Horizonte Minerals Acquisition Of Teck Cominco -7-

27th Jul 2010 07:30

reviewing and approving the Group's strategy, budgets, major items of capital expenditure and acquisitions. The Company has an audit committee and a remuneration committee with formally delegated duties and responsibilities. The remuneration committee comprises David Hall and Allan Walker and is responsible for determining the terms and conditions of service, including remuneration and other benefits granted or proposed to be granted by the Company. The audit committee, also comprising David Hall and Allan Walker, has primary responsibility for monitoring the quality of internal controls, ensuring that the financial performance of the Group is properly measured and reported on, and for reviewing reports from the Group's auditors relating to the Group's accounting and internal controls. The Directors intend to comply with Rule 21 of the AIM Rules for Companies relating to directors' dealings and will take all reasonable steps to ensure compliance by the Group's applicable employees. 11. The City Code Under Rule 9 of the City Code, where any person acquires, whether by a series of transactions over a period of time or otherwise, an interest in shares which (taken together with shares already held by him and an interest in shares held or acquired by persons acting in concert with him) carry 30 per cent. or more of the voting rights of a company which is subject to the City Code, that person is normally required to make a general offer to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights in that company to acquire the balance of their interests in the company. Rule 9 of the City Code also provides that, among other things, where any person who, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. but does not hold more than 50 per cent. of the voting rights of a company which is subject to the City Code, and such person, or any person acting in concert with him, acquires an additional interest in shares which increases the percentage of shares carrying voting rights in which he is interested, then such person is normally required to make a general offer to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights of that company to acquire the balance of their interests in the company. An offer under Rule 9 must be in cash (or with a cash alternative) and at the highest price paid within the preceding 12 months for any shares in the company by the person required to make the offer or any person acting in concert with him. Under the City Code a concert party arises when persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate, through the acquisition by any of them of shares in a company, to obtain or consolidate control of that company. Under the City Code, control means an interest or interest in shares carrying in aggregate 30 per cent. or more of the voting rights of a company, irrespective of whether such interest or interests give de facto control. Rule 9 of the City Code further provides, among other things, that where any person who together with persons acting in concert with him holds over 50 per cent. of the voting rights of a company acquires an interest in shares which carry additional voting rights, then they will not generally be required to make a general offer to the other shareholders to acquire the balance of their shares. On Admission Teck will hold 50 per cent. of the voting rights of the Company. As this amount is greater than a 30 per cent. interest and not more than a 50 per cent. holding of the voting rights in the Company on Admission, in normal circumstances a general offer from Teck to the Company's Shareholders would be required under Rule 9 of the City Code to acquire all the Ordinary Shares not already owned by Teck. Dispensation from Rule 9 of the City Code in relation to the Placing Under Note 1 on the Notes on the Dispensations from Rule 9 of the City Code, the Takeover Panel will normally waive the requirement for a general offer to be made in accordance with Rule 9 of the City Code (a "Rule 9 Offer") if, inter alia, the shareholders of the company who are independent of the person who would otherwise be required to make an offer and any person acting in concert with him (the "Independent Shareholders") pass an ordinary resolution on a poll at a general meeting (a "Whitewash Resolution") approving such a waiver. The Takeover Panel may waive the requirement for a Whitewash Resolution to be considered at a general meeting (and for a circular to be prepared in accordance with Section 4 of Appendix 1 to the City Code) if Independent Shareholders holding more than 50 per cent. of the company's shares capable of being voted on such a resolution confirm in writing that they would vote in favour of the Whitewash Resolution were such a resolution to be put to the shareholders of the company at a general meeting. Each of the Independent Shareholders (who together are the beneficial owners of 29,868,812 Ordinary Shares, representing 50.6 per cent. of the Existing Ordinary Shares carrying voting rights as at the date of this document) have written to the Takeover Panel to confirm: 1. that it/he/she has absolute discretion over the manner in which its/his/her respective Ordinary Shares are voted and that these Ordinary Shares are held free of all liens, pledges, charges and encumbrances; 2. that: (a) save for the fact that they are shareholders in the Company, there is no connection between it/him/her and Teck; (b) it/he/she does not have any interest or potential interest, whether commercial, financial or personal, which is conditional on the outcome of the Acquisition and Placing; and (c) it/he/she is an Independent Shareholder of the Company; and 3. that, in connection with the Transaction: (a) it/he/she has consented to the Takeover Panel granting a waiver from the obligation for Teck to make a Rule 9 offer to the Company's Shareholders; (b) subject to Independent Shareholders of the Company holding more than 50 per cent. of the shares capable of being voted on a Whitewash Resolution giving separate confirmations in writing, it/he/she consents to the Takeover Panel dispensing with the requirement that Independent Shareholders approve a Whitewash Resolution at a general meeting of the Company; and (c) it/he/she would vote in favour of a Whitewash Resolution were such a resolution put to the Independent Shareholders of the Company at a general meeting. In giving the confirmations referred to above, each of the Independent Shareholders acknowledged: 4. that, if the Takeover Panel receives written confirmation from Independent Shareholders holding more than 50 per cent. of the shares capable of being voted on a Whitewash Resolution, the Takeover Panel will approve a waiver from the obligation for Teck to make a Rule 9 Offer, without the requirement for the waiver to be approved by Independent Shareholders of the Company at a general meeting (an "Accelerated Panel Waiver"); and 5. that, if no general meeting is held to approve the Whitewash Resolution: (a) there would not be an opportunity for any other person to make any alternative proposal to the Company conditional on such Whitewash Resolution not being approved by Independent Shareholders of the Company; (b) there would not be an opportunity for any other Shareholders to make known their views on the waiver of Rule 9; and (c) there would be no requirement for the Company either (i) to obtain and make known to the Shareholders competent independent advice under Rule 3 of the City Code on either the Transaction or the waiver of the obligation for Teck to make a Rule 9 offer or (ii) to publish a circular to Shareholders in compliance with Appendix 1 of the City Code in connection with this matter. Independent Shareholders also confirmed that they would not sell, transfer, pledge, charge or grant any option or other right over, or create any encumbrance over, or otherwise dispose of their Ordinary Shares until after the conclusion of the General Meeting to approve, inter alia, the Placing. Following completion of the Acquisition, the Quantom Transaction and the Placing, Teck will hold 50 per cent. of the Enlarged Share Capital. Any further increase in the interest in Ordinary Shares by Teck will be subject to Rule 9 of the City Code. 12. General Meeting A notice convening the General Meeting to be held at 10 a.m. on 12 August 2010 at the offices of Westhouse Securities Limited, One Angel Court, London, EC2R 7HJ at which resolutions to: (a) approve the Acquisition; (b) amend the Company's articles of association to remove the concept of an 'authorised share capital' pursuant to section 21 of the Act; (c) authorise the Directors of the Company pursuant to section 551 of the Act to allot Ordinary Shares and grant rights to subscribe for Ordinary Shares in connection with the Acquisition, the Quantom Transaction, the Broker Shares and the Placing; and (d) disapply any pre-emption rights on the issue and allotment of Ordinary Shares pursuant to section 570 of the Act, will be proposed is set out at the end of this document. 13. Action to be taken You will find enclosed the form of proxy for use at the General Meeting. You are requested to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible and, in any event, so as to be received by the Company not later than 10 a.m. on 10 August 2010. Completion and (MORE TO FOLLOW) Dow Jones Newswires July 27, 2010 02:30 ET (06:30 GMT)