Offer by IG Co Limited
Published: 19/08/2005, 11:08
IG Co Limited 19 August 2005 19 August 2005 IG Co Limited This announcement is not for release, publication or distribution in or into the United States, Canada, Australia or Japan. RECOMMENDED CASH OFFER FOR MUSIC CHOICE EUROPE PLC Summary •The boards of IG Co Limited ("IGC") and of Music Choice Europe plc ("MCE") announce that agreement has been reached on the terms of a recommended cash offer ("the Offer") to be made by Smith & Williamson Corporate Finance Limited ("Smith & Williamson") on behalf of IGC, to acquire the whole of the issued and to be issued ordinary share capital of MCE. •The Offer of 8 pence in cash per MCE Share values the existing issued share capital of MCE at approximately £2.65 million. •MCE directors and other shareholders have irrevocably undertaken to accept or exercise voting rights in favour of the acceptance of the Offer in respect of 24,299,514 MCE Shares in aggregate, representing approximately 73.23 per cent. of the issued share capital of MCE. •As Margot Daly is both a director of MCE and acting in concert with IGC, she is connected with the Offer and therefore not independent for the purposes of considering the Offer on behalf of MCE Shareholders. The Independent Directors have, accordingly, considered the Offer on behalf of the Board. •The Independent Directors of MCE, who have been so advised by Teather & Greenwood Limited ("Teather & Greenwood"), consider the terms of the Offer to be fair and reasonable. In providing its advice to the Independent Directors, Teather & Greenwood has taken into account the commercial assessment of the Independent Directors. •Accordingly, the Independent Directors recommend unanimously MCE Shareholders to accept the Offer, as they intend to in respect of their entire beneficial holding of 54,000 MCE Shares, representing approximately 0.16 per cent. of the issued share capital of MCE. Commenting on the Offer, Mike Thomas, Chairman of MCE said, "In the light of the rapidly changing marketplace, the MCE Board has undertaken a strategic review with an aim to deliver shareholder value. The review has generated this Offer. The Offer provides shareholders with an opportunity to realise their investment in cash now, in the face of an otherwise uncertain future for the Company." On behalf of IGC, Mark Schneider said, "MCE is the original European pioneer of legal digital music subscription services. MCE packages music unlike anyone else today. The company already has a strong subscriber base on digital television and increasingly broadband, but this service deserves a bigger audience. Under the direction of IGC we believe that MCE can grow, prosper and simply make it easier for consumers to locate, enjoy and even buy, the music they love." Chief Executive of MCE, Margot Daly said, "It has been a privilege to work with shareholders like Sky, Time Warner and Sony Corporation of America who had the vision to help build this digital music business in the early 1990s. With this transaction, we now look forward to growing as a global and multi-channel-to-market digital music brand." This summary should be read in conjunction with the full text of this announcement. The conditions and certain terms of the Offer are set out in Appendix I of this announcement. Enquiries IGC John Grimshaw 01534 760 000 Smith & Williamson, Adviser to IGC Nicola Horton 020 7131 4000 David Jones 020 7131 4000 MCE Mike Thomas 020 7014 8700 Teather & Greenwood, Adviser to MCE Jeff Keating 020 7426 9000 Sindre Ottesen 020 7426 9000 Weber Shandwick Square Mile Louise Robson 020 7067 0700 RECOMMENDED CASH OFFER FOR MUSIC CHOICE EUROPE PLC 1. Introduction The boards of IG Co Limited and of Music Choice Europe plc announce that agreement has been reached on the terms of a recommended cash offer ("the Offer") to be made by Smith & Williamson on behalf of IGC, to acquire the whole of the issued and to be issued ordinary share capital of MCE. 2. Terms of the Offer On behalf of IGC, Smith & Williamson will offer to acquire, on the terms and subject to the conditions set out in Appendix I and to be set out in the Offer Document and the Form of Acceptance, the entire issued and to be issued share capital of MCE on the following basis: for each MCE Share 8 pence in cash. The Offer values the existing issued share capital of MCE at approximately £2.65 million. The MCE Shares to be acquired by IGC pursuant to the Offer will be acquired fully paid and free from all liens, equities, charges, encumbrances, rights of pre-emption and other third party rights and interests of any nature whatsoever and together with all rights now or hereafter attaching thereto, including the right to receive and retain all dividends and other distributions (if any) declared, paid or made on or after the date of this announcement. 3. Recommendation The Independent Directors of MCE, who have been so advised by Teather & Greenwood, consider the terms of the Offer to be fair and reasonable. In providing its advice to the Independent Directors, Teather & Greenwood has taken into account the commercial assessment of the Independent Directors. Accordingly, the Independent Directors recommend unanimously MCE Shareholders to accept the Offer, as they intend to in respect of their entire beneficial holding of 54,000 MCE Shares, representing approximately 0.16 per cent. of the issued share capital of MCE. 4. Undertakings in relation to the Offer Irrevocable undertakings to accept or exercise voting rights in favour of acceptance of the Offer have been received from Mike Thomas, the Chairman of MCE, Sky Ventures Limited (with which non-executive directors David Rey and Chris Stylianou are associated), Sony Digital Radio Europe Limited (with