amazon.com NV Investment Holdings LLC to
subscribe for up to 15,924,384 ordinary shares in Micro Focus at
446.60 pence per share (the “AWS Warrants”), in connection with a
commercial agreement entered into between Micro Focus and
Amazon.com Services LLC on 24 February 2021. The vesting of the AWS
Warrants generally depends on the level of software revenues
generated by Amazon, Inc. and/or any of its affiliates for Micro
Focus under the commercial agreement over the multi-year term,
according to revenue targets set out in the agreement. The vesting
of the AWS Warrants is subject to acceleration in certain limited
circumstances (including a change of control of Micro Focus or a
sale of certain parts of Micro Focus’s group).
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 OR
REGULATIONS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
25 August 2022
RECOMMENDED CASH ACQUISITION
of
MICRO FOCUS INTERNATIONAL PLC (“MICRO
FOCUS”)
by
OPEN TEXT CORPORATION (“OPENTEXT”)
through its wholly-owned subsidiary, Open Text UK Holding Limited
(“Bidco”)
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
The
boards of OpenText and Micro Focus are pleased to announce that
they have agreed the terms of a recommended cash acquisition to be
made by OpenText, through its wholly-owned subsidiary, Bidco, of
the entire issued and to be issued share capital of Micro Focus
(the “Acquisition”).
Under
the terms of the Acquisition, which will be subject to the
Conditions set out below and in Appendix 1 to this Announcement and
to the full terms and conditions which will be set out in the
Scheme Document, each Micro Focus Shareholder will be entitled to
receive:
532 pence in cash per Micro Focus Share (the “Acquisition
Price”).
The
Acquisition Price represents a premium of
approximately:
●
98.3 per cent. to
the Closing Price of 268 pence per Micro Focus Share on 24 August
2022 (being the last Business Day before the date of this
Announcement);
●
79.1 per cent. to
the volume-weighted average price of 297 pence per Micro Focus
Share for the three-month period ended 24 August 2022 (being the
last Business Day before the date of this Announcement);
and
●
60.5 per cent. to
the volume-weighted average price of 331 pence per Micro Focus
Share for the six-month period ended 24 August 2022 (being the last
Business Day before the date of this Announcement).
The
Acquisition values the entire issued and to be issued ordinary
share capital of Micro Focus at approximately £1.8 billion on
a fully diluted basis and values Micro Focus at approximately
£5.1 billion on an enterprise value basis.
The
Acquisition Price implies an enterprise value multiple of
approximately:
●
2.1 times Micro
Focus’s revenues for the year ended 31 October 2021 and 2.2
times for the 12 months ended 30 April 2022; and
●
5.9 times Micro
Focus’s Adjusted EBITDA for the year ended 31 October 2021
and 6.3 times for the 12 months ended 30 April 2022.
If any
dividend, other distribution or other return of capital is
announced, declared, made or paid, or becomes payable, in respect
of Micro Focus Shares on or after the date of this Announcement and
before the Effective Date, OpenText and Bidco reserve the right to
reduce the consideration payable in respect of each Micro Focus
Share by the amount of all or part of any such dividend, other
distribution or other return of capital. In such circumstances,
Micro Focus Shareholders would be entitled to receive and retain
any such dividend, other distribution or other return of
capital.
The
Acquisition is expected to be effected by means of a
Court-sanctioned scheme of arrangement between Micro Focus and
Scheme Shareholders under Part 26 of the Companies Act, although
OpenText and Bidco reserve the right to effect the Acquisition by
way of a Takeover Offer.
The
Acquisition will be subject to the Conditions and certain further
terms set out in Appendix 1 to this Announcement, including, among
other things: (i) the approval of Scheme Shareholders at the Court
Meeting and the passing of the resolutions relating to the Scheme
by Micro Focus Shareholders at the General Meeting; (ii) the
sanction of the Scheme by the Court; (iii) the Scheme becoming
Effective no later than 11.59 p.m. on the Long Stop Date; and (iv)
the receipt of certain antitrust and foreign investment approvals.
In order to become Effective, the Scheme must be approved by a
majority in number representing not less than 75 per cent. in value
of the Scheme Shareholders in each case present, entitled to vote
and voting, either in person or by proxy, at the Court Meeting and
at any separate class meeting which may be required by the Court or
at any adjournment of such meeting.
Micro
Focus Shares will be acquired by Bidco 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 Micro Focus
Shares.
3.
Background
to and reasons for the Acquisition
OpenText is the
leader in a growing US$92 billion Information Management market,
delivering a compelling suite of hybrid solutions that help
customers power and protect their critical information, enable
their digital transformation and automate business workflows.
OpenText elevates individuals and organisations to gain the
information advantage through Content Services, Business Network,
Digital Experiences, Security, and Developer APIs. With deeply
integrated hybrid solutions that bring openness and agility,
OpenText enables customers to bring scalable and secure solutions
to grow in a digital world. Through its investments in cloud
combined with its proven track record of execution, OpenText
continues to deliver total growth, cloud organic growth, upper
quartile adjusted EBITDA and strong free cash flow
generation.
Micro
Focus is one of the world’s largest enterprise software
providers addressing the technology needs and challenges of its
customers globally. Micro Focus’s solutions help
organisations leverage existing IT investments, enterprise
applications and emerging technologies to address complex, rapidly
evolving business requirements while protecting corporate
information at all times. Micro Focus’s broad set of
technology for security, IT operations, applications delivery,
governance, modernisation and analytics provides innovative
solutions that the world’s largest organisations need to run
and transform concurrently. Micro Focus serves tens of thousands of
customers globally, including many of the largest companies in the
Fortune Global 500, across a number of key sectors, and had annual
revenue of approximately US$2.7 billion for the 12 months
ended 30 April 2022.
The
proposed acquisition of Micro Focus represents a compelling
opportunity for OpenText. Micro Focus’s leadership positions
in key complementary markets will expand OpenText’s strategic
presence in high value segments. OpenText will benefit from Micro
Focus’s valuable intellectual property and the combined
software portfolio will allow for significant innovation and
product integration across modern cloud and hybrid computing
environments. Additionally, Micro Focus’s marquee customer
base will strengthen and deepen OpenText’s presence in the
Global 10,000 and expand OpenText’s geographic footprint in
North America, EMEA, APAC and Japan, in each case by 50 per cent.
or more, which is highly complementary to OpenText’s
geographical presence today. OpenText, with Micro Focus, will
possess one of the largest global customer bases and broadest
solution suites in enterprise software, addressing a market
opportunity of approximately US$170 billion. The Acquisition will
create further opportunities through accelerating the transition of
Micro Focus’s install base to cloud, modernising its
applications and improving customer renewals.
The
acquisition of Micro Focus represents an opportunity for
significant value creation for OpenText. The proposed acquisition
will allow Micro Focus to benefit from OpenText’s leadership
in shifting to cloud services and best-in-class renewals to
accelerate growth while enhancing and protecting customer
investments off cloud. Furthermore, off-cloud innovation and
offering Micro Focus’s customers multiple paths to the
OpenText cloud creates an additional opportunity for growth.
Through the application of OpenText best practices, elimination of
duplicative costs, development of an integrated go-to-market
roadmap and modernisation and migration of Micro Focus applications
to OpenText’s cloud platform, OpenText expects Micro Focus to
return to organic growth and uplift Adjusted EBITDA and free cash
flow to OpenText standards.
The
Enlarged Group is expected to generate approximately US$6.2 billion
in annualised revenue and approximately US$2.2 billion annualised
Adjusted EBITDA, while maintaining OpenText’s aspirations of
Adjusted EBITDA margin of 37-39% in fiscal year 2025. The Enlarged
Group’s cash generating profile will enable de-levering,
targeting a net leverage ratio of less than 3x within
eight quarters and consequently position it for future growth
opportunities.
The
Micro Focus Directors, who have been so advised by Goldman Sachs
and Numis as to the financial terms of the Acquisition, consider
the terms of the Acquisition to be fair and reasonable. In
providing advice to the Micro Focus Directors, Goldman Sachs and
Numis have taken into account the commercial assessments of the
Micro Focus Directors. Goldman Sachs and Numis are providing
independent financial advice to the Micro Focus Directors for the
purposes of Rule 3 of the Code.
Accordingly,
the Micro Focus Directors intend to recommend unanimously that
Micro Focus Shareholders vote in favour of the Scheme at the Court
Meeting and the resolutions to be proposed at the General Meeting
(or in the event that the Acquisition is implemented by way of a
Takeover Offer, that Micro Focus Shareholders accept or procure
acceptance of such Takeover Offer) as the Micro Focus Directors who
hold Micro Focus Shares have irrevocably undertaken to do in
respect of their own beneficial holdings of Micro Focus Shares,
amounting in aggregate to 1,183,378 Micro Focus Shares representing
approximately 0.352 per cent. of the issued share capital of Micro
Focus as at 24 August 2022 (being the last Business Day before the
date of this Announcement). Further details of these irrevocable
undertakings are set out at Appendix 3 to this
Announcement.
5.
Background
to and reasons for the recommendation
Micro
Focus has more than 40 years of experience in delivering proven,
scalable and robust solutions for its customers with its roots in
customer-centric innovation and targeted investment. Micro Focus is
now one of the world’s largest enterprise software providers
delivering technology and services to power the digital economy and
working with its tens of thousands of customers to help solve the
digital dilemma – running and transforming simultaneously.
Built through innovation and a series of transformational
acquisitions, Micro Focus operates in dynamic and growing markets
and has the products, capabilities and team to capture the
significant opportunities available.
In late
2017, Micro Focus completed the acquisition of Hewlett Packard
Enterprise’s software business (“HPE
Software”) creating the
seventh largest pure-play enterprise software company in the world
at the time. Along with the acquisitions of The Attachmate Group
and Serena Software, the combination with HPE Software brought
together two of the leaders in the software industry. The number
and scale of the transactions that created the enlarged Micro Focus
Group was followed by a period where the management was focused on
delivering the integration and the need to reposition and reinvest
in certain portfolios to remain competitive in evolving end
markets. In 2020, following a period of declining revenues, a
detailed strategic and operational review of the business was
undertaken and a new strategic plan was implemented under the
leadership of Stephen Murdoch and his executive team. The emergence
of the COVID-19 pandemic resulted in some operational headwinds and
macroeconomic uncertainties for Micro Focus and its customers. As
the business has adapted to the challenges presented, Micro Focus
has demonstrated its resilient business model, which is underpinned
by high levels of recurring revenues and long-term customer
relationships. Through this period Micro Focus has continued to
deliver for both its customers and stakeholders and continued to
execute multiple programmes to transform and deliver the objectives
of its strategy.
While
revenues have continued to decline, significant progress in
transforming Micro Focus has been made and the foundations that the
Board and management team committed to deliver are now largely in
place. The company is now focusing the entire organisation
externally onto customers and capturing the significant
opportunities for value creation. This progress is highlighted by
the transition to one single enterprise-wide platform and the
creation of a single global Go-to-Market organisation that can
deliver sustained, improved revenue performance. Furthermore, there
has been targeted investment across the portfolio, focused on
capturing growth, improving customer retention and the launch of
multiple SaaS and subscription offerings making Micro Focus more
competitive and innovative. These initiatives have improved Micro
Focus’s agility and enabled management to start to simplify
the organisation and identify material opportunities for further
efficiency and productivity improvements.
The Micro Focus Board acknowledges the increasingly challenging
external environment in which Micro Focus and its customers are
currently operating and the associated increased execution risks
but believes that the transformation achieved in recent years
provides a strong foundation and a broad range of opportunities for
the continued development of the business and value creation for
shareholders in time. The Micro Focus Board believes that this
foundation provides an investment proposition for shareholders
based on the following characteristics:
●
Large digital transformation portfolio:
a broad product portfolio supporting critical use cases aligned to
essential outcomes that Micro Focus’s customers are striving
to achieve;
●
Global scale, global reach and global
relevance: one of the world’s largest enterprise
software companies, supporting thousands of customers
worldwide;
●
Highly diversified and recurring revenue
base: no revenue concentration by end market, with
approximately 70 per cent. recurring revenues;
●
Strong and consistent free cash flow
generation: strategy underpins sustainable cash flow
generation; and
●
Efficient allocation of capital:
methodical approach to investment to deliver value to Micro
Focus’s customers and shareholders.
The
Micro Focus Directors did not solicit an offer for Micro Focus.
However, the Micro Focus Directors regularly consider all options
for driving and improving shareholder value. The initial
unsolicited proposals received from OpenText at 478 pence and 514
pence per Micro Focus Share were not at a level the Micro Focus
Directors felt adequately reflected an appropriate valuation of
Micro Focus and its future prospects. After OpenText’s third
proposal reached a level of 532 pence per Micro Focus Share in
cash, the Micro Focus Board determined that the offer from OpenText
was at a level that they would be willing to recommend to Micro
Focus Shareholders, subject to agreement of customary terms and
conditions.
In
considering the financial terms of the Acquisition and determining
whether they reflect an appropriate valuation of Micro Focus and
its future prospects, the Micro Focus Directors took into account a
number of factors including that:
●
the Acquisition
reflects the strength of the Micro Focus business and its future
prospects, and provides an opportunity for Micro Focus Shareholders
to crystallise, in cash, the value of their investments at a fair
and reasonable value which represents a significant premium to the
prevailing market valuation;
●
the Acquisition
Price represents an attractive premium of 98.3 per cent. to the
closing price on 24 August 2022 (being the last Business Day before
the date of this Announcement]) and 79.1 per cent. to the volume
weighted average price in the three months to 24 August
2022;
●
the Acquisition
Price implies an enterprise value multiple of approximately 2.1
times Micro Focus’s revenues and 5.9 times Adjusted EBITDA
for the year ended 31 October 2021 and approximately 2.2 times
Micro Focus’s revenues and 6.3 times Adjusted EBITDA for the
12 months ended 30 April 2022;
●
the certainty of
delivering a substantial premium to Micro Focus Shareholders in
cash through the Acquisition should be weighed against the inherent
uncertainty of the delivery of future value that exists in the
business, in particular in the context of a more challenging
macroeconomic environment for Micro Focus and its customers with
higher levels of inflation, higher interest rates and deteriorating
outlook for the global economy; and
●
the Acquisition
delivers more immediate value and lower execution risk to Micro
Focus Shareholders than other options considered by the Micro Focus
Board.
The
Micro Focus Board believes that the Acquisition will also deliver a
number of strategic benefits to Micro Focus’s business
through the combination of Micro Focus with the complementary
product portfolio and operations of OpenText. The combined business
will be well positioned to accelerate the simplification of the
business and deliver improved revenue performance through access to
an improved route to market for Micro Focus’s existing
portfolio given OpenText’s significant experience in SaaS,
transitions and the established SMB channel.
In
considering the Acquisition, the Micro Focus Board has taken into
account OpenText's stated intentions for the business and its
employees. The Micro Focus Board believes that the Acquisition
represents a positive outcome for Micro Focus’s employees,
customers, partners and other stakeholders who will benefit from
the opportunities provided by a combination of Micro Focus with
OpenText given the combined product portfolio, competitive market
position, customer base and the greater scale and diversification
to support Micro Focus’s future growth and
development.
Following careful
consideration of the financial terms of the Acquisition, the
combination of value and certainty that the terms of the
Acquisition provide to Micro Focus Shareholders, and the above
factors, the Micro Focus Directors intend to recommend unanimously
the Acquisition to Micro Focus Shareholders. The Micro Focus
Directors who hold or are beneficially entitled to Micro Focus
Shares have each irrevocably undertaken to vote in favour of the
Scheme at the Court Meeting and in favour of the Resolutions to be
proposed at the General Meeting in respect of all their Micro Focus
Shares, being in aggregate 1,183,378 Micro Focus Shares
(representing approximately 0.352 per cent. of the issued share
capital of Micro Focus).
6.
Information
relating to OpenText and Bidco
OpenText
OpenText is a
publicly-listed company incorporated under the laws of Canada and
its shares are traded on NASDAQ and the Toronto Stock Exchange,
with a market capitalisation of approximately US$10 billion.
OpenText is a leading provider of information management products
and services that help companies all over the world manage the
creation, capture, use, analysis and lifecycle of structured and
unstructured data. OpenText has a long history of successful
transactions executed with focus and speed, both in our traditional
and adjacent market segments, and a proven track record of
effectively integrating acquired businesses.
