LR/AIM Rules transactions–1 January to 30 April 2017

Lexis®PSL Corporate and Market Tracker has conducted research examining LR/AIM Rules transactions for the period 1 January 2017 to 30 April 2017.

Background and approach

Lexis®PSL Corporate and Market Tracker has conducted research to examine LR/AIM Rules transactions for the period 1 January to 30 April 2017 (the Review Period).

The scope of the data analysed includes all Class 1 transactions on the Main Market of the LSE, all related party transactions on the Main Market with a deal value of £100 million and above, and all substantial transactions and related party transactions on AIM with a deal value of £10 million and above.

We reviewed a total of 32 transactions that were subject to either the UKLA Listing Rules or the AIM Rules (collectively, the Rules). Of these there were 8 Class 1 transactions and 24 related party transactions (7 for Main Market companies, 17 for AIM companies). Below is a summary and analysis of the 32 transactions.

Class 1 Transactions

Company names Transaction value (overall) Use of proceeds Nature of transaction Key Terms of transaction Advisers
British American Tobacco plc (BAT) acquires Reynolds American Inc (Reynolds) £40.95 billion ($49.4 billion) To expand and create a unified global business for tobacco and Next Generation Products.to have significant presence in high growth emerging markets and direct access to US markets. Acquisition (see below) Transaction will be effected by US statutory merger - non-BAT shareholders' will receive £23.92 ($29.44) per share and 0.5260 BAT ordinary shares which shall be represented by BAT American Depository Receipts listed on the New York Stock Exchange (ADRs) BAT intends to register BAT ADRs under US securities laws. BAT advisors: Centerview Partners UK LLP, Deutsche Bank AG and UBS Limited.
Tesco plc (Tesco) acquires Booker Group plc (Booker) £3.7 billion To accelerate revenue growth Merger (see below) The merger is based on a Court-sanctioned scheme of arrangement
Each Booker scheme shareholder will receive new Tesco shares of 0.861 and 0.426 GBP in cash.
Booker's chief executive officer, Charles Wilson, and chairman, Stewart Gilliland, will join the board of the combined companies.
Tesco advisors: Greenhill, Barclays and Citi.Booker advisor: J.P. Morgan Cazenove
RM plc (RM)acquires Connect Education & Care Limited (Connect Care) £56.5 million To become a market leader and improve their UK regional presence;
The board believes that there are several areas for potential cost synergies from the combined businesses
Acquisition (see below) RM conditionally agreed to purchase the entire issued share capital of Connect Care on a cash free, debt free basis, subject to customary adjustments. RM will also assume Connect Care's pension schemes which reported a combined net liability of £7.9 million on an IAS 19 basis as at 31 August 2016. RM advisors: Rothschild and Numis Securities Limited
Reckitt Benckiser Group plc (RB acquires Mead Johnson Nutrition Company (Mead Johnson) £14.36 billion ($17.9 billion) To grow in consumer health and on investing in Powerbrands with attractive growth prospect.RB increases its developing markets scale by approximately 65%. Developing markets will account for approximately 40% of the combined group's sales, with a critical mass in key geographies, notably China.
RB's retail scale and whitespace expertise will also enable accelerated entry into new markets for Mead Johnson.
Merger (see below) RB signs a merger agreement with Mead Johnson under which Mead Johnson shareholders will receive $90 in cash for each share of common stock, valuing the total equity at $16.6 billion.RB does not intend to buy-back any further RB shares until the debt level is materially lower.
Mead Johnson may continue to pay its normal quarterly dividend until completion, not to exceed $0.4125 per share, to be declared and paid on dates consistent with the 2016 quarterly dividend declaration and payment dates.