which non-executive director Gary Podorowsky is associated) and Time Warner/MCE Holdings Limited (with which non-executive director Ron Grant is associated) in respect of in aggregate, 24,299,514 MCE Shares, representing approximately 73.23 per cent. of MCE's share capital. These irrevocable undertakings will continue to be binding even in the event of a competing offer being made for MCE. Each of the irrevocable undertakings will cease to be binding if the Offer is not made, is withdrawn or lapses or in the event that the Offer Document is not released within 14 days of this announcement. IGC has undertaken to declare the Offer unconditional as to acceptances upon receiving valid acceptances in respect of over 73.07 per cent. of the MCE Shares to which the Offer relates and to declare the Offer unconditional in all respects simultaneously with declaring the Offer unconditional as to acceptances provided that no circumstances exist at such time which would result in any of the conditions to the Offer (other than the acceptance condition) not being fulfilled or not remaining satisfied. 5. Pensions and fees MCE's employees belonged to the Time Warner UK Pension Plan (the "Plan"), which is a multi-employer defined benefit final salary scheme. MCE employees were entitled to be a member of this Plan by virtue of MCE being an associate of Time Warner/MCE Holdings Limited (which directly holds 5,358,330 MCE Shares, representing approximately 16.1 per cent. of the issued share capital of MCE). If the Offer is successful, MCE would no longer be such an associate and Music Choice Limited ("MCL"), the subsidiary of MCE that was a member of the Plan, would ultimately have had to withdraw from it. On an FRS17 basis, the Plan currently has a deficit. Following discussions with the trustees of the Plan, a settlement was agreed of £1.9 million to allow MCL to leave the Plan immediately with no further recourse. This settlement was approved by the Pensions Regulator. To remove the uncertainties that the pension obligation would place on MCE as an independent quoted company and to provide greater flexibility for MCE going forward, the three largest MCE shareholders - Sky Ventures ("Sky"), Time Warner/ MCE Holdings Limited and Sony Digital Radio Europe Ltd ("Sony") - provided the funding for MCE's settlement. The funding was split between the three shareholders approximately in proportion with their current shareholding in MCE. Rather than paying directly to the trustee Sky and Sony paid their share of the funding to MCL, who immediately upon receipt passed this on to the trustees of the Plan. Upon receipt of all the settlement monies by the trustees of the Plan, MCL withdrew from the Plan. The MCE Directors, who have been so advised by Teather & Greenwood, consider the ex gratia payments to MCL by Sky and Sony to be fair and reasonable as far as the shareholders of MCE are concerned. In providing its advice Teather & Greenwood has taken into account the Directors' commercial assessment of the payments. In addition, in the event that the Offer is completed, the largest MCE shareholders referred to above have agreed to contribute to the Company's costs in relation to the Offer up to a maximum amount of £99,000. 6. Information on IGC IGC is a newly incorporated company, based in Jersey, which has been formed for the purpose of making the Offer. Since incorporation, it has not traded or entered into any material obligations other than in connection with the Offer and the financing thereof. The directors of IGC are Paul Howard Glazier, John Grimshaw and Eddie Noel, who are the nominated board appointees of the current IGC shareholders. IGC is currently owned by two Jersey-based companies who hold their shares in IGC on trust for the following entities and individuals, in equal shares: Schneider Media & Holding Group LLC (which is wholly owned and controlled by Mark Schneider), Bluewater Communications Holdings LLC (which is wholly owned and controlled by John Gregg), The St Paul's Trust (a discretionary settlement for the benefit of Roger Ames and his family), and Neil Richardson. Following the Offer becoming or being declared unconditional in all respects Margot Daly, MCE's Chief Executive, is expected to become a shareholder in IGC, pursuant to a right to subscribe for new shares representing approximately 1.48 per cent. of the then issued share capital of IGC. The cash payable under the Offer will be provided by IGC from its own resources. 7. Information on MCE and background to the Offer MCE was launched in 1993 as an analogue provider of a limited number of audio channels. MCE floated on the London Stock Exchange in October 2000, at which time it raised £46 million to fund its development as a participant in digital music broadcasting and to establish the Music Choice brand in Europe. MCE is now best known for its 40 music channels available on Sky Digital in the UK, but also broadcasts on digital television across Europe and the Middle East and provides non-stop music compilation channels to broadband ISPs such as NTL broadband. During 2002, however, despite increasing audience numbers, it became apparent that MCE was unable to deliver the level of advertising revenues originally anticipated through sales of advertising space. The Company therefore took action to reduce its cost base in an effort to achieve operating breakeven on subscription revenue alone. This objective was achieved during the six months to 30 June 2004. At the same time, however, the Company noted that "...stronger competition in the marketplace will certainly affect turnover and profit levels during the second half." Following a review of its working capital requirements, MCE returned approximately £15 million of excess