Cash Offer for InterQuest Group PLC

Pubished 18th May 2017


RNS Number : 4841F

Chisbridge Limited
18 May 2017

Not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction.
FOR IMMEDIATE RELEASE

CASH OFFER
by
CHISBRIDGE LIMITED ("Chisbridge")
for
INTERQUEST GROUP PLC ("InterQuest")
18 May 2017
Summary
· Further to its announcement on 16 May 2017, the Board of Chisbridge announces that it intends to make a cash offer, with a loan note alternative, for the whole of the issued and to be issued share capital of InterQuest ("Offer").

· Chisbridge is a new company that has been set up by Gary Ashworth, Christopher Eldridge and David Bygrave, who are all directors of InterQuest, ("Management Team") for the purposes of making the Offer.

· Under the terms of the Offer, which is subject to the terms and further conditions set out in Appendix I of this Announcement, InterQuest Shareholders will be entitled to receive:

For each InterQuest Share: 42 pence in cash ("Offer Price")
· The Offer values the existing issued share capital of InterQuest at approximately £15.8 million.

· The Offer Price represents a premium of approximately:

• 9.37 per cent. to the Closing Price per InterQuest Share of 38.4 pence on 15 May 2017 (being the last Business Day prior to the commencement of the Offer Period); and

• 14.85 per cent. to the average Closing Price per InterQuest Share of 36.57 pence, being the average Closing Price per InterQuest Share on each of the Business Days in the three months prior to 15 May 2017 (being the last Business Day prior to the commencement of the Offer Period).

· Chisbridge has decided to offer an unguaranteed and unsecured loan note alternative to the Cash Offer in the form of the Loan Notes. InterQuest Shareholders must elect to accept wither the Cash Offer or the Loan Note Alternative in respect of their entire holding of InterQuest Shares.

· Chisbridge has received an irrevocable undertaking and letters of intent to accept the Offer in respect of a total of 15,874,328 InterQuest Shares representing approximately 42.2 per cent. of the InterQuest Shares.

· The Offer is subject to an acceptance condition at a level of Chisbridge needing to acquire or agree to acquire (whether pursuant to the Offer or otherwise) InterQuest Shares representing more than 50 per cent. of the voting rights then normally exercisable at a general meeting of InterQuest. Chisbridge intends, upon the Offer becoming wholly unconditional and subject to Chisbridge then owning 75 per cent. of the InterQuest Shares, to take the necessary actions to cancel the admission to trading on AIM of the InterQuest Shares and re-register InterQuest as a private limited company. The net result of these actions would be for InterQuest to become a private company with no ability for those InterQuest Shareholders who have not accepted the Offer to trade their InterQuest Shares in the future on a public trading platform.

· Save in respect of the second interim dividend announced by InterQuest on 14 March 2017 to be paid on 16 June 2017 to InterQuest Shareholders on the register on 19 May 2017 (the "Announced Dividend"), which InterQuest Shareholders will be entitled to receive and retain in addition to the Offer consideration, Chisbridge will have the right to reduce the Offer consideration by the amount of any dividend (or other distribution) which is paid or becomes payable by InterQuest to InterQuest Shareholders.

Commenting on the Offer, Gary Ashworth, Chairman of Chisbridge said:
"The Management Team believes the continued volatility of InterQuest's share price and the disproportionate effect of negative news on its share price has negatively impacted the perception of InterQuest by clients and staff. The markets in which InterQuest operates have seen intense competition and we believe its performance remains subject to wider economic sentiment which is difficult to forecast due to Brexit uncertainties. Any negative impact on business confidence is likely to affect hiring decisions which could lead to short-term trading challenges for InterQuest.

As a people business, the ability to use equity to incentivise and motivate the employees who deliver revenue is, in our opinion, vital for success. Share price volatility has defeated one of the core reasons for remaining on AIM, namely to attract, motivate and retain staff of an appropriate calibre through share options and share ownership. A number of key personnel who are optionholders and shareholders of InterQuest have expressed concern about its share price performance and the continuance of its admission to AIM. We believe InterQuest will have a greater chance of attracting, retaining and incentivising key personnel with bonus and share option arrangements which would not comply with corporate governance guidelines for a publicly quoted company.

