Motorola Solutions Inc., which sells communications equipment to government and corporate customers, said Friday that it is buying Psion PLC for about 129 million pounds ($200 million) in cash.
London-based Psion makes mobile computing products for industrial markets, and has customers in more than 50 countries. Motorola Solutions said the addition of Psion will boost its mobile-computing portfolio and deepen its presence in its current global markets.
Under the terms of the agreement, Motorola Solutions will pay 88 pence ($1.36) for each Psion share. The offer represents a premium of about 45 percent over Psion's closing stock price of 60.5 pence Thursday on the London Stock Exchange.
The news sent Psion's shares up 45 percent to 87.75 pence in afternoon trading in London.
Psion has a major operational presence near Toronto and employs about 830 people. It posted 2011 revenue of 176 million pounds ($273 million).
The acquisition is expected to cut Motorola Solutions' overall costs and boost its margins, resulting in higher earnings per share on a non-U.S. basis in the first full year after closing and on a U.S. basis in the second full year.
The deal, which is expected to close in the fourth quarter, is contingent on getting 90 percent of Psion's shares tendered, regulatory approval and other customary closing conditions, Motorola Solutions said.
Shares of Motorola Solutions rose 67 cents to $48.02 in late morning trading. They are still down 9 percent from their 52-week high of $52.78 in early March.
Samsung Galaxy Note 10.1 Release Date Nears: Amazon US Hints at July Debut - mobilenapps.com
- Samsung Galaxy Note 10.1 pre-order from Amazon(Photo: PhoneArena)
It is getting common day by day that online retailer mistakenly put the products up for preorders before the device maker announces any official release date. And this time, the same story has happened with Samsung Galaxy Note 10.1 tablet, which Amazon U.S. by error put on preorders indicating that tablet is coming to market very soon and subsequently took down the product page after a while.
Amazon put the tablet up on preorder at its Web site with shipments schedule to arrive in three to five weeks, suggesting that the tablet will go on sales sometime in July. However, the retailer pulled down the Galaxy Note 10.1 product page within a few hours after putting the tablet in the first place. And subsequently Samsung revealed to Engadget that Amazon published the page by mistake and the retailer has taken it down. Whatever the case may be, Galaxy Note 10.1 has completely disappeared from Amazon without any valid reason.
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Not a long time ago, the modified version of Galaxy Note 10.1 was caught on camera by folks behind the German website Tablet Community. The tech site reported that Samsung is modifying the hardware department of the tablet in order to accommodate S-Pen slot and upgrade the processor chip to quad-core. Amazon's Galaxy Note 10.1 product page ties with the early leaks that the tablet will power quad-core 1.4 GHz processor under the hood. However, the processor is found to be quad-core Xeon contrary to the May report that indicated at inclusion quad-core Exynos chip.
Introduced at Mobile World Congress in February this year, Galaxy Note 10.1 packs 10.1-inch screen with display resolution of 1280 X 800 pixels. The tablet was originally announced with dual-core 1.4GHz Exynos process and 1GB of RAM. The device has 32GB of internal storage and supports microSD card up to 32GB. Samsung Galaxy Note 10.1 sports 3.15-megapixel rear camera with LED flash support which can record 1080p videos at 30fps. The tablet also has front facing 2-megapixel camera.
The tablet will come with HSPA+ connectivity, though there will be not support for voice calling or text messaging. It runs Android 4.0 Ice Cream Sandwich. The tablet has received much spotlight due to its ability to run multiple apps simultaneously. In case you can watch a movie while checking you Gmail Inbox on Samsung Galaxy Note 10.1.
When it comes to official release date, it appears that the tablet is all set to debut next month. It seems that Galaxy Note 10.1 is the only MWC show's gadget that has not been released in the market. Blame the hardware updates as reason why Samsung delayed tablet's release date. Amazon U.S. listed that the tablet is hitting shelves within three to five weeks, which accounts to July release date.
European Telcos count on 4G for pricing power - Reuters UK
PARIS |
PARIS (Reuters) - European telecom operators are planning to charge customers more for faster new fourth-generation mobile services in the hope of recouping massive network investments and clawing back lost pricing power.
It's a risky approach since it could put off recession-weary customers and slow the adoption of a technology that benefits telcos by lowering operating costs and helping reduce network overload.
The strategy also differs from what U.S. operators Verizon (VZ.N) and AT&T (T.N) have done in their 4G rollout. They incorporated the new technology into all of their offers without extra charges, something they could afford to do because they already charge higher prices.
European operators are expected to spend $15.25 billion through 2015 on upgrading their networks to get to faster 4G speeds, according to Rethink Technology Research. But upgrades are lagging in much of Europe compared to the U.S. and Japan.
Where operators have launched -- such as in the Nordic countries, Austria, and Germany -- few customers have rushed to the service because 4G smartphones have not been available. Nearly all of the current few hundred thousand users of the new technology in Europe are using laptop dongles or home routers.
With smartphones now finally trickling to market, some of the early movers, including Vodafone (VOD.L) in Germany and Teliasonera (TLSN.ST) in Sweden are seeking to sell 4G service plans as a separate, more expensive option for tech-savvy users.
Others, such as Deutsche Telekom (DTEGn.DE) in its home market, are taking a different tack, more akin to the U.S. approach. All customers will be on the 4G network where it is available, and the company hopes to lure customers by playing the network quality card.
Deutsche Telekom wants to have fast services available in about 100 cities in Germany by the end of 2012 and has now far more than a quarter of that target covered.
France Telecom (FTE.PA) will likely seek to charge more once it launches 4G in a handful of cities including Marseille early next year. It is now testing various tariff structures and doing consumer studies before settling on a final pricing strategy, said Chief Financial Officer Gervais Pellissier said.
"If we are able to multiply speeds by five or ten, people will use more services on line, browse more, do e-commerce," he said at the Reuters Global Media and Technology Summit.
"We think we can monetize that: why should it cost the same as not having access to those services?"
NO PREMIUM FOR SPEED ALONE
Getting the business model right will be key for European operators, which are already suffering from a toxic cocktail of price competition and regulatory pressure that has eroded profits and sent sector valuations near ten-year lows.
Investors will be expecting a return on the billions global operators are spending on 4G.
Unlike their U.S. peers Verizon and AT&T, Europe's telcos have not yet been able to take full advantage of the mobile revolution of recent years that has made smartphones and tablets must-have devices. They don't have the same pricing power in markets like the UK, France or Spain as the U.S. operators do and as result their profit margins are lower, analysts say.
Yet seeking to use the arrival of 4G, also known as long-term evolution (LTE) technology, to claw back profitability may not pay off in the end.
"People are not willing to pay a significant premium for speed alone, particularly when in the initial period there is limited coverage," said Thomas Wehmeier, analyst at Informa Telecoms & Media.
"Customers will feel pretty aggrieved if they are paying 60 euros a month but a big proportion of the traffic is going over the old network."
Wehmeier argues that the better approach is the one taken by Verizon which aggressively rolled out 4G technology to its network starting in 2010 and gave all customers access as part of existing monthly plans. Then it focused its marketing on Verizon's faster speeds than rivals, emblazoning ads with the slogan "America's largest 4G LTE network: experience the speed and power in more places."
By the end of April, Verizon's LTE network had coverage for 200 million people, or about two thirds of the U.S. population. AT&T now has coverage in about 39 cities and promises coverage for almost 150 million of the population by the end of 2012.
BE BRAVE AND EXPLORE
When operators roll out 4G, they do it gradually over several years by adding new equipment and software to existing mobile towers. Users can eventually get speeds of up to 100 megabits of data per second, more than double even the fastest 3G networks.
But even after operators launch 4G services commercially, the actual speed that users experience when surfing the web can vary widely depending on if their city has been covered and the number of people accessing the same mobile tower at the same time.
Teliasonera, which launched the world's first 4G network in late 2009 and now counts 140,000 subscribers, just began marketing its first LTE-enabled smartphone this quarter, the Samsung Galaxy II.
It offers four monthly service plans from roughly 11 to 45 euros ($14-$57)per month, but users get the highest speeds and mobile data allotment only if they sign up for the most expensive one.
For example, the 11 euro plan offers 10 megabits per second download speed for 2 gigabytes of data, while the 45 euro one has speeds of 80 megabits per second for 40 gigabytes of data.
Hakan Dahlstrom, who heads Teliasonera's mobile business defended the unconventional pricing approach.
"It's very important that we are brave and explore how to make money from mobile data," he said in an interview.
The pace that European customers adopt 4G adoption will also depend on how generously operators subsidize the new smartphones. Today there are only a handful of 4G mobiles and tablets that work in Europe; Apple's iPhone and iPad do not.
However, some of Europe's big operators have been taking the knife to the generous subsidies, including Telefonica (TEF.MC) and Vodafone in Spain, in another effort to boost margins.
"My feeling is that 4G will not develop if we don't subsidize the handsets," said France Telecom's Pellissier.
"We are bring to market more segmented offers on mobile data for big users who are willing to use more and smaller ones who aren't. At least at the beginning, we see 4G being sold at the higher price and not open to all customers."
($1 = 0.7939 euros)
(Additional reporting by Sinead Carew in New York; Editing by Hans-Juergen Peters)
(For other news from Reuters Media and Technology Summit, click here)
REG - Psion PLC - Recommended Cash Offer - Reuters
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 THAT JURISDICTION
RECOMMENDED CASH OFFER
by
Motorola Solutions, Inc. ("Motorola Solutions")
for
Psion plc ("Psion")
Summary
· Motorola Solutions and Psion are pleased to announce that they have agreed the terms of a recommended cash offer to be made by Motorola Solutions for the entire issued and to be issued share capital of Psion.