cash to its shareholders in September 2004. On 22 February 2005, MCE issued a trading update which stated that "in recent months the Board has noted that the pace of change in its marketplace has accelerated. In particular, the Board expects that TV broadcasting platforms will seek greater discounts for basic content which is, currently, the prime source of the Company's revenue and that this will place increased pressure on margins. At the same time, the costs to the Company of maintaining its technical infrastructure are increasing." As part of this trading update, the Board announced a strategic review of the Company's activities. For the year ended 31 December 2004 MCE reported a consolidated operating loss of approximately £9,000 on turnover of approximately £10 million. Net cash outflow from operating activities for the same period was approximately £457,000. As at 31 December 2004, MCE had consolidated group net assets of £1.6 million. In the light of the above circumstances the Independent Directors believe that the Offer provides shareholders with an opportunity to realise their investment in cash in a company which is facing some uncertainty in relation to its future development and prospects. 8. IGC's intentions and strategy It is IGC's intention that, following the Offer becoming or being declared wholly unconditional, it will continue the operation of the business of MCE in the same manner as it is currently conducted. IGC hopes that MCE will be able to extend its customer base by developing new relationships with digital TV platforms in Europe and Asia and grow its revenue base by capitalising on new opportunities that have arisen through technological development. IGC believes that MCE will benefit from the increased flexibility with which it can be run as a private as opposed to a public company, and hopes that private status will allow it to compete within its marketplace more effectively. The board of IGC has given assurances to the Independent Directors that, following the Offer becoming or being declared unconditional in all respects, the existing employment rights (other than pension rights and other insured benefits which will need to be provided under alternative arrangements) of all employees of the MCE Group will be fully safeguarded. 9. MCE Board As Margot Daly is both a director of MCE and acting in concert with IGC she is connected with the Offer and therefore not independent for the purposes of considering the Offer on behalf of MCE Shareholders. None of the Independent Directors have any financial interest in IGC nor will they have any continuing involvement with either MCE or IGC if the Offer becomes or is declared unconditional in all respects. Immediately following the Offer becoming wholly unconditional all the Independent Directors will resign from the MCE Board. The Independent Directors have, accordingly, taken responsibility for reaching conclusions on the appropriate recommendation to be made to MCE Shareholders. The Independent Directors have received advice from Teather & Greenwood. 10. Parties acting in concert with IGC Margot Daly, who has the right to subscribe for new shares in IGC which she is expected to exercise and is therefore expected to become a shareholder in IGC following the Offer being declared wholly unconditional, holds 26,304 MCE Shares, and options over 546,296 MCE Shares granted under the provisions of the MCE Share Option Schemes. Smith & Williamson Investment Management Limited, a 100 per cent. subsidiary of Smith & Williamson Holdings Limited, Smith & Williamson's parent company, manages funds on a discretionary basis on behalf of three clients who hold, in aggregate, 2,385 MCE Shares. Simon George, who has agreed to subscribe for new shares in MCE following the Offer being declared wholly unconditional, holds options over 40,000 MCE Shares granted under the provisions of the MCE Share Option Schemes. 11. MCE Share Option Schemes The Offer extends to any shares unconditionally allotted or issued fully paid (or credited as fully paid) pursuant to the exercise of options under the MCE Share Option Schemes prior to the date on which the Offer closes (or such earlier date as IGC, subject to the City Code, may determine). IGC will make appropriate proposals to participants in the MCE Share Option Schemes in due course which would take effect after the Offer has become or has been declared wholly unconditional, to the extent that their options have not been exercised. 12. De-listing and compulsory acquisition If IGC receives acceptances under the Offer in respect of, and/or otherwise acquires 90 per cent. or more of the MCE Shares to which the Offer relates, IGC will exercise its rights pursuant to the provisions of sections 428 to 430F (inclusive) of the Companies Act 1985 to acquire compulsorily the remaining MCE Shares to which the Offer relates. If the Offer becomes or is declared wholly unconditional and IGC has acquired or agreed to acquire MCE Shares carrying 75 per cent. of the voting rights of MCE, IGC intends to procure the making of applications by MCE to the UKLA for the cancellation of the listing of MCE Shares on the Official List of the UKLA and to the London Stock Exchange for the cancellation of trading in MCE Shares on its market for listed securities. It is anticipated that a notice period of not less than 20 business days prior to cancellation will commence either on IGC attaining the required 75 per cent. as described above or on the first date of issue of compulsory acquisition notices under section 429 of the Companies Act 1985. The cancellation of listing and trading would significantly reduce the liquidity and marketability of any MCE Shares in respect of which valid acceptances of the Offer are not received. 