RB advisors: Robey Warshaw LLP and Bank of America Merrill Lynch (joint financial advisors), Deutsche Bank AG and HSBC Bank plc
Sportech plc (Sportech) disposes of the football pools business to OpCapita LLP (OpCapita) through a newly incorporated private limited company FP Acquisitions Limited (FP) £83 million Afurther return of capital to shareholders from the net cash proceeds of the disposal
to create a focused gaming business primarily based in the US and comprising the racing and digital and venues divisions
Disposal (see below) The disposal will be effected through the sale of the assets and liabilities of The Football Pools Limited and Football Pools Games Limited pursuant to the terms of the sale agreement.Sportech and FP will enter a transitional service agreement on completion. Sportech's advisors: Investec Bank PLC and Peel Hunt LLP
OpCapita's advisor: Dean Street Advisers.
Standard Life plc (Standard Life) acquires Aberdeen Asset Management plc (Aberdeen) £3.8 billion To be a leader in active investing, the combined group will be the UK's largest investor and Europe's second largest. Merger (see below) A court-sanctioned scheme of arrangement Aberdeen shareholders will receive 0.757 new shares in exchange for each Aberdeen share
Standard Life shareholders will receive the final dividend of 0.1335 GBP per Standard Life share and
Aberdeen shareholders will receive an interim dividend of up to 0.075 GBP.
Standard Life's chairman, Sir Gerry Grimstone, would become chairman of the of the Combined Group and Aberdeen's chairman, Simon Troughton, would become deputy chairman. Standard Life's CEO, Keith Skeoch, and Aberdeen's CEO, Martin Gilbert, would become co-CEOs of the Combined Group.  In addition, Aberdeen's CFO, Bill Rattray, and Standard Life's CIO, Rod Paris, would retain their positions in the Combined Group.
the board of the Combined Group would comprise equal numbers of Standard Life directors and Aberdeen directors.
The combined group will be headquartered in Scotland.
Aberdeen's advisors: J.P. Morgan Cazenove and Credit Suisse
Standard Life's advisors: Goldman Sachs International
John Wood Group plc (John Wood) acquires Amec Foster Wheeler plc (Amec Foster) £2.225 million To become a global leader in project, engineering and technical services delivery across a broad platform of industrial sectors. Merger (see below) Court-sanctioned scheme of arrangement
Amec Foster shareholders' will receive for each of their share a 0.75 New Wood Group shares
and the companies agreed to put arrangements in place to allow holders of Amec Foster ADSs to participate in the Combination.
Amec Fosters' advisors: Goldman Sachs International, BofA Merrill Lynch and Barclays Bank.
John Wood avdisors: J.P. Morgan Cazenove and Credit Suisse.
Circassia Pharmaceuticals plc (Circassia acquires AstraZeneca (AstraZeneca) £186.06 million ($230 million) To secure certain US commercial rights to two chronic obstructive pulmonary disease products Collaboration agreement (see below) Circassia will issue ordinary shares with a value of £40.45 million ($50 million) to AstraZeneca on completion;
Circassia will pay AstraZeneca deferred non-contingent consideration of £80.91 million ($100 million) on the earlier of: (i) 30 June 2019; and (ii) the approval of Duaklir® by the FDA;
Circassia will initially enter a commercial collaboration and profit share arrangement with AstraZeneca for Tudorza® in the US.
Circassia will make further payments to AstraZeneca of up to £64.72 million ($80 million) dependent on the level of Tudorza®'s sales within the US;
Circassia intends to fund the deferred and contingent consideration through third-party financing;
Circassia will pay royalties to AstraZeneca on sales of Duaklir® in the US, following potential approval; and
Circassia will make R&D contributions of up to £50.57 million ($62.5 million) payable to AstraZeneca as deferred payments.
Circasscia advisors: Numis Securities Limited and J.P. Morgan Securities plc

