Pre-Annual General Meeting Information • Aug 15, 2022
Pre-Annual General Meeting Information
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take you are recommended to seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000. All Shareholders are advised to consult their own professional advisers regarding their own tax position.
If you have sold or otherwise transferred all your Ordinary Shares, please send this Circular, and all accompanying documents, at once to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. However, such documents should not be forwarded or transmitted in or into the United States, Canada, Australia, South Africa or Japan.
Liberum Capital Limited, which is authorised and regulated by the Financial Conduct Authority, is acting for the Company and for no one else in connection with the Tender Offer and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Liberum Capital Limited or for affording advice in relation to the Tender Offer, the contents of this document or any transaction, arrangement or other matter referred to in this document.
This document should be read as a whole. Your attention is drawn to the letter from the Chairman of CLS Holdings plc set out on pages 5 to 8 of this document which contains the recommendation by the Directors of the Company to Shareholders to vote in favour of the Resolution to be proposed at the General Meeting.
The Tender Offer will close at 3.00 p.m. on 9 September 2022 unless extended in accordance with paragraph 7 of Part II of this Circular. The procedure for tendering Ordinary Shares is set out in Part II of this Circular. Further copies of this Circular and the accompanying Tender Form are available from the Receiving Agent at the address or telephone number set out on pages 4 and 11. Unless you have sold or transferred all your Ordinary Shares you are recommended to retain this Circular for reference.
Notice of the General Meeting of the Company convened for 11.00 a.m. on 9 September 2022 is set out at the end of this Circular. To be valid, the accompanying form of proxy for use at the General Meeting must be completed and returned so as to reach the Registrars by post at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6AH by not later than 11.00 a.m. on 7 September 2022.
As an alternative to completing the enclosed form of proxy, Shareholders can appoint proxies electronically via www.clsholdings.com/evoting to be received by the Registrars by not later than 11.00 a.m. on 7 September 2022. CREST members can also appoint proxies by using the CREST electronic proxy appointment service and transmitting a CREST Proxy Instruction in accordance with the procedures set out in the CREST Manual so that it is received by the Registrars (under CREST participant 3RA50) by not later than 11.00 a.m. on 7 September 2022. The time of receipt will be taken to be the time from which the Registrars are able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
| Page | |
|---|---|
| Expected timetable of events | 3 |
| Definitions | 4 |
| Part I – Letter from the Chairman of CLS | 5 |
| Part II – Terms of the Tender Offer | 9 |
| Part III – Notice of General Meeting | 17 |
| Latest time and date for receipt of proxy appointments | 11.00 a.m. on 7 September 2022 |
|---|---|
| Ex Dividend Date for 2022 Interim Dividend | 8 September 2022 |
| Record Date for 2022 Interim Dividend | 9 September 2022 |
| General Meeting | 11.00 a.m. on 9 September 2022 |
| Latest time and date for receipt of Tender Forms and TTE instructions from CREST Shareholders | 3.00 p.m. on 9 September 2022 |
| Tender Offer closes | 3.00 p.m. on 9 September 2022 |
| Record Date for the Tender Offer | 6.00 p.m. on 9 September 2022 |
| Outcome of Tender Offer announced | On 12 September 2022 |
| Cheques despatched for certificated Ordinary Shares purchased pursuant to the Tender Offer and payment through CREST for uncertificated Ordinary Shares purchased pursuant to the Tender Offer |
By 16 September 2022 |
| CREST accounts credited with uncertificated Ordinary Shares unsuccessfully tendered and despatch of balance share certificates for unsold certificated Ordinary Shares and share certificates for unsuccessful tenders of certificated Ordinary Shares |
By 16 September 2022 |
2022 Interim Dividend payment date 3 October 2022
The following definitions apply throughout this Circular and the accompanying Tender Form unless the context otherwise requires:
| "2022 Annual General Meeting" | the annual general meeting of the Company held on 28 April 2022 |
|---|---|
| "2022 Interim Dividend" | the interim dividend of 2.60 pence per Ordinary Share announced on 10 August 2022 |
| "Board" | the board of directors of the Company as constituted from time to time |
| "Business Day" | any day other than a Saturday, Sunday or bank holiday in England |
| "Capital Amount" | has the meaning given to it in paragraph 10 of Part II of this Circular |
| "Circular" | this document |
| "CLS" or "Company" | CLS Holdings plc |
| "CREST" | the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations) |
| "CREST member" | a person who has been admitted by Euroclear as a system-member (as defined in the CREST Regulations) |
| "CREST participant" | a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations) |
| "CREST Regulations" | Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) |
| "CREST sponsor" | a CREST participant admitted to CREST as a CREST sponsor |
| "CREST sponsored member" | a CREST member admitted to CREST as a sponsored member |
| "Directors" | the directors of the Company as at the date of this Circular |
| "Distribution Amount" | has the meaning given to it in paragraph 10 of Part II of this Circular |
| "DTR" | the Disclosure Guidance and Transparency Rules published by the FCA |
| "Euroclear" | Euroclear UK & International Limited |
| "FCA" | the UK Financial Conduct Authority |
| "General Meeting" | the general meeting of the Company convened for 11.00 a.m. on 9 September 2022 to consider and, if thought fit, approve the Resolution, notice of which is set out at the end of this Circular |
| "Group" | the Company and its subsidiaries |
| "HMRC" | Her Majesty's Revenue & Customs |
| "Latest Practicable Date" | 11 August 2022, being the latest practicable date prior to the posting of this Circular |
| "Liberum Capital" | Liberum Capital Limited, financial adviser and corporate broker to CLS |
| "Member account ID" | identification code or number attached to any member account in CREST |
| "North American person" | has the meaning given to it in paragraph 9 of Part II of this Circular |
| "Ordinary Shares" | ordinary shares of 2.5 pence each in the capital of the Company |
| "Participant ID" | the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant |
| "Qualifying Shareholders" | Shareholders who are permitted to participate in the Tender Offer |
| "Receiving Agent" | Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH |
| "Record Date" | 6.00 p.m. on 9 September 2022 |
| "Registrars" | Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS13 8AE |
| "Resolution" | the special resolution set out in the Notice of General Meeting on page 17 of this Circular |
| "Shareholders" | holders of Ordinary Shares from time to time |
| "Tender Form" | the tender form accompanying this Circular issued for use by Shareholders in connection with the Tender Offer |
| "Tender Offer" | the invitation by the Company to Shareholders to tender Ordinary Shares on the terms and subject to the conditions set out in this Circular and the Tender Form |
| "TFE instruction" | a transfer from escrow instruction (as defined by the CREST manual issued by Euroclear) |
| "TTE instruction" | a transfer to escrow instruction (as defined by the CREST manual issued by Euroclear) |
(Incorporated and Registered in England No. 2714781)
Directors
Lennart Sten (Non-Executive Chairman) Anna Seeley (Non-Executive Vice Chairman) Fredrik Widlund (Chief Executive Officer) Andrew Kirkman (Chief Financial Officer) Elizabeth Edwards (Non-Executive Director) Bill Holland (Non-Executive Director) Denise Jagger (Non-Executive Director) Christopher Jarvis (Non-Executive Director) Bengt Mortstedt (Non-Executive Director)
Registered and Head Office:
16 Tinworth Street London SE11 5AL
15 August 2022
On 11 May 2022, your Board announced an Updated Dividend Policy, Proposed Tender Offer and Trading Update (the "Announcement"). The Board reiterated its commitment to its strategy and business model to drive long-term value including its planned 2022 disposals which, as at the date of the Announcement, had been at or above valuations. The Board of CLS stated their belief that the share price discount to net tangible assets ("NTA") was unjustified and that it was in the best interests of Shareholders to take steps to reduce this discount.