13. General Smith & Williamson, on behalf of IGC, will despatch the Offer Document, setting out full details of the Offer, to MCE Shareholders as soon as is practicable and in any event within 28 days of the date of the announcement. The Offer is not being made, directly or indirectly, in or into the United States, Canada, Australia or Japan. Paul Howard Glazier, John Grimshaw and Eddie Noel are directors of Nautilus Trust Company Limited, which is regulated under the Financial Services (Jersey) Law 1998 to carry on trust company business in Jersey. Paul Howard Glazier, John Grimshaw and Eddie Noel are directors of one of Nautilus Trust Company Limited's company clients, La Ville Trustees Limited, which holds 2,700 MCE Shares. Save for the holding of 2,700 MCE Shares held by La Ville Trustees Limited, the irrevocable undertakings referred to above, Margot Daly's holding of 26,304 MCE Shares, the holding of 2,385 MCE Shares by Smith & Williamson Investment Management Limited, and the options over MCE Shares held by Margot Daly and Simon George, neither IGC nor any person acting in concert with IGC owns or controls any MCE Shares or has any options or rights to acquire any MCE Shares. The Offer will be on the terms and will be subject to the conditions which are set out or referred to in Appendix I hereto and in addition to those terms which will be set out in the formal Offer Document and the Form of Acceptance in respect thereof. Smith & Williamson, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for IGC and no one else in connection with the Offer and the matters described herein and will not be responsible to anyone other than IGC for providing the protections afforded to its customers or for giving advice in relation to the Offer or any other matter referred to herein. Teather & Greenwood, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for MCE and no one else in connection with the Offer and the matters described herein and will not be responsible to anyone other than MCE for providing the protections afforded to its customers or for giving advice in relation to the Offer or any other matter referred to herein. This announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for, securities. Any acceptance or other response to the Offer should be made only on the basis of information referred to in the Offer Document and the Form of Acceptance. The IGC Directors accept responsibility for the information contained in this announcement except for the information relating to the MCE Group and the MCE Directors and their connected persons and persons acting in concert with and associates of MCE, the Independent Directors' expressions of opinion and recommendation, and the information relating to Mark Schneider, John Gregg, Roger Ames and Neil Richardson. To the best of the knowledge and belief of the IGC Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. Mark Schneider accepts responsibility for the information contained in this announcement except for the information relating to the MCE Group and the MCE Directors and their connected persons and persons acting in concert with and associates of MCE, the Independent Directors' expressions of opinion and recommendation, and the information relating to John Gregg, Roger Ames and Neil Richardson. To the best of the knowledge and belief of Mark Schneider (who has taken all reasonable care to ensure that such is the case) the information contained in this announcement for which he accepts responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. John Gregg accepts responsibility for the information contained in this announcement except for the information relating to the MCE Group and the MCE Directors and their connected persons and persons acting in concert with and associates of MCE, the Independent Directors' expressions of opinion and recommendation, and the information relating to Mark Schneider, Roger Ames and Neil Richardson. To the best of the knowledge and belief of John Gregg (who has taken all reasonable care to ensure that such is the case) the information contained in this announcement for which he accepts responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. Roger Ames accepts responsibility for the information contained in this announcement except for the information relating to the MCE Group and the MCE Directors and their connected persons and persons acting in concert with and associates of MCE, the Independent Directors' expressions of opinion and recommendation, and the information relating to Mark Schneider, John Gregg and Neil Richardson. To the best of the knowledge and belief of Roger Ames (who has taken all reasonable care to ensure that such is the case) the information contained in this announcement for which he accepts responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. Neil Richardson accepts responsibility for the information contained in this announcement except for the information relating to the MCE Group and the MCE Directors and their connected persons and persons acting in concert with and associates of MCE, the Independent Directors' expressions of opinion and recommendation, and the information relating to Mark Schneider, John Gregg and Roger Ames. To the best of the knowledge and belief of Neil Richardson (who has taken all reasonable care to ensure that such is the case) the information contained in this announcement for which he accepts responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. Margot Daly accepts responsibility for the information contained in this announcement except for the information relating to the MCE Group and the MCE Directors and their connected persons and persons acting in concert with and associates of MCE, the