Bidco
Bidco
is a wholly-owned subsidiary of OpenText, incorporated in England
and Wales. Bidco has been formed for the purpose of implementing
the Acquisition. Save for activities undertaken in connection with
its incorporation and the Acquisition, Bidco has not, since its
incorporation, traded before the date of this
Announcement.
7.
Information
relating to the Micro Focus Group
Micro
Focus is one of the world’s largest enterprise software
providers addressing the technology needs and challenges of its
customers globally. Micro Focus’s solutions help
organisations leverage existing IT investments, enterprise
applications and emerging technologies to address complex, rapidly
evolving business requirements while protecting corporate
information at all times. Micro Focus’s broad set of
technology for security, IT operations, applications delivery,
governance, modernisation and analytics provides innovative
solutions that the world’s largest organisations need to run
and transform concurrently.
Micro
Focus software provides the tools that its tens of thousands of
customers need to build, operate, secure and analyse their
enterprises. Within the Micro Focus product portfolio are a broad
and diverse portfolio of products which are organised into five
product groups with each group containing multiple
products:
●
Application Modernisation & Connectivity
(“AMC”): AMC solutions help customers unlock the
value from core business applications through the provision of
innovative solution for modernisation which enable a
transformational journey to deliver ongoing value and greater
flexibility from longstanding IT investments, on or off the
mainframe.
●
Application Delivery Management
(“ADM”): ADM solutions help customers increase
velocity, remove bottlenecks and deliver high-performing
applications to better support their digital business. Combined,
these solutions increase stakeholder alignment and the delivery of
value, while liberating resources to release faster without
compromising quality.
●
IT Operations Management
(“ITOM”): ITOM Solutions simplify the complexity
of IT operations. Powered by built-in analytics, they help business
users easily engage with IT through Enterprise Service Management,
deliver Full-Stack AIOps for service assurance, automate the
service fulfilment life cycle, and strengthen IT service
governance.
●
CyberRes: Comprehensive security
solutions help enterprises create cyber resilience through
detecting threats, securing data and applications, and protecting
identities – enabling customers to adapt and evolve for the
future. Artificial Intelligence, machine learning and behavioural
analytics capabilities enable this to be done and enterprise
scale.
●
Information Management & Governance
(“IM&G”): IM&G solutions help customers
analyse, understand and control data – to derive value and
manage enterprise risk. Efficient compliance, governance, customer
behaviour and IOT analytics are representative use
cases.
Micro
Focus is headquartered in the United Kingdom, with significant
operations in the United States and India where the majority of its
workforce is based. Micro Focus is listed on the London Stock
Exchange and is a member of the FTSE 250 index. The Micro Focus
ADSs are listed on the New York Stock Exchange.
8.
Strategic
plans and intentions with regard to management, employees and
places of business
The
proposed acquisition of Micro Focus is a highly compelling
strategic proposition for OpenText, which provides the opportunity
for significant growth, cost synergies and strong value creation
for the Enlarged Group and substantial benefits for all
stakeholders. OpenText believes that the acquisition of Micro Focus
will create a global platform for information and infrastructure
software available in the cloud and off-cloud. OpenText believes
that the Enlarged Group will benefit from one of the most diverse
product ranges in the market with multiple avenues for future
growth, revenue and cash flow generation. OpenText is aware of the
scale of the transformation that the Micro Focus Group has been
delivering in recent years in the context of a challenging
macroeconomic environment and believes that it can bring
significant expertise and resources, together with deep experience
of integrating acquired businesses into the OpenText Group, to
support Micro Focus’s business transformation efforts and
position the Enlarged Group for future revenue and cash flow
growth.
OpenText values
Micro Focus's strong brands, products and culture and attaches
great importance to the depth of skillset, expertise and experience
of Micro Focus's management team and employees. OpenText intends
that existing employees of Micro Focus will have the ability to
benefit from potential new opportunities and will make an important
contribution to the success of the Enlarged Group following the
Effective Date.
OpenText has
confidence in the UK as an attractive destination for investment
and in the long-term future of the UK’s technology sector.
OpenText values Micro Focus’s and OpenText’s UK
heritage, Micro Focus’s commercial and Government customer
base in the UK, and Micro Focus’s and OpenText’s
existing customers, employees and investments in the UK. OpenText
is committed to maintaining a strong presence in the UK and the
Enlarged Group will honour and continue to deliver Micro
Focus’s contracts with the UK Government.
Prior
to this Announcement, and consistent with market practice, OpenText
has been granted access to limited Micro Focus information and
Micro Focus’s senior management for the purposes of
conducting a confirmatory due diligence exercise. Following the
Effective Date, OpenText intends to review Micro Focus’s
business further to determine the optimal structure for the Micro
Focus Group and its operations within the Enlarged Group’s
business units and markets. However, OpenText has not yet made any
decisions in relation to specific actions or initiatives. OpenText
expects its review to include Micro Focus’s business and
operations (including recruitment and vendor costs, open vacancies,
sales, product development and research and development
(“R&D”)
activities), premises and pension schemes. OpenText expects to
conclude its review within 12 months after the Effective Date and
intends for Micro Focus to be on OpenText’s operating model
within six quarters after the Effective Date.
Cost savings programme
OpenText notes and
supports Micro Focus’s management’s stated objective to
achieve approximately US$300 million of targeted cost reductions
(net of inflation) under its group-wide cost initiatives in order
to reduce the Micro Focus cost base and free-up cash flow and
position the Micro Focus business for future growth, and
understands from Micro Focus’s management that Micro Focus
has already begun executing targeted initiatives in order to
achieve its cost saving targets.
In
addition to Micro Focus’s US$300 million of targeted net cost
reductions (net of inflation), OpenText is targeting approximately
US$100 million of additional cost synergies across the Enlarged
Group consistent with market practice for transactions of this
scale, which OpenText intends to realise within the 24 months
following the Effective Date. Although no firm decisions have been
made at this stage, OpenText anticipates that of the total
approximately US$400 million target cost savings, the savings not
already executed by Micro Focus will be generated primarily through
a combination of operational efficiencies, elimination of
duplicative roles and listed public company costs (which includes
Micro Focus listing costs, audit and other professional fees and
Micro Focus Board remuneration packages), lower general and
administrative expenses relative to the size of the Enlarged Group,
rationalisation of recruitment and vendor costs, ceasing hiring for
non-essential vacancies, best in class improvements in sales and
product development productivity, and optimisation of the Enlarged
Group’s portfolio of real estate and offices to ensure that
the Enlarged Group is operating efficiently and in line with
industry best practice. OpenText expects that these initiatives
will result in moderate headcount reduction across the Enlarged
Group consistent with market practice for transactions of this
scale. At this stage, no decisions have been made in relation to
the extent to which headcount reductions in any geographies or
areas of the business might contribute towards the targeted cost
savings.
Research and development
Owing
to the nature of its business, Micro Focus conducts significant
R&D activities, with approximately 40 per cent, of the Micro
Focus employee base dedicated to R&D.
OpenText is also
committed to innovation and helping organisations deliver on their
digital imperatives.
As part
of the review referred to above, OpenText will evaluate the
existing R&D and related functions (customer support and sales)
of the Micro Focus Group to ascertain how best to integrate these
activities into the OpenText Group’s existing functions. The
review will be focused on identifying product offerings and end
markets where optimisation of R&D and related functions and/or
capital investment, simplification of product offerings and/or
increased coordination between business units within the Enlarged
Group can help drive long-term growth. Although OpenText has not
made any decisions in relation to any specific actions that may be
taken as a result of this review, OpenText expects to consider the
following areas of potential integration and consolidation:
business units, cloud operations, technical support and centralised
common R&D activities. Innovation and R&D in the UK will
continue following the Effective Date.
Management and employees
OpenText attaches
great importance to the depth of skillset, expertise and experience
of the existing management and employees of the Micro Focus Group.
OpenText anticipates that employees of the Micro Focus Group will
have the opportunity to benefit from potential new opportunities
within the Enlarged Group following the Effective
Date.
Following the
Effective Date, the existing contractual and statutory employment
rights of the Micro Focus employees will be safeguarded, in
accordance with applicable law. OpenText does not intend to make
any material changes to the terms and conditions of employment of
Micro Focus employees for a period of 12 months after the Effective
Date.
As
stated above, OpenText expects that the cost saving targets
referred to above will result in moderate headcount reduction
across the Enlarged Group, consistent with market practice for
transactions of this scale. At this stage, no decisions have been
made in relation to the extent to which headcount reductions in any
geographies or areas of the business might contribute towards the
targeted cost savings, however, as stated above, any headcount
reduction is likely to result from a combination of operational
efficiencies, elimination of duplicative roles and listed public
company costs, lower general and administrative expenses relative
to the size of the Enlarged Group and best in class improvements in
sales and product development productivity. The evaluation,
preparation, finalisation and implementation of any headcount
reductions will be subject to comprehensive planning and engagement
with Micro Focus’s leadership and all necessary information
and consultation with employees and employee representatives
required by applicable local law, and may be reduced by natural
attrition. Any individuals affected will be addressed in a manner
consistent with the established high standards and practices of
OpenText, and in accordance with applicable local laws. OpenText
will also consider, where possible, how individuals in affected
roles may potentially be reassigned to other appropriate roles
within the Enlarged Group.
Save as
set out above, OpenText does not intend to make any material change
in the balance of skills and functions of employees and management
of Micro Focus. It is expected that each of the non-executive Micro
Focus directors will resign from their office as a director of
Micro Focus on or shortly after the Effective Date.
Management Incentive Arrangements
Under
the terms of the Co-operation Agreement, OpenText and Micro Focus
have agreed that all outstanding awards and options under the Micro
Focus Share Plans that are unvested immediately before Court
Sanction will be dealt with as follows:
●
RSU Awards will be
exchanged for equivalent awards over OpenText shares;
●
PSU Awards granted
in FY20 and FY21 will vest on Court Sanction to the extent
determined by the Micro Focus Remuneration Committee in accordance
with the relevant share plan rules and PSU Awards granted in FY22
will be exchanged for equivalent awards over OpenText
shares;
●
Awards under the
Micro Focus DSBP will be exchanged for equivalent awards over
OpenText shares; and
●
OpenText will make
appropriate proposals to participants who hold options under the
Micro Focus ESPP, Irish Sharesave and UK Sharesave plans in due
course in accordance with the relevant plans rules and applicable
law.
As
outlined in more detail in the Co-operation Agreement, OpenText and
Micro Focus have also agreed provisions relating to the treatment
of awards held by Micro Focus employees who cease employment with
the Enlarged Group in certain circumstances during a specified
period after the Effective Date.
Further
details on OpenText’s proposals regarding both vested and
unvested awards under the Micro Focus Share Plans will be provided
in the Scheme Document and in the letters to participants in the
Micro Focus Share Plans as required by Rule 15 of the
Code.
Other
than as disclosed in this paragraph 8, OpenText has not entered
into, and has not had any discussions in respect of, any form of
incentivisation or other arrangements with members of Micro
Focus’s management.
Headquarters, locations and fixed assets
The
Acquisition provides the opportunity to optimise Micro
Focus’s and OpenText’s existing offices. As part of the
review referred to above, following the Effective Date, OpenText
will review the global office and real estate footprint of the
Enlarged Group, and consider where the Enlarged Group has
co-located office facilities and where there is scope for
consolidation in order to optimise rental and lease expenses, and
to enable colleagues to work more closely together and enhance the
corporate culture of the Enlarged Group. The review will include
both OpenText and Micro Focus offices. Subject to this review,
OpenText expects that there will be opportunities to consolidate in
a number of locations where Micro Focus and OpenText operate.
OpenText expects that the Enlarged Group will retain a combination
of existing OpenText and Micro Focus offices.
Following the
Effective Date, OpenText intends to maintain its global head office
location of Waterloo, Canada, which will serve as the global head
office of the Enlarged Group.
OpenText does not
have any intentions to redeploy any of Micro Focus’s fixed
assets.
Pensions
Micro
Focus does not operate any defined benefit pension schemes in the
UK. Micro Focus operates a number of defined benefit pension
schemes in countries outside the UK, with the highest concentration
of these schemes being in Germany (where typically there are no
funding requirements in addition to the obligation on the employer
to settle the benefits when they fall due for
payment).
OpenText recognises
the importance of upholding Micro Focus’s pension obligations
and ensuring that, where relevant, Micro Focus’s pension
schemes are appropriately funded in accordance with their governing
documentation and statutory requirements in the relevant
jurisdictions. However, as part of the review referred to above,
OpenText will need to review Micro Focus’s pension schemes in
detail after the Effective Date, including in relation to any
ongoing funding arrangements, contributions and admission of new
members to the schemes. Any changes resulting from such review will
be made in accordance with applicable law and the documentation
governing the schemes.
Trading facilities
Micro
Focus Shares are currently listed on the Official List and admitted
to trading on the Main Market of the London Stock Exchange. As set
out in paragraph 14 below, applications will be made to: (a) the
London Stock Exchange to cancel trading in Micro Focus Shares on
the Main Market of the London Stock Exchange; and (b) the FCA to
cancel the listing of the Micro Focus Shares on the Official List,
in each case with effect from or shortly after the Effective Date.
OpenText also intends to re-register Micro Focus as a private
company as soon as practicable following the Effective
Date.
As set
out in paragraph 14 below, it is intended that, following the
Effective Date, Micro Focus’s ADR Programme will
be terminated and that applications will be made to delist the
Micro Focus ADSs from the NYSE and terminate Micro
Focus’s
registration with the SEC.
Environmental, Social and Governance
OpenText
prioritizes environmental, social and corporate governance
(“ESG”) goals and recently
published its 3rd annual Corporate Citizenship Report. OpenText is
proud of its ESG accomplishments and is committed to a
science-based emissions target of 50 per cent. reduction by 2030
with net-zero by 2040. OpenText is also supportive of Micro
Focus’s
existing environmental, renewable energy and carbon related
commitments and will continue to support such initiatives to ensure
that Micro Focus achieves its aims of making sustainable and
responsible businesses an integral part of Micro Focus’s
operations.
None of
the statements in this paragraph 8 is a “post-offer
undertaking” for the purposes of
Rule 19.5 of the Code.
9.
Irrevocable
undertakings
OpenText has
received irrevocable undertakings to vote in favour (or procure a
vote in favour) of the Scheme at the Court Meeting and the
Resolutions to be proposed at the General Meeting from those Micro
Focus Directors who hold Micro Focus Shares in respect of their own
beneficial shareholdings, totalling 1,183,378 Micro Focus Shares,
representing approximately 0.352 per cent. of the issued share
capital of Micro Focus as at 24 August 2022, being the last
Business Day before the date of this Announcement.
In
addition to the irrevocable undertakings received from Micro Focus
Directors described above, OpenText has received an irrevocable
undertaking to vote in favour (or procure a vote in favour) of the
Scheme at the Court Meeting and the Resolutions to be proposed at
the General Meeting from Dodge & Cox in respect of, in
aggregate, 54,654,085 Micro Focus Shares (including 31,090,071
Micro Focus Shares represented by Micro Focus ADSs), representing
approximately 16.27 per cent. of the issued share capital of Micro
Focus as at 24 August 2022, being the last Business Day before the
date of this Announcement.
Therefore, in
total, OpenText has received irrevocable undertakings to vote in
favour (or procure a vote in favour) of the Scheme at the Court
Meeting and the Resolutions to be proposed at the General Meeting
in respect of 55,837,463 Micro Focus Shares (including 31,090,071
Micro Focus Shares represented by Micro Focus ADSs), representing
approximately 16.62 per cent. of the issued share capital of Micro
Focus as at 24 August 2022, being the last Business Day before the
date of this Announcement.
Further
details of these irrevocable undertakings are set out in Appendix 3
to this Announcement.
10.
Financing
of the Acquisition
Concurrently with
this Announcement, OpenText and certain of its subsidiaries entered
into (i) a Term Loan Agreement (the “Term Loan Agreement”) among OpenText, the
lenders party thereto, the subsidiary guarantors party thereto and
Barclays Bank PLC, as administrative agent and (ii) a Bridge Loan
Agreement (the “Bridge Loan Agreement”, and the bridge
facility provided for therein, the “Bridge Facility”), among OpenText, the
lenders party thereto, the subsidiary guarantors party thereto and
Barclays Bank PLC, as administrative agent.