In these circumstances we believe InterQuest's stakeholders' interests would better be protected if it were a private company."

This summary should be read in conjunction with the full text of the following Announcement including the Appendices. The Offer will be subject to the conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions that will be set out in the Offer Document and, in respect of InterQuest Shares held in certificated form, the Form of Acceptance.
It is intended that the Offer Document and the Form of Acceptance containing further details of the Offer will be despatched to InterQuest Shareholders (other than to persons in a Restricted Jurisdiction) as soon as practicable and, in any event, not later than 28 days after the date of this Announcement (unless agreed otherwise with the Panel).

Appendix III sets out details of the interests of the Management Team and others in InterQuest Shares. Appendix IV sets out details of an irrevocable undertaking and letters of intent which have been received by Chisbridge. Appendix V sets out the sources and bases of certain financial and other information contained in this Announcement. Appendix VI contains the definitions of certain terms used in this Announcement.

The information communicated in this Announcement is inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

Enquiries:
Chisbridge
Gary Ashworth
Chris Eldridge


+44 (0)7909 912 800
SPARK Advisory Partners - Financial adviser to Chisbridge:
Matt Davis
Mark Brady
Miriam Greenwood



+44 (0) 203 368 3550
Apart from the responsibilities, if any, which may be imposed on SPARK Advisory Partners Limited by the Financial Services and Markets Act 2000, the European Communities (Markets in Financial Instruments) Regulations 2007 (as amended) or the regulatory regimes established thereunder or the Code, SPARK Advisory Partners Limited does not accept any responsibility whatsoever for the contents of this announcement or for any statements made or purported to be made by it or on its behalf in connection with the Offer, SPARK Advisory Partners Limited accordingly disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement.

SPARK Advisory Partners is acting exclusively as financial adviser to Chisbridge and no one else in connection with the Offer. SPARK Advisory Partners will not be responsible to anyone other than Chisbridge for providing the protections afforded to its clients or for providing advice in relation to the Offer or any other matter referred to in this Announcement or otherwise.

Further information
This Announcement is for information purposes only. It is not intended to and does not constitute, or form part of, an offer or invitation or the solicitation of any offer to sell or purchase any securities or the solicitation of any offer to otherwise acquire, subscribe for, sell or otherwise dispose of any security pursuant to the Offer or otherwise. The Offer will be made solely by means of the Offer Document and, in respect of InterQuest Shares held in certificated form, the Form of Acceptance, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any decision in respect of, or other response to, the Offer should be made only on the basis of the information contained in those documents.

This Announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

InterQuest Shareholders who are not resident in and citizens of the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions.

The release, publication or distribution of this Announcement in or into jurisdictions other than the United Kingdom may be restricted by law and therefore persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person. This Announcement has been prepared for the purposes of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Unless otherwise determined by Chisbridge or required by the Code and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, into or from a Restricted Jurisdiction or any jurisdiction where to do so would violate the laws in that jurisdiction and no person may accept the Offer if to do so would constitute a violation of the laws in that jurisdiction. Accordingly, unless otherwise determined by Chisbridge or required by the Code and permitted by applicable law and regulation, copies of this Announcement and formal documentation relating to the Offer will not be and must not be, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction or any jurisdiction where to do so would violate the laws of that jurisdiction.

Cautionary note regarding forward-looking statements

This Announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the InterQuest Group and certain plans and objectives of the boards of directors of InterQuest and Chisbridge. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the Management Team and Chisbridge in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate.

Forward-looking statements also include statements about Chisbridge's beliefs and expectations related to the Offer being declared wholly unconditional, benefits that would be afforded to customers, and benefits to Chisbridge that are expected to be obtained as a result of the Offer being declared wholly unconditional. There can be no assurance that the Offer will be declared wholly unconditional. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this Announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements.

Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Announcement.

The statements contained in this Announcement are made as at the date of this Announcement, unless some other time is specified in relation to them, and publication of this Announcement shall not give rise to any implication that there has been no change in the facts set out in this Announcement since such date. Nothing contained in this Announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of InterQuest or Chisbridge except where expressly stated.

