Somers Limited (formerly Bermuda National Limited)

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 ( FSMA ), if you are resident in the United Kingdom, or, if not, from another appropriately authorised independent financial adviser. If you have sold or otherwise transferred all of your Westhouse Shares please send this document, together with the accompanying documents, as soon as possible, to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee. However, this document and the accompanying documents should not be forwarded or transmitted in or into or from the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Smith & Williamson Corporate Finance Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for Westhouse and no-one else in connection with the Offer and will not be responsible to anyone other than Westhouse for providing the protections afforded to clients of Smith & Williamson nor for providing advice in relation to the Offer or any other matter or arrangement referred to in this document. Norton Rose Fulbright LLP, which is regulated by the Solicitors Regulation Authority, the independent regulatory body of the Law Society of England and Wales, is acting exclusively for Somers Limited and no-one else in connection with the Offer and will not be responsible to anyone other than Somers Limited for providing the protections afforded to clients of Norton Rose Fulbright LLP nor for providing advice in relation to the Offer or any other matter or arrangement referred to in this document. Offer by Somers Limited (formerly Bermuda National Limited) for Westhouse Holdings PLC A letter from the Chairman of Westhouse Holdings PLC is set out on pages 8 to 16 of this document. The procedure for acceptance of the Offer is set out on pages 21 to 24 of this document. To accept the Offer in respect of certificated Westhouse Shares, the Form of Acceptance must be completed, signed, witnessed (in the case of an individual) and returned together with your definitive share certificate(s) and/or other document(s) of title as soon as possible and, in any event, so as to be received by post to Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH or (during normal business hours only) by hand to Computershare, The Pavilions, Bridgwater Road, Bristol BS13 8AE by no later than 1.00 p.m. on 20 December A reply-paid envelope for use within the UK accompanies this document for your convenience. The procedure for acceptance of the Offer in respect of certificated Westhouse Shares is set out in paragraph 15(a) of Part II of this document and in the accompanying Form of Acceptance. To accept the Offer in respect of uncertificated Westhouse Shares, acceptances should be made electronically through CREST so that the TTE Instruction settles not later than 1.00 p.m. on 20 December The procedure for acceptance of the Offer in respect of uncertificated Westhouse Shares is set out in paragraph 15(b) of Part II of this document. This document should be read in conjunction with the accompanying Form of Acceptance (in respect of certificated Westhouse Shares). If you are a CREST sponsored member, you should refer to your CREST sponsor, as only your CREST sponsor will be able to send the necessary TTE Instructions to Euroclear.

2 IMPORTANT NOTICE Neither this document nor the accompanying documents constitute or form part of any offer to sell or issue or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to these documents or otherwise in any jurisdiction in which such offer, invitation or solicitation is unlawful, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. Unless otherwise determined by Somers or required by the City Code and permitted by applicable law and regulation, the Offer is not being made, directly or indirectly, in or into, or by the use of the mails or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce, or any facility of a national securities exchange, of a Restricted Jurisdiction (including the United States, Canada, Australia or Japan) and the Offer is not capable of acceptance by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this document, the Form of Acceptance (in respect of certificated Westhouse Shares) and any related documents are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from a Restricted Jurisdiction and persons receiving such documents (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from a Restricted Jurisdiction. Doing so may render invalid any purported acceptance of the Offer. All persons (including, without limitation, nominees, trustees and custodians) who would, or otherwise intend to, forward this document, the Form of Acceptance (in respect of certificated Westhouse Shares) and any related documents to any jurisdiction outside of the United Kingdom should read the further details in this regard which are contained in paragraph 6 of Part B of Appendix I, paragraph (c) of Part C of Appendix I and paragraph (c) of Part D of Appendix I to this document before taking any action. The availability of the Offer to Westhouse Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Westhouse Shareholders who are not so resident should inform themselves of, and observe, any applicable requirements. FORWARD-LOOKING STATEMENTS This document contains certain forward-looking statements with respect to Somers and Westhouse. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, aim, will, may, would, could or should or other words of similar meaning or the negative thereof. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, economic performance, financial conditions, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of the operations of the Somers Group or the Westhouse Group; and (iii) the effects of government regulation on the business of the Somers Group or the Westhouse Group. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied by such forwardlooking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. All subsequent oral or written forward-looking statements attributable to Somers or Westhouse or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of Somers or Westhouse following completion of the Offer, unless otherwise stated. 2

3 PUBLICATION ON WEBSITES In accordance with Rule 30.4 of the City Code, a copy of this document and the Form of Acceptance will be made available, subject to certain restrictions relating to persons resident in any Restricted Jurisdiction, on the websites of Westhouse at and Somers at until the end of the Offer Period (or, if later, the end of any competition reference period). For the avoidance of doubt, the contents of the websites referred to above are not incorporated into and do not form part of this document. 3