Independent Directors' expressions of opinion and recommendation, and the information relating to Mark Schneider, John Gregg, Roger Ames and Neil Richardson. To the best of the knowledge and belief of Margot Daly (who has taken all reasonable care to ensure that such is the case) the information contained in this announcement for which she accepts responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The MCE Directors accept responsibility for the information contained in this announcement relating to the MCE Group and the MCE Directors and their connected persons and persons acting in concert with and associates of MCE except for the Independent Directors' expressions of opinion and recommendation. To the best of the knowledge and belief of the MCE Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The Independent Directors accept responsibility for the expressions of opinion and recommendation made by them in relation to the Offer contained in this announcement. To the best of the knowledge and belief of the Independent Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. 14. Dealing disclosure requirements Under the provisions of Rule 8.3 of the Code, any person who, alone or acting together with any other person(s) pursuant to an agreement or understanding (whether formal or informal) to acquire or control relevant securities of MCE, owns or controls, or becomes the owner or controller, directly or indirectly, of one per cent. or more of any class of securities of MCE is required to disclose, by not later then 12.00 noon (London time) on the London business day following the date of the relevant transaction, dealings in such securities of the Company (or in any option in respect of, or derivative referenced to, any such securities) during the period to the date on which the Offer becomes or is declared unconditional as to acceptances or lapses or is otherwise withdrawn. Under the provisions of Rule 8.1 of the Code, all dealings in relevant securities of MCE by IGC or MCE, or by any of their respective "associates" (within the meaning of the Code) must also be disclosed. If you are in any doubt as to the application of Rule 8 of the Code to you, please contact an independent financial adviser authorised under the Financial Services and Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. Definitions In this announcement, unless the context requires otherwise, the following expressions shall have the following meanings: "Code" The City Code on Takeovers and Mergers "Form of the form of acceptance and authority relating to the Offer Acceptance" "IGC" IG Co Limited "IGC Paul Howard Glazier, John Grimshaw and Eddie Noel Directors" "IGC Group" IGC and its existing subsidiary undertakings "Independent Mike Thomas, Tony Ayers, Ron Grant, Gary Podorowsky, David Rey, Directors" Philippe-Olivier Rousseau and Chris Stylianou "London Stock London Stock Exchange plc Exchange" "MCE" or Music Choice Europe plc "Company" "MCE Directors" the directors of MCE as at the date of this announcement or "Board" "MCE Group" MCE and its existing subsidiary undertakings "MCE Share the share option schemes of the Company Option Schemes" "MCE holders of MCE Shares Shareholders" "MCE Shares" the existing issued fully paid ordinary shares of 1 pence each in the capital of MCE and any further such shares which are unconditionally allotted or issued and fully paid before the date on which the Offer closes (or such earlier date, not being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances as IGC may, subject to the Code, decide) "Offer" the offer by Smith & Williamson on behalf of IGC to acquire the MCE Shares and, where the context admits, any subsequent revision, variation, extension or renewal thereof "Offer the document to be addressed to MCE Shareholders containing the Document" Offer "Panel" the Panel on Takeovers and Mergers "Smith & Smith & Williamson Corporate Finance Limited Williamson" "Teather & Teather & Greenwood Limited, which is authorised and regulated Greenwood" in the United Kingdom by the Financial Services Authority and is a member of the London Stock Exchange "UKLA" the Financial Services Authority in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 "United the United Kingdom of Great Britain and Northern Ireland Kingdom" or "UK" "United the United States of America (including any states of the United States" States of America and the District of Columbia), its possessions and territories, and all other areas subject to its jurisdiction Appendix I CONDITIONS OF THE OFFER The Offer will be subject to the following conditions: (a) valid acceptances being received (and not, where permitted, withdrawn) by not later than 3.00pm on the first closing date of the Offer (or such later time(s) and/or date(s) as IGC may, subject to the rules of the Code, decide) in respect of not less than 73.07 per cent. (or such lower percentage as IGC may decide) in nominal value of the MCE Shares to which the Offer relates, provided that this condition will not be satisfied unless IGC and/or its wholly owned subsidiaries shall have acquired or agreed to acquire (whether pursuant to the Offer or otherwise) MCE Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of MCE, including for this purpose (except to the extent otherwise agreed by the Panel) any such voting rights attaching to any MCE Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise; and for this purpose: (i) the expression "MCE Shares to which the Offer relates" shall be construed in accordance with sections 428 to 430F of the Companies Act 1985; (ii) MCE Shares which have been unconditionally allotted shall be deemed to carry the voting rights which they will carry upon issue; and (iii) valid acceptances shall be deemed