Strategic Review and Commencement of Offer Period under the Takeover Code

11 July, 2016

This announcement contains Inside Information

11 July 2016

AVANTI COMMUNICATIONS GROUP PLC

Strategic Review and Commencement of Offer Period under the Takeover Code

On 7 July 2016, the Board of Avanti Communications Group plc, (“Avanti” or the “Company” or the “Group”) announced its intention to engage in discussions with a number of potential investors to address its funding requirements.

Following that announcement, and in response to initial interest from potential acquirors, the Board is of the view that it should, in parallel to considering an equity raise, conduct a wider strategic review to explore additional opportunities including a corporate transaction such as a merger with or offer for the Group by a third party or a sale of the Group’s businesses. The Board therefore intends to pursue all of these possible alternatives to ensure the best outcome for its shareholders. The commencement of a “formal sale process” in accordance with Note 2 on Rule 2.6 of The City Code on Takeovers and Mergers (the “Code”), provides the most appropriate framework under which such considerations can be made.

Formal Sale Process – Takeover Code Implications

Any discussions in relation to a merger with a third party or a sale of the Company will take place within the framework of a “formal sale process” in accordance with Note 2 on Rule 2.6 of The City Code on Takeovers and Mergers (the “Code”), under which the Board is able to have discussions with parties interested in such a transaction on a confidential basis.

The Panel on Takeovers and Mergers (the “Takeover Panel“) has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code such that any interested party participating in the formal sale process will not be required to be publicly identified as a result of this announcement (subject to Note 3 to Rule 2.2 of the Code), and will not be subject to the 28 day deadline referred to in Rule 2.6(a) of the Code, for so long as it is participating in the formal sale process.

Interested parties should note Rule 21.2 of the Code, which prohibits any form of inducement fee or any other offer-related arrangement. The Group has not at this stage requested any dispensation from the Takeover Panel under Note 2 to Rule 21.2 of the Code from this prohibition, although it reserves the right to do so in the future.

This announcement is not an announcement of a firm intention to make an offer under Rule 2.7 of the Code and there can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.

Following this announcement, the Group is now considered to be in an “offer period” as defined in the Code, and the dealing disclosure requirements listed below will apply.

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement will be available on the Group’s website at www.avantiplc.com as soon as possible and in any event no later than 12:00 noon (London time) on 12 July 2016 (being the business day following the date of this announcement). The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Enquiries:

Avanti: Matthew Springett, +44 (0)207 749 6703

Jefferies: Dominic Lester, Jonathan Wilcox, Tariq Hussain +44 (0) 20 7029 8000

Cenkos Securities: Max Hartley / Nicholas Wells (Nomad) +44 (0)207 397 8900

 

Important Notices

Jefferies International Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, will act as financial adviser to the Company and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Jefferies or for affording advice in relation to any other matters referred to in this announcement.

This announcement is for information purposes only and 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 whether pursuant to this announcement or otherwise. The distribution of this announcement in 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.

Rule 2.10 Disclosure

In accordance with Rule 2.10 of the Code, the Company confirms that it has 147,396,350 ordinary shares of one penny each in issue (“Ordinary Shares”). The International Securities Identification Number (ISIN) for the Ordinary Shares is GB00B1VCNQ84.

Disclosure requirements of the Takeover 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 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 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, 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 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 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 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.