4 ACTION TO BE TAKEN TO ACCEPT THE OFFER (a) (b) If you hold Westhouse Shares in certificated form (that is, not in CREST), you should: (i) complete, sign and have witnessed (in the case of an individual) the Form of Acceptance in accordance with paragraph 15(a) of the Letter from Somers set out in Part II of this document; and (ii) return the completed Form of Acceptance (along with any appropriate share certificate(s) and/or other document(s) of title) using the accompanying reply-paid envelope (for use within the UK only) as soon as possible and, in any event, so as to be received by 1.00 p.m. on 20 December If you hold Westhouse Shares in uncertificated form (that is, in CREST), you should follow the procedures set out in paragraph 15(b) of the Letter from Somers set out in Part II of this document and send a TTE Instruction to settle as soon as possible and, in any event, no later than 1.00 p.m. on 20 December If you have any questions about the Offer, or are in any doubt as to how to complete the accompanying Form of Acceptance or make an Electronic Acceptance, please call Computershare on ( if calling from overseas). Copies of this document sent to persons in electronic form or by means of being published on Westhouse s and Somers websites and all future documents, announcements and information required to be sent to persons in relation to the Offer may be requested to be received by such persons in hard copy form by writing to Computershare, Corporate Actions Projects, Bristol BS99 6AH. Copies of any information incorporated by reference in this document will not be provided unless such a request is made. THE FIRST CLOSING DATE OF THE OFFER IS 1.00 P.M. ON 20 DECEMBER

5 CONTENTS Page PART I LETTER FROM THE CHAIRMAN OF WESTHOUSE HOLDINGS PLC 8 PART II LETTER FROM THE BOARD OF SOMERS LIMITED 17 APPENDIX I CONDITIONS AND FURTHER TERMS OF THE OFFER 27 PART A: CONDITIONS OF THE OFFER 27 PART B: FURTHER TERMS OF THE OFFER 28 PART C: FORM OF ACCEPTANCE 39 PART D: ELECTRONIC ACCEPTANCES 42 APPENDIX II FINANCIAL INFORMATION ON WESTHOUSE HOLDINGS PLC 45 APPENDIX III FINANCIAL INFORMATION ON SOMERS LIMITED 46 APPENDIX IV ADDITIONAL INFORMATION 47 DEFINITIONS 57 5

6 IMPORTANT DATES AND TIMES The dates and times set forth in the table below in connection with the Offer may change in accordance with the terms and conditions of the Offer, as described in this document. Announcement of the Offer 29 November 2013 Publication of this document 29 November 2013 First closing date of the Offer 1.00 p.m. on 20 December 2013 Earliest date the Offer can be closed* 1.00 p.m. on 20 December 2013 Expected date by which the consideration is to Week commencing 30 December 2013 be despatched* Latest date the Offer can become unconditional 1.00 p.m. on 28 January 2014 as to acceptances Latest date by which all Conditions must be satisfied 1.00 p.m. on 28 January 2014 Latest date for consideration to be despatched** Week commencing 3 February 2014 Notes: * Assuming the Offer is declared wholly unconditional on the first closing date and receipt of acceptances is complete in all respects. ** Assuming the Offer is declared wholly unconditional on the latest possible date and receipt of acceptances is complete in all respects. These times and dates are indicative only. The period during which the Offer is open for acceptance may be extended by Somers in certain circumstances (see Parts B, C and D of Appendix I of this document). If any of the above terms and/or dates change, the revised times and/or dates will be notified through a Regulatory Information Service in the UK and/or to Westhouse Shareholders. DEALINGS DISCLOSURE REQUIREMENTS OF THE CITY CODE Under Rule 8.3(a) of the City Code, any person who is interested in one 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 City Code, any person who is, or becomes, interested in one 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

7 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 of the City Code). 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 including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. You should contact the Panel s Market Surveillance Unit on +44 (0) if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure. 7