The
Term Loan Agreement provides for a senior secured delayed-draw term
loan facility in an aggregate principal amount of $2.585 billion
(the “Term Loan Facility”). The proceeds of the
Term Loan Facility will only be used to finance the Acquisition,
including the cash consideration payable to Micro Focus
Shareholders.
The
Bridge Loan Agreement provides for commitments of up to $2.0
billion which, together with cash on hand and borrowings under
OpenText’s
existing revolving credit facility, will be used to repay Micro
Focus’s
existing debt. Subject to the conditions in the Bridge Loan
Agreement, OpenText intends to reduce commitments or the borrowings
under the Bridge Loan Agreement by accessing the debt capital
markets prior to or following the closing of the Acquisition. Such
debt issuance would be subject to market and other conditions and
this Announcement does not constitute the offer or sale of any
securities in any jurisdiction.
Barclays, as sole
financial adviser to OpenText and Bidco, is satisfied that
sufficient resources are available to Bidco to satisfy in full the
cash consideration payable to Micro Focus Shareholders pursuant to
the terms of the Acquisition.
Further
information on the financing of the Acquisition will be set out in
the Scheme Document.
11.
Acquisition-related
arrangements
Confidentiality Agreement
OpenText and Micro
Focus entered into the Confidentiality Agreement on 28 July 2022
pursuant to which each of OpenText and Micro Focus has undertaken
to keep certain information relating to the Acquisition and to the
other party confidential and not to disclose such information to
third parties (except to certain permitted parties) for the
purposes of evaluating the Acquisition or as permitted in writing
by the other party, unless required by applicable laws or
regulations. The confidentiality obligations of each party under
the Confidentiality Agreement shall remain in place for a period of
24 months from the date of the Confidentiality Agreement, with
certain exceptions. The Confidentiality Agreement also contains
customary non-solicit and standstill provisions, in each case
subject to customary carve-outs.
Clean Team Agreement
OpenText and Micro
Focus entered into the Clean Team Agreement on 1 August 2022, which
sets out how any confidential information that is commercially
sensitive can be disclosed, used or shared for the purposes of due
diligence, negotiations, integration planning and antitrust and/or
regulatory analyses and clearances. Such commercially sensitive
information must only be made available to the party receiving
information through designated persons removed from day-to-day
commercial or strategic operations and decisions and external
professional advisers. The findings of such designated persons and
external advisers may only be relayed to other employees, officers
and directors of the receiving party in specified circumstances and
subject to certain restrictions.
Co-operation Agreement
OpenText, Bidco and
Micro Focus entered into a co-operation agreement (the
"Co-operation Agreement") on
25 August 2022, pursuant to which, among other things, OpenText and
Micro Focus have agreed to cooperate: (i) in relation to obtaining
regulatory clearances in connection with the Acquisition and the
making of filings in respect of such clearances, and (ii) in
preparing and implementing appropriate proposals in relation to
Micro Focus’s employees and the Micro Focus Share Plans.
Bidco has also agreed to certain provisions in relation to any
switch to a Takeover Offer.
The
Co-operation Agreement will terminate in certain circumstances,
including: (i) if agreed in writing between OpenText and Micro
Focus at any time before the Effective Date, (ii) upon service of a
notice from OpenText to Micro Focus if the Micro Focus Directors
withdraw, qualify or adversely modify their recommendation of the
Acquisition, or make an announcement that they intend to, or (iii)
upon service of a notice by either party if, (a) a competing offer
completes, becomes effective or is declared or becomes
unconditional, (b) the Acquisition terminates or lapses in
accordance with its terms, unless such termination or lapse is as a
result of a switch to an offer, (c) any Condition which has not
been waived is (or has become) incapable of satisfaction by the
Long Stop Date and, notwithstanding that Bidco has the right to
waive such Condition, it will not do so (in circumstances where the
invocation of the relevant Condition has been permitted by the
Panel), (d) the Scheme is not approved at the relevant Court
meeting or sanctioned by the Court, or the Micro Focus Shareholder
resolutions necessary to approve the Scheme are not passed by the
Micro Focus Shareholders, or (e) the Acquisition does not become
effective by the Long Stop Date.
12.
Micro
Focus Share Plans
Participants in the
Micro Focus Share Plans shall be contacted regarding the effect of
the Acquisition on their rights under the Micro Focus Share Plans
and appropriate proposals will be made to such participants in due
course. Details of these proposals will be set out in the Scheme
Document.
13.
Structure
of and conditions to the Acquisition
It is
intended that the Acquisition will be implemented by means of a
Court-sanctioned scheme of arrangement under Part 26 of the
Companies Act, although OpenText reserves the right to implement
the Acquisition by means of a Takeover Offer (subject to Panel
consent and the terms of the Co-operation Agreement). The purpose
of the Scheme is to provide for Bidco to become the owner of the
issued and to be issued share capital of Micro Focus. The Scheme is
an arrangement between Micro Focus and the Scheme Shareholders and
is subject to the approval of the Court. The procedure involves,
among other things, an application by Micro Focus to the Court to
sanction the Scheme, in consideration for which Scheme Shareholders
will receive cash on the basis described in paragraph 2 of this
Announcement.
On the
Scheme becoming Effective: (i) it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted
at the Court Meeting or the General Meeting (and, if they attended
and voted, whether or not they voted in favour of the Scheme at the
Court Meeting or in favour of or against the Resolutions at the
General Meeting).
and (ii) share certificates in respect of Scheme Shares will cease
to be of value and should be destroyed and entitlements to Scheme
Shares held within the CREST system will be cancelled. The
consideration payable under the Scheme will be despatched to Scheme
Shareholders by Bidco no later than 14 days after the Effective
Date.
Any
Micro Focus Shares issued before the Scheme Record Time will be
subject to the terms of the Scheme. The Resolutions to be proposed
at the General Meeting will, among other matters, provide that the
Micro Focus Articles be amended to incorporate provisions requiring
any Micro Focus Shares issued or transferred after the Scheme
Record Time (other than to Bidco and/or its nominee(s)) to be
automatically transferred to Bidco on the same terms as the
Acquisition (other than terms as to timings and formalities). The
provisions of the Micro Focus Articles (as amended) will avoid any
person (other than Bidco and its nominee(s)) holding shares in the
capital of Micro Focus after the Effective Date.
The
Acquisition is subject to the Conditions and certain further terms
set out in Appendix 1 to this Announcement and to the full terms
and conditions to be set out in the Scheme Document, including,
among other things:
●
the approval of the
Scheme by a majority in number of the Scheme Shareholders 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 or at any adjournment of such meeting) and who represent
not less than 75 per cent. in value of the Scheme Shares voted by
those Scheme Shareholders;
●
the passing of the
Resolutions by the requisite majority of Micro Focus Shareholders
at the General Meeting;
●
the Scheme being
sanctioned by the Court (without modification, or with modification
on terms agreed by OpenText and Micro Focus) and an office copy of
the Court Order being delivered to the Registrar of Companies;
and
●
the receipt of
certain antitrust and foreign investment approvals.
It is
expected that the Scheme Document, containing further information
about the Acquisition and notices of the Court Meeting and General
Meeting, together with Forms of Proxy, will be provided to Micro
Focus Shareholders within 28 days of the date of this Announcement
(unless a later date is agreed between OpenText, Micro Focus and
the Panel). Subject to the satisfaction or waiver of all relevant
conditions, including the Conditions and certain further terms set
out in Appendix 1 to this Announcement and to be set out in the
Scheme Document, and subject to the approval and availability of
the Court, it is expected that the Scheme will become Effective in
the first quarter of 2023. An expected timetable of principal
events relating to the Acquisition will be included in the Scheme
Document.
The
Scheme will be governed by English law and will be subject to the
jurisdiction of the Court. The Scheme will be subject to the
applicable requirements of the Code, the Panel, the London Stock
Exchange, the Court and the FCA.
Subject
to the terms of the Co-operation Agreement, and obtaining the
consent of the Panel, OpenText reserves the right to elect to
implement the Acquisition by way of a Takeover Offer as an
alternative to the Scheme.
In such
event, the Takeover Offer will be implemented on the same terms and
conditions, so far as applicable, as those which would apply to the
Scheme subject to appropriate amendments to reflect the change in
method of effecting the Acquisition, including (without limitation)
the inclusion of an acceptance condition set at 90 per cent. of
Micro Focus Shares to which the Takeover Offer relates (or such
lesser percentage as may be required by the Co-operation Agreement
and/or determined after consultation with the Panel (if
necessary)), being in any case more than 50 per cent. of the voting
rights normally exercisable at a general meeting of Micro Focus,
including, for this purpose, any such voting rights attaching to
Micro Focus Shares that are issued before the Takeover Offer
becomes or is declared unconditional as to acceptances, whether
pursuant to the exercise of any outstanding subscription or
conversion rights or otherwise).
14.
Cancellation
of admission to listing and re-registration as a private
company
It is
intended that dealings in Micro Focus Shares will be suspended
shortly before the Effective Date at a time to be set out in the
Scheme Document. It is further intended that applications will be
made to the London Stock Exchange to cancel trading in Micro Focus
Shares on the Main Market of the London Stock Exchange, and to the
FCA to cancel the listing of Micro Focus Shares on the Official
List, in each case with effect from or shortly following the
Effective Date.
On the
first Business Day after the Effective Date, entitlements to Micro
Focus Shares held within the CREST system will be cancelled, and
share certificates in respect of Micro Focus Shares will cease to
be valid.
It is
also intended that, following the Effective Date, Micro Focus will
be re-registered as a private limited company.
It is
intended that, following the Effective Date, the Micro Focus ADR
Programme will be terminated and that applications be made to
delist the Micro Focus ADSs from the NYSE and terminate Micro
Focus’s
registration with the SEC.
15.
Interests
in Micro Focus Shares
As at
close of business on 24 August 2022 (being the last Business Day
before the date of this Announcement), save for the irrevocable
undertakings referred to in paragraph 9 above, neither OpenText,
Bidco nor, so far as OpenText and Bidco are aware, any person
acting in concert with OpenText or Bidco for the purposes of the
Acquisition, had:
(A)
any interest in, or
right to subscribe for, any relevant securities of Micro
Focus;
(B)
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, any relevant
securities of Micro Focus;
(C)
procured an
irrevocable commitment or letter of intent to accept the terms of
the Acquisition in respect of relevant securities of Micro
Focus;
(D)
borrowed or lent,
or entered into any financial collateral arrangements or dealing
arrangements in respect of, any relevant securities of Micro Focus;
or
(E)
is party to any
Dealing Arrangement in relation to relevant securities of Micro
Focus.
In the
interests of secrecy before this Announcement, OpenText and Bidco
have not made any enquiries in respect of the matters referred to
in this paragraph 15 of certain parties who may be deemed by the
Panel to be acting in concert with OpenText and/or Bidco for the
purposes of the Acquisition. Enquiries of such parties will be made
as soon as practicable following the date of this Announcement. To
the extent necessary, further disclosure in accordance with Rule
8.1(a) and Note 2(a)(i) on Rule 8 of the Code will be made as soon
as possible and by no later than 12 noon on 9 September
2022.
16.
Overseas
Shareholders
The
availability of the Acquisition and the distribution of this
Announcement to Micro Focus Shareholders who are not resident in
the United Kingdom may be affected by the laws and regulations of
the relevant jurisdiction in which they are located. Such persons
should inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdiction. Micro Focus
Shareholders who are in any doubt regarding such matters should
consult an appropriate independent professional adviser in the
relevant jurisdiction without delay.
This
Announcement does not constitute an offer for sale of any
securities or an offer or an invitation to purchase any securities.
Micro Focus Shareholders are advised to read carefully the Scheme
Document and related Forms of Proxy once these have
been despatched.
The
Micro Focus Shares underlying the Micro Focus ADSs will be included
in the Acquisition. Micro Focus ADS Holders will receive the
Acquisition Price under the terms of the Acquisition in respect of
the Micro Focus Shares underlying their Micro Focus ADSs in
accordance with the terms of the Micro Focus ADR Programme deposit
agreement upon surrender of their Micro Focus ADSs. The depositary
of the Micro Focus ADR Programme, Deutsche Bank Trust Company
Americas, will contact Micro Focus ADS Holders with further details
in due course.
It is
intended that, following the Effective Date, the Micro Focus ADR
Programme will be terminated and that applications be made to
delist the Micro Focus ADSs from the NYSE and terminate Micro
Focus’s
registration with the SEC.
18.
Documents
available on website
Copies
of the following documents will be available promptly on
OpenText’s
and Micro Focus’s websites at
https://investors.opentext.com/ and
https://www.microfocus.com/en-us/investors, respectively, by no
later than 12 noon on the Business Day following the date of this
Announcement, subject to certain
restrictions relating to persons residing in Restricted
Jurisdictions until the end of the Offer
Period:
(b)
the irrevocable
undertakings described in Appendix 3 to this
Announcement;
(c)
the Confidentiality
Agreement;
(d)
the Clean Team
Agreement;
(e)
the Co-operation
Agreement;
(f)
the consent letters
from each of Barclays, Goldman Sachs and Numis referred to in
paragraph 19 below; and
(g)
the documents
relating to the financing of the Acquisition.
None of
the content of any of the websites referred to in this Announcement
nor the content of any website accessible from hyperlinks is
incorporated into, or forms part of,
this Announcement.
The
Acquisition will be subject to the Conditions and other terms set
out in Appendix 1 to this Announcement and to the full terms and
conditions which will be set out in the Scheme Document. The Scheme
Document will be despatched to Micro Focus Shareholders within 28
days of the date of this Announcement (unless a later date is
agreed between OpenText, Micro Focus and the Panel).
In
deciding whether or not to vote or procure votes to approve the
Scheme at the Court Meeting or to vote or procure votes in favour
of the resolutions relating to the Scheme at the General Meeting in
respect of their Micro Focus Shares, Micro Focus Shareholders
should rely on the information contained, and follow the procedures
described, in the Scheme Document.
Goldman
Sachs, Numis and Barclays have each given and not withdrawn their
consent to the publication of this Announcement with the inclusion
in this Announcement of the references to their names in the form
and context in which they appear.
The
bases and sources for certain financial information contained in
this Announcement are set out in Appendix 2 to this Announcement.
Details of irrevocable undertakings received by OpenText and given
by the Micro Focus Directors and Dodge & Cox are set out in
Appendix 3 to this Announcement. The defined terms used in this
Announcement are set out in Appendix 4 to this
Announcement.
Enquiries
Micro Focus International plc
|
|
Micro
Focus International plc
|
|
Stephen
Murdoch, CEO
Matt
Ashley, CFO
Ben
Donnelly, Investor Relations
|
+44 (0)
1635 32646
Investors@microfocus.com
|
Goldman
Sachs International (Lead financial adviser to Micro
Focus)
|
Jung
Min
Nicholas
van den Arend
Nick
Harper
|
+44 (0)
20 7774 1000
|
|
|
Numis
Securities Limited (Financial adviser and corporate broker to Micro
Focus)
|
Simon
Willis
Joshua
Hughes
Havish
Patel
|
+44 (0)
20 7260 1000
|
|
|
Jefferies
International Limited (Financial adviser and corporate broker to
Micro Focus)
|
Sam
Barnett
Philip
Noblet
|
+44 (0)
20 7029 8000
|
|
|
Brunswick
(PR advisor to Micro Focus)
|
|
Sarah
West
Jonathan
Glass
|
+44 (0)
20 7404 5959
microfocus@brunswickgroup.com
|
|
|
|
|
OpenText
|
|
OpenText
|
|
Harry
Blount, SVP, Investor Relations
|
+1 415
963 0825
|
Barclays
(sole financial adviser to OpenText and Bidco)
|
|
Omar
Faruqui
|
+44 (0)
20 7623 2323
|
Bruce
Rothney
Steven
Markovich
Michael
Keslosky
Darren
Johnson
|
|
|
|
Allen
& Overy LLP and Cleary Gottlieb Steen & Hamilton LLP are
acting as legal advisers to OpenText and Bidco. Slaughter and May
and Cravath, Swaine & Moore LLP are acting as legal advisers to
Micro Focus.