· Under the terms of the Offer, Psion Shareholders who accept the Offer will be entitled to receive 88 pence in cash for each Psion Share held.
· The Offer values the entire issued and to be issued share capital of Psion at approximately £129.3 million and represents:
· a premium of 45.5 per cent. to the Closing Price of 60.5 pence per Psion Share on 14 June 2012, the last Business Day prior to the start of the Offer Period;
· a premium of 54.9 per cent. to the one month average price prior to the start of the Offer Period of 56.8 pence per Psion Share;
· a premium of 66.2 per cent. to the six month average price prior to the start of the Offer Period of 52.9 pence per Psion Share; and
· a multiple of 14.4x 2011 reported EBITDA and a multiple of 9.0x 2011 adjusted EBITDA.
· The Psion Directors, who have been so advised by Canaccord Genuity Hawkpoint, consider the terms of the Offer to be fair and reasonable. In providing its advice to the Psion Directors, Canaccord Genuity Hawkpoint has taken into account the commercial assessments of the Psion Directors.
· Accordingly, the Psion Directors intend to recommend unanimously that Psion Shareholders accept the Offer as they have each irrevocably undertaken to do (or procure to be done) in respect of their own entire beneficial holdings of Psion Shares (amounting, in aggregate, to 153,929 Psion Shares and representing, in aggregate, approximately 0.11 per cent. of the existing issued share capital of Psion). The Psion Directors have also irrevocably undertaken to accept the Offer in respect of any Psion Shares that they acquire under the Psion Share Plans over, in aggregate, 3,612,351 Psion Shares or any proposals made by Motorola Solutions in relation to the Psion Share Plans which, together with their existing holdings referred to above, represent approximately 2.49 per cent. of the fully diluted share capital of Psion based on the exercise of all options/awards under Psion Share Plans. Further details of these irrevocable undertakings are contained in paragraphs 4 and 7 and Appendix 3 to this announcement.
· Motorola Solutions has entered into share purchase agreements with certain Psion Shareholders pursuant to which, conditional upon the release of this announcement, Motorola Solutions will acquire, in aggregate, 14,077,244 Psion Shares (representing, in aggregate, approximately 9.999 per cent. of the existing issued share capital of Psion). Further details of these share purchase agreements are contained in paragraph 7 and Appendix 3 to this announcement.
· In addition, certain Psion Shareholders have irrevocably undertaken to accept (or procure acceptances of) the Offer in respect of their shareholdings (excluding those Psion Shares which Motorola Solutions has contracted to acquire) amounting, in aggregate, to 23,766,467 Psion Shares and representing, in aggregate, approximately 16.88 per cent. of the existing issued share capital of Psion. Further details of these irrevocable undertakings are contained in paragraph 7 and Appendix 3 to this announcement.
· Accordingly, Motorola Solutions has contracted to acquire and procured irrevocable undertakings to accept (or procure acceptances of) the Offer (including those from the Psion Directors) in respect of aggregate holdings of 37,997,640 Psion Shares representing approximately 27.0 per cent. of the existing issued share capital of Psion.
· The Offer will be subject to the conditions and further terms set out in Appendix 1 to this announcement and to be set out in the Offer Document and the Form of Acceptance which include, amongst other things:
· Motorola Solutions having acquired not less than 90 per cent. of the Psion Shares to which the Offer relates and of the voting rights attached to those shares; and
· satisfaction of antitrust conditions regarding Canada, Germany, Portugal and the UK, which conditions shall be satisfied only if the clearances are obtained on terms satisfactory to Motorola Solutions and in accordance with the terms of the Cooperation Agreement.
· Motorola Solutions expects to realise cost and revenue synergies resulting in margin expansion opportunities and expects the transaction to be accretive to earnings per share on a non-US GAAP basis in the first full year following completion and on a US GAAP basis in the second full year following completion.*
* This statement regarding earnings per share is not intended, and is not to be construed, as a profit forecast or to be interpreted to mean that earnings per Motorola Solutions share or those of the combined group for the current or future financial years will necessarily match or exceed the historical published earnings per Motorola Solutions share.
Gregory Brown, Chairman and Chief Executive Officer of Motorola Solutions, said:
"Psion is a compelling opportunity to strengthen our industry-leading, mobile-computing portfolio with ruggedized handheld products and vehicle-mount terminals that will deepen our presence in the global markets in which we compete."
John Hawkins, Chairman of Psion, said:
"The Psion Directors are pleased to unanimously recommend this Offer by Motorola Solutions at a price which offers a significant cash premium to both the current and recent market prices. Psion continues to successfully deliver on its strategy of introducing exciting new products while strictly managing the cost base. The Offer by Motorola Solutions provides Psion Shareholders with certainty in an environment where certainty is in short supply."
Goldman Sachs International is acting as financial adviser to Motorola Solutions. Canaccord Genuity Hawkpoint is acting as financial adviser to Psion for the purposes of Rule 3 of the Takeover Code.
This summary should be read in conjunction with, and is subject to, the full text of this announcement and its Appendices.
The conditions to, and certain further terms of, the Offer are set out in Appendix 1. The bases and sources for certain financial information contained in this announcement are set out in Appendix 2. Details of irrevocable undertakings received by Motorola Solutions are set out in Appendix 3 to this announcement. Certain definitions and terms used in this announcement are set out in Appendix 4.
A copy of this announcement will be made available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Motorola Solutions' website at www.motorolasolutions.com/disclosure and Psion's website at http://investorrelations.psion.com by no later than 12 noon (London time) on 18 June 2012.
Enquiries:
Goldman Sachs International, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Motorola Solutions and no one else in connection with the Offer and will not be responsible to anyone other than Motorola Solutions for providing the protections afforded to clients of Goldman Sachs International nor for giving advice in relation to the Offer or any matter or arrangement referred to in this announcement.
Canaccord Genuity Hawkpoint Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Psion plc and no one else in connection with the Offer and will not be responsible to anyone other than Psion plc for providing the protections afforded to clients of Canaccord Genuity Hawkpoint Limited nor for giving advice in relation to the Offer or any matter or arrangement referred to in this announcement.
Canaccord Genuity Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Psion plc and no one else in connection with the Offer and will not be responsible to anyone other than Psion plc for providing the protections afforded to clients of Canaccord Genuity Limited nor for giving advice in relation to the Offer or any matter or arrangement referred to in this announcement.
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 pursuant to this announcement or otherwise. The Offer will be made solely by the Offer Document, when issued, 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 the Offer Document.
This announcement has been prepared in accordance with English law and the Takeover Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.
The Offer will be subject to the applicable rules and regulations of the London Stock Exchange and the Takeover Code.
Motorola Solutions reserves the right to elect with the agreement of Psion and the consent of the Panel (where necessary), to implement the acquisition of Psion by way of a court-approved scheme of arrangement in accordance with Part 26 of the 2006 Act on substantially the same terms, subject to appropriate amendments, as those which would apply to the Offer.
Overseas shareholders
The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom and the availability of the Offer to Psion Shareholders 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 Psion Shareholders who are not resident in the United Kingdom will need to inform themselves about, and observe, any applicable requirements. To the fullest extent permitted by law, Motorola Solutions and Psion disclaim any responsibility or liability for the violation of such restrictions by such persons.
Unless otherwise determined by Motorola Solutions or required by the Takeover Code and permitted by applicable law and regulation, the Offer is not being, and will not be, made, directly or indirectly, in or into or by the use of the mails of, or by any other means or instrumentality (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facility of a national state or other securities exchange of any Restricted Jurisdiction and will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction.
Accordingly, unless otherwise determined by Motorola Solutions or required by the Takeover Code and permitted by applicable law and regulation, copies of this announcement are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction and persons receiving this announcement (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in, into or from such jurisdiction. Any person (including, without limitation, any custodian, nominee and trustee) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this announcement and/or the Offer Document and/or any other related document to any jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.
Notice to US shareholders
The Offer will be made for the securities of a UK company and is subject to UK disclosure requirements, which are different from those of the United States. The financial information on Psion included in this announcement has been prepared in accordance with IFRS and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with US GAAP.
The receipt of cash pursuant to the Offer by a US holder of Psion Shares may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other tax laws. Each holder of Psion Shares is urged to consult his independent professional adviser immediately regarding the tax consequences of accepting the Offer.
The Offer will be made in the United States pursuant to Section 14(e) and Regulation 14E under the US Securities Exchange Act and otherwise in accordance with the requirements of the Takeover Code. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and law.
The Offer will be made in the United States solely by Motorola Solutions. Neither Goldman Sachs International nor Canaccord Genuity Hawkpoint, nor any of their respective affiliates, will be making the Offer in the United States.
This announcement does not constitute an offer of securities for sale in the United States or an offer to acquire or exchange securities in the United States. No offer to acquire securities or to exchange securities for other securities has been made, or will be made, directly or indirectly, in or into, or by use of the mails, any means or instrumentality of interstate or foreign commerce or any facilities of a national securities exchange of, the United States or any other country in which such offer may not be made other than (i) in accordance with the tender offer requirements under the US Securities Exchange Act, as amended, or the securities laws of such other country, as the case may be, or (ii) pursuant to an available exemption from such requirements.
Neither the US Securities and Exchange Commission nor any US state securities commission has approved or disapproved of the Offer, or passed comment upon the adequacy or completeness of this announcement or the Offer Document. Any representation to the contrary is a criminal offence.