8 PART I LETTER FROM THE CHAIRMAN OF Westhouse Holdings PLC (a company incorporated in Jersey under the Companies (Jersey) Law 1991 (as amended) with registered number 88781) Directors: Garth Milne (Chairman) William Staple (Deputy Chairman) Christopher Getley (Chief Executive Officer) Andrew Proctor (Finance Director) Sir Hayden Philips (Non-Executive Director) Sandra Pope (Non-Executive Director) Registered Office: 3rd Floor, Windward House La Route de la Liberation St Helier Jersey JE2 3BQ Channel Islands 29 November 2013 To the holders of Westhouse Shares, the Westhouse Optionholders, PCL Noteholders and persons with information rights Dear Shareholder, Offer by Somers Limited (formerly Bermuda National Limited) for Westhouse Holdings PLC 1. Introduction Westhouse is pleased to announce that it has agreed the terms of an equity and debt fundraising underwritten by its strategic shareholder, Somers Limited ( Somers ) which includes an Open Offer and Placing (the Conditional Issue ) to raise, in aggregate, up to 3.45 million (before expenses). On completion of this transaction Somers, an investment holding company specialising in the financial services sector with a capital base of approximately $200 million 1 and assets under administration of $6.5 billion, will own not less than 80.0 per cent. of Westhouse. The Westhouse Directors believe there is evidence of a cyclical recovery in the markets in which it operates after an extended period of slowdown that triggered consolidation within the corporate broking sector. The Board sees a strong outlook for its business which will be enhanced by being part of a financially robust group that is entrepreneurial and international in its outlook. Somers has developed its business as a platform for corporate investments and acquisitions in the financial services sector. In addition to Westhouse, these currently include 100 per cent. of Bermuda Commercial Bank Limited, 62.5 per cent. of London-based wealth manager J O Hambro Investment Management Limited and substantial stakes in UK listed finance house Private and Commercial Finance Group plc and independent financial adviser Ascot Lloyd Holdings Limited. In the past year Westhouse has ceased to be an AIM quoted company and has agreed a funding strategy with Somers which, if implemented, would see Westhouse become a subsidiary of Somers. Against that background, the Board of Somers believes that it is appropriate to extend a voluntary offer to minority shareholders on the same terms that the equity fundraising is taking place. The purpose of this letter is to set out the details of this Offer and to set out the factors that the Board believe you should consider in deciding whether or not to accept the Offer. Your decision as to whether to accept the Offer will depend upon your individual circumstances. If you are in any doubt as to what action you should take, you should seek your own independent financial advice. 1 Based on shareholders equity of $130.2 million as at 30 June 2013 adjusted for the acquisition of J O Hambro Investment Management Limited and the consolidation of other investments in accordance with IFRS. 8

9 I draw your attention to the Letter from Somers set out in Part II of this document, which gives further details about the Offer, as well as the additional information set out in Parts A to D of Appendix I of this document. 2. Terms of the Offer The Offer is contained in the Letter from Somers set out in Part II of this document and is subject, inter alia, to the Conditions and further terms set out in Appendix I to this document and (in respect of certificated Westhouse Shares) the accompanying Form of Acceptance. The Offer is being made on the following basis: for each Westhouse Share: 1 pence in cash The Offer values Westhouse at approximately 5.5 million on the basis of outstanding balance sheet debt of 5.2 million and a share capital of 33,023,835 Westhouse Shares at 1p each, worth 0.3 million. The Offer is conditional upon: valid acceptances being received in respect of such number of Westhouse Shares which will result in Somers holding Westhouse Shares carrying more than 50 per cent. of the total number of Westhouse Shares; and FCA approval to the change of control of Westhouse Securities being granted on or before 28 January 2014, being 60 days after the date of publication of this document. Full details of the conditions to which the Offer is subject are set out in Part A of Appendix I to this document. The first closing date of the Offer is 1.00 p.m. on 20 December 2013 and your attention is drawn to the procedures for acceptance of the Offer which are set out in paragraph 15 of Part II of this document. The Westhouse Shares will be acquired pursuant to the Offer fully paid and free from all liens, charges, equitable interests, encumbrances and rights of pre-emption and any other interests of any nature whatsoever and together with all rights attaching thereto. 3. Irrevocable undertaking Somers has received an irrevocable undertaking from SBS Nominees Limited on behalf of Mr Ryan Anderson to accept the Offer in respect of its entire holding of 3,545,000 Westhouse Shares representing approximately per cent. of Westhouse s issued share capital, as at the date of this document. Accordingly, it is expected that the Offer will become unconditional as to acceptances immediately following FCA approval of the change of control of Westhouse Securities. This irrevocable undertaking will lapse if the Offer lapses or is withdrawn. A copy of the irrevocable undertaking is on display on Westhouse s and Somers websites ( and respectively). 4. Placing and Open Offer The Company is proposing to raise, in aggregate, up to 3.45 million (before expenses) by way of the Conditional Issue which includes an Open Offer and Placing. The Board of Westhouse wishes to allow Westhouse Shareholders who choose not to accept the Offer, the opportunity to participate in the Open Offer on the basis of 1 Open Offer Share for every 1 Share held at the Record Date. In addition, the Board of Westhouse will extend the Open Offer to all PCL Noteholders on the basis of 2 Westhouse Shares for every 1 of nominal of PCL Notes held on the Record Date. The Open Offer Shares may be subscribed for at the Open Offer Price of 1 pence per share. Qualifying Shareholders will have the right to apply for Open Offer Shares in excess of their Open Offer Entitlements, but any such applications will only be accepted to the extent that other Westhouse Shareholders apply for less than their aggregate Open Offer Entitlements. Such excess applications will be satisfied at the Company s discretion. 9