The Board also announced that, subject to the completion of a number of property sales by the end of the first half of 2022 and the significant share price discount to NTA persisting, it intended to undertake a tender offer of its Ordinary Shares.
In light of the persisting share price discount to NTA and the completion of a number of property sales, your Board announced on 10 August 2022 a tender offer to return up to approximately £25.5 million through the purchase of 1 in every 40 Ordinary Shares at 250 pence per Ordinary Share.
The purpose of this Circular is to provide you with information about the background to, and reasons for, the Tender Offer and why the Board considers that the Tender Offer is in the best interests of the Shareholders as a whole and why the Board unanimously recommends that you vote in favour of the Resolution to approve the Tender Offer to be proposed at the General Meeting, to be held at 11.00 a.m. on 9 September 2022, notice of which is set out in Part III of this Circular.
The Circular also contains details on the procedure that should be followed by those Qualifying Shareholders in order to participate in the Tender Offer.
During the first six months of the current financial year, the Board completed two property disposals, realising an aggregate of £10.1 million at prices that were in line with their valuations as at 31 December 2021.
Furthermore, on 3 August 2022, CLS announced that it had completed on the sale of two UK properties, Great West House, Brentford and 62 London Road, Staines and one French property, 96 Rue Nationale, Lille for a total of £39.8 million. The three properties sold for an average of 3.7% above the 31 December 2021 valuations.
The share price of an Ordinary Share has continued to trade at a significant discount to the NTA value of an Ordinary Share (last reported NTA per Ordinary Share of 352.8 pence per Ordinary Share, stated as at 30 June 2022). The Board believes the share price discount to its NTA is unjustified and it is in the best interests of all Shareholders to implement the Tender Offer to reduce this discount.
The Board has determined that the Tender Offer should be made at an appropriate premium to the price per Ordinary Share and that this would be the most suitable way of returning capital to Shareholders in a quick and efficient manner, taking account of the relative costs, complexity and timeframes of the possible methods, as well as treating all Shareholders equally.
The Board of Directors of the Company considers the Tender Offer to be beneficial to the Shareholders as a whole, including, among other reasons, that:
The size of the Tender Offer has been determined to be appropriate to ensure that the Group's loan-to-value ratio and liquidity remain within an acceptable level, being below 40% within a suitable timeframe, and with cash and liquid resources and available facilities being over £100 million, providing the Group with the flexibility to focus its portfolio on attractive growth prospects and continue to invest to improve the quality of its existing portfolio.
Shareholders should read the whole of this Circular and not just rely on the summarised information set out in this letter. Further information on the UK tax treatment of the Tender Offer for Shareholders is contained in Part II of this Circular.
The Company delivered a robust set of results in the first half of this year with increases in net assets, profits and dividends. Our focus remains on our diverse and strong set of tenants with continued high rent collection and excellent results from our one hotel and student operation. CLS remains well-placed with significant financial strength despite the slowdown in market activity that we have seen since the end of the first quarter.
We secured 331,668 sq. ft (30,813 sqm) of lettings and renewals although vacancy increased to 6.9% (31 December 2021: 5.8%) due to lease expiries and completion of refurbishments, which are currently being marketed to prospective tenants. We invested £24.5 million of capital expenditure in an increased number of refurbishments and a limited amount of developments so as to improve the quality of our space to meet market needs.
Over the six months of 2022, EPRA NTA increased by 0.7% to 352.8p per share (31 December 2021: 350.5p) mainly as a result of positive foreign exchange movements due to sterling weakening and a slight overall uptick in property valuations before lease incentives. Total accounting return for the six month period was 2.2% (30 June 2021: (0.8%)).
Given market uncertainty, we have chosen to reduce our acquisition activity with just two acquisitions made in Germany for £76.9 million. The properties, which exchanged in the first quarter, completed in April and July. Each had a Net Initial Yield ("NIY") of 5.1% but both have good asset management opportunities and a combined reversionary yield of 5.6%. Two disposals were completed in the first half of this year for £10.1 million at book value with a NIY of 6.0%. Since the half-year, three further disposals have completed for £39.8 million at an average of 3.7% above 31 December 2021 book values with a NIY of 4.9%. We are targeting further disposals in the second half of this year, focussing on smaller properties with less growth potential to release funds to invest in the portfolio whilst maintaining gearing at appropriate levels.
Your Board is proposing that the Company makes a Tender Offer to purchase up to 10,184,894 Ordinary Shares, representing 2.5 per cent. of the Company's current issued ordinary share capital (excluding treasury shares), at 250 pence per Ordinary Share.