All subsequent oral or written forward-looking statements attributable to Chisbridge or InterQuest or any of their respective members, directors, officers or employees or any persons acting on their behalf are qualified in their entirety by the cautionary statement above. All forward-looking statements included in this Announcement are based on information available to Chisbridge and InterQuest on the date hereof and are made only as of the date of this Announcement. Undue reliance should not be placed on such forward-looking statements.

Subject to compliance with the Code, neither InterQuest nor Chisbridge intends, or undertakes any obligation, to update any information contained in this Announcement.

Dealing disclosure requirements

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper 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 paper 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 paper 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 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper 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 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper 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 paper offeror, 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 p.m. (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 paper 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 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. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

You should note that, for the purposes of the above summary of Rule 8 of the Code, Chisbridge is not treated as a paper offeror and therefore there is no requirement to disclose interests or dealings in the shares of Chisbridge under Rule 8 of the Code.

Publication of this Announcement
A copy of this Announcement (together with any document incorporated by reference) will be available free of charge, subject to any applicable restrictions relating to persons resident in Restricted Jurisdictions, on Chisbridge website at www.chisbridge.com by no later than 12 noon on 19 May 2017 until the end of the Offer Period. For the avoidance of doubt, the contents of the Chisbridge website are not incorporated into and do not form part of this Announcement unless otherwise stated herein. You may request a hard copy of this Announcement, and all future documents, announcements and information in relation to the Offer, by writing to Neville Registrars, Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA, or by calling, between 9.00 a.m. and 5.00 p.m. on Monday to Friday (except UK bank holidays) on 0121 585 1131. Unless such a request is made, and save as otherwise required by Rule 2.11 of the Code, a hard copy of this Announcement (and any information incorporated by reference in it) will not be sent to any person.

Information relating to InterQuest Shareholders
Please be aware that addresses, electronic addresses and certain other information provided by InterQuest Shareholders, persons with information rights and other relevant persons for the receipt of communications from InterQuest may be provided to Chisbridge during the Offer Period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

Rounding
Certain figures included in this Announcement have been subject to rounding adjustments.

Time
In this Announcement references to time are to London time.

Not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction.
FOR IMMEDIATE RELEASE

18 May 2017

CASH OFFER

by

CHISBRIDGE LIMITED ("Chisbridge")
for

INTERQUEST GROUP PLC ("InterQuest")
1. Introduction

On 22 November 2016 the Management Team requested permission from the board of InterQuest to evaluate the viability of a management buyout of the Company. The Management Team since that time has been structuring an offer which would incentivise and motivate key personnel whilst remaining sufficiently attractive for funding partners. This process completed against the back drop of weak trading following the outcome of the Brexit referendum and has culminated in the Offer.

Further to its announcement on 16 May 2017, the Board of Chisbridge today announces that it intends to make a cash offer, with a loan note alternative (further details of which are given in paragraph 3 below), for the whole of the issued and to be issued share capital of InterQuest.

The Offer values each InterQuest Share at 42 pence and InterQuest's existing issued share capital at approximately £15.8 million.

The Offer Price represents a premium of 9.3 per cent. to the Closing Price of 38.4 pence per InterQuest Share on 15 May 2017, being the last Business Day prior to the commencement of the Offer Period and a premium of 14.85 per cent. to the average Closing Price per InterQuest Share of 36.57 pence, being the average Closing Price per InterQuest Share on each of the Business Days in the three months prior to 15 May 2017 (being the last Business Day prior to the commencement of the Offer Period).

In aggregate, Chisbridge has received an irrevocable undertaking and letters of intent to accept or procure acceptance of the Offer in respect of a total of 15,874,328InterQuest Shares, representing approximately 42.2 per cent. of the existing issued share capital of InterQuest.

2. The Offer

The formal Offer, together with the procedure for acceptance, which will be subject to the conditions and further terms set out below and in Appendix I, will be contained in a letter from Chisbridge to be set out in the Offer Document and, in relation to certificated shareholders, the accompanying Form of Acceptance, will be made on the following basis:

For each InterQuest Share 42 pence in cash
InterQuest Shares will be acquired by Chisbridge pursuant to the Offer fully paid and free from all liens, equities, charges, equitable interests, encumbrances, rights of pre-emption and other third party rights and/or interests of any nature whatsoever and together with all rights attaching to them, now or in the future, including the right to receive and retain all dividends, interest and other distributions declared, paid or made in the future.