Nature of transaction

Company Shareholding Financing Conditions Close of transaction
BAT acquires Reynolds BAT acquires remaining 57.8% shares of Reynolds not already obtained by BAT. Existing cash resources, new bank credit lines and the issuance of new bonds Subject to BAT's and Reynolds' shareholder approval.
Obtaining anti-trust from U.S and Japan
Approval of the BAT shares for listing on the LSE and the BAT ADRs on the NYSE, and other customary conditions
3rd quarter of 2017
Tesco acquires Booker Booker owns 16% from the new merger entity Existing cash resources Subject to shareholders' approval and
to CMA pre-conditions
Effective date (tbc)
RM acquires Connect Care RM assumes the entire share capital of Connect Care. Existing cash reserves and new debt facilities Subject to shareholders' approval and
clearance from CMA
The acquisition is expected to complete in the first half of RM's current financial year ending 30 November 2017.
RB acquires Mead Johnson tbc New fully underwritten debt facilities with Bank of America Merrill Lynch, Deutsche Bank and HSBC including an additional £1 billion revolving credit facility to provide financing headroom from the date of completion. RB expects to refinance the bridge by the issuance of bonds to reflect the expected cash flows of the combined group The acquisition is subject to approval by both shareholders of RB and Mead Johnson; regulatory approvals (including in the US, China and other markets), and certain other customary conditions End of 3rd quarter of 2017
Sportech disposes of the football pools business to FP N/A Full cash FP must obtain the necessary licences from the Gambling Commission and the passing of the resolution by Sportech shareholders at the general meeting. Completion date (tbc)
Standard Life acquires Aberdeen Aberdeen shareholders would own approximately 33.3% and Standard Life shareholders would own approximately 66.7% of the Combined Group on a diluted basis All share merger Subject to shareholder approval from both companies
Court approvals
CMA clearance
European Commission clearance
German clearance
Irish clearance
EU Member State clearance; and
US Anti-Trust
3rd quarter of 2017
John Wood acquires Amec Foster Amec Foster shareholders will own approximately 44%. of the share capital of the Combined Group. All share merger Subject to shareholders approval of both companies
court approvals
CMA clearance
regulatory clearance from Australia, Canada, Turkey and UK.
Second half of 2017
Circassia enters a collaboration agreement with AstraZeneca tbc A combination of consideration shares and cash (or, in certain circumstances interest bearing short-term debt). Subject to shareholders' approval
the issuance and delivery of an independent valuation report in relation to the consideration shares
Early in Q2 2017.

Irrevocables :

6.8% of share capital of Booker represents irrevocable undertaking of Booker's directors in favour of the Scheme at the Scheme Court Meeting and the resolutions to be proposed at the Booker general meeting. 0.0049% of share capital of Tesco represents irrevocable undertaking of Tesco's directors in favour of the resolutions proposed at Tesco's general meeting. Two directors of Tesco who hold their shares in the form of ADRs (0.0034%) have irrevocably undertaken to vote in favour of the Tesco resolutions to be proposed at the Tesco general meeting.

Standard Life directors have irrevocably undertaken to vote in favour of the resolutions to be proposed at the Standard Life general meeting totalling to approximately 0.2% of their share capital. Aberdeen recommending directors have irrevocably undertaken to vote in favour of the scheme in respect of their own beneficial holdings totalling to approximately 0.2% of their share capital.

Amec Foster's directors have irrevocably undertaken to vote in favour of the scheme in respect of their own beneficial holdings totalling to approximately 0.14% of their share capital. John Wood's directors have irrevocably undertaken to vote in favour of the relevant resolutions at the John Wood general meeting which will be convened in connection with the combination, in respect of their entire beneficial holdings of approximately 0.5% of their share capital.

Mix and Match Facility:

Booker shareholders' will be able to elect, subject to off-setting elections, to vary the proportions in which they receive new Tesco shares and cash. The Mix and Match Facility will not change the total number of new Tesco shares to be issued or the maximum amount of cash that will be paid under the terms of the Merger. The chief executive officer of Booker has irrevocably undertaken to elect to receive 100%. New Tesco shares in respect of his entire holding of Booker shares, subject to the elections of other Booker shareholders. A Booker shareholder not making an election under the Mix and Match Facility will receive 0.861 New Tesco Shares and 0.426 GBP in cash for each Booker share it holds.

Lockout Agreement:

The chief executive officer of Booker entered into a lockout agreement to not dispose of his current holding of 24,533 Tesco shares and the new Tesco shares he will receive pursuant to the merger without Tesco's consent during the lock-up period of five years from the effective date.