The Tender Offer will be open to all Qualifying Shareholders on the Company's share register on the Record Date. Qualifying Shareholders may participate in the Tender Offer by tendering either all or a proportion of their registered holdings of Ordinary Shares. Each Qualifying Shareholder will be entitled to sell under the Tender Offer, 1 Ordinary Share for every 40 Ordinary Shares registered in their name on the Record Date, rounded down to the nearest whole number of Ordinary Shares. The Tender Offer will also present Qualifying Shareholders with an opportunity to sell more than their pro rata entitlement of Ordinary Shares to the extent that other Qualifying Shareholders tender less than their pro rata entitlement. If the number of Ordinary Shares validly tendered is less than 10,184,894, surplus tenders will be accepted in proportion to the number of additional Ordinary Shares tendered so that the total number of Ordinary Shares purchased pursuant to the Tender Offer does not exceed 10,184,894. The Ordinary Shares purchased under the Tender Offer will be held in treasury. The Tender Offer will be void if less than 0.1 per cent. of the issued Ordinary Shares (excluding treasury shares) are, in aggregate, tendered.
If you hold Ordinary Shares in certificated form, tenders may only be made on the accompanying Tender Form, which is personal to the Shareholder(s) named on it and may not be assigned or transferred.
If you hold Ordinary Shares in uncertificated form, tenders may only be made by way of an electronic tender.
Unless the Board determines to vary the tender price in accordance with paragraph 8 of Part II of this Circular, a Tender Form and/or electronic tender once submitted cannot be withdrawn. To be valid, Tender Forms and/or electronic tenders must be received by the Receiving Agent no later than 3.00 p.m. on 9 September 2022.
Further information relating to the Tender Offer is set out in Part II of this Circular.
The attention of Shareholders who are citizens, residents or nationals of countries outside the UK wishing to participate in the Tender Offer is drawn to paragraph 9 of Part II of this Circular.
A summary of the taxation consequences of the Tender Offer for UK resident Shareholders is set out in paragraph 10 of Part II of this Circular. It should be noted that this refers to the current system of taxation. Shareholders are advised to consult their own professional advisers regarding their own tax position.
As the record date for the Tender Offer is the same as the record date for the 2022 Interim Dividend, Shareholders who participate in the Tender Offer will continue to receive the 2022 Interim Dividend, being 2.60 pence per Ordinary Share, in respect of any Ordinary Shares tendered.
Under Rule 5.1.2 of the DTR, certain substantial Shareholders are required to notify the Company and the FCA of the percentage of voting rights they hold as Shareholders or through their direct or indirect holding of financial instruments within the limits referred to in the DTR. Following the Company's purchase of Ordinary Shares in relation to the Tender Offer, the percentage of voting rights held by a Shareholder may change, giving rise to an obligation on the Shareholder to notify the Company and the FCA within two trading days of becoming aware or being deemed to have become aware of such change. If you are in any doubt as to whether you should notify the Company and the FCA or as to the form of that notification, please consult your solicitor or other professional adviser.
The respective interests of the Sten and Karin Mortstedt Family & Charity Trust, held through wholly owned subsidiaries of Creative Value Investment Group, and Bengt Mortstedt in the Company as at the Latest Practicable Date are set out in the table below together with details of the maximum percentage of the Company's voting rights that would be represented by their respective interests in the Company assuming that the Company purchases the maximum of 10,184,894 Ordinary Shares pursuant to the Tender Offer and that in each case neither the Sten and Karin Mortstedt Family & Charity Trust (through wholly owned subsidiaries of Creative Value Investment Group) nor Bengt Mortstedt nor their respective interests sells any of the Ordinary Shares in which they are beneficially interested pursuant to the Tender Offer or otherwise.
| Number of Ordinary Shares |
Percentage of current issued Ordinary Share capital3 |
Maximum percentage after Tender Offer3 |
Maximum percentage after Tender Offer and full exercise of general authority3 |
|
|---|---|---|---|---|
| The Sten and Karin Mortstedt Family & Charity Trust1 | 209,648,740 | 51.46 | 52.78 | 58.81 |
| Bengt Mortstedt2 | 26,572,550 | 6.52 | 6.69 | 7.45 |
| Totals | 236,221,290 | 57.98 | 59.47 | 66.26 |
1 The Ordinary Shares of the Company in which the Sten and Karin Family & Charity Trust is interested are owned by subsidiaries of Creative Value Investment Group Limited, a company owned by the Sten and Karin Mortstedt Family & Charity Trust.
2 Bengt Mortstedt is considered a concert party with the Sten and Karin Family & Charity Trust.
3 Excluding treasury shares and assuming that neither the Sten and Karin Mortstedt Family & Charity Trust nor Bengt Mortstedt tender any Ordinary Shares under the Tender Offer and do not sell any Ordinary Shares to the Company, and in addition if the Company were to acquire any Ordinary Shares pursuant to the general on-market share buyback authority obtained at the 2022 Annual General Meeting.
Further details of the procedure for tendering and settlement are set out in Part II of this Circular and the accompanying Tender Form.
The procedure for tendering Ordinary Shares depends on whether Ordinary Shares are held in certificated or uncertificated form and is summarised below.
Qualifying Shareholders who hold Ordinary Shares in certificated form and who wish to participate in the Tender Offer should follow the instructions on the accompanying Tender Form and return it to the Receiving Agent to arrive by no later than 3.00 p.m. on 9 September 2022. Qualifying Shareholders who hold their Ordinary Shares in certificated form should also send their share certificate(s) in respect of the Ordinary Shares tendered with their Tender Form.
Qualifying Shareholders who hold their Ordinary Shares in uncertificated form (that is, in CREST) and who wish to tender all or any of their existing holdings of Ordinary Shares should tender electronically through CREST so that the TTE instruction settles no later than 3.00 p.m. on 9 September 2022. Further details of the procedures for tendering and settlement are set out in Part II of this Circular.
Shareholders who do not wish to participate in the Tender Offer should not complete the Tender Form and will not be required to make a TTE instruction.
The Tender Offer will be financed solely from the Company's existing cash resources.