The
person responsible for arranging the release of this Announcement
on behalf of Micro Focus is Janet McCarthy, Chief Legal
Officer.
Important notices relating to financial advisers
Barclays which is authorised by the PRA and regulated in the United
Kingdom by the FCA and the PRA, is acting exclusively for OpenText
and Bidco and no one else in connection with the matters described
in this Announcement and will not be responsible to anyone other
than OpenText and Bidco for providing advice in relation to the
Acquisition or any other matter referred to in this
Announcement.
In accordance with the Code, normal United Kingdom market practice
and Rule 14e-5(b) of the U.S. Securities Exchange Act of 1934, as
amended (the “U.S. Exchange Act”), Barclays and its
affiliates will continue to act as exempt principal trader in Micro
Focus securities on the London Stock Exchange. These purchases and
activities by exempt principal traders which are required to be
made public in the United Kingdom pursuant to the Code will be
reported to a Regulatory Information Service and will be available
on the London Stock Exchange website at
www.londonstockexchange.com. This information will also be publicly
disclosed in the United States to the extent that such information
is made public in the United Kingdom.
Goldman Sachs International (“Goldman Sachs”), which is authorised
by the PRA and regulated by the FCA and the PRA in the United
Kingdom, is acting exclusively for Micro Focus and no one else in
connection with the Acquisition and will not be responsible to
anyone other than Micro Focus for providing the protections
afforded to clients of Goldman Sachs or for providing advice in
connection with the matters referred to in this Announcement. No
representation or warranty, express or implied, is made by Goldman
Sachs as to the contents of this Announcement.
Numis Securities Limited (“Numis”), which is authorised
and regulated by the FCA in the United Kingdom, is acting
exclusively for Micro Focus and no one else in connection with the
Acquisition and the contents of this Announcement and will not be
responsible to anyone other than Micro Focus for providing the
protections afforded to clients of Numis nor for providing advice
in relation to the Acquisition, the contents of this Announcement
or any matters referred to herein. Neither Numis 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 Numis in connection with this Announcement, any statement
contained herein or otherwise.
Jefferies International Limited (“Jefferies”), which is regulated
in the United Kingdom by the FCA, is acting as financial adviser
exclusively for Micro Focus and no one else in connection with the
matters set out in this Announcement. In connection with such
matters, Jefferies will not regard any other person as its client
and will not be responsible to anyone other than Micro Focus for
providing the protections afforded to clients of Jefferies or for
providing advice in relation to the contents of this Announcement
or any other matter referred to herein. Neither Jefferies nor any
of its subsidiaries, affiliates or branches owes or accepts any
duty, liability or responsibility whatsoever (whether direct,
indirect, consequential, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of
Jefferies in connection with this Announcement, any statement
contained herein or otherwise.
Further information
This Announcement is for information purposes only and is not
intended to, and does not, constitute or form part of any offer or
invitation to purchase, otherwise acquire, subscribe for, exchange,
sell or otherwise dispose of, 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 decision in respect of the Acquisition should be
made only on the basis of the information in the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer,
the Takeover Offer document).
This Announcement does not constitute a prospectus or a prospectus exempted
document.
This Announcement has been prepared for the purpose of complying
with English law and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions outside the UK.
Overseas Shareholders
The release, publication or distribution of this Announcement in
jurisdictions other than the UK may be restricted by law and
therefore any persons who are not resident in the UK or who are
subject to the laws of any jurisdiction other than the UK
(including Restricted Jurisdictions) should inform themselves
about, and observe, any applicable legal or regulatory
requirements. In particular, the ability of persons who are not
resident in the UK or who are subject to the laws of another
jurisdiction to participate in the Acquisition or to vote their
Micro Focus Shares in respect of the Scheme at the Court Meeting,
or to execute and deliver Forms of Proxy appointing another to vote
at the Court Meeting on their behalf, may be affected by the laws
of the relevant jurisdictions in which they are located or to which
they are subject. Any failure to comply with applicable legal or
regulatory requirements of any jurisdiction may constitute a
violation of securities laws in that jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons
involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any
person.
Unless otherwise determined by OpenText or required by the Code,
and permitted by applicable law and regulation, the Acquisition
shall not be made available, directly or indirectly, in, into or
from a Restricted Jurisdiction where to do so would violate the
laws in that jurisdiction and no person may vote in favour of the
Acquisition by any such use, means, instrumentality or form within
a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that
jurisdiction.
The Acquisition will be subject to the applicable requirements of
English law, the Code, the Panel, the London Stock Exchange and the
FCA.
Copies of this Announcement and any formal documentation relating
to the Acquisition are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in
or into or from any Restricted Jurisdiction or any jurisdiction
where to do so would constitute a violation of the laws of such
jurisdiction and persons receiving such documents (including
custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported
vote in respect of acceptance of the Acquisition.
Further details in relation to Micro Focus Shareholders in overseas
jurisdictions will be contained in the Scheme
Document.
Additional information for U.S. investors
U.S. shareholders (and Micro Focus ADS Holders) should note that
the Acquisition relates to an offer for the shares of a UK company
that is a “foreign private issuer” as defined under
Rule 3b-4 of the U.S. Exchange Act and is being made by means of a
scheme of arrangement provided for under English company law. The
Acquisition, implemented by way of a scheme of arrangement, is not
subject to the tender offer rules or the proxy solicitation rules
under the U.S. Exchange Act, as amended. Accordingly, the
Acquisition is subject to the procedural and disclosure
requirements, rules and practices applicable to a scheme of
arrangement involving a target company in the UK listed on the
London Stock Exchange, which differ from the requirements of the
U.S. tender offer and proxy solicitation rules. If, in the future,
OpenText exercises its right to implement the Acquisition by way of
a Takeover Offer and determines to extend the Takeover Offer into
the United States, the Acquisition will be made in compliance with
applicable U.S. securities laws and regulations, including Sections
14(d) and 14(e) of the U.S. Exchange Act and Regulation 14D and 14E
thereunder. Such a takeover offer would be made in the United
States by OpenText and/or Bidco (a wholly-owned subsidiary of
OpenText) and no one else.
The financial information with respect to Micro Focus included in
this Announcement and the Scheme Document has been or will have
been prepared in accordance with IFRS and thus may not be
comparable to financial information of U.S. companies or companies
whose financial statements are prepared in accordance with U.S.
GAAP.
It may be difficult for U.S. shareholders and Micro Focus ADS
Holders to enforce their rights and any claims they may have
arising under the U.S. federal securities laws in connection with
the Acquisition, since Micro Focus, OpenText and Bidco are each
located in a country other than the United States, and some or all
of their respective officers and directors may be residents of
countries other than the United States. U.S. shareholders and Micro
Focus ADS Holders may not be able to sue Micro Focus, OpenText,
Bidco or their respective officers or directors in a non-U.S. court
for violations of the U.S. securities laws. Further, it may be
difficult to compel Micro Focus, OpenText or Bidco and their
respective affiliates to subject themselves to the jurisdiction or
judgment of a U.S. court.
The receipt of cash pursuant to the Scheme by U.S. shareholders
(and Micro Focus ADS Holders) as consideration for the cancellation
of its Micro Focus shares pursuant to the Scheme may be a taxable
transaction for U.S. federal income tax purposes and under
applicable U.S. state and local, as well as foreign and other, tax
laws. Each Micro Focus Shareholder (including U.S. shareholders) is
urged to consult their independent professional adviser immediately
regarding the tax consequences of the Acquisition applicable to
them, including under applicable U.S. federal, state and local, as
well as foreign and other, tax laws.
Micro Focus is currently subject to
the informational requirements of the U.S. Exchange Act and, in
accordance therewith, files reports and other documents with the
SEC. Reports and other information filed by Micro Focus with the
SEC may be obtained free or charge from the SEC’s website
at www.sec.gov.
Neither the SEC nor any U.S. state securities commission has
approved, disproved or passed judgment upon the fairness or the
merits of the Acquisition or determined if this Announcement is
adequate, accurate or complete. Any representation to the contrary
is a criminal offence in the U.S.
In accordance with normal United Kingdom practice and pursuant to
Rule 14e-5(b) of the U.S. Exchange Act (if applicable), OpenText,
Bidco, certain affiliated companies and their nominees or brokers
(acting as agents), may from time to time make certain purchases
of, or arrangements to purchase, shares or other securities of
Micro Focus outside of the United States, other than pursuant to
the Acquisition, until the date on which the Acquisition and/or
Scheme becomes effective, lapses or is otherwise withdrawn. If such
purchases or arrangements to purchase were to be made, they would
occur either in the open market at prevailing prices or in private
transactions at negotiated prices and would comply with applicable
law, including the U.S. Exchange Act. Any information about such
purchases or arrangements to purchase will be disclosed as required
in the UK, will be reported to a Regulatory Information Service and
will be available on the London Stock Exchange website at
www.londonstockexchange.com.
Forward-looking statements
This Announcement (including information incorporated by reference
in this Announcement), oral statements made regarding the
Acquisition, and other information published by OpenText, Bidco and
Micro Focus contain statements which are, or may be deemed to be,
“forward-looking
statements”. All statements,
other than statements of historical fact are, or may be deemed to
be, forward-looking statements. Forward-looking statements are
prospective in nature and are not based on historical facts, but
rather on assumptions, expectations, valuations, targets,
estimates, forecasts and projections of OpenText, Bidco and Micro
Focus about future events, and are therefore subject to risks and
uncertainties which could cause actual results, performance or
events to differ materially from those expressed or implied by the
forward-looking statements. The forward-looking statements
contained in this Announcement include statements relating to the
expected effects of the Acquisition on the OpenText Group, the
Micro Focus Group and the Enlarged Group, the expected timing and
scope of the Acquisition and other statements other than historical
facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as “plans”, “expects”, “budget”, “targets”, “aims”, “scheduled”, “estimates”, “forecast”, “intends”, “anticipates”,
“seeks”, “prospects”, “potential”, “possible”, “assume” or “believes”, or variations of
such words and phrases or statements that certain actions, events
or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be
achieved. OpenText, Bidco and Micro Focus give no assurance that
such expectations will prove to be correct. By their nature,
forward-looking statements involve risks (known and unknown) and
uncertainties (and other factors that are in many cases beyond the
control of OpenText, Bidco and/or Micro Focus) because they relate
to events and depend on circumstances that may or may not occur in
the future.
There are a number of factors that could affect the future
operations of the OpenText Group, the Micro Focus Group and/or the
Enlarged Group and that could cause actual results and developments
to differ materially from those expressed or implied by such
forward-looking statements. These factors include the satisfaction
(or, where permitted, waiver) of the Conditions, as well as
additional factors, such as: domestic and global business and
economic conditions; the impact of the Covid-19 pandemic or other
pandemics, asset prices; market-related risks such as
fluctuations in interest rates and exchange rates, industry trends,
competition, changes in government and regulation, changes in the
policies and actions of governments and/or regulatory authorities
(including changes related to capital and tax), changes in
political and economic stability (including exposures to terrorist
activities, the UK’s exit from the
European Union, Eurozone instability, the Russia-Ukraine conflict,
disruption in business operations due to reorganisation activities,
interest rate, inflation, deflation and currency fluctuations), the
timing impact and other uncertainties of future or planned
acquisitions or disposals or offers, the inability of the Enlarged
Group to realise successfully any anticipated synergy benefits when
the Acquisition is implemented (including changes to the board
and/or employee composition of the Enlarged Group), the inability
of the OpenText Group to integrate successfully the Micro Focus
Group’s
operations and programmes when the Acquisition is implemented, the
Enlarged Group incurring and/or experiencing unanticipated costs
and/or delays (including IT system failures, cyber-crime, fraud and
pension scheme liabilities), or difficulties relating to the
Acquisition when the Acquisition is implemented. Other unknown or
unpredictable factors could affect future operations and/or cause
actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors.
Each forward-looking statement speaks only as of the date of this
Announcement. Neither OpenText Group nor Micro Focus Group, nor any
of their respective associates or directors, officers or advisers,
provides any representation, warranty, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this Announcement will actually
occur. Forward-looking statements involve inherent risks and
uncertainties. All forward-looking statements contained in this
Announcement are expressly qualified in their entirety by the
cautionary statements contained or referred to in this section.
Readers are cautioned not to place undue reliance on these
forward-looking statements. Other than in accordance with their
legal or regulatory obligations (including under the Code, the UK
Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules), neither the OpenText Group nor the Micro Focus
Group is under or undertakes any obligation, and each of the
foregoing expressly disclaims any intention or obligation, to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
No profit forecasts or estimates or quantified financial benefits
statements
Nothing in this Announcement is intended, or is to be construed, as
a profit forecast, profit estimate or quantified financial benefits
statement for any period and no statement in this Announcement
should be interpreted to mean that earnings or earnings per share
for OpenText or Micro Focus for the current or future financial
years, will necessarily match or exceed the historical published
earnings or earnings per share for OpenText or Micro Focus, as
appropriate.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in one
per cent. or more of any class of relevant securities of an offeree
company or of any 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 p.m. on
the tenth business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 p.m. on the tenth
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 before the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in one per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person’s interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. on
the business day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
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 Panel’s
website at www.thetakeoverpanel.org.uk, including details of the
number of relevant securities in issue, when the offer period
commenced and when any offeror was first identified. You should
contact the Panel’s Market Surveillance
Unit on +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.
Electronic communications
Please be aware that addresses, electronic addresses and certain
information provided by Micro Focus Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Micro Focus may be provided to OpenText and/or
Bidco during the Offer Period as required under
section 4 of Appendix 4 to the Code to comply with Rule 2.11(c) of
the Code.
Publication on a website and availability of hard
copies
This Announcement and the documents required to be published
pursuant to Rule 26 of the Code will be available, subject to
certain restrictions relating to
persons resident in Restricted Jurisdictions, on
OpenText’s
website at https://investors.opentext.com/
and on Micro Focus’s
website at https://www.microfocus.com/en-us/investors
by no later than 12 noon (London time)
on the Business Day following the publication of this
Announcement. Neither the content of any of the websites
referred to in this Announcement nor the content of any website
accessible from hyperlinks in this Announcement is incorporated
into, or forms part of, this Announcement.
Micro Focus Shareholders
may, subject to applicable securities laws, request a hard copy of
this Announcement (and any information incorporated into it by
reference to another source) by contacting Micro Focus’s
registrars, Equiniti, between 8.30 a.m. to 5.30 p.m.
(London time) Monday to Friday (excluding public holidays in
England and Wales) on 0371 384 2734 (textphone for shareholders
with hearing difficulties 0371 384 255) within the United Kingdom or
on +44 (0)121 415 0804 from overseas, or by submitting a request in
writing to Aspect House, Spencer Road, Lancing, West Sussex BN99
6DA, United Kingdom, with an address to which the hard copy may be
sent. Calls are charged at the standard geographic rate and will
vary by provider. 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. Micro Focus
Shareholders may, subject to applicable securities laws, also
request that all future documents, announcements and information to
be sent in relation to the Acquisition should be in hard copy
form.
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.
Non-GAAP Financial Measures
This Announcement includes certain financial measures that the SEC
defines as “non- GAAP
measures.”
For a reconciliation of Micro Focus’s Adjusted EBITDA to
the most directly comparable measure calculated and presented in
accordance with IFRS and a discussion of their limitations, please
refer to Micro Focus’s Annual Report and
Accounts for the year ended October 31, 2021 on Form 20-F under
“Segmental
Reporting”
and Micro Focus’s Interim Results for
the six-months ended April 30, 2022 on Form 6-K under “Alternative
Performance Measures.”
Financial Projections
Any depiction of future revenue is based on predictions by
OpenText’s
and Micro Focus’s management and is a
forecasted projection only. A reconciliation of expected Adjusted
EBITDA, a forward-looking non-GAAP measure, would not be feasible
without unreasonable efforts because of the unpredictability of the
items that would be excluded from non-GAAP measures for the
resulting company.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Code, Micro Focus confirms that
as at the date of this Announcement, it had in issue 336,020,900
ordinary shares (excluding ordinary shares held in treasury) of 10
pence each. The International Securities Identification Number
(ISIN) for the ordinary shares is GB00BJ1F4N75.