To the extent permitted by applicable law, in accordance with normal UK practice and pursuant to Rule 14e‑5(b) of the US Securities Exchange Act, Motorola Solutions and its members or their respective nominees, or brokers (acting as agents) may from time to time make certain purchases of, or arrangements to purchase, Psion securities other than pursuant to the Offer such as in open market or privately negotiated purchases outside the United States during the period in which the Offer remains open for acceptance if implemented by way of a takeover offer. In accordance with the requirements of Rule 14e‑5(b) such purchases, or arrangements to purchase, must comply with English law, the Takeover Code and the Listing Rules. In addition, in accordance with Rule 14e‑5(b) of the US Securities Exchange Act, Goldman Sachs International will continue to act as exempt market makers in Psion securities on the London Stock Exchange. Any information about such purchases will be disclosed as required in the United Kingdom and will be available from the Regulatory Information Service provider available at www.londonstockexchange.com. If required, this information will also be publicly disclosed in the United States to the extent that such information is made public in the United Kingdom.
Forward-looking statements
This announcement, including information included or incorporated by reference in this announcement, may contain "forward-looking statements" within the meaning of applicable federal securities laws concerning each of the Wider Motorola Solutions Group and the Wider Psion Group. In respect of Motorola Solutions, these forward-looking statements are made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Generally, the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. These statements are based on assumptions and assessments made by Motorola Solutions and/or Psion in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those suggested by them. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, and include, but are not limited to: (1) the satisfaction of the conditions of the Offer, including (a) receipt of regulatory approvals, and (b) receipt of the requisite number of acceptances by Psion Shareholders; (2) the expected timeline for completing the transaction; (3) Motorola Solutions' ability to integrate Psion with its Enterprise Mobility Computing business in an efficient and effective manner; (4) Motorola Solutions' ability to achieve expected cost savings associated with the transaction; (5) the impact on Motorola Solutions' performance and financial results deriving from the perceived benefits of the transaction; and (6) current economic conditions, particularly in Europe, where Psion has a significant amount of sales as well as future market conditions and the behaviours of other market participants. Therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement and do not represent the views of Motorola Solutions or Psion as of any subsequent date. A detailed description of other risks and uncertainties affecting Motorola Solutions is contained in Item 1A of Motorola Solutions' 2011 Annual Report on Form 10-K and in its other filings with the Securities and Exchange Commission (SEC). These filings are available for free on the SEC's website at www.sec.gov and on Motorola Solutions' website at www.motorolasolutions.com. Neither the Wider Motorola Solutions Group nor the Wider Psion Group assume any obligation to, and do not intend to, update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required pursuant to applicable law.
Nothing in this announcement is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per Psion Share or Motorola Solutions share for the current or future financial years, or those of the combined group, will necessarily match or exceed the historical published earnings per Psion Share or Motorola Solutions share.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover 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 Takeover 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.
Publication on Website
This announcement and the display documents required to be published pursuant to Rule 26.1 of the Takeover Code will be available on Motorola Solutions' website at www.motorolasolutions.com/disclosureand on Psion's website at http://investorrelations.psion.comby no later than 12 noon (London time) on 18 June 2012.
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 THAT JURISDICTION
FOR IMMEDIATE RELEASE
15 June 2012
RECOMMENDED CASH OFFER
by
Motorola Solutions, Inc. ("Motorola Solutions")
for
Psion plc ("Psion")
1. Introduction
Motorola Solutions and Psion are pleased to announce that they have agreed the terms of a recommended cash offer to be made by Motorola Solutions for the entire issued and to be issued share capital of Psion.
2. The Offer
The Offer, which will be on the terms and subject to the conditions set out below and in Appendix 1 to this announcement, and to be set out in the Offer Document and the Form of Acceptance, will be made on the following basis:
The Offer values the entire issued and to be issued share capital of Psion at approximately £129.3 million and represents:
· a premium of 45.5 per cent. to the Closing Price of 60.5 pence per Psion Share on 14 June 2012, the last Business Day prior to the start of the Offer Period;
· a premium of 54.9 per cent. to the one month average price prior to the start of the Offer Period of 56.8 pence per Psion Share;
· a premium of 66.2 per cent. to the six month average price prior to the start of the Offer Period of 52.9 pence per Psion Share; and
· a multiple of 14.4x 2011 reported EBITDA and a multiple of 9.0x 2011 adjusted EBITDA.
The Psion Directors intend to recommend unanimously that all Psion Shareholders accept the Offer. The terms of this recommendation are described in paragraph 4 below.
3. Background to and reasons for the Offer
Motorola Solutions believes the strategic rationale for the Offer is very attractive to the respective customers and shareholders of Motorola Solutions and Psion. Psion is a company with a rich heritage of innovation that fits well with Motorola Solutions' 80‑year history of industry leadership. Psion has assets, resources and technologies that make it a complementary business to Motorola Solutions' Enterprise Mobile Computing business.
Motorola Solutions sees several key benefits to the proposed combination. Psion would enhance Motorola Solutions' mobile computing portfolio, improve its global service offerings, add complementary resources and capabilities and increase the global presence of Motorola Solutions and Psion. Psion broadens Motorola Solutions' Enterprise Mobile Computing business by adding complementary rugged handheld products and vehicle-mount terminals that emphasise increased modularity. Motorola Solutions brings extensive resources and capabilities to Psion that would further enable the development of Psion's core business and provide its customers with long‑term benefits. Through this combination, Psion would gain access to Motorola Solutions' premier distribution network of 1,700 direct salespeople and more than 9,000 valued channel partners for the Enterprise Mobile Computing business backed by its comprehensive global service and support network. Together, Motorola Solutions and Psion will better serve their combined customers with an enhanced range of mobile computing products, services and solutions.
Motorola Solutions is confident that the combined group will be better positioned as a company with greater scale, reach and operational assets to meet the future challenges of the competitive mobile computing marketplace.
Motorola Solutions expects to realise cost and revenue synergies resulting in margin expansion opportunities and expects the transaction to be accretive to earnings per share on a non-US GAAP basis in the first full year following completion and on a US GAAP basis in the second full year following completion.*
* This statement regarding earnings per share is not intended, and is not to be construed, as a profit forecast or to be interpreted to mean that earnings per Motorola Solutions share or those of the combined group for the current or future financial years will necessarily match or exceed the historical published earnings per Motorola Solutions share.
4. Recommendation
The Psion Directors, who have been so advised by Canaccord Genuity Hawkpoint, consider the terms of the Offer to be fair and reasonable. In providing its advice to the Psion Directors, Canaccord Genuity Hawkpoint has taken into account the commercial assessments of the Psion Directors. Canaccord Genuity Hawkpoint is providing independent financial advice to Psion for the purposes of Rule 3 of the Takeover Code.
Accordingly, the Psion Directors intend to recommend unanimously that Psion Shareholders accept the Offer as they have each irrevocably undertaken to do (or procure to be done) in respect of their own entire beneficial holdings of Psion Shares (amounting, in aggregate, to 153,929 Psion Shares and representing, in aggregate, approximately 0.11 per cent. of the existing issued share capital of Psion). The Psion Directors have also irrevocably undertaken to accept the Offer in respect of any Psion Shares that they acquire under the Psion Share Plans over, in aggregate, 3,612,351 Psion Shares or any proposals made by Motorola Solutions in relation to the Psion Share Plans which, together with their existing holdings referred to above, represent approximately 2.49 per cent. of the fully diluted share capital of Psion based on the exercise of all options/awards under Psion Share Plans. Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement.
5. Background to and reasons for the recommendation
The Psion Directors have evaluated the Offer by Motorola Solutions on behalf of Psion's Shareholders as a whole. In deciding to recommend the Offer to the Psion Shareholders, the Psion Directors have taken into account a range of factors, including those outlined below.
Psion remains on track to deliver its previously announced strategy of refreshing its product portfolio through the successful launch of its new Omnii XT15 and Omnii RT15 products in the first quarter of 2012 and by reducing its on-going cost base largely through completing its previously announced restructuring programme. Psion's continued commitment to modularity has been well received by its customers, as evidenced by the performance of its new products since launch. The Psion Directors remain optimistic about the potential of Psion's new product portfolio. In a market hampered by slow economic growth, Psion's Omnii platform provides differentiation and valuable future-proofing for customers.
Nevertheless, macroeconomic conditions and market factors outside of Psion's control continue to put trading and growth potential at risk and any change in the composition of the Euro member countries could have a further adverse impact on the business.
The Psion Directors see a business combination with Motorola Solutions as one that could be highly attractive to its customers and employees. Psion's and Motorola Solutions' complementary product portfolios, customer bases and geographic strengths create a natural combination. Motorola Solutions will provide Psion with access to global channels, scale and significant financial resources, all of which would be highly synergistic. The Psion Directors believe that adding Psion's specialist expertise in rugged mobile computing solutions to Motorola Solutions' breadth, expertise and distribution capabilities worldwide provides the opportunity for the combined business to offer even better solutions to their customers.
The Psion Directors understand that a number of factors, including those outlined above, led Motorola Solutions to making an approach for Psion. Subsequent discussions resulted in the proposed recommended Offer for Psion by Motorola Solutions at a price of 88 pence per Psion Share.
While the Psion Directors believe that there may be potential for Psion to achieve further growth over the longer term, achieving this growth, and the potential valuation increase attached thereto, is uncertain. The Psion Directors therefore believe that the Psion Shareholders should be given the opportunity to realise value from their investment in cash, immediately and at a significant premium to the recently traded price of Psion Shares.
6. Further terms and conditions to the Offer
The Psion Shares will be acquired pursuant to the Offer fully paid and free from all liens, charges, equities, encumbrances, rights of pre-emption and any other interests of any nature whatsoever and together with all rights now or hereafter attaching thereto, including without limitation voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement.