10 The Open Offer is to be fully underwritten by Somers with no underwriting fee and will raise gross proceeds of up to 0.35 million through the issuance of 35,099,835 new shares in Westhouse. At the same time as the Open Offer, Somers has undertaken, subject to satisfaction of the conditions referred to below in this paragraph 4 of this Part I, to subscribe for 264,900,165 Placing Shares in Westhouse at 1p per share, raising 2.64 million before expenses. These Placing Shares will represent 70.1 per cent. 1 of the enlarged share capital of Westhouse. Simultaneously with the placing of Westhouse Shares with Somers, it is proposed that the management and employees of Westhouse will subscribe for up to 45,000,000 Placing Shares in Westhouse at 1p per share, raising up to a further 0.45 million before expenses (the Management Participation ), of which 30,000,000 Placing Shares are subject to a firm commitment to subscribe by the executive management of Westhouse s operating subsidiary, Westhouse Securities Limited. These Placing Shares will represent 11.9 per cent. 2 of the enlarged share capital of Westhouse. The Westhouse Board has determined that the Company requires a substantial investment to better capitalise the business and facilitate growth and considers, in the context of the further investment in the Company being made by Somers, the Management Participation to be a normal commercial arrangement to align management s risk and reward with that of Somers. Accordingly, the Westhouse Board (excluding those Westhouse Directors participating in the Management Participation) is recommending that the independent shareholders of Westhouse (excluding those Shareholders participating in the Management Participation) vote in favour of a resolution to be proposed to approve the Management Participation. It should be noted that the Placing is not being made available to all Westhouse Shareholders; Smith & Williamson considers that in the circumstances the Management Participation is fair and reasonable although it also considers that the Placing Price may not fully reflect the value of the Company, as it does not fully recognise the future potential of the Westhouse Group on a fully funded basis, as part of a substantial financial services group. The Conditional Issue is conditional upon approval of the change of control of Westhouse Securities by the FCA, Westhouse Shareholder approval for an increase in the Company s authorised share capital and authorisation for the allotment of new Westhouse Shares (including, in the case of the Management Participation, Westhouse Shareholder approval for the Management Participation) and the irrevocable and unconditional agreement of each of the PCL Noteholders to the proposed extension of the maturity date of the PCL Notes from 31 December 2017 to 31 December 2018, save in the latter case as otherwise agreed by Somers. As such there is no guarantee that the Conditional Issue will complete and Shareholders should be mindful of this. A separate circular has today been posted to Westhouse Shareholders, together with a notice of extraordinary general meeting, to seek Westhouse Shareholder approval for the Conditional Issue and the Management Participation. Upon completion of the Conditional Issue, Somers is expected to hold a minimum of 80.0 per cent. 3 of the Company s share capital. 5. Information on Somers Limited Your attention is drawn to paragraph 4 of the Letter from Somers set out on page 17 of this document which provides information on Somers and the other members of the Somers Group. 1 Being the percentage of Westhouse s enlarged share capital represented by the 264,900,165 Placing Shares to be subscribed by Somers, where Westhouse s enlarged share capital is the existing share capital of 33,023,835 Westhouse Shares adjusted for the issue of 345,000,000 Westhouse Shares pursuant to the Conditional Issue. 2 Being the percentage of Westhouse s enlarged share capital represented by the 45,000,000 Placing Shares to be subscribed for by the management and employees of Westhouse, where Westhouse s enlarged share capital is the existing share capital of 33,023,835 Westhouse Shares adjusted for the issue of 345,000,000 Westhouse Shares pursuant to the Conditional Issue. 3 Based on a holding of 302,460,719 Westhouse Shares, representing Somers holding at the date of this document of 15,235,277 Westhouse Shares, acceptances of the Offer of 3,545,000 Westhouse Shares (being the Irrevocable Undertaking only), Somers commitment under the Placing of 264,900,165 Westhouse Shares and Open Offer entitlements (as adjusted for acceptances) of 18,780,277 Westhouse Shares. 10

