Response to Offer Document

Pubished 5th June 2017


InterQuest Group PLC - ITQ
Response to Offer Document
Released 14:22 05-Jun-2017

RNS Number : 1753H
InterQuest Group PLC
05 June 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

5 June 2017

InterQuest Group plc

("InterQuest" or the "Company")

Response to Offer Document

The independent director of the Company (being David Higgins) (the "Independent Director") notes the announcement by Chisbridge Limited ("Chisbridge") on 1 June 2017 that the offer document (the "Offer Document"), containing details of its offer for the entire issued and to be issued ordinary share capital of InterQuest (the "Offer"), has been posted to shareholders.

The Offer Price of 42 pence per share represents a discount of approximately:

· 6.1% to the Closing Price of an InterQuest Share on 2 June 2017 (being the last practicable Business Day prior to the publication of this announcement) of 44.75 pence per share1;

· 55.8% to the 12 month closing high of 95.0 pence per share2; and

· 56.0% to the 12 month high Volume Weighted Average Price ("VWAP") of 95.5 pence per share2.

The Independent Director, who is being advised by Panmure Gordon, has concluded that he is unable to recommend the Offer to InterQuest Shareholders on the basis that it materially undervalues the Company and its prospects.

The Independent Director will be writing to InterQuest Shareholders no later than 15 June 2017 to explain the principal reasons why they should reject the Offer and take no action. These reasons will include:

· Chisbridge, which is owned by the Management Team and Luke Johnson, clearly sees value in the business which is not reflected in the Offer Price.

· Chisbridge is not paying an adequate premium for control. Based on the Closing Price of 39.25 pence per InterQuest Share on 15 May 20171 (being the last Business Day prior to the announcement that Chisbridge was evaluating making an offer for InterQuest at 42 pence per share), Chisbridge is paying a premium of only 7.0% for control of InterQuest.

· Chisbridge's Offer fails to reflect the future potential of InterQuest's business following:

- the acquisition of Rees Draper Wright in August 2016 which is expected to enable the Company to expand operations in the US and provide the opportunity to cross sell services;

- the progress that the Management Team has made in restructuring underperforming divisions; and

- the increase in consultant headcount during 2016 which, typically has a delayed impact on revenues.

· Remaining an AIM quoted business would enable the Company to continue to:

- attract, incentivise and retain staff through the issue of share options over InterQuest Shares which will have a market quotation;

- use equity as part of any future acquisitions;

- give customers additional commercial comfort from the financial transparency of being a quoted company; and

- access the capital markets.

· The Independent Director believes that remaining an AIM quoted business would be beneficial in providing shareholders with a market in InterQuest Shares. However, he recognises that InterQuest's performance remains subject to wider economic sentiment which is difficult to forecast.

The Independent Director continues to recommend that InterQuest shareholders take no action in respect of the Offer and to ignore the Offer.

Further announcements will be made as and when appropriate.

Capitalised terms used in the Offer Document have the same meanings in this announcement, save where the context provides otherwise.

Contacts:

InterQuest Group plc

David Higgins (Independent Director) Tel: +44 (0) 7768 011 414

Panmure Gordon (UK) Limited
(Financial Adviser, Nomad and Broker)

Dominic Morley Tel: +44 (0) 20 7886 2500
Karri Vuori

James Greenwood

Important notices:

Panmure Gordon (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for InterQuest and the Independent Director and no one else in connection with the Offer and will not be responsible to anyone other than InterQuest and the Independent Director for providing the protections afforded to its clients or for providing advice in relation to the Offer or any other matters referred to herein.

The Independent Director accepts responsibility for the information contained in this announcement. To the best of his knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained in this announcement for which he is responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

Publication on website:

In accordance with Rule 26.1 of the Code, a copy of this announcement will be made available (subject to certain restrictions relating to persons resident in restricted jurisdictions) at www.interquestgroup.com by no later than 12 noon (London time) on 6 June 2017, being the date following the date of this announcement.

Additional information

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, 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 distribution of this announcement in jurisdictions other than the United Kingdom and the availability of any offer to shareholders of InterQuest who are not resident in the United Kingdom may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom or shareholders of InterQuest who are not resident in the United Kingdom will need to inform themselves about, and observe, any applicable requirements.

Sources and bases:

The relevant bases of calculation and sources of information are provided below in the order in which such information appears in this announcement. Where such information is repeated in this announcement, the underlying sources and bases are not repeated.

(1) The share prices on 15 May 2017 and 2 June 2017 are sourced from the AIM Appendix of the London Stock Exchange Daily Official List.

(2) The discount represented by the Offer Price in relation to the 12 month closing high share price and the 12 month high VWAP is sourced from Thomson Reuters Datastream for the period 3 June 2016 to 2 June 2017.

This information is provided by RNS
The company news service from the London Stock Exchange