Cardpoint and Alphyra confirm merger

Source: Cardpoint

The boards of Cardpoint and alphyra are pleased to announce that they have agreed the terms of a merger of Cardpoint and alphyra to create a leading European consumer payments and cash distribution group.

The parent company of the Enlarged Group will be a newly incorporated company named Payzone plc and will be headquartered and domiciled in Ireland and listed on AIM.

The transformational Merger combines two strong, proven and complementary businesses. Payzone will benefit from a diverse product, geographic and Client portfolio, as well as an experienced management team with a proven ability to grow the business and a clear strategy of how to move the combined entity forward, which, taken together, will provide a strong competitive platform on which to continue to build. The established market presence of both alphyra and Cardpoint offers both stability and scope for further growth, particularly within the UK and Germany. Additionally, recently targeted alphyra markets of Romania, Poland and Greece offer substantial future growth opportunities.

The Payzone Board believes that the Merger will create significant value for Payzone Shareholders through cost savings, particularly in the UK, which are expected to be achieved over a period of 12 to 18 months.

The key terms of the Merger are as follows:
  • It is proposed that Payzone will acquire the entire issued and to be issued share capital of both Cardpoint and alphyra in consideration for the issue of Payzone Shares. It is expected that the Merger will be completed and the Payzone Shares admitted to trading on AIM by the end of December 2007.
  • Following the Merger and on a Fully-Diluted Basis, Payzone will be owned approximately 59.05 per cent. by alphyra Shareholders (being principally alphyra's management and Balderton Capital) and approximately 40.95 per cent. by Cardpoint Shareholders.
  • Certain alphyra Shareholders, including Balderton Capital and the other alphyra Management Vendors have stated that they intend, prior to Admission of the Payzone Shares to AIM, to enter into arrangements to sell down up to 50 per cent. of their Payzone Shares at or around the date of Completion. A Rion. A Relationship Agreement between Payzone, Balderton Capital and the alphyra Management Vendors contains lock-up arrangements to restrict the sale of the remaining Payzone Shares held by these alphyra Vendors that are not included in the Placing.
  • Payzone is led by a board drawn from both Cardpoint and alphyra, with a Balderton Nominee. It is chaired by Bob Thian, Chairman of Cardpoint, and managed by Chief Executive Officer John Nagle and Chief Financial Officer John Williamson, both from alphyra. The existing non-executive directors of Cardpoint have been appointed to the Payzone board as well as Mark Evans of Balderton Capital (all as non-executive directors).
  • Payzone has received irrevocable undertakings to vote in favour of the Cardpoint Resolutions from the Cardpoint Directors in respect of, in aggregate, 2,511,666 Cardpoint Shares, representing approximately 2.23 per cent. of the existing issued share capital of Cardpoint.
  • Payzone has received irrevocable undertakings to vote in favour of the Cardpoint Resolutions from certain other Cardpoint Shareholders in respect of, in aggregate, 57,894,103 Cardpoint Shares, representing approximately 51.51 per cent. of the existing issued share capital of Cardpoint.
  • The acquisition of alphyra by Payzone will be effected by way of a sale and purchase agreement between Payzone and the alphyra Vendors.
  • The acquisition of Cardpoint by Payzone will be effected by way of a Scheme of Arrangement between Cardpoint and Cardpoint Shareholders. It is anticipated that the Scheme Document will be posted to Cardpoint Shareholders on or around 19 October 2007.
  • It is intended that Payzone would seek to move to the main market of the London Stock Exchange at such time as the Directors consider to be in the best interests of the Company and its Shareholders.

Commenting on today's announcement, Bob Thian, Chairman of Cardpoint, said: "This transformational deal creates a leading consumer payments acceptance and cash distribution network with operations throughout Europe and strong potential for growth. With a highly experienced management team in place and a clear strategy for growth, we are confident that this merger will create significant value for shareholders."

John Nagle, Chief Executive Officer of alphyra, said: "This is an exciting merger combining cost savings and enhanced economies of scale, with a management team well positioned to participate in sector consolidation. alphyra has emerged from a successful period as a private business in excellent health and focused on leveraging the significant international and domestic growth opportunities for the benefit of all shareholders."

In view of the size of the transaction in relation to Cardpoint, the Merger constitutes a reverse-takeover of alphyra by Cardpoint under Rule 14 of the AIM Rules and is therefore conditional on the consent of the Cardpoint Shareholders being given at an extraordinary general meeting. The Merger is also conditional on the consent of Cardpoint Shareholders to the waiver of the obligation that would otherwise arise for Balderton Capital to make an offer for Cardpoint under Rule 9 of the UK Takeover Code. Such consents will be sought at the Cardpoint EGM, notice of which will be included in the Scheme Document.

The directors of Cardpoint, who have been so advised by Rothschild, consider the terms of the Merger to be fair and reasonable. In providing its advice, Rothschild has taken into account the commercial assessment of the directors of Cardpoint.

The directors of Cardpoint consider that the Cardpoint Resolutions to be proposed at the Cardpoint EGM and the Scheme Meeting are in the best interests of Cardpoint and Cardpoint Shareholders as a whole. Accordingly, the Cardpoint directors intend unanimously to recommend that Cardpoint Shareholders vote in favour of the Cardpoint Resolutions to be proposed at the Scheme Meeting and the Cardpoint EGM, as they have irrevocably undertaken to do in respect of their own beneficial holdings amounting to, in aggregate, 2,511,666 Cardpoint Shares (representing approximately 2.23 per cent. of the existing issued share capital of Cardpoint).

An AIM Admission Document relating to Payzone and the Payzone Shares has been published today and is available electronically on Cardpoint's website. The AIM Admission Document will be sent to Cardpoint Shareholders later today. It is expected that the suspension of trading of the Cardpoint Shares on AIM will be lifted shortly.

The UK Takeover Panel has confirmed that, following the Cardpoint announcement on 4 September 2007, the Merger will be treated by the UK Takeover Panel as a reverse-takeover requiring a Rule 9 Whitewash pursuant to Appendix 1 of the UK Takeover Code and not as a general offer for Cardpoint under the terms of the UK Takeover Code. Following publication of this announcement, Cardpoint will no longer be in an offer period under the UK Takeover Code and will consequently be removed from the UK Takeover Panel's disclosure table.

Comments: (0)