In so far as a distribution is declared, made or paid or payable by Psion in respect of the Psion Shares after the date of this announcement, the Offer Price will be reduced by the aggregate amount of the distribution that has been declared, made or paid or is payable (excluding any associated tax credit). To the extent that a distribution that has been declared, made or paid or is payable is or will be (i) transferred pursuant to the Offer on a basis which entitles Motorola Solutions alone to receive the distribution and to retain it or (ii) cancelled, the Offer Price will not be subject to change in accordance with this paragraph.
The Offer will be subject to the conditions and further terms set out in Appendix 1 to this announcement and to be set out in the Offer Document and Form of Acceptance which include, amongst other things:
· Motorola Solutions having acquired not less than 90 per cent. of the Psion Shares to which the Offer relates and of the voting rights attached to those shares; and
· satisfaction of antitrust conditions regarding Canada, Germany, Portugal and the UK, which conditions shall be satisfied only if the clearances are obtained on terms satisfactory to Motorola Solutions and in accordance with the terms of the Cooperation Agreement.
7. Irrevocable undertakings and share purchase agreements
Motorola Solutions has entered into share purchase agreements with certain Psion Shareholders pursuant to which, conditional upon the release of this announcement, Motorola Solutions will acquire, in aggregate, 14,077,244 Psion Shares (representing, in aggregate, approximately 9.999 per cent. of the existing issued share capital of Psion).
Motorola Solutions has also procured irrevocable undertakings from certain Psion Shareholders to accept (or procure acceptances of) the Offer in respect of their shareholdings (excluding those Psion Shares which Motorola Solutions has contracted to acquire) amounting, in aggregate, to 23,766,467 Psion Shares and representing, in aggregate, approximately 16.88 per cent. of the existing issued share capital of Psion.
In addition, the Psion Directors have irrevocably undertaken to accept (or procure acceptances of) the Offer in respect of their own entire beneficial holdings of Psion Shares (amounting, in aggregate, to 153,929 Psion Shares and representing, in aggregate, approximately 0.11 per cent. of the existing issued share capital of Psion). The Psion Directors have also irrevocably undertaken to accept the Offer in respect of any Psion Shares that they acquire under the Psion Share Plans over, in aggregate, 3,612,351 Psion Shares or any proposals made by Motorola Solutions in relation to the Psion Share Plans which, together with their existing holdings referred to above, represent approximately 2.49 per cent. of the fully diluted share capital of Psion based on exercise of all options/awards under Psion Share Plans.
Accordingly, Motorola Solutions has contracted to acquire and procured irrevocable undertakings to accept (or procure acceptances of) the Offer (including those from the Psion Directors) in respect of aggregate holdings of 37,997,640 Psion Shares representing approximately 27.0 per cent. of the existing issued share capital of Psion.
Further details of these share purchase agreements and irrevocable undertakings to accept (or procure acceptances of) the Offer are set out in Appendix 3 to this announcement.
8. Financing of the Offer
The cash consideration payable under the terms of the Offer will be funded by Motorola Solutions' existing cash resources.
Goldman Sachs International, as financial adviser to Motorola Solutions, confirms it is satisfied that sufficient resources are available to Motorola Solutions to satisfy in full the cash consideration payable to Psion Shareholders under the terms of the Offer.
9. Information relating to Motorola Solutions
Motorola Solutions is a leading provider of mission-critical communication systems and enterprise mobility solutions, with more than 100,000 government and enterprise customers in over 100 countries. Through leading-edge innovation and state-of-the-art communication solutions, Motorola Solutions is recognised as a global leader in the markets it serves. With more than 23,000 employees worldwide in over 65 countries (as of 31 December 2011), Motorola Solutions provides a wide array of products and services ranging from public safety networks to secure government communications, along with mobile computing, RFID and data capture solutions. Motorola Solutions' communications-focused products and services help Motorola Solutions' customers improve their operations through increased effectiveness and efficiency of their mobile workforce.
In 2011, Motorola Solutions had net sales of $8.2 billion, representing a 7.7 per cent. increase over the prior year. Motorola Solutions' Enterprise business accounted for approximately $2.8 billion in sales for 2011 and grew by 11 per cent. and it now represents approximately 35 per cent. of Motorola Solutions' total business. This sales growth was driven primarily by helping its enterprise customers further mobilise their workforce and improve customer service. Motorola Solutions' Enterprise Mobile Computing business is one of several businesses comprising the company's broader Enterprise business. The Enterprise Mobile Computing business designs, manufactures and sells a comprehensive set of mobile computing products and provides services to a wide-range of customers, including those in retail and hospitality, transportation and logistics, manufacturing, and more. In 2011, the Enterprise Mobile Computing business was able to grow its customer base, introduce some award-winning products, and expand its capabilities through new, innovative software offerings.
10. Information relating to Psion
Psion was one of the pioneers of quality mobile handheld computers and their application in industrial segments around the world. Psion has been an innovator in mobile computing since 1980, starting with the invention of the PDA, through to helping its global customers solve their business problems today.
Psion's core business is the design, manufacture, supply and service of rugged, handheld and vehicle-mounted devices designed to improve business efficiency and productivity for leading enterprises around the world.
Through its open innovation business model, Psion has the ability to work directly with its customers and partners to co-create new variants of its mobile hardware, software and service that meet the specific needs of the marketplace.
11. Offer-related arrangements
(a) Confidentiality Agreement
Pursuant to the Confidentiality Agreement, each party agreed to treat and keep all of the other party's confidential information as secret and confidential and will not, without the other party's prior written consent, directly or indirectly communicate or disclose the other party's confidential information to any person other than to certain permitted recipients or as required by law or regulation or in the context of discussions with the Panel. The Confidentiality Agreement also included other customary obligations on Motorola Solutions, including non-solicitation of Psion's employees.
(b) Cooperation Agreement
Pursuant to the Cooperation Agreement, amongst other things, (i) Psion and Motorola Solutions have each agreed to co-operate in preparing and submitting antitrust filings and notifications in connection with the antitrust conditions, (ii) Motorola Solutions has agreed to use its reasonable endeavours to obtain clearances in respect of the antitrust conditions however it is not required to provide or accept any remedy which in its opinion is material in the context of the Offer, (iii) Psion and Motorola Solutions have each agreed to co-operate regarding the implementation of appropriate proposals in relation to the Psion Share Plans, (iv) Motorola Solutions has agreed that it shall agree to the extension of the closing date for acceptances to the Offer until at least 14 days following the later of (A) the date on which the Office of Fair Trading has granted clearance of the Offer and (B) 24 October 2012 or, if earlier, the date on which the Canadian antitrust condition is satisfied, and that it will invoke non-satisfaction of the Acceptance Condition only after such date and in certain other limited circumstances and (v) Motorola Solutions has agreed to procure run-off D&O insurance cover for the current and former directors and officers of Psion.
The Cooperation Agreement will be terminated and the obligations thereunder shall cease, (i) if agreed between Psion and Motorola Solutions prior to completion of the Offer, (ii) if the Offer lapses or is withdrawn and (iii) upon withdrawal or modification of the Psion Directors' recommendation of the Offer.
(c) Incentivisation arrangements
Motorola Solutions may consider incentivisation arrangements to take effect following completion in respect of key Psion employees, but no proposals have yet been made or agreed and no discussions regarding the terms of incentivisation arrangements have taken place between Motorola Solutions and Psion, save in respect of Psion's sales commission systems and employee performance measures which are expected to be maintained until the end of 2012 (irrespective of when the Offer becomes wholly unconditional).
12. Opening Position Disclosure
Motorola Solutions confirms that it is on the date of this announcement making an Opening Position Disclosure, setting out the details required to be disclosed by it under Rule 8.1(a) of the Takeover Code.
In the interests of maintaining secrecy prior to this announcement, Motorola Solutions has not yet completed its enquiries in respect of the matters referred to in this paragraph of certain parties deemed to be acting in concert with Motorola Solutions for the purposes of the Offer. Enquiries of such parties will be completed as soon as practicable following the date of this announcement, and in accordance with Note 2(a)(i) to Rule 8 of the Takeover Code, further disclosures, if any, required in respect of such parties will be made as soon as possible and in any event by no later than 12 noon (London time) on 29 June 2012.
13. Management, employees and locations
In the coming weeks, Motorola Solutions intends to form an integration team consisting of representatives from both Motorola Solutions and Psion, to begin planning for the combination of Psion within Motorola Solutions' Enterprise Mobility Computing business. Following the Offer becoming wholly unconditional, Motorola Solutions intends to carry out a review of the combined group's operations. No decisions have been made by Motorola Solutions in relation to that integration or review and no detailed discussions have been held between Motorola Solutions and Psion in this regard. Until such review occurs, Motorola Solutions cannot be certain what repercussions there will be on the employment of the management and employees of the combined group, or the location of Psion's places of business or any redeployment of Psion's assets. However, Motorola Solutions can confirm that:
· nominees of Motorola Solutions will be appointed to the Psion board upon the Offer becoming wholly unconditional and accordingly there will be a rationalisation of the Psion board at that time;
· where appropriate, Motorola Solutions intends to derive available cost synergies from combining any duplicate facilities;
· it is Motorola Solutions' expectation that its review will result in a reduction in headcount in the combined group;
· Motorola Solutions has given assurances to the board of Psion that, following completion of the transaction, the existing employment rights of all employees of Psion will be observed at least to the extent required by law; and
· Motorola Solutions intends to allow management and employees of Psion to participate in Motorola Solutions' benefit plans in due course.