At the Latest Practicable Date, the issued share capital of the Company was 438,777,780 Ordinary Shares, of which 31,382,020 Ordinary Shares were held by the Company as treasury shares.
At the Latest Practicable Date, the Company operates the Performance Incentive Plan (the "Plan") which sets out share awards made to participants of Element B of the Plan and a Long-Term Incentive Plan (the "LTIP"). As at this date, there were awards outstanding under Element B of the Plan in respect of 570,082 shares and options outstanding under the LTIP in respect of 1,956,940 shares. Together, these represented 0.62 per cent of the Company's issued share capital on that date. If both the authority to purchase shares set out in the Resolution and the authority granted at the 2022 Annual General Meeting were exercised in full, the share awards would represent 0.71 per cent of the Company's issued share capital as at the Latest Practicable Date.
Your attention is drawn to the Terms of the Tender Offer set out in Part II of this Circular.
Whether or not you intend to attend the General Meeting in person, you are encouraged to appoint a proxy. To be valid, the accompanying form of proxy for use at the General Meeting must be completed and returned so as to reach the Registrars by post at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6AH by not later than 11.00 a.m. on 7 September 2022.
As an alternative to completing the enclosed form of proxy, Shareholders can appoint proxies electronically via www.clsholdings.com/evoting so that the instruction is received by the Registrars by not later than 11.00 a.m. on 7 September 2022. CREST members can also appoint proxies by using the CREST electronic proxy appointment service and transmitting a CREST Proxy Instruction in accordance with the procedures set out in the CREST Manual so that it is received by the Registrars (under CREST participant 3RA50) by not later than 11.00 a.m. on 7 September 2022. The time of receipt will be taken to be the time from which the Registrars are able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
If you are in any doubt as to the action you should take, you are recommended to seek your own independent advice.
The Board considers the Resolution to be in the best interests of Shareholders as a whole. Accordingly, the Board recommends that Shareholders vote in favour of the Resolution to be proposed at the General Meeting, as the Directors intend to do for their respective individual beneficial holdings of, in aggregate, 27,540,915 Ordinary Shares, representing approximately 6.77 per cent. of the Company's issued share capital as at the Latest Practicable Date.
The Board makes no recommendation to Shareholders in relation to participation in the Tender Offer itself. Whether or not Shareholders decide to tender all or any of their Ordinary Shares will depend on, amongst other things, their view of the Company's prospects and their own individual circumstances, including their tax position. Shareholders need to take their own decision and are recommended to consult their duly authorised independent advisers.
Yours sincerely
Lennart Sten Non-Executive Chairman
Shareholders are invited to tender Ordinary Shares on the terms and subject to the conditions set out in this Circular and the accompanying Tender Form. The Company will only acquire Ordinary Shares pursuant to the Tender Offer if at least 0.1 per cent. of the issued ordinary share capital of the Company (excluding treasury shares) is tendered.
The Board is proposing that the Company purchases from Qualifying Shareholders up to 10,184,894 Ordinary Shares at 250 pence per Ordinary Share. The Tender Offer is open to all Qualifying Shareholders on the Company's share register on the Record Date, who may participate by tendering all or a proportion of their holdings of Ordinary Shares at that price.
Each Qualifying Shareholder will be entitled to sell 1 Ordinary Share for every 40 Ordinary Shares registered in their name on the Record Date under the Tender Offer, rounded down to the nearest whole number of Ordinary Shares. Any resulting fractional entitlements of tendering Shareholders will be aggregated and used to satisfy surplus tenders. The Tender Offer will also present Qualifying Shareholders with an opportunity to sell more than their pro rata entitlement of Ordinary Shares to the extent that other tendering Shareholders tender less than their pro rata entitlement of Ordinary Shares. If the number of Ordinary Shares validly tendered is less than 10,184,894, surplus tenders will be accepted in proportion to the number of additional Ordinary Shares tendered so that the total number of Ordinary Shares purchased pursuant to the Tender Offer does not exceed 10,184,894.
Ordinary Shares purchased pursuant to the Tender Offer will be acquired free of all liens, charges, restrictions, claims, equitable interests and encumbrances and together with all rights attaching thereto. Ordinary Shares purchased by the Company will be held in treasury.
Different procedures apply for Ordinary Shares in certificated and uncertificated form.
If you hold Ordinary Shares in certificated form, you may only tender such Ordinary Shares by completing and returning the Tender Form in accordance with the instructions set out in paragraph 2(i) below and the instructions printed thereon.
If you hold Ordinary Shares in certificated form, but under different designations, you should complete a separate Tender Form in respect of each designation. Additional Tender Forms are available from Computershare Investor Services PLC, Corporate Actions Projects, Bristol, BS99 6AH.
If you hold Ordinary Shares in uncertificated form (that is, in CREST) you may only tender such Ordinary Shares by TTE instruction in accordance with the procedure set out in paragraph 2(ii) below and, if those Ordinary Shares are held under different member account IDs, you should send a separate TTE instruction for each member account ID.
If you wish to participate in the Tender Offer you should complete, if relevant, Boxes 4, 6, 7 and 8, and sign Box 5 of the accompanying Tender Form in accordance with the instructions printed on it. Tenders may only be made on the accompanying Tender Form, which is personal to the Shareholder(s) named on it and may not be assigned or transferred. The Tender Form represents a right to tender Ordinary Shares. It is not a document of title.
If you hold Ordinary Shares in both certificated and uncertificated forms, you should complete a Tender Form for the certificated holding/s and tender your Ordinary Shares held in uncertificated form by TTE instruction in accordance with the procedure set out in paragraph 2(ii) below. In addition, you should complete separate Tender Forms for Ordinary Shares held in certificated form but under different designations, Additional Tender Forms can be obtained from the Receiving Agent.
If you wish to participate in the Tender Offer the completed and signed Tender Form, together with your share certificate(s) and/or other documents of title in respect of your Ordinary Shares tendered, should be returned by post to Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH as soon as possible and, in any event, so as to be received not later than 3.00 p.m. on 9 September 2022. No acknowledgement of receipt of documents will be given. The instructions printed on the Tender Form shall be deemed to form part of the terms of the Tender Offer.