In addition, as at the date of this Announcement there are unlisted
warrants issued to Amazon.com NV Investment Holdings LLC to
subscribe for up to 15,924,384 ordinary shares in Micro Focus at
446.60 pence per share (the “AWS Warrants”), in connection with
a commercial agreement entered into between Micro Focus and
Amazon.com Services LLC on 24 February 2021. The vesting of the AWS
Warrants generally depends on the level of software revenues
generated by Amazon, Inc. and/or any of its affiliates for Micro
Focus under the commercial agreement over the multi-year term,
according to revenue targets set out in the agreement. The vesting
of the AWS Warrants is subject to acceleration in certain limited
circumstances (including a change of control of Micro Focus or a
sale of certain parts of Micro Focus’s group).
APPENDIX 1
CONDITIONS AND CERTAIN FURTHER TERMS OF THE
ACQUISITION
The
Acquisition will be subject to the terms and conditions set out in
this Appendix and in the Scheme Document.
Part A
1.
Conditions
to the Scheme and the Acquisition
The
Acquisition will be conditional on the Scheme becoming
unconditional and Effective, subject to the provisions of the Code,
by no later than 11.59 p.m. on the Long Stop Date.
The
Scheme will be subject to the following conditions:
(a) (i) its
approval by a majority in number representing not less than 75 per
cent. in value of the Scheme Shareholders who are on the register
of members of Micro Focus at the Voting Record Time (or the
relevant class or classes thereof, if applicable), in each case
present, entitled to vote and voting, either in person or by proxy,
at the Court Meeting and at any separate class meeting which may be
required by the Court (as applicable) or at any adjournment of any
such meeting; and
(ii) the Court
Meeting and any separate class meeting which may be required by the
Court being held 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 (if any) as OpenText and Micro Focus may
agree and, if required, the Court may allow);
(b) (i) the
Resolutions being duly passed by the requisite majority or
majorities of the Micro Focus Shareholders at the General Meeting
or at any adjournment thereof; and
(ii) the
General Meeting being held on or before the 22nd day after the
expected date of the General Meeting to be set out in the Scheme
Document in due course (or such later date (if any) as OpenText and
Micro Focus may agree, and if required, the Court may allow);
and
(c) (i) the
sanction of the Scheme by the Court with or without modification
(but subject to any such modification being acceptable to OpenText
and Micro Focus) and the delivery of a copy of the Court Order to
the Registrar of Companies (the Court Sanction); and
(ii) the
Sanction Hearing being held on or before the 22nd day after the
expected date of the Sanction Hearing to be set out in the Scheme
Document in due course (or such later date (if any) as OpenText and
Micro Focus may agree, and if required, the Court may
allow).
In
addition, subject as stated in Part B below and to the requirements
of the Panel, the Acquisition will also be conditional on the
following Conditions and, accordingly, the necessary actions to
make the Scheme effective will not be taken unless the following
Conditions (as amended if appropriate) have been satisfied or,
where relevant, waived:
insofar
as the Acquisition constitutes, or is deemed to constitute, a
concentration with a Community dimension within the scope of
Council Regulation (EC) 139/2004 (as amended) (the
“Regulation”):
(i)
the European
Commission having issued a decision under Article 6(1)(b), 6(2),
8(1) or 8(2) of the Regulation, or being deemed to have done so
under Article 10(6) of the Regulation, declaring the Acquisition
compatible with the internal market and allowing the Acquisition to
proceed unconditionally or on terms satisfactory to OpenText;
or
(ii)
following a
referral by the European Commission of the Acquisition (or part of
it) to a relevant national competition authority of an EU Member
State under Article 9 of the Regulation, all such relevant
competition authority or authorities having issued or being deemed
to have issued a decision with equivalent effect to that referred
to in paragraph 3(a)(i) above with respect to those parts of the
Acquisition referred to it or them, as the case may be, and, to the
extent relevant, the European Commission issuing a decision
referred to in paragraph 3(a)(i) above with respect to any part of
the Acquisition retained by it;
either:
(i)
confirmation that
the UK Competition and Markets Authority (the “CMA”) has no further questions in
relation to the Acquisition following the submission of a briefing
paper to the CMA’s Mergers Intelligence Committee by
OpenText; or
(ii)
as at the date on
which all other Conditions are satisfied or waived, the CMA not
having (A) requested submission of a merger notice in relation to
the Acquisition; (B) given notice to either party that it intends
to commence a Phase I investigation in relation to the Acquisition;
or (C) indicated that the statutory review period in which the CMA
has to decide whether to make a reference in relation to the
Acquisition under section 34ZA of the Enterprise Act 2002 (the
“EA”) has begun;
or
(iii)
if the CMA opens an
investigation into the Acquisition, confirmation that the
Acquisition will not be subject to a reference under section 33 of
the EA (a “Phase 2 CMA
Reference”); or
(iv)
in the event that a
Phase 2 CMA Reference is made in relation to the Acquisition, the
CMA either:
(A)
concluding in a
report published in accordance with section 38 of the EA that
neither the Acquisition nor any matter arising from or relating to
the Acquisition has or is expected to result in a substantial
lessening of competition within any market or markets in the United
Kingdom for goods or services; or
(B)
allowing the
Acquisition and any matter arising from or relating to the
Acquisition to proceed on terms satisfactory to
OpenText;
(i)
all required
filings having been made under the United States Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (as amended) and the rules and
regulations made thereunder and all applicable waiting periods
(including any agreements with the U.S. Federal Trade Commission or
the Antitrust Division of the U.S. Department of Justice to delay
consummation of the Acquisition) relating to the Acquisition have
expired or been terminated; and
(ii)
no judgment,
injunction (whether temporary, preliminary or permanent), or legal
order issued by any governmental entity of competent jurisdiction
or other law having been enacted, entered or promulgated which
prevents, makes illegal, prohibits, restrains or enjoins the
consummation of the Acquisition;
either:
(i)
(A) an advance
ruling certificate having been issued by the Commissioner of
Competition (the “Commissioner”) to OpenText
pursuant to section 102 of the Canadian Competition Act (the
“Competition
Act”) or (B) the Commissioner having issued a
no-action letter to OpenText confirming that he does not intend to
apply to the Competition Tribunal under section 92 of the
Competition Act for an order directing the Parties not to proceed
with the Acquisition; or
(ii)
following the
filing of a formal notification of the Acquisition to the
Commissioner pursuant to subsection 114(1) of the Competition Act,
either:
(A)
the applicable
waiting period having expired or having been waived under section
123 of the Competition Act without the Commissioner issuing a
supplementary information request regarding the Acquisition;
or
(C)
an order having
been obtained from the Competition Tribunal and with the consent of
the Commissioner pursuant to section 92 of the Competition Act for
the Acquisition to proceed subject to conditions accepted by
OpenText;
following
notification of the Acquisition to the South African Competition
Commission (“SA
Commission”) by OpenText, either:
(i)
all applicable
suspensions and other relevant time periods (including any
extensions thereof) in relation to such notification having
expired, lapsed or been terminated under the Competition Act, No.
89 of 1998 (as amended); or
(ii)
the SA
Commission’s approval having been obtained for the
Acquisition to proceed unconditionally or subject to conditions
accepted by OpenText;
following
notification of the Acquisition to the Turkish Competition Board
pursuant to the Act on the Protection of Competition (Law No. 4054,
as amended (“Law No.
4054”), Communiqué No. 2010/4 on Mergers and
Acquisitions Subject to the Approval of the Competition Board (the
“Communiqué”) and
Communiqué No. 2022/2 on the Amendment of the Communiqué
(the “Amendment
Communiqué”), either:
(i)
the Turkish
Competition Board having declined jurisdiction over the Acquisition
or having approved the Acquisition unconditionally or on terms
satisfactory to OpenText; or
(ii)
the applicable
waiting period having expired pursuant to Article 10 of Law No.
4054; and
following
notification of the Acquisition to the Saudi General Authority for
Competition (“GAC”) pursuant to Article 7 of
Royal Decree No. (M/75) dated 29/06/1440H, either:
(i)
the Board of
Directors of the GAC (the “Board”) having issued a decision
approving the Acquisition or stating that the GAC has no objection
to the consummation of the Acquisition (either unconditionally or
on conditions satisfactory to OpenText) and, where any such
decision is conditional, the conditional decision having not been
withdrawn by the Board;
(ii)
the Acquisition
having been deemed approved by the GAC because the applicable
waiting period under Article 23 of the Implementing Regulations
issued by Resolution No. (337) dated 25/1/1441H expired without the
Board issuing any decision to any of the Parties or by way of
public announcement; or
(iii)
the Board or the
Governor of the GAC having confirmed in writing that the
requirement to file for economic concentration clearance in respect
of the Acquisition does not apply or has been waived.
a
notification having been made and accepted under the UK National
Security and Investment Act 2021 (the “NSIA”) and one of the following
having occurred:
(i)
the Secretary of
State confirming before the end of the review period that no
further action will be taken in relation to the
Acquisition;
(ii)
if the Secretary of
State issues a call-in notice in relation to the Acquisition, the
parties receiving a final notification pursuant to section 26(1)(b)
of the NSIA containing confirmation that the Secretary of State
will take no further action in relation to the call-in notice and
the Acquisition under the NSIA;
(iii)
the Secretary of
State making a final order pursuant to section 26(1)(a) of the NSIA
allowing the Acquisition to proceed unconditionally or on terms
satisfactory to OpenText; or
(iv)
OpenText having
received written notice by or on behalf of the Secretary of State
that the NSIA does not apply to the Acquisition;
the
parties having submitted a joint voluntary notice of the
Acquisition to the Committee on Foreign Investment in the United
States (“CFIUS”); and
(i)
the parties having
received written notice from CFIUS that CFIUS has concluded its
review (or, if applicable, investigation) of the Acquisition under
section 721 of the Defense Production Act of 1950 (as amended) (the
“DPA”) and
determined that: (A) the Acquisition is not a “covered
transaction” (as defined under the DPA, including all
implementing regulations thereof), or (B) there are no unresolved
national security concerns with respect to the Acquisition;
or
(ii)
CFIUS having sent a
report regarding the Acquisition to the President of the United
States (the “President”), and: (A) the
President having announced a decision to take no action to suspend
or prohibit the Acquisition, or (B) the period under the DPA during
which the President may announce a decision to take action to
suspend or prohibit the Acquisition having expired without any such
action being announced or taken;
insofar
as such a notification is considered necessary by OpenText, a
notification of the Acquisition having been made to and accepted by
the Foreign Investment Review Board (“FIRB”) pursuant to the Foreign
Acquisitions and Takeovers Act 1975 (Cth) (“FATA”) and one of the following
having occurred:
(i) OpenText
receiving written notice under the FATA by or on behalf of the
Treasurer of the Commonwealth of Australia (the “Treasurer”) that there is no
objection to the Acquisition, on an unconditional basis or subject
to conditions satisfactory to OpenText;
(ii) the
Treasurer becoming precluded from making an order or decision under
Part 3 of the FATA in relation to the Acquisition;;
(iii) where an
interim order is made under section 68 of the FATA in respect of
the Acquisition, and the subsequent period for making an order or
decision under Part 3 of the FATA in relation to the Acquisition
elapses without the Treasurer making such an order or decision;
or
(iv) OpenText
having received written notice by or on behalf of the FIRB that the
FATA does not apply to the Acquisition;
insofar
as such a notification is considered necessary by OpenText, a
notification of the Acquisition having been made to and accepted by
the Czech Ministry of Industry and Trade pursuant to the Czech Act
No. 34/2021 Coll., as amended (“Czech FDI Act”) and one of the
following having occurred:
(i) OpenText
having received written notice under the Czech FDI Act by or on
behalf of the Czech Ministry of Industry and Trade that the
Acquisition is approved;
(ii) OpenText
having received written notice under the Czech FDI Act by or on
behalf of the Czech Ministry of Industry and Trade that the
Acquisition is approved but subject to conditions satisfactory to
OpenText; or
(iii) OpenText
having received written notice by or on behalf of the Czech
Ministry of Industry and Trade that the Czech FDI Act does not
apply to the Acquisition;
insofar
as such a notification is considered necessary by OpenText, a
notification having been made and accepted under the German Foreign
Trade Act (Außenwirschaftsgesetz – “AWG”) and the German Foreign Trade
Ordinance (Außenwirtschaftsverordnung –
“AWV”) to obtain
a certificate issued by the German Federal Ministry of Economics
and Climate Action (Bundesministerium für Wirtschaft und
Klimaschutz – “BMWK”) for the issuance of a
non-objection certificate pursuant to Section 58 para. 1 AWV
(Unbedenklichkeitsbescheinigung) or, if applicable, an approval
pursuant to Section 58a para. 1 AWV (Freigabe) and/or Section 61
AWV (Freigabe) in relation to the Acquisition (in each case the
“German FDI
Clearance”) and one of the following having
occurred:
(i) the BMWK
having issued
(A)
a German FDI
Clearance, or
(B)
another binding
decision confirming that the Acquisition does not raise concerns
with respect to: (1) the public order or security of the Federal
Republic of Germany or of other member states of the European Union
or in relation to projects or programs of European Union interest,
or (2) with respect to essential security interests of the Federal
Republic of Germany,
in each
case unconditionally or subject to restrictions
(Beschränkungen), obligations (Handlungspflichten) or binding
orders (Anordnungen) or other conditions, in each case on terms
satisfactory to OpenText (including by way of having concluded a
public law contract (öffentlich-rechtlicher Vertrag) with the
German government);
(ii)
a German FDI
Clearance being deemed to have been issued pursuant to Section 58
para. 2 AWV or, if applicable, Section 58a para. 2 AWV, or Section
61, sentence 2 AWV; or
(iii)
OpenText having
received written notice by or on behalf of the relevant authority
that the AWG, AWV, or other relevant laws and regulations do not
apply to the Acquisition; and
insofar
as such a notification is considered necessary by OpenText, a
notification of the Acquisition and the initiation of a
consultation procedure with the relevant authority under the
Swedish Protective Security Act (2018:585) (“PSA”) and the following having
occurred:
(i) Micro
Focus having received written notice under the PSA that there is no
objection to the Acquisition, on an unconditional basis or subject
to conditions satisfactory to OpenText; or
(ii) Micro
Focus having received written notice by or on behalf of the
relevant authority that the PSA does not apply to the
Acquisition.
5.