After completion of the Offer, Motorola Solutions will integrate Psion into its Enterprise Mobile Computing business. John Conoley, the Chief Executive Officer of Psion, and Adrian Colman, the Chief Financial Officer of Psion, will step down from their positions, but are expected to continue with the combined group on an interim basis in advisory roles to assist with a smooth integration.
Subject to the delisting of Psion, Motorola Solutions will also seek to reduce costs where appropriate which have historically been related to Psion's status as a listed company.
14. Employee share plans
The Offer will extend to any Psion Shares unconditionally allotted or issued pursuant to the exercise of options and/or vesting of awards under the Psion Share Plans prior to the date on which the Offer closes (or such earlier date as Motorola Solutions may, subject to the rules of the Takeover Code or with the consent of the Panel, decide).
Appropriate proposals will be made in due course to participants in the Psion Share Plans.
15. Squeeze-out, delisting and cancellation of trading and re-registration
If Motorola Solutions receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Psion Shares by nominal value and voting rights attaching to such shares to which the Offer relates, Motorola Solutions intends to exercise its rights pursuant to the provisions of Chapter 3 of Part 28 of the 2006 Act to squeeze-out the remaining Psion Shares.
After the Offer becomes or is declared unconditional in all respects and Motorola Solutions has by virtue of its shareholdings and acceptances of the Offer acquired, or agreed to acquire, issued share capital representing at least 75 per cent. of the voting rights of Psion, Motorola Solutions intends to procure the making of an application by Psion for cancellation, respectively, of the trading in Psion Shares on the London Stock Exchange's market for listed securities and of the listing of Psion Shares on the Official List. A notice period of not less than 20 Business Days prior to the cancellation will commence on the date on which the Offer becomes or is declared unconditional in all respects provided Motorola Solutions has attained 75 per cent. or more of the voting rights as described above or otherwise as soon as Motorola Solutions attains 75 per cent. or more of the voting rights as described above. Delisting would significantly reduce the liquidity and marketability of any Psion Shares not assented to the Offer.
It is also proposed that, following the Offer becoming unconditional in all respects and after the Psion Shares are delisted, Psion will be re‑registered as a private company under the relevant provisions of the 2006 Act.
16. Display documents
Copies of the following documents will be available on Motorola Solutions' and Psion's website at www.motorolasolutions.com/disclosure and http://investorrelations.psion.com respectively by no later than 12 noon (London time) on 18 June 2012:
(a) the share purchase agreements entered into between Motorola Solutions and certain Psion Shareholders, details of which are set out in paragraph 7 and Appendix 3 to this announcement;
(b) irrevocable undertakings received by Motorola Solutions, details of which are set out in paragraph 7 and Appendix 3 to this announcement;
(c) the Confidentiality Agreement; and
(d) the Cooperation Agreement.
17. General
The Offer will be on the terms and subject to the conditions set out herein and in Appendix 1, and to be set out in the Offer Document and Form of Acceptance. It is expected that the Offer Document and the Forms of Acceptance accompanying the Offer Document will be posted as soon as practicable and, in any event (save with the consent of the Panel), within 28 days of this announcement. It is expected that, following satisfaction, or, where relevant, waiver of the conditions set out herein and in Appendix 1, and to be set out in the Offer Document and Form of Acceptance, the Offer will become wholly unconditional in the fourth quarter of 2012.
The Offer Document and Forms of Acceptance (in respect of Psion Shareholders who hold the Psion Shares in certificated form) will be made available to all Psion Shareholders, other than those in Restricted Jurisdictions, free of charge on Motorola Solutions' website at www.motorolasolutions.com/disclosure and Psion's website at http://investorrelations.psion.com.
Psion Shareholders are urged to read the Offer Document and, if the Psion Shares are held in certificated form, the Form of Acceptance when they are sent to them because they will contain important information, including what steps to take to accept the Offer.
This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.
Motorola Solutions reserves the right to elect with the agreement of Psion and the consent of the Panel (where necessary), to implement the acquisition of Psion by way of a court-approved scheme of arrangement in accordance with Part 26 of the 2006 Act on substantially the same terms, subject to appropriate amendments, as those which would apply to the Offer.
In accordance with Rule 2.10 of the Takeover Code, as at the close of business on 14 June 2012, Psion's issued share capital consisted of 140,772,456 shares of 15 pence each. The international securities identification number for Psion's ordinary shares is GB00B0D5VH57.
Enquiries:
Goldman Sachs International, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Motorola Solutions and no one else in connection with the Offer and will not be responsible to anyone other than Motorola Solutions for providing the protections afforded to clients of Goldman Sachs International nor for giving advice in relation to the Offer or any matter or arrangement referred to in this announcement.
Canaccord Genuity Hawkpoint Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Psion plc and no one else in connection with the Offer and will not be responsible to anyone other than Psion plc for providing the protections afforded to clients of Canaccord Genuity Hawkpoint Limited nor for giving advice in relation to the Offer or any matter or arrangement referred to in this announcement.
Canaccord Genuity Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Psion plc and no one else in connection with the Offer and will not be responsible to anyone other than Psion plc for providing the protections afforded to clients of Canaccord Genuity Limited nor for giving advice in relation to the Offer or any matter or arrangement referred to in this announcement.
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 pursuant to this announcement or otherwise. The Offer will be made solely by the Offer Document, when issued, 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 the Offer Document.
This announcement has been prepared in accordance with English law and the Takeover Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.
The Offer will be subject to the applicable rules and regulations of the London Stock Exchange and the Takeover Code.
Motorola Solutions reserves the right to elect with the agreement of Psion and the consent of the Panel (where necessary), to implement the acquisition of Psion by way of a court-approved scheme of arrangement in accordance with Part 26 of the 2006 Act on substantially the same terms, subject to appropriate amendments, as those which would apply to the Offer.
Overseas shareholders
The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom and the availability of the Offer to Psion Shareholders 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 Psion Shareholders who are not resident in the United Kingdom will need to inform themselves about, and observe, any applicable requirements. To the fullest extent permitted by law, Motorola Solutions and Psion disclaim any responsibility or liability for the violation of such restrictions by such persons.
Unless otherwise determined by Motorola Solutions or required by the Takeover Code and permitted by applicable law and regulation, the Offer is not being, and will not be, made, directly or indirectly, in or into or by the use of the mails of, or by any other means or instrumentality (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facility of a national state or other securities exchange of any Restricted Jurisdiction and will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction.
Accordingly, unless otherwise determined by Motorola Solutions or required by the Takeover Code and permitted by applicable law and regulation, copies of this announcement are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction and persons receiving this announcement (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in, into or from such jurisdiction. Any person (including, without limitation, any custodian, nominee and trustee) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this announcement and/or the Offer Document and/or any other related document to any jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.
Notice to US shareholders
The Offer will be made for the securities of a UK company and is subject to UK disclosure requirements, which are different from those of the United States. The financial information on Psion included in this announcement has been prepared in accordance with IFRS and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with US GAAP.
The receipt of cash pursuant to the Offer by a US holder of Psion Shares may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other tax laws. Each holder of Psion Shares is urged to consult his independent professional adviser immediately regarding the tax consequences of accepting the Offer.
The Offer will be made in the United States pursuant to Section 14(e) and Regulation 14E under the US Securities Exchange Act and otherwise in accordance with the requirements of the Takeover Code. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and law.
The Offer will be made in the United States solely by Motorola Solutions. Neither Goldman Sachs International nor Canaccord Genuity Hawkpoint, nor any of their respective affiliates, will be making the Offer in the United States.
This announcement does not constitute an offer of securities for sale in the United States or an offer to acquire or exchange securities in the United States. No offer to acquire securities or to exchange securities for other securities has been made, or will be made, directly or indirectly, in or into, or by use of the mails, any means or instrumentality of interstate or foreign commerce or any facilities of a national securities exchange of, the United States or any other country in which such offer may not be made other than (i) in accordance with the tender offer requirements under the US Securities Exchange Act, as amended, or the securities laws of such other country, as the case may be, or (ii) pursuant to an available exemption from such requirements.
Neither the US Securities and Exchange Commission nor any US state securities commission has approved or disapproved of the Offer, or passed comment upon the adequacy or completeness of this announcement or the Offer Document. Any representation to the contrary is a criminal offence.
To the extent permitted by applicable law, in accordance with normal UK practice and pursuant to Rule 14e‑5(b) of the US Securities Exchange Act, Motorola Solutions and its members or their respective nominees, or brokers (acting as agents) may from time to time make certain purchases of, or arrangements to purchase, Psion securities other than pursuant to the Offer such as in open market or privately negotiated purchases outside the United States during the period in which the Offer remains open for acceptance if implemented by way of a takeover offer. In accordance with the requirements of Rule 14e‑5(b) such purchases, or arrangements to purchase, must comply with English law, the Takeover Code and the Listing Rules. In addition, in accordance with Rule 14e‑5(b) of the US Securities Exchange Act, Goldman Sachs International will continue to act as exempt market makers in Psion securities on the London Stock Exchange. Any information about such purchases will be disclosed as required in the United Kingdom and will be available from the Regulatory Information Service provider available at www.londonstockexchange.com. If required, this information will also be publicly disclosed in the United States to the extent that such information is made public in the United Kingdom.