As an alternative to the cash consideration which they would otherwise be entitled to receive, InterQuest Shareholders will be able to elect to receive Offer Loan Notes, which will be issued on the basis of 42 pence in nominal value of Offer Loan Notes for each InterQuest Share.

InterQuest Shareholders must elect to receive either cash or Offer Loan Notes for their entire holding of InterQuest Shares. There is no option for InterQuest Shareholders to accept the Offer and elect to receive partly cash and partly Offer Loan Notes.

Save in respect of the Announced Dividend, which InterQuest Shareholders will be entitled to receive and retain in addition to the Offer consideration, Chisbridge will have the right to reduce the Offer consideration by the amount of any dividend (or other distribution) which is paid or becomes payable by InterQuest to InterQuest shareholders.

3. The Loan Note Alternative

Chisbridge has decided to offer an unsecured and unguaranteed loan note alternative to the Cash Offer in the form of the Offer Loan Notes.

The Offer Loan Notes will be created by a resolution of the Board of Chisbridge (or a duly authorised committee thereof) and will be constituted by the Offer Loan Note Instrument executed as a deed by Chisbridge.

The issue of the Offer Loan Notes will be conditional on the Offer being declared wholly unconditional. The Offer Loan Notes will not be transferable.

No application will be made for the Offer Loan Notes to be listed or dealt in on any stock exchange.

The Offer Loan Notes will not be qualifying corporate bonds for United Kingdom taxation purposes for InterQuest Shareholders who are individuals.

The Offer Loan Notes will bear interest at 3 per cent. per annum above the Bank of England base lending rate from time to time but this interest will be accrued and only paid when the Offer Loan Notes are redeemed. The Offer Loan Notes are, on the face of the Offer Loan Note Instrument, redeemable on 30 June 2027, save in the event of an earlier sale of all the interests of the Offer Loan Note Holders in Chisbridge to an unconnected third party. However, payments under the Offer Loan Notes are subject to the terms of the Subordination Deed and it cannot be guaranteed that redemption will occur on that date. InterQuest Shareholders who elect to receive Offer Loan Notes must accede to the terms of the Subordination Deed.

Chisbridge may (subject to the terms of the Subordination Deed), at any time, elect to redeem all or any part of the Offer Loan Notes (or any Offer Loan Notes or part of any Offer Loan Notes held by certain of the Offer Loan Noteholders as the board of Chisbridge may elect).

InterQuest Shareholders should consider carefully, in light of their own investment objectives and tax position, whether they wish to elect for the Offer Loan Notes under the Loan Note Alternative and are strongly advised to seek their own independent financial advice before making any such election.

4. Irrevocable undertaking and letters of intent to accept the Offer

In aggregate, Chisbridge has received an irrevocable undertaking and letters of intent to accept or procure acceptance of the Offer in respect of a total of 15,874,328InterQuest Shares, representing approximately 42.2 per cent. of the existing issued share capital of InterQuest.

Details of these undertakings are set out in Appendix IV. Gary and Clare Ashworth have irrevocably undertaken to accept the Loan Note Alternative in relation to their combined holdings of 12,509,012InterQuest Shares amounting to approximately 33.26 per cent. of the entire issued share capital of InterQuest.

5. Information on Chisbridge

Chisbridge was incorporated in England and Wales on 28 October 2016 for the purpose of making the Offer. All of the issued ordinary shares in Chisbridge are owned by the Management Team, comprising Gary Peter Ashworth (Chairman), Christopher Ernest Eldridge (Group Chief Executive) and David Charles Bygrave (Group Finance Director), and by Clare Ashworth and Luke Johnson.

To date, Chisbridge has neither traded nor engaged in any activities, other than those in relation to its incorporation, the issuing of shares to the Management Team and the making of the Offer.

Management Team biographies are provided below:

Gary Ashworth founded the InterQuest Group in November 2001. Previously Gary was the founder of Abacus Recruitment plc, a group of recruitment agencies. Abacus was floated on AIM in September 1995, was the best performing AIM share in both 1996 and 1997 and subsequently sold to Carlisle Holdings in 1998. Gary is a Fellow and past President of the Institute of Employment Consultants and has worked in recruitment since 1980.