General
Third Party clearances
(a)
the waiver (or
non-exercise within any applicable time limits) by any Relevant
Authority or any other body or person whatsoever in any
jurisdiction (each a “Third
Party”) of any termination right, right of
pre-emption, first refusal or similar right (which is material in
the context of the Micro Focus Group taken as a whole) arising as a
result of or in connection with the Acquisition including, without
limitation, its implementation and financing or the proposed direct
or indirect acquisition of any shares or other securities in, or
control or management of, Micro Focus by OpenText or any member of
the OpenText Group;
(b)
all necessary
filings or applications having been made in connection with the
Acquisition and all mandatory statutory or regulatory obligations
in any jurisdiction having been complied with in connection with
the Acquisition or the acquisition by any member of the OpenText
Group of any shares or other securities in, or control of, Micro
Focus and all authorisations, orders, grants, recognitions,
determinations, confirmations, consents, licences, clearances,
permissions, exemptions and approvals reasonably deemed necessary
or appropriate by OpenText or any member of the OpenText Group for
or in respect of the Acquisition including without limitation, its
implementation and financing or the proposed direct or indirect
acquisition of any shares or other securities in, or control of,
Micro Focus by any member of the OpenText Group having been
obtained in terms and in a form reasonably satisfactory to OpenText
from all appropriate Third Parties or persons with whom any member
of the Wider Micro Focus Group has entered into contractual
arrangements and all such material authorisations, orders, grants,
recognitions, determinations, confirmations, consents, licences,
clearances, permissions, exemptions and approvals necessary or
appropriate to carry on the business of any member of the Wider
Micro Focus Group which is material in the context of the OpenText
Group or the Micro Focus Group as a whole or of the financing of
the Acquisition remaining in full force and effect and all filings
necessary for such purpose having been made and there being no
notice or intimation of any intention to revoke or not to renew any
of the same at the time at which the Acquisition becomes otherwise
unconditional and all necessary statutory or regulatory obligations
in any jurisdiction having been complied with; and
(c)
other than in
relation to the approvals referred to in paragraphs 3 or 4 above,
no Third Party having 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 enacted, made or proposed any
statute, regulation, decision or order, or having taken any other
steps, which in each case would or might reasonably be expected
to:
(i)
require, prevent or
delay the divestiture, or materially alter the terms envisaged for
any proposed divestiture by any member of the OpenText Group or any
member of the Wider Micro Focus Group of all or any portion of
their respective businesses, assets or property or impose any
limitation on the ability of any of them to conduct their
respective businesses (or any of them) or to own any of their
respective assets or properties or any part thereof which, in any
such case, is material in the context of the OpenText Group or the
Micro Focus Group in either case taken as a whole;
(ii)
require, prevent or
delay any proposed divestiture by any member of the OpenText Group
of any shares or other securities in Micro Focus;
(iii)
impose any material
limitation on, or result in a delay in, the ability of any member
of the OpenText Group directly or indirectly to acquire or to hold
or to exercise effectively, directly or indirectly, all or any
rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or the equivalent)
in any member of the Wider Micro Focus Group or the OpenText Group
to exercise management control over any such member;
(iv)
otherwise adversely
affect the business, assets, profits or prospects of any member of
the OpenText Group or of any member of the Wider Micro Focus Group
to an extent which is adverse to and material in the context of the
OpenText Group or the Micro Focus Group in either case taken as a
whole;
(v)
make the
Acquisition or its implementation or the acquisition or proposed
acquisition by Bidco or any member of the OpenText Group of any
shares or other securities in, or control of Micro Focus void,
illegal, and/or unenforceable under the laws of any relevant
jurisdiction, or otherwise, directly or indirectly, restrain,
restrict, prohibit or delay the same, or impose additional
conditions or obligations with respect thereto, or otherwise
challenge or interfere therewith;
(vi)
require (save as
envisaged in the terms of the Acquisition or sections 974 to 991
(inclusive) of the Companies Act) any member of the OpenText Group
or the Wider Micro Focus Group to offer to acquire any shares or
other securities (or the equivalent) or interest in any member of
the Wider Micro Focus Group or the OpenText Group owned by any
third party;
(vii)
impose any
limitation on the ability of any member of the OpenText Group to
integrate or co-ordinate its business, or any part of it, with the
businesses or any part of the businesses of any other member of the
Wider Micro Focus Group which is adverse to and material in the
context of the Micro Focus Group or the OpenText Group in either
case taken as a whole; or
(viii)
result in any
member of the Wider Micro Focus Group ceasing to be able to carry
on business under any name under which it presently does
so,
and all
applicable waiting and other time periods (including any extensions
thereof) during which any such Third Party could institute,
implement or threaten any action, proceeding, suit, investigation,
enquiry or reference or any other step under the laws of any
jurisdiction in respect of the Acquisition or the acquisition or
proposed acquisition of any Micro Focus Shares having expired,
lapsed or been terminated.
6.
Certain
matters arising as a result of any arrangement, agreement,
etc.
except
as Disclosed, there being no provision of any agreement,
arrangement, licence, permit or other instrument to which any
member of the Wider Micro Focus Group is a party or by or to which
any such member or any of its assets are or may be bound, entitled
or subject, which, in each case as a consequence of the Acquisition
or the proposed acquisition of any shares or other securities (or
equivalent) in Micro Focus or because of a change in the control or
management of Micro Focus or otherwise, would or would reasonably
be expected to result in (in each case to an extent which is or
would be material and adverse in the context of the Wider Micro
Focus Group as a whole):
(a)
any monies borrowed
by or any other indebtedness or liabilities (actual or contingent)
of, or grant available to any such member, being or becoming
repayable or capable of being declared repayable immediately or
earlier than their or its 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;
(b)
any such agreement,
arrangement, licence, permit or instrument or the rights,
liabilities, obligations or interests of any such member thereunder
being terminated or adversely modified or affected or any onerous
obligation or liability arising or any adverse action being taken
or arising thereunder;
(c)
any assets or
interests of any such member being or falling to be disposed of or
charged or ceasing to be available to any such member or any right
arising under which any such asset or interest could be required to
be disposed of or charged or could cease to be available to any
such member other than in the ordinary course of
business;
(d)
other than in the
ordinary course of business, the creation or enforcement of any
mortgage, charge or other security interest over the whole or any
part of the business, property, assets or interest of any such
member;
(e)
the rights,
liabilities, obligations or interests of any such member in, or the
business of any such member with, any person, firm, company or body
(or any arrangement or arrangements relating to any such interest
or business) being terminated, or adversely modified or
affected;
(f)
the value of any
such member or its financial or trading position or prospects being
prejudiced or adversely affected;
(g)
any such member
ceasing to be able to carry on business under any name under which
it presently does so; or
(h)
the creation of any
liability, actual or contingent, by any such member (including any
material tax liability or any obligation to obtain or acquire any
material authorisation, notice, waiver, concession, agreement or
exemption from any Third Party or any person) other than trade
creditors or other liabilities incurred in the ordinary course of
business or in connection with the Acquisition,
and no
event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any
member of the Wider Micro Focus Group is a party or by or to which
any such member or any of its assets may be bound, entitled or
subject, would or might reasonably be expected to result in any of
the events or circumstances as are referred to in paragraphs (a) to
(h) of this Condition.
7.
Certain
events occurring since Last Accounts Date
except
as Disclosed, no member of the Wider Micro Focus Group having,
since the Last Accounts Date:
(a)
save as between
Micro Focus and wholly-owned subsidiaries of Micro Focus and/or
pursuant to the exercise of options or vesting of awards granted
under the Micro Focus Share Plans in the ordinary course, issued or
agreed to issue, authorised or proposed the issue of additional
shares of any class or transferred or sold any shares out of
treasury;
(b)
save as between
Micro Focus and wholly-owned subsidiaries of Micro Focus or for the
grant of options and awards and other rights under the Micro Focus
Share Plans in the ordinary course, issued, or agreed to issue,
authorised or proposed the issue of securities convertible into
shares of any class or rights, warrants or options to subscribe
for, or acquire, any such shares or convertible
securities;
(c)
other than to
another member of the Micro Focus Group, before completion of the
Acquisition, recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus issue, dividend or other
distribution whether payable in cash or otherwise or made any bonus
issue;
(d)
save for
intra-Micro Focus Group transactions, authorised, implemented or
announced any merger or demerger with any body corporate or
acquired or disposed of or transferred, mortgaged or charged or
created any security interest over any assets or any right, title
or interest in any asset (including shares and trade investments)
or authorised or proposed or announced any intention to propose any
merger, demerger, acquisition or disposal, transfer, mortgage,
charge or security interest, in each case, other than in the
ordinary course of business and, in each case, to the extent which
is material in the context of the Micro Focus Group taken as a
whole;
(e)
save for
intra-Micro Focus Group transactions, made or authorised or
proposed or announced an intention to propose any material change
in its loan capital;
(f)
issued, authorised
or proposed the issue of, or made any change in or to, any
debentures or (save for intra-Micro Focus Group transactions or
save in the ordinary course of business), incurred or increased any
indebtedness or become subject to any liability (actual or
contingent) which is material in the context of the Micro Focus
Group taken as a whole;
(g)
purchased, redeemed
or repaid or announced any proposal to purchase, redeem or repay
any of its own shares or other securities or reduced or, save in
respect to the matters mentioned in paragraph (a) or (b) above,
made any other change to any part of its share capital, in each
case, to the extent which is material in the context of the Micro
Focus Group taken as a whole;
(h)
except for
intra-Micro Focus Group transactions, implemented, or authorised,
proposed or announced its intention to implement, any
reconstruction, merger, demerger, acquisition, disposal,
amalgamation, scheme, commitment or other transaction or
arrangement otherwise than in the ordinary course of
business;
(i)
entered into or
varied or authorised, proposed or announced its intention to enter
into or vary any contract, transaction or commitment (whether in
respect of capital expenditure or otherwise) which is of a
long-term, onerous or unusual nature or magnitude or which is or is
reasonably likely to be materially restrictive on the businesses of
any member of the Wider Micro Focus Group or the OpenText Group or
which involves an obligation of such a nature or magnitude or which
is other than in the ordinary course of business and which, in any
such case, is material in the context of the Micro Focus Group
taken as a whole;
(j)
been unable or
deemed unable, or admitted in writing that it is unable, to pay its
debts as they fall due 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, in any such case, is material in the context
of the Micro Focus Group taken as a whole;
(k)
(other than in
respect of a member which is dormant and was solvent at the
relevant time) taken any corporate action or had any legal
proceedings started or threatened against it for its winding-up
(voluntary or otherwise), dissolution or reorganisation or for the
appointment of a receiver, administrative receiver, administrator,
manager, trustee or similar officer of all or any of its assets or
revenues or any analogous proceedings in any jurisdiction or
appointed any analogous person in any jurisdiction or had any such
person appointed which in each case is material in the context of
the Micro Focus Group taken as a whole;
(l)
commenced
negotiations with any of its creditors or taken any step, in each
case in connection with financial difficulties of the Micro Focus
Group, with a view to rescheduling or restructuring any of its
indebtedness or entered into a composition, compromise, assignment
or arrangement with any of its creditors whether by way of a
voluntary arrangement, scheme of arrangement, deed of compromise or
otherwise, or entered into any agreement with any of its creditors
to refinance, reschedule or restructure any of its
indebtedness;
(m)
other than in
respect of claims between Micro Focus and wholly-owned subsidiaries
of Micro Focus, waived, settled or compromised any claim (otherwise
than in the ordinary course of business), which is material in the
context of the Micro Focus Group taken as a whole;
(n)
entered into,
varied or authorised any material agreement, transaction,
arrangement or commitment (whether in respect of capital
expenditure or otherwise) which:
(i)
is of a long-term,
onerous or unusual nature or magnitude or which is reasonably
likely to involve an obligation of such nature or magnitude (save
in the ordinary course of business); or
(ii)
is likely to
materially restrict the business of any member of the Wider Micro
Focus Group other than to a nature and extent which is normal in
the context of the business concerned,
and, in
either case, which is or would reasonably be expected to be
material and adverse in the context of the Micro Focus Group taken
as a whole;
(o)
entered into any
contract, commitment, arrangement or agreement otherwise than in
the ordinary course of business or passed any resolution or made
any offer (which remains open for acceptance) with respect to or
announced any intention to, or to propose to, effect any of the
transactions, matters or events referred to in this Condition and
which is material in the context of the Micro Focus Group taken as
a whole;
(p)
made any alteration
to its constitutional documents (other than in connection with the
Scheme) which is material and adverse to the interests of Bidco in
the context of the Acquisition;
(q)
made or agreed or
consented to any change to:
(i)
the terms of the
trust deeds, scheme rules or other documentation constituting the
pension scheme(s) established by any member of the Wider Micro
Focus Group for its directors, employees or their
dependents;
(ii)
the contributions
payable to any such scheme(s) or to the benefits which accrue or to
the pensions which are payable thereunder;
(iii)
the basis on which
qualification for, or accrual or entitlement to, such benefits or
pensions are calculated or determined; or
(iv)
the basis upon
which the liabilities (including pensions) of such pension schemes
are funded, valued or made,
in each
case, which has a material adverse effect on the financial position
of the Micro Focus Group taken as a whole;
(r)
other than as
detailed in the Co-operation Agreement, proposed, agreed to provide
or modified the terms of any of the Micro Focus Share Plans or
other benefit constituting a material change relating to the
employment or termination of employment of a material category of
persons employed by the Wider Micro Focus Group or which constitute
a material change to the terms or conditions of employment of any
senior employee of the Wider Micro Focus Group, (save as agreed by
the Panel (if required) and by OpenText), or entered into or
changed the terms of any contract with any director or senior
executive of any member of the Wider Micro Focus Group;
or
(s)
on or after the
date of this Announcement, and other than with the consent of
OpenText, taken (or agreed or proposed to take) any action which
requires, or would require, the consent of the Panel or the
approval of Micro Focus Shareholders in a general meeting in
accordance with, or as contemplated by, Rule 21.1 of the
Code.
8.
No
adverse change, litigation or regulatory enquiry
except
as Disclosed, since the Last Accounts Date:
(a)
no adverse change
or deterioration having occurred in the business, assets, financial
or trading position or profits or prospects of any member of the
Wider Micro Focus Group which, in any such case, is material and
adverse in the context of the Micro Focus Group taken as a
whole;
(b)
no litigation,
arbitration proceedings, prosecution or other legal proceedings to
which any member of the Wider Micro Focus Group is or may become a
party (whether as a plaintiff, defendant or otherwise) and no
investigation by any Third Party or other investigative body
against or in respect of any member of the Wider Micro Focus Group
having been instituted, announced, implemented or threatened by or
against or remaining outstanding in respect of any member of the
Wider Micro Focus Group which in any such case has had or might
reasonably be expected to have a material and adverse effect on the
Micro Focus Group taken as a whole or in the context of the
Acquisition;
(c)
no contingent or
other liability of any member of the Wider Micro Focus Group having
arisen or become apparent to OpenText or increased other than in
the ordinary course of business which has had or might reasonably
be expected to have a material and adverse effect on the Micro
Focus Group, taken as a whole or in the context of the
Acquisition;
(d)
(other than as a
result of or in connection with the Acquisition) no enquiry or
investigation by, or complaint or reference to, any Third Party
having been threatened, announced, implemented, instituted by or
remaining outstanding against or in respect of any member by or the
Wider Micro Focus Group which in any case is material in the
context of the Micro Focus Group taken as a whole;
(e)
no member of the
Wider Micro Focus Group having conducted its business in breach of
any applicable laws and regulations which in any case is material
in the context of the Micro Focus Group taken as a whole;
and
(f)
no steps having
been taken which are likely to result in the withdrawal,
cancellation, termination or modification of any licence or permit
held by any member of the Wider Micro Focus Group which is
necessary for the proper carrying on of its business.
9.
No
discovery of certain matters
(a)
except as
Disclosed, OpenText not having discovered:
(i)
that any financial,
business or other information concerning the Wider Micro Focus
Group as contained in the information publicly disclosed at any
time by or on behalf of any member of the Wider Micro Focus Group
is materially misleading, contains a material misrepresentation of
fact or omits to state a fact necessary to make that information
not misleading, in each case, to the extent which is material and
adverse in the context of the Micro Focus Group taken as a
whole;
(ii)
that any member of
the Wider Micro Focus Group or partnership, company or other entity
in which any member of the Wider Micro Focus Group has a
significant economic interest and which is not a subsidiary
undertaking of Micro Focus, is subject to any liability (actual or
contingent) which is not disclosed in the annual report and
accounts of Micro Focus for the financial year ended 31 October
2021, in each case, to the extent which is material and adverse in
the context of the Micro Focus Group taken as a whole;
or
(iii)
any information
which affects the import of any information disclosed at any time
by or on behalf of any member of the Wider Micro Focus Group and
which is material and adverse in the context of the Micro Focus
Group taken as a whole; and
(b)
except as
Disclosed, OpenText not having discovered that:
(i)
any past or present
member of the Wider Micro Focus Group has failed to comply with any
and/or all applicable legislation or regulation, of any
jurisdiction with regard to the use, treatment, handling, storage,
carriage, disposal, spillage, release, discharge, leak or emission
of any waste or hazardous substance or any substance likely to
impair the environment or harm human health or animal health or
otherwise relating to environmental matters or the health and
safety of humans, or that there has otherwise been any such use,
treatment, handling, storage, carriage, disposal, spillage,
release, discharge, leak or emission (whether or not the same
constituted a non-compliance by any person with any such
legislation or regulations, and wherever the same may have taken
place) any of which storage, carriage, disposal, spillage, release,
discharge, leak or emission would be likely to give rise to any
liability (actual or contingent) or cost on the part of any member
of the Wider Micro Focus Group and which is material in the context
of the Micro Focus Group taken as a whole;
(ii)
there is, or is
likely to be, for any reason whatsoever, any liability (actual or
contingent) of any past or present member of the Wider Micro Focus
Group to make good, remediate, repair, reinstate or clean up any
property or any controlled waters now or previously owned,
occupied, operated or made use of or controlled by any such past or
present member of the Wider Micro Focus Group (or on its behalf) or
by any person for which a member of the Wider Micro Focus Group is
or has been responsible, or in which any such member may have or
previously have had or be deemed to have had an interest, under any
environmental legislation, regulation, notice, circular or order of
any Third Party and which is material in the context of the Micro
Focus Group taken as a whole;
(iii)
circumstances exist
(whether as a result of the making of the Acquisition or otherwise)
which would be reasonably likely to lead to any Third Party
instituting, or whereby any member of the OpenText Group or any
present or past member of the Wider Micro Focus Group would be
likely to be required to institute, an environmental audit or take
any other steps which would in any such case be reasonably likely
to result in any liability (whether actual or contingent) to
improve, modify existing or install new plant, machinery or
equipment or carry out changes in the processes currently carried
out or make good, remediate, repair, re-instate or clean up any
land or other asset currently or previously owned, occupied or made
use of by any past or present member of the Wider Micro Focus Group
(or on its behalf) or by any person for which a member of the Wider
Micro Focus Group is or has been responsible, or in which any such
member may have or previously have had or be deemed to have had an
interest which is material in the context of the Micro Focus Group
taken as a whole; or
(iv)
circumstances exist
whereby a person or class of persons would be likely to have any
claim or claims in respect of any product or process of manufacture
or materials used therein currently or previously manufactured,
sold or carried out by any past or present member of the Wider
Micro Focus Group which claim or claims would be likely, materially
and adversely, to affect any member of the Wider Micro Focus Group
and which is material in the context of the Micro Focus Group taken
as a whole.