Box 2 of the accompanying Tender Form shows your entire registered shareholding in the Company on the Latest Practicable Date, under the name and address specified in Box 1. If you buy or sell any Ordinary Shares in certificated form between the Latest Practicable Date, and the Record Date you should amend Box 2 with the new number of Ordinary Shares in certificated form held by you.
Box 3 shows the number of Ordinary Shares in certificated form you are entitled to sell pursuant to the Tender Offer calculated on the basis of 1 Ordinary Share for every 40 Ordinary Shares in certificated form registered in your name on the Latest Practicable Date, rounded down to the nearest whole number of Ordinary Shares. If you buy or sell any Ordinary Shares in certificated form between the Latest Practicable Date, and the Record Date, the Ordinary Shares in certificated form you are entitled to sell pursuant to the Tender Offer will be adjusted accordingly and you should enter your amended entitlement (based on the new number to be entered by you in Box 2) in Box 3.
To accept the Tender Offer, insert in Box 4 the total number of Ordinary Shares in certificated form that you wish to tender under the Tender Offer if different from the number shown in Box 3 (amended, as appropriate). If no number of Ordinary Shares in certificated form is inserted in Box 4, and you have signed Box 5, you will be deemed to have inserted in Box 4 the number of Ordinary Shares in certificated form shown in Box 3 (amended, as appropriate) or, if less, your entire holding of Ordinary Shares in certificated form. If a number greater than your entire holding of Ordinary Shares is inserted in Box 4 and you have signed Box 5, you will be deemed to have inserted in Box 4 the number of Ordinary Shares shown in Box 2 (amended, as appropriate) representing the whole of your registered holding of Ordinary Shares in certificated form on the Record Date.
All Tender Forms are issued only to the addressees and are specific to the classes of security and the unique designated accounts printed on the Tender Forms. These personalised forms are not transferable between different (i) account holders; (ii) classes of security; or (iii) uniquely designated accounts. The Company, Liberum Capital and the Registrars accept no responsibility for any instruction that does not comply with these instructions.
If the Ordinary Shares that you wish to tender are in uncertificated form you should take (or procure to take) the action set out below to transfer to escrow (by means of a TTE instruction) the total number of Ordinary Shares that you wish to tender under the Tender Offer, specifying the Receiving Agent (in its capacity as a CREST participant under the participant ID referred to below) as the escrow agent, as soon as possible and in any event so that the transfer to escrow settles not later than 3.00 p.m. on 9 September 2022.
The input and settlement of a TTE instruction in accordance with this paragraph (ii) shall constitute an offer to sell the number of Ordinary Shares at the price indicated on the terms of the Tender Offer, by transferring such Ordinary Shares to the relevant escrow account as detailed below (an "Electronic Tender").
If you are a CREST sponsored member, you should refer to your CREST sponsor before taking any action. Your CREST sponsor will be able to confirm details of your Participant ID and the Member account ID under which your Ordinary Shares are held. In addition, only your CREST sponsor will be able to send the TTE instruction to Euroclear in relation to your Ordinary Shares.
To tender Ordinary Shares in uncertificated form you should send (or, if you are a CREST sponsored member, procure that your CREST sponsor sends) a TTE instruction to Euroclear, which must be properly authenticated in accordance with Euroclear's specifications and which must contain, in addition to the other information that is required for the TTE instruction to settle in CREST, the following details:
After settlement of the TTE instruction, you will not be able to access the Ordinary Shares concerned in CREST for any transaction or charging purposes, notwithstanding that they will be held by the Receiving Agent as your agent until they are transferred to itself, as escrow agent for the Company. On the first Business Day after the closing of the Tender Offer, the Receiving Agent will transfer the Ordinary Shares that are accepted by the Company to itself, as escrow agent for the Company.
You are recommended to refer to the CREST Manual published by Euroclear for further information on the CREST procedures outlined above.
You should note that Euroclear does not make available special procedures, in CREST, for any particular corporate action. Normal system timings and limitations will therefore apply in connection with a TTE instruction and its settlement. You should therefore ensure that all necessary action is taken by you (or by your CREST sponsor) to enable a TTE instruction relating to your Ordinary Shares to settle prior to 3.00 p.m. on 9 September 2022. In this connection you are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
An appropriate announcement will be made if any of the details contained in this paragraph (ii) are altered in any material respect for any reason.
Withdrawals of Electronic Tenders are not permitted once submitted.
Normal CREST procedures (including timings) apply in relation to any Ordinary Shares that are, or are to be, converted from uncertificated to certificated form, or from certificated to uncertificated form, during the course of the Tender Offer. Shareholders who are proposing to convert any such shares are recommended to ensure that the conversion procedures are implemented in sufficient time to enable them to take all necessary steps in connection with any participation in the Tender Offer (in particular, as regards delivery of share certificates and/ or other documents of title or transfers to an escrow balance as described above) prior to 3.00 p.m. on 9 September 2022.
If your Ordinary Shares are in certificated form but your share certificate(s) and/or other document(s) of title is/are not readily available or are lost, the Tender Form should nevertheless be completed, signed and returned as described in paragraph 2(i) above so as to be received not later than 3.00 p.m. on 9 September 2022 together with any share certificate(s) and/or other document(s) of title that you may have available, accompanied by a letter stating that the balance will follow and the share certificate(s) and/or other document(s) of title should be forwarded as soon as possible thereafter and, in any event, so as to arrive by not later than 3.00 p.m. on 9 September 2022.
If you have lost your share certificate(s) and/or other document(s) of title, you should write to the Registrars at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6AH for a letter of indemnity in respect of the lost share certificate(s) and/or other document(s) of title that, when completed in accordance with the instructions given, should be returned by post to Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH to be received no later than 3.00 p.m. on 9 September 2022.
Tendering Shareholders will not be obliged to pay brokerage fees, commissions or transfer taxes or duty in the UK on the sale of Ordinary Shares in relation to the Tender Offer.
The delivery of share certificates for Ordinary Shares and all other required documents and all remittances will be at the risk of the tendering Shareholder.
All trade reporting and transaction reporting in respect of the purchases and sales of Ordinary Shares in relation to the Tender Offer will be executed by the Company's stockbrokers as agent for CLS.