11 6. Background to, reasons for and effect of the Offer Somers is an investment holding company specialising in the financial services sector. It was established to provide a platform for corporate investments and acquisitions in the financial services sector where the fallout from the 2008 financial crisis is expected to continue to provide a number of attractive investment opportunities. Somers has made a substantial investment in Westhouse to date, of in aggregate 8.9 million and the Board of Somers believes the acquisition of further Westhouse Shares is an important part of its strategy to continue to strengthen its financial services business through the opportunity to create a well-funded corporate and institutional stockbroking business, with first class sectoral research, sales and distribution that is well placed to exploit a cyclical upturn in the UK financial services industry. The Somers Group made an initial investment in the PCL Notes of Westhouse of 3.5 million in August 2010 and, together with its associates, has subsequently provided further debt funding of 3.9 million and equity funding of 1.5 million, taking its aggregate total investment in Westhouse at the date of this document to 8.9 million. In addition, it is proposing to invest further funds, pursuant to the Conditional Issue described in paragraph 4 above, of 3.0 million, to provide such funds as necessary to allow Westhouse to grow its business. Members of Westhouse s management team have undertaken to subscribe for 300,000 worth of Westhouse Shares in the Placing and a further 150,000 of Westhouse Shares will be made available by the Company to other employees on the same terms as Somers. Westhouse will become a subsidiary of Somers following completion of the Offer and Conditional Issue and Somers shall be entitled to determine the composition of the Company s Board. However, the Company will remain as an independent entity operating day-to-day functions distinctly and separately from Somers. Following completion of the Conditional Issue, Somers interest in the Westhouse Shares will be not less than 80.0 per cent. and the number of Westhouse Shares held by parties other than Somers or Westhouse employees is expected to fall below 10 per cent. of the Company s issued share capital. In the context of the proposed financing the Boards of Westhouse and Somers felt it was appropriate to offer Shareholders, and in particular those non-employee minority Shareholders, the opportunity to sell their Westhouse Shares at the same price as the Westhouse Shares will be issued under the Conditional Issue. 7. Information on Westhouse, current trading and prospects Westhouse is a sectorally focussed corporate and institutional broker. It employs over 50 employees and has 70 corporate clients listed on the London capital markets. The Westhouse Group has a strong track record across a number of market sectors with particular expertise in mining, oil & gas, investment funds, growth companies, insurance, and media. Westhouse offers corporate finance, corporate broking, sales and trading capabilities, supported by high quality equity research. In February 2012 it completed a merger with Arbuthnot Securities Limited, significantly increasing the scale of the Westhouse business and adding complementary sector expertise. On 11 January 2013, Westhouse announced its proposed cancellation from admission to trading on AIM which subsequently became effective on 12 February At that time the Board of Westhouse noted the difficult trading environment for corporate and institutional brokers due to fewer corporate transactions and lower trading volumes. The Board also noted that it was fortunate in having a supportive shareholder base that has demonstrated its commitment to Westhouse. These statements remain true and the Offer must be seen in the context of the continued funding by Somers of Westhouse s business. For the year ended 31 December 2012, Westhouse reported revenue of 9.2 million (year ended 31 December 2011: 7.5 million), a loss before taxation of 5.9 million (year ended 31 December million loss) and shareholders funds of 2.3 million (year ended 31 December million). Since 11

12 the cancellation from admission to trading on AIM, Somers has provided debt financing of 2.7 million to Westhouse. The Board of Westhouse has resolved that, in order to further grow the business, a substantial investment was required to better capitalise the business and facilitate growth. The Westhouse Board is confident that, following completion of the Offer and Conditional Issue, Westhouse will be well positioned to become profitable and is optimistic about the future prospects of the business. The Company s trading environment remains challenging and Westhouse has cut costs further in The City Code Under Rule 9 of the City Code, a person who acquires, whether by a series of transactions over a period of time or not, an interest in shares as defined in the City Code which (taken together with shares in which persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company which is subject to the City Code, is normally required to make a general offer in cash to all other shareholders of that company to acquire the balance of the shares not held by such a person (or group of persons acting in concert). Rule 9 provides that where any person, together with persons acting in concert with him, is interested in shares in a company which is subject to the City Code and which in aggregate carry not less than 30 per cent. but not more than 50 per cent. of that company s voting rights, and such person, or any person acting in concert with him, acquires further interests in shares, such person is normally required, in the same way, to make a general offer to all shareholders. Rule 9 also provides that where any person, together with persons acting in concert with him, is interested in shares in a company which is subject to the City Code and which in aggregate carry more than 50 per cent. of that company s voting rights, such person, or any person acting in concert with him, may normally acquire further interests in shares without the obligation to make a general offer to all shareholders. Upon satisfaction of the Conditions, Somers will own in excess of 50 per cent. of the voting rights of Westhouse. Accordingly there are no further thresholds at which Somers is required to make a mandatory offer pursuant to Rule 9 of the City Code. Consequently, upon completion of the Offer it is unlikely that Somers will be required to make a further offer to acquire all of the outstanding Westhouse Shares in the event that Somers were to acquire an interest in further Westhouse Shares whether by further investment under the Conditional Issue or otherwise or through the purchase of existing Westhouse Shares from a minority Westhouse Shareholder. 9. Management, employees and locations The Westhouse Board has considered the effects of the Acquisition on Westhouse, including specifically the effect on its employees. It is Somers intention to retain Westhouse s existing operating structure within the Somers Group as part of Somers on-going strategy to build its financial services business. Somers believes that the additional investment in Westhouse should offer enhanced opportunities for the existing management team and the employees of Westhouse and there are no current plans to make personnel changes. Upon completion of the Offer and Conditional Issue, Somers shall be entitled to determine the composition of the Board of Westhouse. Somers has been a supportive shareholder and has stated that this investment is part of its ongoing strategy to make investments in the financial services sector. Somers has agreed to provide the employees of Westhouse with the opportunity to subscribe for Westhouse Shares at the Placing Price and to introduce an HMRC approved share option scheme. No discussions have taken place at this stage regarding the terms of this scheme or on the basis on which it will be allocated. Heron Tower, 110 Bishopsgate, London EC2N 4AY, which is subject to a remaining lease term of 9 years and 9 months will remain the Company s principal place of business. 12