10.
Anti-corruption,
economic sanctions, criminal property and money
laundering
save as
Disclosed, OpenText not having discovered that:
(a)
(i) any past or
present member, director, officer or employee of the Wider Micro
Focus Group is or has at any time engaged in any activity, practice
or conduct which would constitute an offence under the Bribery Act
2010, the U.S. Foreign Corrupt Practices Act of 1977 or any other
applicable anti-corruption or anti-bribery law, rule or regulation
or any other applicable law, rule or regulation concerning improper
payments or kickbacks; or (ii) any person that performs or has
performed services for or on behalf of the Wider Micro Focus Group
is or has at any time engaged in any activity, practice or conduct
in connection with the performance of such services which would
constitute an offence under the Bribery Act 2010, the U.S. Foreign
Corrupt Practices Act of 1977 or any other applicable
anti-corruption legislation or anti-bribery law, rule or regulation
or any other applicable law, rule or regulation concerning improper
payments or kickbacks;
(b)
any asset of any
member of the Wider Micro Focus 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 proceeds of crime
under any other applicable law, rule or regulation concerning money
laundering or proceeds of crime or any member of the Wider Micro
Focus Group is found to have engaged in activities constituting
money laundering under any applicable law, rule or regulation
concerning money laundering;
(c)
any past or present
member, director, officer or employee of the Wider Micro Focus
Group, or any other person for whom any such person may be liable
or responsible, is or has engaged in any conduct which would
violate applicable economic sanctions or dealt with, made any
investments in, made any funds or assets available to or received
any funds or assets from:
(i)
any government,
entity or individual in respect of which U.S., UK or European Union
persons, or persons operating in those territories, are prohibited
from engaging in activities or doing business, or from receiving or
making available funds or economic resources, by U.S., UK or
European Union laws or regulations, including the economic
sanctions administered by the United States Office of Foreign
Assets Control, or HMRC; or
(ii)
any government,
entity or individual targeted by any of the economic sanctions of
the United Nations, the U.S., the UK, the European Union or any of
its member states,
which,
in each case, would cause any member of the Wider Micro Focus Group
to be in breach of any economic sanctions laws applicable to the
Wider Micro Focus Group;
(d)
any past or present
member, director, officer or employee of the Wider Micro Focus
Group, or any other person for whom any such person may be liable
or responsible:
(i)
has engaged in
conduct which would violate any relevant anti-terrorism laws,
rules, or regulations, including but not limited to the U.S.
Anti-Terrorism Act;
(ii)
has engaged in
conduct which would violate any relevant anti-boycott law, rule or
regulation or any applicable export controls, including but not
limited to the Export Administration Regulations administered and
enforced by the U.S. Department of Commerce or the International
Traffic in Arms Regulations administered and enforced by the U.S.
Department of State;
(iii)
has engaged in
conduct which would violate any relevant laws, rules, or
regulations concerning human rights, including but not limited to
any law, rule or regulation concerning false imprisonment, torture
or other cruel and unusual punishment, or child labour;
or
(iv)
is debarred or
otherwise rendered ineligible to bid for or to perform contracts
for or with any government, governmental instrumentality or
international organisation or found to have violated any applicable
law, rule or regulation concerning government contracting or public
procurement; or
(e)
any member of the
Wider Micro Focus Group is or has been engaged in any transaction
which would cause Bidco or OpenText to be in breach of any law or
regulation upon the acquisition of Micro Focus, including but not
limited to the economic sanctions of the United States Office of
Foreign Assets Control, or HM Treasury & Customs in the UK, or
any government, entity or individual targeted by any of the
economic sanctions of the United Nations, the U.S. or the European
Union.
Part B
Waiver
and invocation of the Conditions
1.
Subject to the
requirements of the Panel in accordance with the Code, OpenText
reserves the right in its sole discretion to waive, in whole or in
part, all or any of the Conditions in Part A of this Appendix 1,
except for Conditions 1 (Conditions to the Scheme and the
Acquisition), 2(a)(i), 2(b)(i) and 2(c)(i) (Scheme approval), which cannot be
waived. If any of Conditions 1 (Conditions to the Scheme and the
Acquisition), 2(a)(ii), 2(b)(ii) and 2(c)(ii) (Scheme approval) is not satisfied by
the relevant deadline specified in the relevant Condition, OpenText
shall make an announcement by 8.00 a.m. on the Business Day
following such deadline confirming whether it has invoked the
relevant Condition, waived the relevant deadline or agreed with
Micro Focus to extend the relevant deadline.
2.
OpenText shall be
under no obligation to waive (if capable of waiver), to determine
to be or remain satisfied or to treat as satisfied any of the
Conditions in Part A of Appendix 1 above by a date or time earlier
than the latest date and time specified above for the fulfilment of
the relevant Condition notwithstanding that the other Conditions to
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.
Subject to
paragraph 4 below, under Rule 13.5(a) of the Code, OpenText may
only invoke a Condition so as to cause the Acquisition not to
proceed, to lapse or to be withdrawn with the consent of the Panel.
The Panel will normally only give its consent if the circumstances
which give rise to the right to invoke the Condition are of
material significance to OpenText in the context of the
Acquisition. This will be judged by reference to the facts of each
case at the time that the relevant circumstances
arise.
4.
Each of Conditions
1 (Conditions to the Scheme and
the Acquisition), 2(a), 2(b) and 2(c) (Scheme approval) (and any acceptance
condition if the Acquisition is implemented by means of a Takeover
Offer) will not be subject to Rule 13.5(a) of the
Code.
5.
Any Condition that
is subject to Rule 13.5(a) of the Code may be waived by
OpenText.
6.
The Acquisition
will not become Effective unless the Conditions have been fulfilled
or (to the extent capable of waiver) waived or, where appropriate,
have been determined by OpenText to be or remain satisfied by no
later than 11.59 p.m. on the Long Stop Date.
7.
Each of the
Conditions shall be regarded as a separate Condition and shall not
be limited by reference to any other Condition.
Part C
Implementation by way of Takeover Offer
Subject
to the terms of the Co-operation Agreement (while the Co-operation
Agreement is continuing), and obtaining the consent of the Panel,
OpenText reserves the right to elect to implement the Acquisition
by way of a Takeover Offer as an alternative to the Scheme. In such
event, the Takeover Offer will be implemented on the same terms and
conditions, so far as applicable, as those which would apply to the
Scheme subject to appropriate amendments to reflect the change in
method of effecting the Acquisition, including (without limitation)
the inclusion of an acceptance condition set at 90 per cent. of
Micro Focus Shares to which the Takeover Offer relates (or such
lesser percentage as may be required by the Co-operation Agreement
and/or determined after consultation with the Panel (if
necessary)), being in any case more than 50 per cent. of the voting
rights normally exercisable at a general meeting of Micro Focus,
including, for this purpose, any such voting rights attaching to
Micro Focus Shares that are issued before the Takeover Offer
becomes or is declared unconditional as to acceptances, whether
pursuant to the exercise of any outstanding subscription or
conversion rights or otherwise.
Part D
Certain further terms of the Acquisition
1.
If OpenText is
required by the Panel to make a mandatory offer for Micro Focus
Shares under Rule 9 of the Code, OpenText may make such alterations
to the above Conditions as are necessary to comply with Rule 9 of
the Code.
2.
The availability of
the Acquisition to persons not resident in the UK may be affected
by the laws of the relevant jurisdiction. Persons who are not
resident in the UK should inform themselves about, and observe, any
applicable requirements. Micro Focus Shareholders who are in any
doubt about such matters should consult an appropriate independent
professional adviser in the relevant jurisdiction without delay and
observe any applicable requirements. Further details in relation to
Overseas Shareholders will be contained in the Scheme
Document.
3.
Micro Focus Shares
will be acquired by Bidco 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 or accruing 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, repurchase or redemption or otherwise) made on or after
the date of this Announcement in respect of Micro Focus
Shares.
4.
If any dividend,
other distribution or return of capital is announced, declared,
made, payable or paid in respect of Micro Focus Shares on or after
the date of this Announcement and before the Effective Date,
OpenText reserves the right to reduce the consideration payable in
respect of each Micro Focus Share by the amount of all or part of
any such dividend, other distribution or return of capital, in
which case any reference in this Announcement to the consideration
payable under the terms of the Acquisition will be deemed to be a
reference to the consideration as so reduced. If OpenText exercises
this right or makes such a reduction in respect of a dividend,
other distribution or return of capital, Micro Focus Shareholders
will be entitled to receive and retain that dividend, other
distribution or return of capital. Any exercise by OpenText of its
rights referred to in this paragraph 4 shall be the subject of an
announcement and, for the avoidance of doubt, shall not be regarded
as constituting any revision or variation of the
Acquisition.
5.
This Announcement
and any rights or liabilities arising hereunder, the Acquisition,
the Scheme and the Forms of Proxy will be governed by the laws of
England and Wales and be subject to the jurisdiction of the courts
of England and Wales. The Acquisition will also be subject to the
Conditions and further terms set out in this Announcement and to be
set out in the Scheme Document and such further terms as may be
required to comply with the Listing Rules and the provisions of the
Code. The Acquisition and the Scheme will comply with the
applicable requirements of the FCA, the London Stock Exchange and
the Court, as well as with the Panel and the Code. This
Announcement does not constitute, or form part of, an offer or
invitation to purchase Micro Focus Shares or any other
securities.
APPENDIX 2
SOURCES AND BASES OF INFORMATION
In this
Announcement, unless otherwise stated or the context otherwise
requires, the following sources and bases have been
used:
(a)
The value
attributed to the fully diluted issued share capital of Micro Focus
of US$2,183 million is based on a value of 532 pence per Micro
Focus Share, and the fully diluted share capital of Micro Focus of
347,710,059 Micro Focus Shares, which is calculated on the basis
of:
(i)
336,020,900 Micro
Focus Shares in issue on 24 August 2022 (being the last Business
Day before the date of this Announcement); plus
(ii)
25,093,295 Micro
Focus Shares which may be issued (net of options proceeds) on or
after the date of this Announcement on the exercise of options or
vesting of awards under the Micro Focus Share Plans;
plus
(iii)
2,556,283 Micro
Focus Shares which may be issued (net of warrants proceeds) on or
after the date of this Announcement on the exercise of AWS
Warrants; less
(iv)
15,960,419 Micro
Focus Shares held in trust in the Micro Focus EBT as at 24 August
2022.
(b)
The enterprise
value of US$5,961 million is calculated by reference to the fully
diluted equity value plus pro forma net debt of US$3,694 million
plus pension liability of US$85 million as at 30 April 2022, with
pro forma net debt comprising the below from the unaudited
consolidated balance sheet of Micro Focus as of that date, unless
otherwise stated:
(i)
net debt of
US$3,651 million;
(ii)
interim dividend of
US$26 million payable on 5 August 2022;
(iii)
outstanding tax
liability of US$17 million in relation to the disposal of the
Digital Safe business.
(c)
The implied
enterprise value multiple of approximately 2.2 times is based on
Micro Focus’s pro forma revenue for the 12 months to 30 April
2022 of US$2,666 million, which is calculated on the basis
of:
(i)
Micro Focus’s
revenue for the 12 months to 30 April 2022 of US$2,744 million;
less
(ii)
Digital
Safe’s revenue reflected in consolidated financial
information of Micro Focus for the 12 months to 30 April 2022 of
US$78 million.
(d)
The implied
enterprise value multiple of approximately 6.3 times is based on
Micro Focus’s pro forma Adjusted EBITDA for the 12 months to
30 April 2022 of US$942 million, which is calculated on the basis
of:
(i)
Micro Focus’s
Adjusted EBITDA for the 12 months to 30 April 2022 of US$978
million; less
(ii)
Digital
Safe’s Adjusted EBITDA reflected in consolidated financial
information of Micro Focus for the 12 months to 30 April 2022 of
US$36 million.
(e)
Where amounts are
shown both in US dollars and sterling in this Announcement, an
exchange rate of US$1.18:£1 has been used, which was derived
from data provided by Bloomberg as at 4.30pm London Time on 24
August 2022 (being the last Business Day before the date of this
Announcement).
(f)
Financial
information relating to Micro Focus has been extracted from the
audited consolidated financial statements of Micro Focus for the
financial year ended 31 October 2021 and the unaudited consolidated
financial statements of Micro Focus for the six months ended 30
April 2022.
(g)
Unless otherwise
stated, all prices for Micro Focus Shares are the Closing Price for
the relevant date.
(h)
The three month and
six month Volume Weighted Average Prices are derived from Bloomberg
data.
(i)
Certain figures
included in this Announcement have been subject to rounding
adjustments.
APPENDIX 3
DETAILS OF IRREVOCABLE UNDERTAKINGS
1.
Irrevocable
undertakings from Micro Focus Directors
The
following Micro Focus Directors have given irrevocable undertakings
in respect of their own beneficial holdings of Micro Focus Shares
(or those Micro Focus Shares over which they have control) to vote
(or procure a vote) in favour of the resolutions relating to the
Acquisition at the Micro Focus Meetings or, in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept
(or procure the acceptance of) such Takeover Offer:
Name
|
Total Number ofMicro Focus Shares
|
Percentage of issued share capital (%)
|
Matthew
Ashley
|
43,280
|
0.013%
|
Richard
Atkins
|
13,862
|
0.004%
|
Amanda
Brown
|
3,841
|
0.001%
|
Gregory
Lock
|
835,000
|
0.248%
|
Stephen
Murdoch
|
287,395
|
0.086%
|
The
obligations of the Micro Focus Directors under the irrevocable
undertakings given by them shall lapse and cease to have effect on
and from the earlier of the following occurrences:
(a)
OpenText publicly
announces, with the consent of the Panel, that it does not intend
to proceed with the Acquisition;
(b)
any competing offer
for the entire issued and to be issued share capital of Micro Focus
becomes or is declared wholly unconditional or, if proceeding by
way of scheme of arrangement, becomes effective in accordance with
its terms; or
(c)
the Acquisition
lapses, is withdrawn or otherwise terminates in accordance with its
terms.
These
irrevocable undertakings remain binding in the event a competing
offer is made for Micro Focus. Stephen Murdoch and Matthew Ashley
also hold options over 1,867,737 Micro Focus Shares pursuant to the
Micro Focus Share Plans. These irrevocable undertakings also extend
to any shares acquired by the Micro Focus Directors as a result of
the vesting of awards or the exercise of options under the Micro
Focus Share Plans.
2.
Irrevocable
undertaking from Dodge & Cox
Dodge
& Cox has given an irrevocable undertaking to vote (or procure
a vote) in favour of the resolutions relating to the Acquisition at
Micro Focus Meetings in respect of the number of Micro Focus Shares
(including 31,090,071 Micro Focus Shares represented by Micro Focus
ADSs) set out below or, in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept (or procure the
acceptance of) such Takeover Offer:
Name
|
Total Number ofMicro Focus Shares
|
Percentage of issued share capital (%)
|
Dodge
& Cox
|
54,654,085*
|
16.27
|
*Includes
31,090,071 Micro Focus Shares represented by Micro Focus
ADSs.