If you are in any doubt as to the procedure for acceptance, please contact the Receiving Agent by telephone on 0370 889 3286 or at either of the addresses set out on page 1 of the accompanying Tender Form. You are reminded that, if you are a CREST sponsored member, you should contact your CREST sponsor before taking any action.
Unless the Tender Offer becomes void or is terminated or is extended, the outcome of the Tender Offer and (if applicable) the extent to which tenders will be scaled down will be announced by no later than 8.30 a.m. on 12 September 2022. The payment of any consideration for Ordinary Shares pursuant to the Tender Offer will be made only after the relevant TTE instruction has settled or (in the case of Ordinary Shares in certificated form which are tendered) timely receipt by the Receiving Agent of share certificate(s) and/or other document(s) of title, a properly completed and duly executed Tender Form and any other documents required by the Tender Form.
If any tendered Ordinary Shares are not purchased by the Company pursuant to the terms of the Tender Offer, relevant share certificate(s) evidencing any such Ordinary Shares and/or other document(s) of title will be returned or sent as promptly as practicable without expense to, but at the risk of, the tendering Shareholder. In the case of any tendered Ordinary Shares held in uncertificated form (that is, in CREST) which are not purchased by the Company pursuant to the terms of the Tender Offer, the escrow agent will provide instructions to Euroclear to transfer all Ordinary Shares held in escrow balances by TFE instruction to the original available balances from which those Ordinary Shares came.
Settlement of the consideration to which any Qualifying Shareholder is entitled pursuant to valid tenders accepted by the Company, will be made as follows:
Where an accepted tender relates to Ordinary Shares in uncertificated form, any cash consideration will be paid by means of CREST by the Company procuring the creation of an assured payment obligation in favour of the payment banks of tendering Shareholders in accordance with the CREST assured payment arrangements, not later than twelve Business Days after the day that the outcome of the Tender Offer is announced.
The Company reserves the right to settle all or any part of the consideration referred to in this paragraph (i), for all or any accepted tenders, in the manner referred to in paragraph (ii) below, if, for any reason, it wishes to do so.
Where an accepted tender relates to Ordinary Shares in certificated form, cheques for the consideration will be despatched by first class post not later than twelve Business Days after the day that the outcome of the Tender Offer is announced at the risk of the person entitled thereto. All cash payments will be made in pounds sterling by cheque drawn on a branch of a UK clearing bank.
Delivery of cash for the Ordinary Shares to be purchased by the Company pursuant to the Tender Offer will be made by the Receiving Agent. The Receiving Agent will act as agent for tendering Shareholders for the purpose of receiving the cash and transmitting such cash to tendering Shareholders. Under no circumstances will interest be paid on the cash to be paid by the Company or the Receiving Agent regardless of any delay in making such payment.
Each Shareholder by whom, or on whose behalf, a Tender Form is executed irrevocably undertakes, represents, warrants and agrees to and with CLS and Liberum Capital, for itself and as agent for CLS, so as to bind such holder and their personal or legal representatives, heirs, successors and assigns to the following effect:
(iii) that the execution of the Tender Form will, upon acceptance of such irrevocable offer, constitute the irrevocable appointment of any director of, or other person nominated by, CLS or Liberum Capital as such Shareholder's attorney and agent ("attorney"), and an irrevocable instruction to the attorney, to complete and execute all or any contracts and/or other documents at the attorney's discretion in relation to the Ordinary Shares referred to in sub-paragraph (i) above for the purchase of such Ordinary Shares by the Company and to do all such other acts and things as may in the opinion of such attorney be necessary or expedient for the purpose of, or in connection with, the Tender Offer;
(iv) that such Shareholder agrees to ratify and confirm each and every act or thing that may be done or effected by CLS or Liberum Capital or any of its directors or any person nominated by CLS or Liberum Capital in the proper exercise of its or his or her powers and/or authorities hereunder;
The failure of any person to receive a copy of this Circular or the Tender Form shall not invalidate any aspect of the Tender Offer. Additional copies of this Circular and the Tender Forms can be obtained from the Receiving Agent. No acknowledgement of receipt of any Tender Forms, share certificates and/or other documents of title will be given.
All powers of attorney and authorities conferred by or referred to in this Circular or in the Tender Forms are given by way of security for the performance of the obligations of the Shareholders concerned and are irrevocable in accordance with Section 4 of the Powers of Attorney Act 1971.
The Tender Offer, all Tender Forms and all contracts resulting therefrom shall be governed by and construed in accordance with English law. Execution on behalf of a Shareholder of a Tender Form constitutes his or her submission, in relation to all matters arising out of or in connection with the Tender Offer and the Tender Form, to the jurisdiction of the English courts.
References in this paragraph to a holder of Ordinary Shares or a Shareholder shall include references to the person or persons executing a Tender Form and, in the event of more than one person executing a Tender Form, the provisions of this paragraph shall apply to them jointly and to each of them.
Each Qualifying Shareholder will be entitled to sell 1 Ordinary Share for every 40 Ordinary Shares registered in his name on the Record Date under the Tender Offer, rounded down to the nearest whole number of Ordinary Shares. Tendering Shareholders may sell more than their pro rata entitlement of Ordinary Shares to the extent that other Shareholders tender less than their pro rata entitlement of Ordinary Shares. If the number of Ordinary Shares validly tendered exceeds 10,184,894 and if and to the extent that any Qualifying Shareholders have tendered less than their pro rata entitlement under the Tender Offer, surplus tenders will be accepted in proportion to the number of additional Ordinary Shares tendered so that the total number of Ordinary Shares purchased pursuant to the Tender Offer does not exceed 10,184,894.
Liberum Capital and CLS reserve the absolute right to inspect (either themselves or through their agents) all Tender Forms, and may consider void and reject any tender that does not in the sole judgment of Liberum Capital and CLS meet the requirements of the Tender Offer. None of Liberum Capital, CLS, the Receiving Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Liberum Capital and CLS reserve the right, in their sole discretion, to treat as valid in whole or in part any Tender Form that is not entirely in order or that is not accompanied by the relevant share certificate(s) and/or other document(s) of title. In that event, however, the consideration under the Tender Offer will only be dispatched when the Tender Form is entirely in order, when the relevant TTE instruction has been settled or (as the case may be) the relevant share certificate(s) and/or other documents of title or indemnities satisfactory to CLS and Liberum Capital has/have been received.