Related Party Transactions

Company name Related parties Transaction value (overall) Related Party Transaction value Related Party shareholding (%) Use of proceeds Market
JKX Oil & Gas (Jersey) Limited Proxima Capital Group and Neptune Invest & Finance Corp pursuant to Listing Rule 11.1.4. £32.57 million ($40 million) £156,224.75 ($3,876,000) N/A To restructure and to approve certain changes to the terms and conditions of the guaranteed convertible bonds Main Market
FastJet plc M&G Investment Management Ltd and JO Hambro Capital Management Limited £23.43 million ($28.8 million) tbc Over 10% For working capital purposes to pursue new strategic/growth opportunities and to expand FastJet into the South African market AIM
Global Energy Developments plc (Global Energy) (see below) The Quasha family trusts and the Everest & Everest Holdings companies have an interest in Lyford, a shareholder of Global Energy.
Alan Quasha, the proposed seller of Everest Vessel Holdings is a principal beneficiary of the Quasha family trusts and is a director of HKN, Global Energy's principal shareholder. Wayne Quasha, controls Everest which itself controls Lyford.
Transaction A: £6.63 million ($8 million)
Transaction B:
Convertible A loan note: £8.7 million ($10.5 million)
Convertible B loan note: £5.06 million ($6.1 million)
Convertible C loan note:£12.43million ($15 million)
tbc 62.45% To make counter-cyclical investments within the global subsea industry that will enable it to capitalise on future recoveries in the oil price and related increased requirements for offshore support services AIM
Acal plc Directors of Acal: Nick Jefferies, Simon Gibbins, Richard Moon, Richard Brooman, Malcolm Diamond, Henrietta Marsh and Tracey Graham. Due to their role as directors their participation in the placing of shares constitutes a related party transaction.
Aberdeen Asset Managers Limited/Aberdeen Asset Investments Limited participation in the placing of shares constitutes a smaller related party transaction pursuant to Listing Rule 11.1.10.
 £14.1 million Directors: £7,499
Aberdeen:£1.7 million
Directors: 0.33% Placing of shares Main Market
Rio Tinto plc 78% of Yancoal Australia Limited is owned by Yanzhou Coal Mining Company Limited. 56% of Yanzhou Coal is owned by Yankuang Group Company Limited which is controlled by State-owned Assets Supervision and Administration Commission of Shandong Province in the People's Republic of China.
The shareholding levels of various Chinese state-owned entities in each of Yankuang, Yanzhou and Chinalco, and Chinalco being a 10.1 % shareholder in the Rio Tinto results in a related party transaction.
£1.97 billion ($2.45 billion) £1.97 billion ($2.45 billion) 10.1% Sale of its wholly-owned Australian subsidiary Coal & Allied Industries Limited to Yancoal Australia Limited Main Market
SDX Energy Inc. MEA Energy Limited and Ingalls & Snyder LLC are SDX largest shareholders and their participation constitutes a related party transaction. £32.14 million ($40 million) £9.45 million ($11.6 million) MEA Energy Limited: 14.4% and Ingalls & Snyder LLC: 14.5% Placing proceeds to fund an acquisition to acquire a portfolio of oil and gas production and exploration assets in Egypt and Morocco. AIM
Kromek Group plc Directors of Kromek: Sir Peter Williams, Derek Bulmer, Lawrence Kinet and Jerel WhittinghamGraeme Speirs, a non-executive director participates in the placing via Polymer N2 Limited.
Miton Group plc is a substantial shareholder.
The participation of the directors and substantial shareholders constitute a related party transaction.
£21 million £15,990 Directors: 0.4%Graeme Speirs: 10.6%
Milton Group: 18.6%
Placing of shares:
to strengthen the Company's balance sheet, driven by OEM requirements; and
for general working capital requirements; capital expenditure to drive efficiency in SPECT; and, to invest in the Company's patent portfolio
AIM
ATTRAQT Group plc Azini 3 LLP is a significant shareholder £28.5 million £60,286.91 more than 10% The net proceeds of the firm placing and open offer will be used primarily to fund the acquisition AIM
Mercia Technologies plc Related party transaction due to their role as directors: Susan Searle, Mark Payton, Martin Glanfield, Matthew Mead, Jonathan Diggines, Ray Chamberlain, Ian Metcalfe and Martin Lamb.
Forward Innovation Fund, Croftdawn Limited, Mercia Growth Nominees Limited and Forward Nominees Limited (as nominee for certain members of the Chamberlain family including Ray Chamberlain constitute a related party transaction.
Woodford Investment Management and Invesco Perpetual participation constitutes a related party transaction.
£40 million Directors & nominees: £322,321.4
Woodford & Inveco: £264,523
Directors: 28.9%. Placing of shares to raise gross proceeds. AIM
Learning Technologies plc Related party transaction due to their role as directors: Andrew Brode, Harry Hill, Leslie-Ann Reed, Peter Gordon and Neil Elton.
Andrew Brode is a director and substantial shareholder of Learning Technologies
£53.6 million Directors: £1,857,500 Directors: 22.64%
Andrew Brode holds 26.89% of the voting rights.
An all cash offer for the entire issued share capital of NetDimensions through a placing and debt facility with Barclays Bank PLC AIM