to have been received in respect of MCE Shares which are treated for the purposes of section 429(8) of the Companies Act 1985 as having been acquired or contracted to be acquired by IGC by virtue of acceptances of the Offer; (b) no Third Party having intervened and there not continuing to be outstanding any statute, regulation or order of any Third Party in each case which would or might reasonably be expected (in any case to an extent which is material in the context of the IGC Group or the MCE Group, as the case may be, taken as a whole) to: (i) make the Offer, its implementation or the acquisition or proposed acquisition by IGC or any member of the Wider IGC Group of any shares or other securities in, or control or management of, MCE or any member of the Wider MCE Group void, illegal or unenforceable in any jurisdiction, or otherwise directly or indirectly restrain, prevent, prohibit, restrict or delay the same or impose additional conditions or obligations with respect to the Offer or such acquisition, or otherwise impede, challenge or interfere with the Offer or such acquisition, or require amendment to the terms of the Offer or the acquisition or proposed acquisition of any MCE Shares or the acquisition of control of MCE or the Wider MCE Group by IGC; (ii) limit or delay the ability of any member of the Wider IGC Group or any member of the Wider MCE Group to acquire or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities in, or to exercise voting or management control over, any member of the Wider MCE Group or any member of the Wider IGC Group; (iii) require, prevent or delay the divestiture or alter the terms envisaged for any proposed divestiture by any member of the Wider IGC Group of any shares or other securities in MCE; (iv) require, prevent or delay the divestiture or alter the terms envisaged for any proposed divestiture by any member of the Wider IGC Group or by any member of the Wider MCE Group of all or any portion of their respective businesses, assets or properties or limit the ability of any of them to conduct any of their respective businesses or to own or control any of their respective assets or properties or any part thereof; (v) except pursuant to Part XIIIA of the Companies Act 1985, require any member of the Wider IGC Group or of the Wider MCE Group to acquire, or to offer to acquire, any shares or other securities (or the equivalent) in any member of either group owned by any third party; (vi) limit the ability of any member of the Wider IGC Group or of the Wider MCE Group to conduct or 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 IGC Group or of the Wider MCE Group; or (vii) otherwise adversely affect the business, assets, profits,financial or trading position or prospects of any member of the Wider MCE Group or of the Wider IGC Group, and all applicable waiting and other time periods during which any Third Party could intervene under the laws of any relevant jurisdiction having expired, lapsed or been terminated; (c) all notifications and filings which are necessary in connection with the Offer having been made, all appropriate waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory or regulatory obligations in any relevant jurisdiction having been complied with in each case in connection with the Offer or the acquisition or proposed acquisition of any shares or other securities in, or control of, MCE or any other member of the Wider MCE Group by any member of the Wider IGC Group or the carrying on by any member of the Wider MCE Group of its business; (d) all Authorisations which are necessary in any relevant jurisdiction for or in respect of the Offer or the acquisition or proposed acquisition of any shares or other securities in, or control of, MCE or any other member of the Wider MCE Group by any member of the Wider IGC Group or the carrying on by any member of the Wider MCE Group of its business having been obtained, in terms and in a form reasonably satisfactory to IGC, from all appropriate Third Parties or from any persons or bodies with whom any member of the Wider MCE Group has entered into contractual arrangements in each case where the absence of such Authorisatio would have a material adverse effect on the MCE Group taken as a whole and all such Authorisations (where the absence of such Authorisation would have a material adverse effect on the MCE Group taken as a whole or the IGC Group taken as a whole) remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same; (e) except as publicly announced by MCE (by the delivery of an announcement to a Regulatory Information Service) prior to 19 August 2005 or as fairly disclosed in writing to IGC by or on behalf of MCE prior to 19 August 2005, there being no provision of any arrangement, agreement, licence, permit, franchise or other instrument to which any member of the Wider MCE Group is a party, or by or to which any such member or any of its assets is or are or may be bound, entitled or subject or any circumstance, which, in each case as a consequence of the Offer or the acquisition or proposed acquisition of any shares or other securities in, or control of, MCE or any other member of the Wider MCE Group by any member of the Wider IGC Group or otherwise, could or might reasonably by expected to result in, (in any case to an extent which is or would be material in the context of the MCE Group taken as a whole): (i) any monies borrowed by or any other indebtedness or liabilities (actual or contingent) of, or any grant available to, any member of the Wider MCE Group which is not already payable on demand being or becoming repayable or capable of being declared repayable immediately or prior to its stated repayment date or the ability of any member of the Wider MCE Group to