Christopher Eldridge has recruited directly at a senior level over the last 20 years running businesses across a broad range of services including: MSP, RPO, executive search, permanent, interim & contract while leading businesses operating in Europe, USA and China. Chris has worked with some of the largest global technology brands to early start-ups, both recruiting and advising on client change programs.

David Bygrave joined InterQuest in December 2015. After spending 10 years with PwC, where he started his career, David moved on to the technology industry in group financial controller or CFO roles at Dreamtime, IDIL, Octavian and Caplin, each role involving the eventual sale of the company or underlying business culminating with the sale of Caplin Group to ION Capital Management in April 2015.

The other shareholders of Chisbridge are:

Clare Ashworth who is the wife of Gary Ashworth.

Luke Johnson who is the Chairman of private equity house Risk Capital Partners LLP. Amongst his current appointments he is Chairman and part-owner of Patisserie Holdings and Chairman and majority owner of Neilson Active Holidays and serves on the board of sporting goods company Zoggs, Brompton Bicycles and Gaucho Restaurants. He is Chairman of The Brighton Pier Group PLC and stockbroker Arden Partners PLC. Luke was previously a director of InterQuest between 2001 and 2010.

6. Information relating to InterQuest

InterQuest was incorporated as a private limited company in England and Wales on 3 October 2001 as Pinco 1688 Limited. InterQuest changed its name to Mightyquest Limited on 21 November 2001 and InterQuest Group Limited on 29 October 2002. InterQuest was re-registered as a public company on 13 May 2005 and InterQuest Shares were admitted to trading on AIM on 20 May 2005.

The InterQuest Group is a specialist digital and technology recruitment business with offices in the UK and US. The InterQuest Group focuses on permanent and contract recruitment across a broad range of sectors, specifically in the high growth functions of digital design, cyber security, digital networks, analytics, change management and other high value niche markets. The Group's service offering includes a growing recruitment process outsourcing business and recently, following the acquisition of RDW, the ability to provide executive search and interim management solutions.

According to its published annual report and accounts for the year ended 31 December 2016 turnover for the InterQuest Group for the year ended 31 December 2016 was £143.61 million. The loss after tax for the year ended 31 December 2016 was £1.24 million. The InterQuest Group had net assets of £22.11 million at 31 December 2016.

InterQuest published its annual report and accounts for the year ended 31 December 2016 on 14 March 2017. The annual report is available on InterQuest's website.

7. Background to and reasons for the Offer

On 22 November 2016 the Management Team requested permission from the board of InterQuest to evaluate the viability of a management buyout of the Company. The Management Team since that time has been structuring an offer which would incentivise and motivate key personnel whilst remaining sufficiently attractive for funding partners. This process completed against the back drop of weak trading following the outcome of the Brexit referendum and has culminated in the Offer.

In its decision to progress with an MBO process the Management Team were mindful of the factors set out below:

Background to the Offer
The Company set out in its AIM Admission document dated 17 May 2005, by which the shares in InterQuest were admitted to trading on AIM, the reasons why the then Board believed it was appropriate to seek an AIM Listing. These reasons included:

• raising the profile of the InterQuest Group to potential acquisition candidates;

• enhancing InterQuest's status with its clients, helping the Group to win new business and, in particular, to achieve preferred supplier status;

• assisting in attracting, retaining and incentivising key employees through the use of the share option awards based on publicly traded shares and through the Share Option Schemes;

• providing the Company with access to a wider shareholder base; and

• facilitating the expansion of the business by acquisition by offering new sources of equity financing for such acquisitions.

The Management Team do not now believe that these reasons are valid, at least, in part. Moreover, the maintenance of admission of the Company's shares to trading on AIM, in the opinion of the Management Team, may, in the current circumstances, undermine InterQuest's ability to achieve these objectives.

In particular, the Management Team believe the continued volatility of the Company's share price and the disproportionate effect of negative news on the share price has negatively impacted the perception of the Company by clients and staff.

As a people business, the ability to use equity to incentivise and motivate the employees who deliver revenue is, in the Management Team's opinion, vital for the success of the Company. The Management Team have now reached the opinion that being AIM quoted weakens the attraction of the Company's equity in the minds of its employees.

Mindful of the factors set out below, the Management Team have been evaluating the continued appropriateness of the Company's admission to trading on AIM.