NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE. THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE NOR AS TO THE TERMS ON WHICH ANY FIRM OFFER MIGHT BE MADE.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

21 June 2023

Statement regarding possible offer for Alfa Financial Software Holdings plc ("Alfa" or "the Company")

CHP Software and Consulting Limited enters into irrevocable undertaking

Irrevocable Commitment

Further to the announcement made by the Company on 9 June 2023 in response to press speculation (the "Possible Offer Announcement") in respect of the possible offer for the Company by EQT X EUR SCSp and EQT X USD SCSp each represented by its manager (gérant), EQT Fund Management S.à r.l. (collectively referred to as "EQT"), EQT announces that it has entered into an irrevocable undertaking with CHP Software and Consulting Limited ("CHP") (which is ultimately controlled by Andrew Page, the Chairman and founder of the Company) in respect of a possible offer by EQT for the entire issued and to be issued share capital of the Company at a price of 208 pence per ordinary share of the Company, to be implemented by means of a recommended scheme of arrangement under Part 26 of the Companies Act 2006 and including a customary right to switch from the Scheme to a takeover offer and the proposed Share Alternative, as further described below (the "Possible Offer").

The irrevocable undertaking is in respect of CHP's entire current holding of 175,905,649 ordinary shares in the capital of the Company representing approximately 59.5 per cent. of the Company's total issued ordinary share capital. 

The irrevocable undertaking provides that CHP will, if a firm offer is made, vote in favour of all resolutions to approve any scheme of arrangement under Part 26 of the Companies Act 2006 in respect of the Possible Offer (the "Scheme") (or, to accept a takeover offer in the event that EQT were to exercise its right to switch from the Scheme to a takeover offer provided that the acceptance condition for such offer is set at not less than 75 per cent. of the fully diluted share capital of the Company).

CHP has also undertaken to vote against any competing proposal, so long as the irrevocable undertaking continues to be binding.

Prior to the release by EQT of an announcement of a firm intention to make an offer for the Company for the purposes of Rule 2.7 of the Code, the irrevocable undertaking will terminate and cease to be binding if:

a.     EQT releases an announcement that it does not intend to proceed with the Possible Offer (for the purposes of Rule 2.8 of the Code); or

b.     EQT has otherwise not released announcement of a firm intention to make an offer for the Company, for the purposes Rule 2.7 of the Code, by 31 August 2023; or

c.     a third party announces a firm intention to make an offer for the Company for the purposes of Rule 2.7 of the Code at a price per ordinary share of the Company equal to or greater than 239 pence (a "Competing Offer") and EQT does not announce a firm intention to make an offer for the Company under Rule 2.7 of the Code at a price per share of the Company equal to or greater than the price of such Competing Offer within ten business days of the announcement of such Competing Offer.

Following the release by EQT of an announcement of a firm intention announcement to make an offer for the Company for the purposes of Rule 2.7 of the Code, the irrevocable undertaking will remain binding in the event of a Competing Offer and will only terminate and cease to be binding in certain limited circumstances, specified in the irrevocable undertaking, including if: the Scheme lapses or is withdrawn for the purposes of the Code, and the relevant bid vehicle formed for the purposes of the offer and ultimately controlled by EQT publicly confirms that it does not intend to to implement the offer by way of a takeover offer, or has otherwise not become effective by 6.00 p.m. on the long stop date specified in the relevant announcement of a firm intention to make an offer for the Company, if and when made by EQT.

Further details regarding the irrevocable undertaking are set out in Appendix 1.

Share Alternative

As stated above and referred to in the Possible Offer Announcement, it is currently expected as an alternative (the "Share Alternative") to the cash offer of 208 pence per ordinary share of the Company (the "Cash Offer"), that an eligible Alfa shareholder would be entitled to elect to receive rollover ordinary and preference shares in a holding company ("Holdco") ultimately controlled by EQT (the "Rollover Securities") in exchange for their holding of Company shares in respect of up to 33 per cent. of their shareholding in the Company (with the remaining percentage of such Alfa shareholder's shareholding being settled by way of the Cash Offer) and at a ratio to be specified in the relevant offer documentation.

CHP has further undertaken to elect for the proposed Share Alternative, up to the maximum amount of 33 per cent. of its holding in the Company; provided that if CHP, acting in good faith, determines that the detailed terms of the Share Alternative do not accurately reflect the term sheet appended to the irrevocable undertaking, CHP may elect to receive cash at a price of 208 pence per ordinary share in respect of all of its holding in the Company.