13 The Independent Directors consider that the effect of the Acquisition and Somers stated plans for Westhouse will be in the long-term interests of its employees and business. 10. Debt Facilities The Company currently has debt facilities with the Somers Group for an aggregate outstanding amount of 3.90 million. Subject to completion of the Offer, the Boards of Somers and the respective Somers Group companies have agreed to extend the terms of these debt facilities to 31 December 2018 at reduced interest rates. Further details of the BCB Facility and the Somers Facilities are included at paragraph 10 of Appendix IV of this document. 11. Westhouse Options As at 28 November 2013 (being the last practicable date prior to the publication of this document) there are 349,500 Westhouse Options outstanding which entitle the holders of such options to subscribe for Westhouse Shares at an exercise price of pence. Accordingly, all of the Westhouse Options are outof-the-money based on the Offer. It is therefore not expected that the Westhouse Options will be exercised prior to completion of the Acquisition. Somers has therefore agreed with the Panel that no equivalent offer will be made to Westhouse Optionholders. The Offer extends to any Westhouse Shares which are unconditionally allotted or issued whilst the Offer remains open for acceptance as a result of the exercise of Westhouse Options. 12. The PCL Notes As at 28 November 2013 (being the last practicable date prior to the publication of this document), PCL Notes totalling 1.04 million are outstanding. The PCL Notes are convertible into Westhouse Shares at a price of 50 pence per Westhouse Share, accordingly, it is not expected that the PCL Noteholders will be converted prior to completion of the Acquisition. Somers has therefore agreed with the Panel that no equivalent offer will be made to PCL Noteholders. The Offer extends to any Westhouse Shares which are unconditionally allotted or issued whilst the Offer remains open for acceptance as a result of the conversion of PCL Notes. The Conditional Issue is conditional, amongst other things, upon the irrevocable and unconditional agreement of each of the PCL Noteholders to the proposed extension of the maturity date of the PCL Notes from 31 December 2017 to 31 December All other terms will remain unchanged and interest on these notes will be accrued and paid together with the principal on maturity. 13. Dividends The Board of Westhouse did not pay a dividend in respect of the financial years ending 31 December 2011 or 31 December 2012 and does not anticipate paying a dividend for the year ended 31 December No dividends are to be paid while there is debt outstanding to the Somers Group without the written consent of all of the respective Somers Group lender(s). Further to paragraph 10 above, the Company s debt to the Somers Group is not expected to be repaid until 31 December Dealing facilities It is intended that a private bulletin board dealing facility will be created for non-employee Westhouse Shareholders who choose not to accept the Offer which would facilitate them entering into transactions amongst themselves. 13