Glencore plc The transactions (taken together) constitute a smaller related party transaction as defined in Listing Rule 11.1.10 For the Mutanda shares: £736.37 million ($922 million) and for the Katanga Shares £30.35 million ($38 million) in total: £ 766.72 million ($960 million). Glencore will set-off against the cash consideration payable to Fleurette, loans owing to the Glencore by Fleurette and secured over the Mutanda shares, amounting to £444.06 million ($556 million) of which £95.84 million ($120 million) comprises accrued interest.
Glencore has acquired shareholder loans owed to Fleurette by Mutanda Mining Sarl in the amount of £103.83 million ($130 million).
Glencore now owns 100% of the shares in Mutanda and approximately 86.33% of the shares in Katanga Glencore purchased from subsidiaries of Fleurette Properties Limited (the remaining 31% stake in Mutanda Mining Sarl and an approximate 10.25% stake in Katanga Mining Limited Main Market
Collagen Solutions plc Related party transaction due to their role as directors: David Evans, Jamal Rushdy. Gillian Black and Malcolm Gillies £12 million £1 million N/A To have sufficient working capital AIM
Anglo American plc The transaction is a smaller related party transaction as the Public Investment Corporation, a substantial shareholder of Anglo American, is a 30% shareholder in Siyanda and Siyanda is the current 49.9% shareholder in MASA Chrome, a subsidiary of Anglo American £24.16 million ($30 million) £24.16 million ($30 million) N/A To sell its 85% interest in the Union Mine in South Africa and 50.1% interest in MASA Chrome Company to a subsidiary of Siyanda Resources Main Market
Totally plc Bob Holt's participation in the open offer constitutes a related party transaction as he is a director of Totally.Substantial shareholders' participation constitute a related party transaction: Unicorn Asset Management Limited and Seneca Partners Limited. £18 million Bob Holt: £42,337Unicorn Asset Managaement: £500,000
Seneca Partners: £249,999.75
Bob Holt: 1.75%Unicorn Asset Management: 26.94%
Seneca Partners Limited: 15.77 %
To increase working capital AIM
Flowtech Fluid Powers plc Miton Asset Management and Premier Asset Management £10 million Miton Asset Management: £70,000Premier Asset Management: £102,000 Miton Asset Management: 14.8%Premier Asset Management: 13% To fund the acquisition pipeline through the placing and may seek in future additional debt funding, whilst considering the overall level of leverage AIM
Duke Royalty Limited Related party transaction due to their role as directors: Nigel Birrell, Neil Johnson, Charles Cannon-Brookes, James Ryan and Justin Cochrane.Neil Johnson, the director, is the sole voting shareholder of Abingdon Capital Corporation.
Charles Cannon-Brooke, is the investment director and holds 40% of Arlington Group Asset Management Limited.
Arlington and Abingdon are both service providers to the company and both have agreed on a reduction in respect to their service fees.
£15 million £1,524,946 13.7% Placing for fund-raising and publish a document for admission on the AIM market AIM
Franchise Brands plc Directors of Franchise Brands. Placing: £20 million
Acquisition of Metro Rod Limited: £28 million.
£11.2 million 56% The net proceeds of the placing will be used to satisfy part of the consideration payable pursuant to the acquisition AIM
AO Worlds plc Related party transaction due to their role as directors: Steve Caunce, John Roberts, Mark Higgins and Chris Hopkinson £50 million £566,981 N/A To increase work capital Main Market
Harwood Wealth Management Group plc Related party transaction due to their role as directors: Neil Dunkley and Mark Howard.
Neil Dunkley is married to Sian Dunkley, who is selling shares, representing 5.02% of the share capital following admission.
related party transaction due to their role as shareholders:Christopher Mills, a non-executive director, is also a director, and the sole shareholder of Harwood Capital Management Limited
Henderson Volantis
£10 million Directors: £149,962
Harwood Capital Management Limited and Henderson Volantis: £166,077
Harwood Capital Management Limited: 26.71%
Henderson Volantis: 12.02%
To finance new acquisitions AIM
Abzena plc Related party transaction due to their role as directors and shareholders: Kenneth Cunningham, John Burt, Julian Smith, Anthony Brampton and Peter Grant.
Related party transaction due to their role as shareholders: Invesco, Woodford and Touchstone Innovations
£25 million Directors: £393.94 Directors: 0.26%
Shareholders: Invesco: 26.2%, Woodford 23.1% and Touchstone Innovations 19.7%
To increase growth in the business AIM
Infrastructure India plc The loan extension, that is provided by GGIC Ltd constitutes a related party transaction £13.64 million ($17 million) N/A 75.4% Extension of a loan AIM
Dorcaster plc Related party transaction due to their role as directors: Karen Jones, Hubert van den Bergh, Dominic Rose, Jessica Rose and Jaime Sarah Rose Scudamore.
The share buy-back constitutes a related party transaction because of the directors' participation and neither of the directors are considered independent for the purpose of making a recommendation to shareholders.
£14 million Directors: £450,000 18.1% To fund the acquisition AIM
Glanbia plc Glanbia Co-operative Society Limited is the largest shareholder of Glanbia and therefore constitutes a related party transaction. £94.61 million (€112 million) £94.61 million (€112 million) 60% Glanbia agreed a non-binding memorandum of understanding with Glanbia Co-operative Society Limited subject to contract and certain approvals, to dispose of 60% of Glanbia Foods Ireland Limited and related assets to Glanbia Co-operative Society Limited . Listing Rules