The maximum number of Rollover Securities available to Alfa shareholders under the Share Alternative would be limited to 20 per cent. of the issued ordinary share capital of Holdco as at completion of the Possible Offer (the "Alternative Offer Maximum").

If valid elections were to be made from eligible Alfa shareholders that would require the issue of Rollover Securities exceeding the Alternative Offer Maximum, the number of Rollover Securities to be issued in respect of each Alfa share would be rounded down on a pro rata basis, and the balance of the consideration for each Alfa Share would be paid in cash in accordance with the terms of the Cash Offer.

The availability of the Share Alternative would also be conditional upon valid elections being made for such number of Rollover Securities as represent at least 7.5 per cent. of the issued ordinary share capital of Holdco at completion of the Possible Offer, failing which the Share Alternative would lapse and no Rollover Securities would be issued.

Unless otherwise determined by EQT and permitted by applicable law and regulation, the Share Alternative would not be offered, sold or delivered, directly or indirectly, in or into any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Possible Offer is sent or made available to Alfa shareholders in that jurisdiction or where to do so would result in compliance requirements or formalities which EQT regards as unduly onerous. In addition, individual acceptances of the Share Alternative would only be valid if all regulatory approvals (if any) required by the relevant Alfa shareholder to acquire the Rollover Securities had been obtained.

If a firm offer were to be made, for the purposes of Rule 24.11 of the Code, Goldman Sachs, as financial adviser to EQT would provide an estimate of the value of a Rollover Security, together with the assumptions, qualifications and caveats forming the basis of its estimate of value, in a letter to be included in the relevant offer documentation.

Further details on the terms of the Share Alternative are set out in Appendix 2.

Further information

Discussions between the parties remain ongoing. There can be no certainty that any offer will be made for the Company by EQT. Further announcements may be made as and when appropriate.

In accordance with Rule 2.6(a) of the Code, EQT is required, by no later than 5.00pm (London time) on 7 July 2023 either to announce a firm intention to make an offer for the Company in accordance with Rule 2.7 of the Code or to announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

In accordance with Rule 2.5 of the Code, EQT reserves the right to vary the form and/or mix of the consideration described in this announcement or implement the transaction by means of a takeover offer as opposed to a scheme of arrangement. EQT also reserves the right to make an offer for the Company on less favourable terms than those described in this announcement: (i) with the agreement or recommendation of the board of the Company; (ii) if a third party announces a firm intention to make an offer for Company which, at that date, is of a value less than the value of the Possible Offer; or (iii) following the announcement by the Company of a Rule 9 waiver transaction. If Alfa announces, declares or pays any new dividend or any other distribution or return of value to shareholders after the date of this announcement (other than the final dividend of 1.2 pence per share payable on 26 June 2023), EQT reserves the right to make an equivalent reduction to the Possible Offer.

Enquiries:

About EQT

EQT is a purpose-driven global investment organization with EUR 119 billion in assets under management within two business segments - Private Capital and Real Assets. 

Funds managed by EQT own portfolio companies and assets in Europe, Asia-Pacific and the Americas and supports them in achieving sustainable growth, operational excellence and market leadership.

More information is available at www.eqtgroup.com

Important Notices

Goldman Sachs International ("Goldman Sachs"), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for EQT and no one else in connection with the Possible Offer or any other matter referred to in this announcement and will not be responsible to anyone other than EQT for providing the protections offered to clients of Goldman Sachs or for providing advice in relation to the contents of this announcement or any matters referred to herein

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities, or the solicitation of any vote or approval in any jurisdiction, whether pursuant to this announcement or otherwise. Any offer, if made, will be made solely by certain offer documentation which will contain the full terms and conditions of any offer, including details of how it may be accepted.

The release, distribution or publication of this announcement in whole or in part, directly or indirectly in, into or from jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

EQT is not aware of any dealings in Alfa ordinary shares that would require a minimum level, or particular form, of consideration that it would be obliged to offer under Rule 6 or Rule 11 of the Code (as appropriate). However, it has not been practicable to make such enquiries of all persons presumed to be acting in concert with EQT. Enquiries of such parties will be made as soon as practicable following the date of this announcement and, to the extent that any further disclosure is required, EQT will make an announcement as soon as practicable, and in any event by the time it is required to make its Opening Position Disclosure pursuant to Rule 8.1 of the Code.