Forward-looking statements
This announcement, including information included or incorporated by reference in this announcement, may contain "forward-looking statements" within the meaning of applicable federal securities laws concerning each of the Wider Motorola Solutions Group and the Wider Psion Group. In respect of Motorola Solutions, these forward-looking statements are made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Generally, the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. These statements are based on assumptions and assessments made by Motorola Solutions and/or Psion in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those suggested by them. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, and include, but are not limited to: (1) the satisfaction of the conditions of the Offer, including (a) receipt of regulatory approvals, and (b) receipt of the requisite number of acceptances by Psion Shareholders; (2) the expected timeline for completing the transaction; (3) Motorola Solutions' ability to integrate Psion with its Enterprise Mobility Computing business in an efficient and effective manner; (4) Motorola Solutions' ability to achieve expected cost savings associated with the transaction; (5) the impact on Motorola Solutions' performance and financial results deriving from the perceived benefits of the transaction; and (6) current economic conditions, particularly in Europe, where Psion has a significant amount of sales as well as future market conditions and the behaviours of other market participants. Therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement and do not represent the views of Motorola Solutions or Psion as of any subsequent date. A detailed description of other risks and uncertainties affecting Motorola Solutions is contained in Item 1A of Motorola Solutions' 2011 Annual Report on Form 10-K and in its other filings with the Securities and Exchange Commission (SEC). These filings are available for free on the SEC's website at www.sec.gov and on Motorola Solutions' website at www.motorolasolutions.com. Neither the Wider Motorola Solutions Group nor the Wider Psion Group assume any obligation to, and do not intend to, update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required pursuant to applicable law.
Nothing in this announcement is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per Psion Share or Motorola Solutions share for the current or future financial years, or those of the combined group, will necessarily match or exceed the historical published earnings per Psion Share or Motorola Solutions share.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover 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 Takeover 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.
Publication on Website
This announcement and the display documents required to be published pursuant to Rule 26.1 of the Takeover Code will be available on Motorola Solutions' website at www.motorolasolutions.com/disclosureand on Psion's website at http://investorrelations.psion.comby no later than 12 noon (London time) on 18 June 2012.
Motorola Solutions Inc : Motorola Solutions to Acquire Psion Plc. for $200 Million in Cash - 4-traders (press release)
Motorola Solutions, Inc. (NYSE: MSI) ("Motorola Solutions") and Psion Plc. (LN: PON) ("Psion") today announced that they have agreed on the terms of a recommended offer by Motorola Solutions for all Psion shares for 88 pence (US $1.36) in cash per Psion share. It is intended that the acquisition will be effected by way of a recommended cash offer.
Psion has been a pioneer in ruggedized mobile computing products and their application in industrial segments around the world. With headquarters in London and a major operational presence near Toronto, Canada, Psion has been a leader in mobile computing solutions since 1980. Psion has approximately 830 employees, customers in more than 50 countries and delivered 2011 revenues of 176 million (approximately US $273 million).
Greg Brown, chairman and CEO of Motorola Solutions, said: "Psion is a compelling opportunity to strengthen our industry-leading, mobile-computing portfolio with ruggedized handheld products and vehicle-mount terminals that will deepen our presence in the global markets in which we compete."
John Hawkins, chairman of Psion, said: "The Psion directors are pleased to unanimously recommend this offer by Motorola Solutions at a price which offers a significant cash premium to both the current and recent market prices. Psion continues to successfully deliver on its strategy of introducing exciting new products while strictly managing the cost base. The offer by Motorola Solutions provides Psion's shareholders with certainty in an environment where certainty is in short supply."
Under the terms of the acquisition, Psion shareholders will receive 88 pence (US $1.36) in cash for each Psion share through a recommended cash offer, valuing Psion's issued ordinary share capital at approximately 129 million (US $200 million). The consideration represents a premium of approximately 45 percent to the closing price of 60.5 pence per Psion share on June 14, 2012, the last trading day prior to this announcement and a premium of approximately 66 percent to the six-month average price of 52.9 pence per Psion share prior to June 15, 2012. The acquisition is expected to close in the fourth quarter of 2012.
Motorola Solutions expects to realize cost and revenue synergies resulting in margin expansion opportunities and expects the transaction to be accretive to earnings per share on a non-U.S. GAAP basis in the first full year following completion and on a U.S. GAAP basis in the second full year following completion.
Organization and Management
Upon completion of the acquisition, Motorola Solutions will combine Psion within Motorola Solutions' Enterprise Mobile Computing (EMC) business, reporting to Girish Rishi, corporate vice president, EMC.
Terms and Approvals
Full details of the offer are contained in an announcement made today in the United Kingdom under Rule 2.7 of the U.K. Takeover Code. Each Psion director intends to recommend Psion shareholders to accept the offer, as each Psion director who holds Psion shares has irrevocably undertaken to Motorola Solutions to do so in relation to Psion shares in which he holds a beneficial interest, amounting to, in aggregate, 153,929 Psion shares and representing, in aggregate, 0.11 percent of Psion's issued share capital.
Motorola Solutions has acquired from certain Psion shareholders, in aggregate, 14,077,244 Psion shares (representing, in aggregate, approximately 9.999 percent of Psion's issued share capital).
Motorola Solutions also has received irrevocable commitments from certain Psion shareholders to accept the offer in respect of, in aggregate, 23,766,467 Psion shares (representing approximately 16.88 percent of Psion's issued share capital). These irrevocable commitments are subject to certain conditions, further details of which are described in the Rule 2.7 announcement.
In connection with today's announcement, Motorola Solutions is expected to make the recommended cash offer for all Psion shares within 28 calendar days. The transaction is conditional upon the tender of 90 percent of Psion shares, regulatory approval and the satisfaction of other customary closing conditions.
Advisers
Goldman Sachs is serving as Motorola Solutions' financial adviser and Clifford Chance is serving as Motorola Solutions' legal counsel in relation to the transaction. Canaccord Genuity Hawkpoint Limited is serving as financial adviser to Psion and Slaughter and May is serving as legal counsel to Psion in relation to the transaction.
About Psion
Psion is one of the pioneers of quality mobile handheld computers and their application in industrial segments around the world. Psion has been an innovator in mobile computing since 1980 with the invention of the PDA. Teklogix, founded in 1967 and acquired by Psion in 2000, began development of rugged, wireless products in the early 80s. Today Psion helps its global customers solve their business problems through rugged mobile communications technology and applications.
Psion's core business is the design, manufacture, supply and service of rugged, handheld and vehicle-mounted devices designed to improve business efficiency and productivity for leading enterprises around the world.
Through its open innovation business model, Psion has the ability to work directly with its customers and partners to co-create new variants of its mobile hardware, software and service that meet the specific needs of the marketplace.
About Motorola Solutions
Motorola Solutions is a leading provider of mission-critical communication solutions and services for enterprise and government customers. Through leading-edge innovation and communications technology, it is a global leader that enables its customers to be their best in the moments that matter. Motorola Solutions trades on the New York Stock Exchange under the ticker "MSI." To learn more, visit www.motorolasolutions.com. For ongoing news, please visit ourmedia center or subscribe to our news feed.
Forward-Looking Statements
This press release, including information included or incorporated by reference in this press release, may contain "forward-looking statements" within the meaning of applicable federal securities laws concerning each of Motorola Solutions and Psion. In respect of Motorola Solutions, these forward-looking statements are made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Generally, the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. These statements are based on assumptions and assessments made by Motorola Solutions and/or Psion in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those suggested by them. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, and include, but are not limited to: (1) the satisfaction of the conditions to closing, including (a) receipt of regulatory approvals, and (b) receipt of the requisite number of acceptances by Psion shareholders; (2) the expected timeline for completing the transaction; (3) Motorola Solutions' ability to integrate Psion with its Enterprise Mobility Computing business in an efficient and effective manner; (4) Motorola Solutions' ability to achieve expected cost savings associated with the transaction; (5) the impact on Motorola Solutions' performance and financial results deriving from the perceived benefits of the transaction; and (6) current economic conditions, particularly in Europe, where Psion has a significant amount of sales, as well as future market conditions and the behaviours of other market participants. Therefore undue reliance should not be placed on such statements which speak only as at the date of this press release and do not represent the views of Motorola Solutions or Psion as of any subsequent date. A detailed description of other risks and uncertainties affecting Motorola Solutions is contained in Item 1A of Motorola Solutions' 2011 Annual Report on Form 10-K and in its other filings with the Securities and Exchange Commission (SEC). These filings are available for free on the SEC's website at www.sec.govand on Motorola Solutions' website at www.motorolasolutions.com. Neither Motorola Solutions nor Psion assume any obligation to, and do not intend to, update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required pursuant to applicable law.
Nothing in this press release is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per Psion share or Motorola Solutions share for the current or future financial years, or those of the combined group, will necessarily match or exceed the historical published earnings per Psion share or Motorola Solutions share.
MOTOROLA, MOTO, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license. All other trademarks are the property of their respective owners. 2012 Motorola Solutions, Inc. All rights reserved.
Motorola Solutions Media Contacts
Nicholas Sweers
+01 847 450 4957
Simon Craddock
+44 7738 928 092
Psion Media Contacts
Buchanan Communications
Charles Ryland/Suzanne Brocks/
Louise Hadcocks
+44 (0) 20 7466 5000
Motorola Solutions Investor Contacts
Shep Dunlap
+01 847 400 6291
Psion Investor Contacts
John Conoley, CEO
Adrian Colman, CFO
+44 (0) 207 025 6860
Apple, Samsung again swallow all the smartphone profits - CNET News
It's all about Apple and Samsung right now.
(Credit: CNET)There's no stopping Apple or Samsung Electronics.
The two companies again dominated the smartphone industry, combining to capture 55 percent of the market and 90 percent of the profits in the first quarter, according to a study by ABI Research.
The numbers only further illustrate the growing divide between Apple, Samsung and everyone else. While Samsung leads the industry with 43 million smartphones shipped, Apple remains the leader when it comes to making money off of its products. The iPhone 4S continues to be the single best selling phone at most carriers, while Samsung's Galaxy S III line is poised for its own breakout success.