14 15. Re-registration It is also proposed, following the Offer becoming or being declared unconditional in all respects, that, in due course, Somers will seek to procure the re-registration of Westhouse as a private limited company under the relevant provisions of the Companies Law. Westhouse s articles of association will also be altered to make them better suited to a private stockbroking business, requiring, inter alia, that employees sell their Westhouse Shares when they leave the employ of the firm. 16. Financing of the Offer The cash consideration payable by Somers under the Offer will be funded out of the existing resources of the Somers Group. Norton Rose Fulbright LLP is satisfied that resources are available to Somers sufficient to satisfy in full the immediate cash consideration payable under the Offer. 17. Overseas Shareholders Overseas Shareholders should refer to paragraph 6 of Part B, paragraph (c) of Part C and paragraph (c) of Part D of Appendix I to this document which contains important information for such shareholders. 18. Action to be taken by Westhouse Shareholders To accept the Offer, your attention is drawn to the procedure for accepting the Offer which is set out in paragraph 15 of the letter from Somers in Part II of this document and Appendix I to this document and, in respect of certificated Westhouse Shares, to the Form of Acceptance, which, together, set out the procedure for acceptance of the Offer. Shareholders are not, however, obliged to accept the Offer. If you wish to remain a Shareholder you should not return the Form of Acceptance accompanying this document or take any other action. In order to accept the Offer in respect of Westhouse Shares held in certificated form (that is, not in CREST) you should complete, sign, have witnessed (in the case of an individual) and return the accompanying Form of Acceptance together with your definitive share certificate(s) and/or other document(s) of title as soon as possible but in any event so as to be received by Computershare, Corporate Actions Projects, Bristol BS99 6AH, or by hand only (during normal business hours only) to Computershare, The Pavilions, Bridgwater Road, Bristol BS13 8AE, by no later than 1.00 p.m. on 20 December A reply-paid envelope accompanies this document for your use within the United Kingdom. In order to accept the Offer in respect of Westhouse Shares held in uncertificated form (that is, in CREST), you should ensure that an Electronic Acceptance is made by you, or on your behalf, by no later than 1.00 p.m. on 20 December You should not complete a Form of Acceptance in respect of such Westhouse Shares. Your decision as to whether to accept the Offer will depend, inter alia, upon your individual circumstances. If you are in any doubt as to the action you should take, you should seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under FSMA, if you are in the United Kingdom, or, if not, from another duly authorised independent financial adviser. 19. Further Information Your attention is drawn to the Letter from Somers set out in Part II of this document and to Appendix I to this document, and, for those Westhouse Shareholders holding Westhouse Shares in certificated form, to the accompanying Form of Acceptance. Westhouse Shareholders and persons with information rights should note that Somers may request details of addresses, electronic addresses and other information provided to Westhouse for the receipt of documents, announcements and other information in hard copy form or electronic form (as the case may be). 14

15 20. Intentions of the Westhouse Directors in respect of their own holdings In assessing whether to accept the Offer in respect of their holdings, each Westhouse Director holding Westhouse Shares has also taken into consideration his own investment requirements and all members of the board holding Westhouse Shares have decided not to accept the Offer (amounting in aggregate to 3,019,446 Westhouse Shares, representing 9.14 per cent. of the issued share capital of the Company). Two of the Westhouse Directors, Messrs Getley and Proctor, are subscribing for Westhouse Shares pursuant to the arrangements described in paragraph 4 of this Part I. 21. Advice to Westhouse Shareholders Under the rules of the City Code, the Westhouse Directors are required to obtain independent financial advice on the Offer and to make known to Westhouse Shareholders the substance of such advice and their own opinion on the Offer. Smith & Williamson is providing the Independent Directors with independent financial advice for the purposes of Rule 3 of the City Code. Sandra Pope is a director of a company connected to the Somers Group and accordingly is not considered to be independent for the purposes of the Offer. The Independent Directors, who have been so advised by Smith & Williamson, consider that the Offer Price (implying an enterprise value of 5.5 million prior to the Placing and Open Offer and 8.9 million after this funding) may not fully reflect the value of the Company, as it does not fully recognise the future potential of the Westhouse Group on a fully funded basis, as part of a substantial financial services group. As set out in paragraph 7 of this Part I, Westhouse has 70 corporate clients and a strong track record across a number of market sectors and the Westhouse Board is confident that, following the completion of the Offer and the Conditional Issue, Westhouse will be well positioned to become profitable and is optimistic about the future prospects for the business. However, this has to be considered in the context of the Group s recent loss making history and the current need for refinancing. In providing its advice, Smith & Williamson has taken account of the Westhouse Directors commercial assessments. However, in deciding whether or not to accept the Offer, the Independent Directors believe that Westhouse Shareholders should consider carefully a number of separate factors, in addition to their own individual investment requirements and objectives. The Independent Directors wish to draw your attention to the factors below which may be potentially detrimental to the future value, liquidity and marketability of the Westhouse Shares, and Westhouse Shareholders should carefully consider whether these factors outweigh the potential benefits of remaining a shareholder in Westhouse: Although, as set out in paragraph 7 above, the Directors of Westhouse are optimistic about the prospects of the Company, and have undertaken not to accept the Offer, Westhouse has made losses in each of the last four years and the Company s trading environment remains challenging. Accordingly, there is no guarantee that the Offer and subsequent Conditional Issue will result in a return to profitability. Furthermore, the future payment of any dividend is dependent on the repayment of the debt outstanding to the Somers Group, which is not anticipated to occur before 31 December 2018; The Offer provides Westhouse Shareholders with an opportunity to realise their investment. The Offer will remain open for acceptance until the earlier of 60 days after the date of publication of this document and 14 days from the point at which the Offer is declared unconditional as to acceptances. Westhouse Shareholders should therefore not rely on any future offer being made by Somers for Westhouse Shares on equivalent terms. Somers has also stated that it does not currently intend to list Westhouse s Shares on a stock exchange in the future. Accordingly, Westhouse Shareholders should be mindful that there is no guarantee they will have a future facility enabling them to sell their Westhouse Shares readily, although it is intended that a private bulletin board dealing facility will be created for non-employee Westhouse Shareholders who choose not to accept the Offer which would facilitate them entering into transactions amongst themselves; Somers has stated that, assuming the Conditions are satisfied (noting that the Irrevocable Undertaking should mean that the 50 per cent. acceptance condition will be satisfied immediately following FCA approval of the change of control of Westhouse Securities), it intends to take a number of steps. These include: 15