Rule 26.1 Disclosure

In accordance with Rule 26.1 of the Code, a copy of this announcement and the irrevocable referred to in it will be available at www.alfasystems.com and www.publication-documents.co.uk, by no later than 12 noon (London time) on 22 June 2023. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Note to US Shareholders

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, EQT or its nominees or brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Alfa ordinary shares outside the United States, other than pursuant to the possible offer, before or during the period in which the possible offer, if made, remains open for acceptance. Also, in accordance with Rule 14e-5(b) of the US Exchange Act, Goldman Sachs International will continue to act as exempt principal traders in Alfa ordinary shares on the London Stock Exchange. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website, www.londonstockexchange.com.

MAR

The information contained within this announcement is deemed by EQT to constitute inside information as stipulated under the Market Abuse Regulations (EU) No.596/2014 (as applicable in the UK and as amended from time to time). Upon the publication of this announcement via a Regulatory Information Service, such information is now considered to be in the public domain.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at  https://www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Takeover Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Bases and Sources

In this announcement, unless otherwise stated or the context otherwise requires, the following bases and sources have been used:

·      References to percentage ownership of the Company have been based on Company's total voting rights last publicly announced before at the date of this announcement, being: 295,469,376.

·      Certain figures included in this announcement have been subject to rounding adjustments.

Disclaimer

The information contained herein does not constitute an offer to sell, nor a solicitation of an offer to buy, any security, and may not be used or relied upon in connection with any offer or solicitation. Any offer or solicitation in respect of EQT X will be made only through a confidential private placement memorandum and related documents which will be furnished to qualified investors on a confidential basis in accordance with applicable laws and regulations. The information contained herein is not for publication or distribution to persons in the United States of America. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold without registration thereunder or pursuant to an available exemption therefrom. Any offering of securities to be made in the United States would have to be made by means of an offering document that would be obtainable from the issuer or its agents and would contain detailed information about the issuer of the securities and its management, as well as financial information. The securities may not be offered or sold in the United States absent registration or an exemption from registration.

Appendix 1

Irrevocable Undertaking

CHP has given an irrevocable undertaking to vote in favour of all resolutions to approve the Scheme (or, to accept a takeover offer in the event that EQT were to exercise its right to switch from the Scheme to a takeover offer provided that the acceptance condition for such takeover offer is set at not less than 75 per cent. of the fully diluted share capital), as summarised in the text of this announcement.. 

Appendix 2 - Indicative terms of Rollover Securities

Set out below are the indicative terms of the Rollover Securities, subject to tax structuring

1.         Voting Rights

Each ordinary share comprising a Rollover Security will carry one vote, while each preference share comprising a Rollover Security would not carry any general voting rights at general meetings of Holdco.

2.         Significant Shareholder

Any holder of Rollover Securities who at Completion holds more than 8 per cent. of the total number of ordinary shares in Holdco (a "Significant Shareholder") would be entitled to appoint (and remove/replace), in good faith consultation with EQT X EUR SCSp and EQT X USD SCSp, each represented by its manager (gérant), EQT Fund Management S.à r.l. ("EQT"), a director to the board of Holdco (the "Board") and also appoint (and remove/replace) an observer to attend, by teleconference or videoconference only, (but not vote at) meetings of the Board.

A Significant Shareholder would also have a consent right over certain matters, including certain amendments to Holdco's organisations or constitutional documents, reorganisations, reductions in capital or distributions of Holdco (other than on a pro rata basis), any material change to the nature of the business, and any transactions between Holdco or its subsidiaries and EQT or its affiliates.

In the event that the Significant Shareholder ceases to hold 8 per cent. of the issued ordinary share capital of Holdco (other than as a result of any issuance by Holdco of new equity securities), such appointment rights and consent rights shall no longer apply.

A Significant Shareholder would have the right to receive annual audited accounts, business plan and budget, monthly management accounts and all information packs provided to the Board. In the event that the Significant Shareholder ceases to hold 5 per cent. of the issued ordinary share capital of Holdco at completion, or makes an investment in any business considered by the Board (acting reasonably and in good faith) to be a competitor, in any material respect, of the business of the Holdco group, such information rights shall no longer apply.

Such Board appointment, consent and information rights are personal to the relevant Significant Shareholder and will not transfer along with any transfer of Rollover Securities.