The Tender Offer will close at 3.00 p.m. on 9 September 2022 (the "Closing Date") and no tenders that are received after that time will be accepted unless Liberum Capital and CLS, in their sole and absolute discretion, shall have extended the period during which the Tender Offer is open, in which event the term "Closing Date" shall mean the latest time and date at which the Tender Offer, as so extended by Liberum Capital and CLS, shall close. Liberum Capital and CLS shall notify the Receiving Agent of any extension of the Closing Date by oral or written notice and shall notify holders of Ordinary Shares of such extension by public announcement not later than 3.00 p.m. on 9 September 2022.
As used in this Circular and in the Tender Form, the "United States" means the United States of America (including the District of Columbia), its territories, its possessions and all other areas subject to its jurisdiction and "US person" means (i) any individual who is a resident or citizen of the United States and (ii) a corporation, partnership or other entity created or organised in or under the laws of the United States or an estate or trust the income of which is subject to United States federal income taxation regardless of its source and "North American person" means a US person and any individual, corporation, partnership, trust or other entity resident in Canada or receiving the Circular in Canada, provided, however, that the terms "North American person" and "US person" shall not include a branch or agency of a United States bank or insurance company that is operating outside the United States for valid business reason as a locally registered branch or agency engaged in the banking or insurance business and not solely for the purpose of investing in securities not registered under the United States Securities Act 1933 (as amended).
The Board has been advised that, under current UK legislation and HMRC published practice, the UK taxation consequences of a purchase by CLS of its Ordinary Shares from Shareholders are broadly as outlined below.
This summary is intended as a general guide and is not exhaustive. This summary is based on current UK tax law and what is understood to be the current published practice of HMRC as at the date of this Circular, both of which are subject to change (possibly with retrospective effect), and the summary does not (unless specifically stated) take into account any future changes in law or HMRC practice. The summary relates only to certain limited aspects of the UK tax treatment of Shareholders.
This summary is intended to apply only to Shareholders: (i) who are resident (and, in the case of individuals, domiciled) in (and only in) the UK for UK tax purposes (unless the position of non-UK resident Shareholders is expressly referred to); (ii) to whom split-year treatment does not apply; (iii) in the case of individuals, who are not Scottish or Welsh taxpayers; (iv) who are the absolute beneficial owners of their Ordinary Shares and any dividends paid, or other distributions made, in respect of those shares; (v) who hold their Ordinary Shares as investments (otherwise than through an individual savings account or a pension arrangement) and not as securities to be realised in the course of a trade; (vi) to whom the UK tax rules concerning carried interest do not apply in relation to their holding or disposal of shares; and (vii) who are not a corporate shareholder that is beneficially entitled to 10 per cent. or more of the Company's shares or distributions and/or controls 10 per cent. or more of the Company's voting rights.
This summary may not apply to certain Shareholders, such as dealers in securities, broker dealers, insurance companies and collective investment schemes, pension schemes, trustees, Shareholders who are exempt from UK taxation, Shareholders who acquired their Ordinary Shares under share incentive arrangements or by (or deemed to be by) virtue of an office or employment, or persons who are connected with the Group or who have acquired their Ordinary Shares other than for bona fide commercial reasons. Such Shareholders may be subject to special rules.
When CLS purchases Ordinary Shares from Qualifying Shareholders pursuant to the Tender Offer, a Shareholder will generally be treated for UK tax purposes as receiving partly a capital sum for the disposal of the Ordinary Shares equal to the amount treated (for UK tax purposes) as paid up on each Ordinary Share (broadly being the amount originally subscribed for the Ordinary Shares, including any premium paid on subscription) (the "Capital Amount") and partly an income distribution to the extent of the amount of any excess above the Capital Amount (the "Distribution Amount").
The Company expects that the Distribution Amount will not be treated as a "property income distribution" for UK tax purposes. On this basis, the Company is not expected to be required to make any deduction of basic rate UK income tax at source in respect of the Distribution Amount. The subsequent paragraphs in this summary have been drafted on the basis that the Distribution Amount will not be a "property income distribution" for UK tax purposes.
Liability to UK income tax or UK corporation tax on income in respect of the Distribution Amount will depend upon the individual circumstances of the Shareholder. An overview of the applicable UK tax rules is set out below.
To the extent that an individual resident (for tax purposes) in the UK receives a Distribution Amount pursuant to the Tender Offer, the amount of UK income tax payable on the receipt will depend on the individual's own personal tax position.
No UK income tax should be payable if the Distribution Amount received, when aggregated with the Shareholder's other dividend income in the year of assessment, does not exceed the annual tax-free allowance (£2,000 for the 2022/23 tax year). "Dividend income" for these purposes includes any UK and non UK source dividends and certain other distributions in respect of shares. Dividend income in excess of the tax-free allowance is taxed at the following rates (for the 2022/23 tax year):
For the purposes of determining which of the taxable bands dividend income falls into, dividend income is treated as the highest part of a Shareholder's income. In addition, dividends within the annual tax-free allowance (the nil-rate band) which would otherwise have fallen within the basic or higher rate bands will use up those bands respectively and so will be taken into account in determining whether the threshold for higher rate or additional rate income tax is exceeded.
Trustees of UK resident trusts should take appropriate advice on the tax consequences of the Tender Offer. Generally, UK resident trusts that are regarded as discretionary or accumulation trusts may be subject to income tax at the dividend trust rate on the total of the Distribution Amount received (8.75 per cent. for trust income up to £1,000 and 39.35 per cent. for trust income over £1,000 for the 2022/23 tax year). The annual tax-free allowance applies to individuals only and there is no equivalent allowance for trusts.
To the extent that a corporate Shareholder within the charge to UK corporation tax receives a Distribution Amount pursuant to the Tender Offer, it is likely that the Distribution Amount will fall within one or more of the classes of income distribution qualifying for exemption from corporation tax. In that case, the whole of the purchase price should be brought into account in the calculation of any chargeable gain on the disposal of the Ordinary Shares (see the section entitled "Taxation of chargeable gains" below).