Reverse Takeovers:

Global Energy entered with Everest Hill Group Inc. into two share purchase agreements to acquire a total of 11 offshore service vessels, a barge vessel and other related equipment through the purchase of 100 per cent of the issued shares in vessel-owning companies. Subject to shareholder approval, which is also required for the issue of the convertible loan notes of Global Energy. finnCap Ltd acted as the financial advisers.

ATTRAQT has entered into a conditional agreement to acquire the entire issued share capital of Fredhopper BV; subject to shareholder approval.

Irrevocables:

ATTRAQT directors and major shareholders have given irrevocable undertakings to the Company to vote in favour of the resolutions representing approximately 78.07% of the share capital.

NetDimensions directors have given irrevocable undertakings to accept the offer by 17.48%. Other NetDimensions shareholders have given irrevocable undertakings to accept the offer by 39.06%.

Change of name:

Global Energy proposes to change name to Nautilus Marine Services plc.

Conditions:

Rio Tinto's sale of its subsidiary is subjected to approvals from the Australian Government, Chinese regulatory agencies and the NSW Government.

Anglo American sale is subject to customary conditions and regulatory approval in South Africa; it is expected to complete during 2017.

Flowtech's placing is subject to shareholders' approvals.

Concert Party:

AO Worlds announces a concert party between Steve Caunce and John Roberts. In aggregate the concert party holds 38.1% of the issued share capital.

Abzena announces a concert party between Invesco and Touchstone Innovations and between Woodford and Touchstone Innovations. Invesco and Touchstone Innovations together hold 45.91% and Woodford and Touchstone Innovations together hold 42.73% of the shared capital.

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