borrow monies or incur any indebtedness being withdrawn or inhibited or becoming capable of being withdrawn; (ii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any member of the Wider MCE Group or any such mortgage, charge or other security interest (wherever created, arising or having arisen) becoming enforceable; (iii) any such arrangement, agreement, licence, permit, franchise or instrument, or the rights, liabilities, obligations or interests of any member of the Wider MCE Group thereunder, being, or becoming capable of being terminated or adversely modified or affected or any material adverse action being taken or any material obligation or liability arising thereunder; (iv) any asset or interest of any member of the Wider MCE Group being or falling to be disposed of or ceasing to be available to any member of the Wider MCE Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any member of the Wider MCE Group otherwise than in either case in the ordinary course of business; (v) any member of the Wider MCE Group ceasing to be able to carry on business under any name under which it presently does so; (vi) the rights, liabilities, obligations or interests of any member of the Wider MCE Group under any such arrangement, agreement, licence, permit, franchise or other instrument or the interests or business of any such member in or with any other person, firm, company or body (or any arrangement or arrangements relating to any such interests or business) being terminated, adversely modified or affected; or (vii) the financial or trading position or the prospects or the value of any member of the wider MCE Group being prejudiced or adversely affected, and no event having occurred which, under any provision of any such arrangement, agreement, licence, permit or other instrument, could result in any of the events or circumstances which are referred to in paragraphs (i) to (vii) of this condition (e) in any case to an extent which is or would be material in the context of the MCE Group taken as a whole; (f) since 31 December 2004 and except as disclosed in MCE's annual report and accounts for the year then ended or as otherwise publicly announced by MCE (by the delivery of an announcement to a Regulatory Information Service) prior to 19 August 2005 or as otherwise fairly disclosed in writing to IGC by or on behalf of MCE prior to 19 August 2005 no member of the Wider MCE Group having: (i) issued or agreed to issue, or authorised the issue of, additional shares of any class, or securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities other than as between MCE and wholly-owned subsidiaries of MCE and other than any options granted as disclosed to IGC prior to 19 August 2005 and any shares issued upon the exercise of any options granted under any of the MCE Share Option Schemes; (ii) purchased or redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital; (iii) recommended, declared, paid or made any bonus, dividend or other distribution whether payable in cash or otherwise (other than to MCE or a wholly-owned subsidiary of MCE); (iv) made or authorised any change in its loan capital which is material in the context of the MCE Group as a whole; (v) other than any acquisition or disposal in the ordinary course of business or a transaction between MCE and a wholly-owned subsidiary of MCE) merged with, demerged 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 assets (including shares in any undertaking and trade investments) or authorised the same (which in any case is material in the context of the MCE Group taken as a whole); (vi) issued or authorised the issue of, or made any change in or to, any debentures or (except in the ordinary course of business) incurred or increased any indebtedness or liability (actual or contingent) which in any case is material in the context of the MCE Group taken as a whole; (vii) entered into, varied or authorised any agreement, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which: (A) is of a long term, onerous or unusual nature or magnitude or which is or could involve an obligation of such nature or magnitude; or (B) could restrict the business of any member of the Wider MCE Group; or (C) is other than in the ordinary course of business, and which in any case is material in the context of the MCE Group taken as a whole; (viii) entered into, implemented, effected or authorised any merger, demerger, reconstruction, amalgamation, scheme, commitment or other transaction or arrangement in respect of itself or another member of the Wider MCE Group otherwise than in the ordinary course of business which in any case is material in the context of the MCE Group taken as a whole; (ix) entered into or varied the terms of, any contract, agreement or arrangement with any of the directors or senior executives of any member of the Wider MCE Group; (x) taken any corporate action or had any legal proceedings instituted or threatened against it or petition presented or order made for its winding-up (voluntarily or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets and revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction which in any case is material in the context of the MCE Group taken as a whole; (xi) been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend)payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business in any case with a material adverse effect on the MCE Group taken as a whole; (xii) waived or compromised any claim otherwise than in the ordinary course of business which is material in the context of the MCE Group taken as a whole; (xiii) made any alteration to its memorandum or articles of association which is material in the context of the Offer; (xiv) entered into any