16 (i) (ii) (iii) completion of the Conditional Issue, as soon as practicable, which will see Somers holding of Westhouse Shares increase to not less than 80.0 per cent. of the Company s issued share capital and will result in non-management or employee minority Westhouse Shareholders holding less than 10 per cent. the Company s issued share capital; subject to satisfying the applicable provisions of the Companies Law, seeking a special resolution of Westhouse Shareholders to: (a) amend the Company s memorandum of association to register the Company as a private company; (b) amend the Company s name to Westhouse Holdings Limited; and (c) adopt new articles of association to reflect the Company s status as a private company, such shareholder resolution shall be passed upon the consent of not less than 75 per cent. of the votes cast by Westhouse Shareholders in a general meeting; and the issue of additional Westhouse Shares for staff subscription and incentivisation schemes. The combined impact of these steps will be to further dilute the shareholding of those Westhouse Shareholders that are not part of the Company s management or its employees and to reduce the future liquidity and marketability of Westhouse Shares. Westhouse Shareholders should note that the Conditional Issue is conditional upon approval of the change of control of Westhouse Securities by the FCA, Westhouse Shareholder approval for an increase in the Company s authorised share capital and authorisation for the allotment of new Westhouse Shares and the irrevocable and unconditional agreement of each of the PCL Noteholders to the proposed extension of the maturity date of the PCL Notes from 31 December 2017 to 31 December 2018, save in the latter case as otherwise agreed by Somers. As such there is no guarantee that the Conditional Issue will complete and Westhouse Shareholders should be mindful of this. Each Westhouse Shareholder should consider their own position carefully, and, if in any doubt, should consult their own professional advisers. Yours faithfully Garth Milne Chairman 16

17 PART II LETTER FROM THE BOARD OF Somers Limited (formerly Bermuda National Limited) Directors: Warren McLeland (Chairman) Michael Collier (Deputy Chairman) David Morgan (Director) Alasdair Younie (Director) Registered Office: 19 Par-la-Ville Road Hamilton Bermuda HM11 29 November 2013 To the holders of Westhouse Shares, Westhouse Optionholders, PCL Noteholders and persons with information rights Dear Shareholder, Offer by Somers Limited for Westhouse Holdings PLC 1. Introduction As announced today by the Board of Westhouse, Somers has agreed the terms of an equity and debt fundraising for the Company to provide a platform for Westhouse to continue to develop its corporate and institutional stockbroking business so that it is well placed to exploit a cyclical upturn in the UK financial services industry. The refinancing will include an Open Offer and Placing, collectively referred to as the Conditional Issue, to raise, in aggregate up to 3.45 million (before expenses). The Placing and Open Offer will be completed at a price of 1p per Share. The Open Offer, which is being fully underwritten by Somers with no underwriting fee, will raise gross proceeds of 0.35 million and the Placing will raise up to a further 3.1 million, including a subscription by Somers for Placing Shares for an aggregate amount of 2.64 million. In advance of the refinancing, the Board of Somers believe that it is appropriate to extend a voluntary offer to Westhouse Shareholders on the same terms as the Conditional Issue. This letter contains the terms of this Offer and the procedure for acceptance. Your attention is drawn to the letter from Garth Milne, the Chairman of the Company, set out on pages 8 to 18 of this document, which sets out factors that the Directors of Westhouse believe, Westhouse Shareholders should consider in assessing whether to accept the Offer. 2. The Offer Somers hereby offers to acquire, on the terms of and subject to the Conditions set out or referred to in this document and (in respect of Westhouse Shares held in certificated form only) in the accompanying Form of Acceptance, all the issued and to be issued ordinary share capital of Westhouse on the following basis: for each Westhouse Share: 1 pence in cash The Westhouse Shares will be acquired by Somers pursuant to the Offer fully paid up and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and other third party interests and rights of whatsoever nature and together with all rights now or hereafter attaching thereto, including voting rights 17