EQT and any Significant Shareholder would each agree to a non-solicitation covenant (subject to customary carve-outs) such that, each party, for up to one year from the date on which such party ceases to hold any Holdco securities and for as long as the other party continues to hold securities in Holdco, will not solicit any member of senior management of Alfa Financial Software Holdings plc.

3.         Unlisted

The Rollover Securities would be unlisted.

4.         Transfers of the Rollover Securities

Rollover Securities would not be transferable (directly or indirectly) during an initial five-year lock-up period (the "Lock-up Period") without the prior written consent of EQT except to its affiliates or pursuant to the drag and tag rights described below.

Following the expiration of the Lock-up Period, a holder of Rollover Securities (a "Rollover Shareholder") would be entitled to transfer its Rollover Securities (provided that any such transfer is for all (but not part) of the Rollover Securities held by such Rollover Shareholder), subject to a customary right of first offer on the part of EQT and to certain other restrictions in respect of the identity of the proposed transferee. Any proposed transferee of Rollover Securities after the Lock-up Period:

·      would be required to adhere to the relevant shareholders' agreement relating to Holdco;

·      would be required to complete any applicable anti-money laundering, anti-bribery and corruption, anti-sanctions and "know your client" checks reasonably required by EQT and/or any antitrust or regulatory change in control approvals required by any regulator; and

·      must not be considered by EQT to be a competitor of the business of the Holdco group or a person whose investment is likely to result in reputational harm to the Holdco group, EQT or their respective affiliates.

5.         Additional Rollover Security Issues

The Rollover Shareholders would be entitled to participate pro rata in securities issues after completion (other than debt financing provided by a third-party lender and subject to customary exceptions).

6.         Exit Arrangements

Any future share sale, asset sale, IPO, winding-up or other form of liquidity event relating to the group (an "Exit") would occur at the absolute discretion of EQT (in good faith consultation with the Board).

Each holder of Rollover Securities will be entitled to pro rata pre-emption and sell-down rights on any IPO. Each holder of Rollover Securities will be required to enter into customary lock-up undertakings and reasonable and customary provisions designed to result in an orderly disposal of securities, but on no more onerous or lengthy terms than EQT (and, for the avoidance of doubt, each holder of Rollover Securities will be offered the same liquidity opportunities as EQT at the same time and on a pro-rata basis).

On any sale of all or substantially all of the business of the Holdco Group, the Board shall seek to distribute the proceeds of such sale to Holdco shareholders as soon as reasonably practicable thereafter (subject to Holdco having sufficient distributable reserves and withholding such amounts as are considered reasonably necessary by EQT in good faith to meet any current or future obligations, liabilities or contingencies of the Group).

7.         Drag along and tag along

EQT shall have a customary drag right (i.e. force a sale) on the same terms (including implied price and form of consideration) on any transfers of direct or indirect shareholdings which would result in a change of control. EQT will not be able to exercise its drag along transfer rights such that any drag transfer would complete within 12 months of completion of the Possible Offer without prior written consent of the relevant Significant Shareholder(s).

Rollover Shareholders shall have a customary pro rata tag right on the same terms (including implied price and form of consideration) on any transfer of direct or indirect shareholdings by EQT(other than in respect of certain excluded instances including, but not limited to, customary permitted transfers to affiliates, any current or prospective director, officer, employee or consultant of the group, reorganisation, IPO, where a drag right has been exercised, and/or any syndication to limited partners and/or co-investors). A transfer by EQT of its securities to a continuation fund will constitute an exit event entitling any Significant Shareholder to tag along all of their Rollover Securities.

On any drag or tag transfer, any dragged or tagging shareholder will be required to give the same warranties and indemnities as are given by EQT.

8.         Risk factors

If a firm offer is made, a more detailed set of risk factors will be set out in any firm intention announcement under Rule 2.7 of the Code but will include, among other things, the following:

·      the Rollover Securities will comprise securities in a private and unquoted company, and there is no current expectation that they will be listed or admitted to trading on any exchange or market for the trading of securities, and will therefore be illiquid;

·      the value of the Rollover Securities will at all times be uncertain and there can be no assurance that any such securities will be capable of being sold in the future or that they will be capable of being sold at the value to be estimated by Goldman Sachs in any offer documentation;

·      the holders of Rollover Securities, apart from any Significant Shareholder, will not enjoy any minority protections or other rights save for those rights prescribed by applicable law; and

·      the holders of Rollover Securities, apart from any Significant Shareholder, will not be afforded the same level of protections and disclosure of information that they currently benefit from as shareholders in the Company as a listed company.