agreement, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) or proposed or announced any intention with respect to any of the transactions, matters or events referred to in this condition (f); (g) since 31 December 2004 and except as disclosed in MCE's annual report and accounts for the year then ended or as otherwise publicly announced by MCE (by the delivery of an announcement to a Regulatory Information Service) prior to 19 August 2005 or as otherwise fairly disclosed in writing to IGC by or on behalf of MCE prior to 19 August 2005: (i) there having been no adverse change or deterioration in the business, assets, financial or trading positions or profit or prospects of any member of the Wider MCE Group which in any case is material in the context of the MCE Group taken as a whole; (ii) no contingent or other liability of any member of the Wider MCE Group having arisen or become apparent or increased which in any case is material in the context of the MCE Group taken as a whole; (iii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider MCE Group is or may become a party (whether as plaintiff, defendant or otherwise) having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Wider MCE Group which in any case is material in the context of the MCE Group taken as a whole; and (iv) (other than as a result of the Offer) no enquiry or investigation by, or complaint or reference to, any Third Party having been threatened, announced, implemented, instituted by or against or remaining outstanding against or in respect of any member of the Wider MCE Group which in any case is material in the context of the MCE Group taken as a whole; (h) IGC not having discovered: (i) that any financial or business or other information concerning the Wider MCE Group disclosed at any time by or on behalf of any member of the Wider MCE Group, whether publicly, to any member of the Wider IGC Group or otherwise, is misleading or contains any misrepresentation of fact or omits to state a fact necessary to make any information contained therein not misleading and which was not subsequently corrected before 19 August 2005 by disclosure either publicly or otherwise to IGC to an extent which in any case is material in the context of the MCE Group as a whole; (ii) that any member of the Wider MCE Group is subject to any liability (actual or contingent) existing at 31 December 2004 which is not disclosed in MCE's annual report and accounts for the financial year ended 31 December 2004 and which in any case is material in the context of the MCE Group taken as a whole; or (iii) any information which affects the import of any information disclosed to IGC at any time by or on behalf of any member of the Wider MCE Group to an extent which is material in the context of the MCE Group taken as a whole. For the purpose of these conditions: (a) "Third Party" means any government, government department or governmental, quasi-governmental, supranational, statutory, regulatory or investigative body, authority (including any national anti-trust or merger control authority), court, trade agency, association, institution or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction; (b) a Third Party shall be regarded as having "intervened" if it has decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or made, proposed or enacted any statute, regulation, decision or order or taken any measures or other steps or required any action to be taken or information to be provided or otherwise having done anything and "intervene" shall be construed accordingly; (c) "Authorisations" means authorisations, orders, grants, recognitions, determinations, certificates, confirmations, consents, licences, clearances, provisions and approvals. (d) "Wider MCE Group" means MCE and its subsidiaries and subsidiary undertakings and associated undertakings (including any company in which any member of the MCE Group is interested or any undertaking in which MCE and such undertakings (aggregating their interests) have a direct or indirect interest in 20 per cent. or more of the voting equity capital of an undertaking); and (e) "Wider IGC Group" means IGC and its subsidiaries and subsidiary undertakings and associated undertakings (including any company in which any member of the IGC Group is interested or any undertaking in which IGC and such undertakings (aggregating their interests) have a direct or indirect interest in 20 per cent. or more of the voting equity capital of an undertaking). Subject to the requirements of the Panel, IGC reserves the right to waive all or any of the above conditions, in whole or in part, except condition (a). Conditions (b) to (h) (inclusive) must be fulfilled, be determined by IGC to be or remain satisfied or (if capable of waiver) be waived by midnight on the 21st day after the later of the first closing date of the Offer and the date on which condition (a) is fulfilled (or in each case such later date as IGC may, with the consent of the Panel, decide), failing which the Offer will lapse. IGC shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of conditions (b) to (h) (inclusive) by a date earlier than the latest date specified above for the fulfilment of that condition. If the Panel requires IGC to make an offer for MCE Shares under the provisions of Rule 9 of the Code, IGC may make such alterations to the conditions of the Offer, including to condition (a), as are necessary to comply with the provisions of that Rule. If the Offer lapses, it will cease to be capable of further acceptance. MCE Shareholders who have accepted the Offer and IGC shall then cease to be bound by acceptances delivered on or before the date on which the Offer lapses. END This information is provided by RNS The company news service from the London Stock Exchange