The consequence, of course, is that the environment is even more treacherous for all of the other competitors. Nokia recently warned that its second-quarter results would disappoint once again, citing the difficult competitive environment, while HTC is still trying to get back to its high-flyer status with its One line of smartphones.
Interestingly, Nokia's slide in smartphones may allow another struggling player, Research in Motion to pass it by. While RIM posted terrible results of its own, including a 20 percent sequential slide in BlackBerry shipments in the first quarter, they looked decent relative to Nokia's own 40 percent drop.
But with Apple and Samsung so strong, it's unclear whether a third player can break out.
The handset vendors are expected to turn their eye to growth markets such as China, particularly as smartphone adoption matures in the U.S. and Western Europe. But even in China, the companies face stiff competition from the likes of Huawei and ZTE, which are able to deliver powerful phones at an attractive price.
Apple Gets New Hearing Date - Yahoo Finance
The injunction hearing between Apple Inc. (AAPL) and Google Inc.’s (GOOG) Motorola Mobility is now scheduled to take place on June 20. This comes after the U.S. Circuit Judge Richard A. Posner cancelled the aforesaid trial that was scheduled to take place on June 11, according to Bloomberg.
Apple had earlier filed a lawsuit against Motorola Mobility related to the infringement of four of its patents. Apple had sought an injunction to bar the sale of Motorola products that includes Droid phones and Xoom tablets in the US.
Motorola Mobility has claimed that Apple too had infringed upon one of its patents related to cellular communications. It is interesting to note that Google had acquired Motorola Mobility for $12.5 billion primarily to get its hands on the significant number of communications patents that Motorola has amassed over the years.
Apple has been very particular about stalling the growth of the android-based operating system. In doing so, it has engaged in legal battles in different countries, particularly against Samsung.
Samsung is leveraging on Android to become one of its most significant competitors and the company is already the largest vendor of Android-based products. The fact that Android is expected to continue its very strong growth all over the world is a major headache for Apple.
Despite the threat from Android and lower-than-expected sales in the tablet market, Apple has maintained its leading position in this arena in the first quarter of 2012. However, in the smartphone market, Android has outrun Apple’s iOS in the first quarter 2012, according to IDC.
We believe that Apple remains the biggest growth story based on its product pipeline, popular apps, iCloud and iPhone 4S, and the new iPad and Apple TV, and loyal customer base. With a solid balance sheet and robust revenues, we expect Apple to outperform its peers in the long run.
We believe that Apple’s legal hassles will continue as competition heats up in the smartphone and tablet space.
We maintain our Outperform recommendation over the long term (6-12 months). Currently, Apple has a Zacks #2 Rank, which implies a Buy rating in the near term.
Read the Full Research Report on GOOGRead the Full Research Report on AAPL
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Special Report: How an African telecom allegedly bribed its way into Iran - Reuters
WASHINGTON/JOHANNESBURG |
WASHINGTON/JOHANNESBURG (Reuters) - For a South African telecommunications company, it represented a unique chance to seize what its chief executive called "one of the most significant ‘virgin' mobile opportunities in the world."
But the location, he added in a memo marked "Strictly Confidential," was "no normal country."
The country was Iran. The company, MTN Group, was widely seen as a post-apartheid success story. Now, seven years after MTN and its local partners won a lucrative license to launch a new Iranian mobile-phone carrier, the deal is swirling in controversy and raising embarrassing questions for South Africa at a time when the Western world is trying to contain Iran's nuclear ambitions.
Turkcell, an Istanbul-based rival, in March filed a federal lawsuit in Washington alleging MTN bribed its way into Iran and stole the license from under it. It is seeking at least $4.2 billion in damages. An elite South African police unit called the Hawks is investigating. MTN has denied the allegations and called Turkcell's demands "extortionate."
MTN has appointed a prominent judge in London to conduct an internal probe of the allegations surrounding what has become one of its most valuable holdings. In 2011, MTN generated $1.3 billion, or 9 percent of its annual revenue, from its Iran venture, the company reported.
The core of the Turkcell case is the sworn testimony of Chris Kilowan, a former MTN executive who guided the company's bid to win the Iranian license and has emerged as the key witness. He has turned over to Turkcell's attorneys some 7,000 pages of internal MTN documents related to "Project Snooker" - MTN's code name for its effort, named after a billiard game popular in Britain. "We said we are going to snooker Turkcell," Kilowan testified.
MTN, now Africa's largest mobile phone carrier, has called Kilowan "a disgruntled former employee" and has termed his allegations "outlandish."
During three days of sworn testimony in Washington that concluded May 2, Kilowan presented an extraordinary tale of a multinational company so intent on winning a contract, it was willing to help Tehran obtain military hardware, sway South Africa's votes before the United Nations' International Atomic Energy Agency and pay bribes, sometimes in the guise of consulting fees. MTN has yet to give evidence in the case, which is continuing and may go on for years.
Kilowan admitted fronting $200,000 of his own cash to reward South Africa's then ambassador to Tehran, Yusuf Saloojee, for assisting MTN in Iran. Kilowan says it was MTN's later refusal to pay him back that convinced him to cooperate with Turkcell. Saloojee, now South Africa's ambassador to Oman, didn't respond to requests for comment. Other South African officials denied Kilowan's allegations.
Reuters has reviewed the entire transcript of Kilowan's deposition, most of which has not been made public, as well as numerous other exclusive documents.
The dramatic testimony comes at a time when the Western world is trying to contain Iran with forceful sanctions intended to deter its nuclear development program, which Iran maintains is peaceful. After choking off Iran's banks from the international monetary system, the European Union plans to implement an embargo on Iranian oil and a ban on insuring oil cargoes on July 1.
The sanctions haven't been leak-proof. Reuters has documented in a recent series of articles how Iranian telecoms - including the MTN joint venture - have managed to obtain embargoed U.S. computer equipment through a network of Chinese, Middle Eastern and Iranian firms. The Turkcell-MTN case offers further evidence that there are always companies willing to do business with a country even when it becomes an international pariah.
That goes for some governments as well. South Africa's ruling party, the African National Congress, has long maintained close ties with Tehran, which during the 1980s supported the anti-apartheid underground and imposed a trade boycott on the white-ruled government.
In an interview last month with Reuters, Gwede Mantashe, the ANC's secretary general, said he had "no problem at all" with South Africa "trading anything" with Iran today, including weapons.
"I WILL TALK TO MY PEOPLE"
Kilowan's story begins in 2004 when MTN sent him to Iran. MTN had seemingly lost out to Turkcell for the license to launch what would be the country's second mobile-phone operator. He testified he began meeting with Iranian officials to determine what had gone wrong with MTN's bid and lay the groundwork for competing for a license to run a third carrier. At the time, Iran had just one mobile operator, Telecommunication Co. of Iran.
Kilowan said he learned from Ambassador Saloojee, who recently had arrived in Tehran, that MTN shouldn't give up on pursuing the second license even though it appeared Turkcell had won. It also soon became clear to Kilowan that if MTN was going to undo Turkcell's victory, it would have to meet a long and growing list of onerous Iranian demands.
The bidding rules required foreign companies to partner with Iranian entities. Turkcell's partners had included Sairan, which Kilowan testified was an arms manufacturer owned by Iran's Ministry of Defense, and Bonyad Mostazafan, a foundation he said reported directly to Iran's supreme leader.
He portrays Sairan and Mostazafan, which eventually teamed up with MTN, as manipulative and untrustworthy, and later wrote in an internal memo that MTN's desire for the license "should not blind us to the clear reality that we are not negotiating with honest partners." Officials at Sairan and Bonyad Mostazafan could not be reached for comment, and Iranian diplomats in South Africa and New York did not respond to requests for comment.
Kilowan said he and two South African diplomats held an initial meeting around March 2004 with a Sairan official, who complained that South Africa had failed to deliver military radios Iran had purchased a year earlier. "You should push your government that they must sell these things to us," Kilowan quoted the Sairan official as saying. "I said, ‘Okay, I will. I will talk to my people, and they will talk to the government.'"
MTN had longstanding connections to the South African government through the ANC, Kilowan testified. These ties are well documented: MTN was set up with government help in 1994 as one of the first black-owned companies after the end of apartheid. Many MTN officials, including chairman Cyril Ramaphosa, had been ANC activists during the struggle to end white rule. Ramaphosa has long been seen as a potential president of South Africa.
A spokeswoman for Ramaphosa referred Reuters back to MTN, which in turn referred to his public statements on the matter. Ramaphosa announced in February that MTN had set up a special committee to investigate Turkcell's claims, saying, "MTN has zero tolerance for corrupt and unethical business practices."
Kilowan testified that during meetings, the Iranians - people at Sairan and other government officials - repeatedly raised two requirements: their need to acquire military hardware, including drone aircraft, and to win support for Tehran's nuclear development program. He said he and his then boss, Irene Charnley, an MTN director, concluded that "if we could somehow develop a strategy around these two issues," MTN might be able to win the second license.
According to Kilowan, MTN set out to provide the Iranians access to high-level South African government officials. This included helping to arrange a visit to Iran by South Africa's then defense minister, Mosiuoa Lekota, to meet his Iranian counterpart.
Lekota visited Iran in August 2004, accompanied by MTN director Charnley and its then chief executive, Phuthuma Nhleko, Kilowan testified. "It was specifically arranged so as to prove to the Iranians that MTN can deliver on the defense matters," said Kilowan, who noted he was in South Africa at the time.
Nhleko, who left MTN last year, told Reuters in an email: "It is really not for me to comment on the visits abroad of South African government ministers."