However, the income distribution exemptions are not comprehensive and are also subject to anti-avoidance rules. To the extent that the Distribution Amount received does not fall within an exemption, that Distribution Amount will be taxable as an income distribution at the prevailing corporation tax rate of 19 per cent. (subject to any available exemptions or relief) and that amount will be excluded from the chargeable gains computation, as it will have been taken into account for the purposes of computing income.
Non-UK resident Shareholders should clarify their position with their professional adviser. Non-UK resident Shareholders should not generally be subject to UK tax on income in respect of the Distribution Amount (whether via withholding or direct assessment), unless they are carrying on a trade, profession or vocation in the UK through a branch or agency (or, in the case of a company, a permanent establishment) in connection with which the Ordinary Shares are used, held or acquired.
As summarized further above, when CLS purchases Ordinary Shares from Qualifying Shareholders pursuant to the Tender Offer, for UK tax purposes Qualifying Shareholders will be treated as receiving a capital sum (the "Capital Amount") for the disposal of their Ordinary Shares. This disposal of Ordinary Shares may, depending on the individual circumstances of the Qualifying Shareholder (including the availability of exemptions and reliefs) give rise to a chargeable gain or an allowable loss for the purposes of UK taxation on chargeable gains. The extent of any gain or loss arising to a particular Qualifying Shareholder will also depend on their base cost in the Ordinary Shares that they dispose of.
No UK capital gains tax should be payable if any chargeable gain in respect of the Capital Amount received, when aggregated with the Shareholder's other chargeable gains in the year of assessment, does not exceed the annual tax-free exemption (£12,300 for the 2022/23 tax year). Chargeable gains in excess of the tax-free exemption are taxed at the following rates (for the 2022/23 tax year):
UK resident trusts should take appropriate advice on the tax consequences of the Tender Offer. Generally, UK resident trustee Shareholders can generally benefit from an annual exemption from chargeable gains tax of £6,150 (for the 2022/23 tax year). Chargeable gains in excess of the tax-free exemption are taxed at 20 per cent.
Corporate shareholders suffer UK corporation tax on chargeable gains at the prevailing rate of corporation tax (19 per cent. for the 2022/23 tax year). Indexation relief may apply to reduce the amount of any chargeable gain for these purposes, but will not create or increase any allowable loss, and will only apply from the date of acquisition up to 31 December 2017 (and not in respect of changes shown in the retail prices indices for months after December 2017). The comment at paragraph (iii) of the section entitled "Taxation of income" above regarding the chargeable gain computation should be noted.
Non-UK resident Shareholders should clarify their position with their professional adviser. A Shareholder who is not resident for tax purposes in the UK will generally be subject to UK taxation of chargeable gains on the disposal of Ordinary Shares pursuant to the Tender Offer if the Shareholder is carrying on a trade, profession or vocation in the UK through a branch or agency (or, in the case of a corporate Shareholder, a permanent establishment) in connection with which the Ordinary Shares are used, held or acquired. In addition, chargeable gains realised by non-residents on the disposal of assets (including shares) deriving at least 75 per cent. of their value from UK land are subject to UK taxation of chargeable gains in certain circumstances. Non-UK resident Shareholders should clarify the application of these rules with their professional adviser.
An individual Shareholder who has previously been resident for tax purposes in the UK, but who ceases to be so resident (or becomes treated as resident outside the UK for the purposes of a double tax treaty) for a period of five years or less, and who disposes of all or part of their Ordinary Shares pursuant to the Tender Offer during that period of temporary non-residency, may be liable to UK capital gains tax on their return to the UK under certain anti-avoidance rules, subject to the relevant conditions applying and subject to any available exemptions or reliefs.
Under section 684 Income Tax Act 2007 (for individuals), HMRC can, in certain circumstances, counteract income tax advantages arising in relation to transactions in securities. Were section 684 to be successfully invoked against any individual Shareholder, that individual Shareholder would be likely to be taxed as though the consideration for the sale of their Ordinary Shares to the Company was an income distribution.
Under the provisions of Part 15 of the Corporation Tax Act 2010 (for corporates), HMRC can in certain circumstances counteract corporation tax advantages arising in relation to transactions in securities. If these provisions were to be applied by HMRC to the Tender Offer, Shareholders who are subject to corporation tax might be liable to corporation tax as if they had received an income distribution.
These transactions in securities provisions apply only in certain circumstances and, in particular, do not apply where it can be shown that the transaction in question was entered into for genuine commercial reasons and did not involve as one of its main objects the obtaining of an income tax or corporation tax advantage. In view of these restrictions on the application of the anti-avoidance provisions, no application has been made to HMRC for clearance in respect of the application of these provisions to the Tender Offer. UK resident individual Shareholders and corporate Shareholders who are within the charge to UK corporation tax are advised to take independent advice as to the potential application of the above provisions in light of their own particular motives and circumstances.
Stamp duty at the rate of 0.5 per cent. of the purchase price will be payable by CLS in respect of the repurchase of Ordinary Shares pursuant to the Tender Offer.
(Incorporated and Registered in England No. 2714781)
Notice is hereby given that a General Meeting of CLS Holdings plc (the "Company") will be held at 16 Tinworth Street, London SE11 5AL on 9 September 2022 at 11.00 a.m. for the purpose of considering and, if thought fit, passing the following resolution, which will be proposed as a special resolution:
London SE11 5AL
Dated 15 August 2022 BY ORDER OF THE BOARD Registered Office David Fuller 16 Tinworth Street Company Secretary
the Meeting or involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the Company or the good order of the Meeting that the question be answered.
CREST personal members or other CREST sponsored members, and those CREST members who have appointed (a) voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear's specifications and must contain the information required for such instructions, as described in the CREST Manual (www.euroclear.com/CREST). The message must be transmitted so as to be received by the issuer's agent (ID 3RA50), by 11.00 a.m. on 7 September 2022.
For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed (a) voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time.
In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the CREST Regulations. Please refer to the CREST Manual at www.euroclear.com/CREST.
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