The
obligations of Dodge & Cox under the irrevocable undertaking
shall lapse and cease to have effect on and from the earlier of the
following occurrences:
(a)
the Acquisition
lapses, is withdrawn or otherwise terminates in accordance with its
terms;
(b)
any competing offer
for the entire issued and to be issued share capital of Micro Focus
becomes or is declared wholly unconditional or, if proceeding by
way of scheme of arrangement, becomes effective in accordance with
its terms;
(c)
a third party
announces under Rule 2.7 of the Code a firm intention to make an
offer for Micro Focus (a Competing
Offer Rule 2.7 Announcement), whether by way of an offer or
a scheme of arrangement, (a Competing Offer) and:
(i)
the Competing Offer
provides for an amount or value of consideration (whether in cash
or securities) which represents an improvement of at least 10 per
cent. over the Acquisition Price, the value of which, in the case
of any securities component or cash consideration in a currency
other than Great British Pounds Sterling, shall be calculated at
5.00 p.m. on the last dealing day prior to the Competing Offer Rule
2.7 Announcement; and
(ii)
a period of ten
Business Days has elapsed from the date of the Competing Offer Rule
2.7 Announcement without OpenText having revised the terms of the
Acquisition so that the price per Micro Focus Share under the
revised terms of the Acquisition is equal to or exceeds the amount
or value of consideration per Micro Focus Share of the Competing
Offer, the value of which, in the case of any securities component
or cash consideration in a currency other than Great British Pounds
Sterling, shall be calculated at 5.00 p.m. on the last dealing day
prior to the date of any such revision ; or
(d)
the Scheme has not
become Effective by 11.59 p.m. on the Long Stop Date.
APPENDIX 4
DEFINITIONS
The following definitions apply throughout this Announcement unless
the context otherwise requires:
“Announcement”
|
this
announcement
|
“Acquisition”
|
the
proposed acquisition by OpenText (through its wholly-owned
subsidiary, Bidco) of the entire issued and to be issued share
capital of Micro Focus by means of the Scheme, or should OpenText
so elect (with the consent of the Panel and subject to the terms of
the Co-operation Agreement), by means of a Takeover
Offer
|
“Acquisition
Price”
|
532
pence per Micro Focus Share
|
“Awards”
|
options
and awards over Micro Focus Shares
|
“AWS
Warrants”
|
warrants
issued to Amazon.com NV Investment Holdings LLC in connection with
Micro Focus’s commercial agreement
with Amazon.com Services LLC entered into on 24 February
2021
|
“Barclays”
|
Barclays
Bank PLC, acting through its investment bank
|
“Bidco”
|
OpenText
UK Holding Limited, a company incorporated in England and Wales
with registered number 14311122
|
“Business
Day”
|
a day,
not being a public holiday, Saturday or Sunday, on which banks in
London are open for normal business
|
“Clean Team
Agreement”
|
the
clean team agreement dated 1 August 2022 between OpenText and Micro
Focus, as described in paragraph 11 of this
Announcement
|
“Closing
Price”
|
the
closing price of a Micro Focus Share as derived from Bloomberg on
any particular date
|
“Code”
|
the
City Code on Takeovers and Mergers issued by the Panel, as amended
from time to time
|
“Companies
Act”
|
the
Companies Act 2006, as amended from time to time
|
“Condition(s)”
|
the
conditions of the Acquisition, as set out in Part A of Appendix 1
to this Announcement and to be set out in the Scheme
Document
|
“Confidentiality
Agreement”
|
the
confidentiality agreement dated 28 July 2022 between OpenText and
Micro Focus, as described in paragraph 11 of this
Announcement
|
“Co-operation
Agreement”
|
the
co-operation agreement dated 25 August 2022 between Micro Focus,
OpenText and Bidco as described in paragraph 11 of this
Announcement
|
“Court”
|
the
High Court of Justice of England and Wales
|
“Court
Meeting”
|
the
meeting or meetings of Scheme Shareholders (or of any class or
classes thereof) to be convened by an order of the Court pursuant
to section 896 of the Companies Act, notice of which will be set
out in the Scheme Document, for the purposes of considering, and if
thought fit, approving the Scheme (with or without amendment) and
any adjournment, postponement or reconvening thereof
|
“Court
Order”
|
the
order of the Court sanctioning the Scheme under section 899 of the
Companies Act
|
“Court
Sanction”
|
has the
meaning given in Condition 2(c)(i) (Scheme approval) in Appendix 1 to this
Announcement
|
“Dealing
Arrangement”
|
an
arrangement of the kind referred to in Note 11(a) in the definition
of “acting
in concert”
in the Code
|
“Dealing
Disclosure”
|
an
announcement pursuant to Rule 8 of the Code containing details of
dealings in relevant securities of a party to an offer
|
“Disclosed”
|
the
information which has been: (a) fairly disclosed in writing before
the date of this Announcement by or on behalf of Micro Focus to
OpenText (or any of OpenText’s respective officers,
employees, agents or advisers in their capacity as such) including,
without limitation, in the virtual data room operated by or on
behalf of Micro Focus in respect of the Acquisition; (b) disclosed
by or on behalf of Micro Focus in the Annual Report and Financial
Statements of Micro Focus for the year ended 31 October 2021; (c)
disclosed by or on behalf of Micro Focus in the interim results
announcement for Micro Focus for the six months ended 30 April
2022; (d) disclosed by or on behalf of Micro Focus in this
Announcement; (e) disclosed in any other public announcement by, or
on behalf of, Micro Focus in accordance with the Listing Rules, the
Disclosure Guidance and Transparency Rules or otherwise made via
Regulatory Information Service before the date of this
Announcement; or (f) otherwise fairly disclosed by or on behalf of
Micro Focus during any management due diligence sessions in respect
of the Acquisition prior to the date of this
Announcement;
|
“Disclosure Guidance
and Transparency Rules”
|
the
Disclosure Guidance and Transparency Rules made by the FCA under
FSMA and forming part of the FCA’s handbook, as amended
from time to time
|
“Effective”
|
in the
context of the Acquisition: (a) if the Acquisition is implemented
by way of the Scheme, the Scheme having become effective pursuant
to its terms; or (b) if the Acquisition is implemented by way of
the Takeover Offer, the Takeover Offer having been declared or
having become unconditional in accordance with the requirements of
the Code
|
“Effective
Date”
|
the
date on which the Acquisition becomes Effective
|
“Enlarged
Group”
|
the
enlarged group following the Acquisition comprising the OpenText
Group and the Micro Focus Group
|
“Eurozone”
|
the
Member States of the European Union that have adopted the euro as
their common currency and sole legal tender
|
“Excluded
Shares”
|
any
Micro Focus Shares:
(i) beneficially
owned by Bidco or any other member of the OpenText Group;
or
(ii) held by
Micro Focus in treasury,
in each
case, immediately before the Scheme Record Time
|
“FCA”
|
the
Financial Conduct Authority or its successor from time to
time
|
“Forms of
Proxy”
|
the
forms of proxy in connection with each of the Court Meeting and the
General Meeting, which shall accompany the Scheme
Document
|
“FSMA”
|
the
Financial Services and Markets Act 2000, as amended from time to
time
|
“General
Meeting”
|
the
general meeting of Micro Focus Shareholders to be convened in
connection with the Scheme for the purpose of considering and, if
thought fit, approving, the Resolutions (with or without
amendment), notice of which shall be contained in the Scheme
Document and any adjournment, postponement or reconvening
thereof
|
“Goldman
Sachs”
|
Goldman
Sachs International
|
“HMRC”
|
HM
Revenue and Customs
|
“IFRS”
|
International
Financial Reporting Standards
|
“Irish
Sharesave”
|
means
the Micro Focus Sharesave Plan Ireland 2013 (as amended from time
to time)
|
“Last Accounts
Date”
|
31
October 2021
|
“Listing
Rules”
|
the
listing rules made under FSMA by the FCA and contained in the
FCA’s
publication of the same name, as amended from time to
time
|
“London Stock
Exchange”
|
the
London Stock Exchange plc or its successor
|
“Long Stop
Date”
|
31 May
2023 or such later date (if any) as OpenText and Micro Focus may
agree (with the consent of the Panel, and the Court may approve (if
such approval(s) are required))
|
“Micro
Focus”
|
Micro
Focus International PLC, a company incorporated in England and
Wales with registered number 05134647
|
“Micro Focus ADR
Programme”
|
Sponsored
level III American Depositary Receipt facility created pursuant to
the deposit agreement between Micro Focus and Deutsche Bank Trust
Company Americas dated 11 August 2017
|
“Micro Focus
ADSs”
|
American
Depositary Shares, each representing one Micro Focus
Share
|
“Micro Focus ADS
Holders”
|
holders
of Micro Focus ADSs
|
“Micro Focus
Articles”
|
the
articles of association of Micro Focus from time to
time
|
“Micro Focus
Directors” or “Micro Focus Board”
|
the
directors of Micro Focus as at the date of this Announcement or,
where the context so requires, the directors of Micro Focus from
time to time
|
“Micro Focus
DSBP”
|
means
the Micro Focus Deferred Share Bonus Plan (as amended from time to
time)
|
“Micro Focus
ESPP”
|
means
the Micro Focus Employee Stock Purchase Plan 2006 (as amended from
time to time)
|
“Micro Focus
Group”
|
Micro
Focus and its subsidiary undertakings from time to
time
|
“Micro Focus
LTIP”
|
the
Micro Focus Incentive Plan 2005 (as amended from time to
time)
|
“Micro Focus
Meetings”
|
the
Court Meeting and the General Meeting
|
“Micro Focus Share
Plans”
|
the
Micro Focus LTIPs, the Micro Focus DSBP, the Irish Sharesave, the
UK Sharesave and the Micro Focus ESPP, each as amended from time to
time
|
“Micro Focus
Shareholders”
|
registered
holders of Micro Focus Shares from time to time
|
“Micro Focus
Shares”
|
the
ordinary shares of 10 pence each in the capital of Micro
Focus
|
“Numis”
|
Numis
Securities Limited
|
“NYSE”
|
the New
York Stock Exchange
|
“Offer
Period”
|
the
offer period (as defined by the Code) relating to Micro Focus,
which commenced on 25 August 2022
|
“Opening Position
Disclosure”
|
an
announcement pursuant to Rule 8 of the Code containing details on
interests or short positions in, or rights to subscribe for, any
relevant securities of a party to the Acquisition
|
“OpenText”
|
OpenText
Corporation, a company incorporated in Ontario with corporation
number 1083604-4
|
“OpenText
Group”
|
OpenText
and its subsidiary undertakings from time to time
|
“Overseas
Shareholders”
|
shareholders
who are resident in, ordinarily resident in, or citizens of,
jurisdictions outside the United Kingdom
|
“Panel”
|
the
Panel on Takeovers and Mergers
|
“PRA”
|
the
Prudential Regulation Authority
|
“PSU
Awards”
|
means
Awards granted under the Micro Focus LTIP with performance
conditions
|
“Relevant
Authority”
|
any
central bank, ministry, governmental, quasigovernmental,
supranational (including the European Union), statutory, regulatory
or investigative body, authority or tribunal (including any
national or supranational antitrust, competition or merger control
authority, any sectoral ministry or regulator and any foreign
investment review body), national, state, municipal or local
government (including any subdivision, court, tribunal,
administrative agency or commission or other authority thereof),
any entity owned or controlled by them, any trade agency,
association, institution or professional or environmental body in
any jurisdiction
|
“relevant
securities”
|
shall
be construed in accordance with the Code
|
“Resolutions”
|
the
resolutions to be proposed at the General Meeting necessary to
implement the Scheme, including, among other things, a resolution
to amend the Micro Focus Articles by the adoption and inclusion of
a new article under which any Micro Focus Shares issued or
transferred after the Scheme Record Time (other than to Bidco
and/or its nominees) shall be automatically transferred to Bidco on
the same terms as the Acquisition (other than terms as to timings
and formalities)
|
“Restricted
Jurisdiction(s)”
|
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 to
Micro Focus Shareholders in that jurisdiction
|
“RSU
Awards”
|
means
Awards granted under the Micro Focus LTIP without performance
conditions
|
“Sanction
Hearing”
|
the
hearing of the Court at which Micro Focus will seek an order
sanctioning the Scheme pursuant to Part 26 of the Companies
Act and any adjournment, postponement or reconvening
thereof
|
“Scheme”
|
the
proposed scheme of arrangement under Part 26 of the Companies Act
between Micro Focus and the Scheme Shareholders in connection with
the Acquisition, with or subject to any modification, addition or
condition approved or imposed by the Court and agreed by Micro
Focus and OpenText
|
“Scheme
Document”
|
the
document to be sent to Micro Focus Shareholders and persons with
information rights containing, among other things, the full terms
and conditions of the Scheme and notices of the Micro Focus
Meetings
|
“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 preceding the
Effective Date (or such other date as OpenText and Micro Focus may
agree)
|
“Scheme
Shareholders”
|
registered
holders of Scheme Shares from time to time
|
“Scheme
Shares”
|
Micro
Focus Shares:
(i) in issue
as at the date of the Scheme Document;
(ii) (if any)
issued after the date of the Scheme Document and before the Voting
Record Time; and
(iii) (if any)
issued on or after the Voting Record Time and before the Scheme
Record Time, either on terms that the original or any subsequent
holders thereof shall be bound by the Scheme or in respect of which
the holders thereof shall have agreed in writing to be bound by the
Scheme,
in each
case, and where the context requires, which remain in issue at the
Scheme Record Time but excluding the Excluded Shares
|
“SEC”
|
the
United States Securities and Exchange Commission
|
“Significant
Interest”
|
in
relation to an undertaking, a direct or indirect interest of 20 per
cent. or more of: (a) the total voting rights conferred by the
equity share capital (as defined in section 548 of the Companies
Act) of such undertaking; or (b) the relevant partnership
interest
|
“Takeover
Offer”
|
if
(with the consent of the Panel) OpenText elects to effect the
Acquisition 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 OpenText or Bidco to acquire the entire issued and to be issued
share capital of Micro Focus on the terms and subject to the
conditions to be set out in the related offer document and, where
the context permits, any subsequent revision, variation, extension
or renewal of such takeover offer
|
“Third
Party”
|
has the
meaning given in Condition 5(a) (General Third Party clearances) in
Appendix 1 to this Announcement
|
“UK” or “United Kingdom”
|
United
Kingdom of Great Britain and Northern Ireland
|
“UK Market Abuse
Regulation”
|
Regulation
(EU) No. 597/2014 of the European Parliament and the Council of 16
April 2014 on market abuse as it forms part of retained EU law as
defined in the European Union (Withdrawal) Act 2018, as amended
from time to time
|
“UK
Sharesave”
|
means
the Micro Focus Sharesave Plan 2006 (as amended from time to
time)
|
“U.S.” or “United States”
|
the
United States of America, its territories and possessions, any
state of the United States and the District of
Columbia
|
“U.S. Exchange
Act”
|
the
U.S. Securities Exchange Act of 1934, as amended from time to time,
and the rules and regulations promulgated thereunder
|
“U.S.
GAAP”
|
generally
accepted accounting principles in the U.S.
|
“U.S. Securities
Act”
|
the
U.S. Securities Act of 1933, as amended from time to time, and the
rules and regulations promulgated thereunder
|
“Voting Record
Time”
|
the
time and date to be specified in the Scheme Document by reference
to which entitlement to vote on the Scheme will be
determined
|
“Wider Micro Focus
Group”
|
the
members of the Micro Focus Group and their respective associated
undertakings and any other body corporate, partnership, joint
venture or person in which Micro Focus and all such undertakings
(aggregating their interests) have a Significant
Interest
|
“£,” or “pence”
|
the
lawful currency of the United Kingdom from time to
time
|
“US$”
|
the
lawful currency of the United States from time to time
|
In this
Announcement: (a) “subsidiary”, “subsidiary undertaking”, “undertaking” and “associated undertaking” have the respective
meanings given to them in the Companies Act; and (b) all times are
London times, unless otherwise stated.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereto duly authorized.
Date:
26 08 2022
Micro
Focus International plc
|
By:
|
/s/
Matt Ashley
|
|
Name:
|
Matt
Ashley
|
|
Title:
|
Chief
Financial Officer
|