In response to emailed questions, Charnley, who left her executive post at MTN in early 2007, said: "Turkcell's allegations are entirely without substance. Neither I nor MTN were in a position to influence the policies or decisions of the South African or Iranian governments, and we did not do so."
"THE FISH"
An Iranian news agency account of Defense Minister Lekota's two-day visit reported that he told a news conference that Iran had a right to pursue peaceful use of nuclear energy. The Iranian defense minister, Ali Shamkhani, said the two sides had discussed expanding military, economic and political ties, and had signed an agreement to expand bilateral cooperation.
In an interview with Reuters, Lekota said he travelled to Iran "on official business" and was not working on behalf of MTN. "I have never had anything to do with the MTN license," he said. Asked the nature of the visit, he replied, "You are subjecting me to a cross-examination of issues that happened some time ago... I don't have access to those documents now."
Asked about the documents, Lindiwe Sisulu, until this week South Africa's defense minister, said her office received none of Lekota's records when he resigned in 2008. "I'm therefore not able to answer on his behalf what it is that he was doing" in Iran, she said.
According to Kilowan, Ambassador Saloojee later showed him a wish list of arms the Iranians wanted to buy from South Africa. The shopping list included radar systems, armored personnel carriers, long-range cannons and the Rooivalk attack helicopter - similar to the U.S. Apache. Kilowan testified that Saloojee told him, "They want everything from the earth to the sea, and everything that is in the sea and everything that flies."
Kilowan said Iranian officials also directly told him they wanted help in acquiring military equipment, including helicopters and drone aircraft. He said he and MTN director Charnley worked to contact South African defense contractors to help deliver to Iran what MTN executives code-named "the fish" - weaponry.
"We were not promising to facilitate the arm sales," Kilowan testified. "We were promising to get them in front of the right people for these arm sales. And if there are any bottlenecks, we would talk to the minister, for example."
Charnley said: "The first time I heard the phrase ‘the fish' in this context was when my attorneys briefed me on the Turkcell allegations in 2012." She denied she tried to help Iran secure arms from South Africa.
To support Kilowan's allegations, Turkcell's lawyers have submitted what they say are internal MTN documents from his computers. The evidence includes an alleged fax from Charnley in November 2004 to the head of Sairan stating she was trying to set up a meeting about the helicopters between Denel, a South African, government-owned defense contractor, and an Iranian helicopter company. The document says it was "signed on her behalf by Nkateko Nyoka," another MTN executive.
Charnley disputed the fax's authenticity. "I didn't send any such fax, am not aware of any such fax having been sent, and I never asked anyone to send such a fax on my behalf," she said. Nyoka, no longer with MTN, said in an interview he didn't know anything about the document.
Turkcell's documents also include an alleged fax to an Iranian official from Donald Ramfolo, then a Denel regional marketing manager, stating, "We at Denel feel honored to have received your request for cooperation in the helicopter support field."
In an interview, Ramfolo said Denel had proposed selling Iran "aviation technology," including fiberglass technology for drones, but MTN wasn't involved and the South African government nixed the deal. "We were doing our own thing and MTN were doing their own thing and we didn't mix," he said. Ramfolo no longer works for Denel. A spokeswoman for Denel did not respond to requests for comment.
Turkcell's evidence also includes an alleged signed agreement between MTN and its Iranian partners from September 2005 that states: "The cooperation between MTN and Iranian shareholders should be in the line of defensive, security and political cooperation. MTN shall fully support cooperation regarding the aforementioned issues in South Africa."
Kilowan testified that the Iranians were insistent on that clause and that Nhleko signed the agreement. Kilowan said it meant "that we would continue to provide support to Sairan in particular around defense matters and we would continue to provide political support or get political support from the South African government for the Iranian government."
Asked to comment, Nhleko said, "Neither the MTN Group nor I were in a position to influence or fetter the decisions and foreign policy of the South African government, and we did not do so."
"A LOT OF PRESSURE"
In the end, South Africa never delivered any arms. In the case of the attack helicopters, Kilowan testified that Saloojee told him South Africa wouldn't sell them to Iran because they contained some American technology, which was under sanctions. Kilowan said the failure to deliver the arms resulted in continued friction between MTN and the Iranians. "The non-delivery of the full fish continued to be a discussion long after," he testified.
MTN was pressed to deliver in other ways. On the nuclear front, Kilowan testified that MTN helped pay for a trip to South Africa around late 2004 by Iran's then-chief nuclear negotiator, Hassan Rowhani, so he could meet with then-President Thabo Mbeki.
"We paid for the hotels in Cape Town. We paid for the dinners, everything. We bought presents for them. And we made sure that he got to see President Thabo Mbeki," Kilowan testified. Rowhani could not be reached for comment.
Mukoni Ratshitanga, a spokesman for former President Mbeki, said, "We're not going to be drawn into commenting on these allegations."
According to Kilowan, MTN was promised the telecom license in November 2005. But when he arrived to pick it up, he said an Iranian official told him that it couldn't be issued until a vote later that week at the IAEA in Vienna. Members were considering whether to refer Iran, which had resumed developing enriched uranium, to the U.N. Security Council for possible sanctions.
South Africa abstained. Several days later, MTN received the license. Kilowan testified that although MTN couldn't claim credit for the abstention, "we essentially put a lot of pressure" on the government. The South African government has denied MTN played any role.
By the time MTN received the license to launch the new telecom, called MTN Irancell, it had made a series of concessions to its Iranian partners.
Although MTN owned 49 percent of the joint venture, it agreed to put up 100 percent of the licensing fee and capitalization costs - 450 million euros ($570 million) in all. By Kilowan's account, the Iranians essentially tricked MTN into signing a document in Farsi that committed it to paying all its partners' share. Neither MTN nor its partners have commented on this allegation.
Over the objection of MTN's chief financial officer at the time, Rob Nisbet, MTN structured its additional contribution as a complex series of loans, Kilowan testified. Nisbet, who has since left MTN, declined to comment.
Kilowan said he also objected to the loan arrangement. In a confidential October 2005 memo to MTN's CEO that was reviewed by Reuters, Kilowan wrote, "They have no intention whatsoever to repay the money that they want us to advance them."
He also wrote, "I have now arrived at the conclusion ... that the primary reason they have shifted to MTN is because they have concluded that we are desperate enough for this license that we will give anything."
MTN's financial statements show that the loans, originally supposed to be repaid by 2009, were renegotiated and extended. The company recently reported that three of four loans were repaid last year, with the fourth extended until 2014.
Among Kilowan's most serious allegations is that MTN paid a series of bribes, including to Javid Ghorbanoghli, an Iranian deputy foreign minister who had once served as Iran's ambassador to South Africa. Kilowan also alleges that payments were made to Ambassador Saloojee and six Iranian government employees he declined to name.
At a meeting at Kilowan's Tehran house in May 2005, Kilowan testified Charnley told Ghorbanoghli: "Look, we are now entering a very delicate phase. We would really appreciate all your assistance that you can give us. And, of course, when we get the license we will be very happy to thank you in the appropriate way for your assistance."
Within months, Kilowan said, the Iranian diplomat began asking him about "compensation." Kilowan said he and Charnley agreed to wait until after MTN received the license.
After the license was issued, Charnley suggested Saloojee also should be paid for assisting MTN, Kilowan testified.
Charnley denied this, stating, "I didn't bribe anyone, I'm not aware of anyone having been bribed, and I wouldn't have tolerated any bribery had I been aware of it."
According to Kilowan, Ghorbanoghli grew agitated in 2006 over not having been paid, saying he needed money to buy a house for his children in South Africa. Kilowan said he and Charnley decided to pay him by awarding a consulting contract to an oil services company in Dubai owned by one of Ghorbanoghli's friends.
Turkcell's evidence includes a copy of an agreement signed by Kilowan on behalf of MTN International, a unit of MTN Group, to pay $400,000 to Aristo Oil International Services for "consulting services" related to "MTNI's entry into the Iranian Mobile Market."
Ghorbanoghli later confirmed the money had arrived, Kilowan testified. "He wanted more, and I negotiated it down to 400,000," he said.
Ghorbanoghli couldn't be reached for comment. Aristo's managing director, Mousa Hosseinzadeh, whose name and alleged signature appear on the documents, asked Reuters for copies and then didn't respond to requests for comment.
As for Saloojee, Kilowan testified that the ambassador approached him after learning that Ghorbanoghli had been paid. Saloojee said he needed money to buy a house in Pretoria, Kilowan said.
Kilowan testified that MTN delayed making the payment so he ended up giving Saloojee $200,000 of his own money in April 2007, through the ambassador's attorneys, with a handshake agreement that Saloojee would repay him when MTN sent the cash.
It never did. Kilowan, who left MTN in late 2007 and is now a Dubai-based businessman, testified that he continued through early 2011 to try to recoup his money from Saloojee and MTN. When the company turned him down, he said, he decided to cooperate with Turkcell.
He testified he does not stand to benefit from the case's outcome, other than travel expenses and compensation for time spent on his deposition and "loss of business." He also said he bills Turkcell an hourly rate for reviewing documents in a separate arbitration case, and has received about $21,800 over the past year. As a result of this disclosure, MTN, which is trying to dismiss Turkcell's lawsuit in the United States, recently called his testimony "paid evidence."
Meanwhile, MTN Irancell has become Iran's fastest-growing mobile phone operator. MTN recently reported it had 45 percent of the Iranian market.
(Stecklow reported from Washington and Dolan from Johannesburg; Additional reporting by Marcus George in Dubai, Ed Cropley in Johannesburg and Wendell Roelf in Cape Town; Edited by Mike Williams, Simon Robinson and Sara Ledwith)
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