Bidder s Statement containing an offer by: Jupiter Civil Pty Ltd ACN 630 129 903 as trustee for The Jupiter Unit Trust ABN 47 305 680 941 to acquire: for a price of: all of your shares in Calibre Group Limited ACN 100 255 623 $0.007 (seven tenths of a cent) cash per Calibre Share (subject to the terms and conditions of the Offer) The Independent Directors of Calibre Group Limited unanimously recommend that you ACCEPT the Offer in the absence of a Superior Proposal This is an important document and requires your immediate attention. If you are in any doubt as to how to deal with it, you should consult your financial, legal or other professional adviser as soon as possible. Accounting Adviser Legal Adviser
Important notices Purpose of this Bidder s Statement This Bidder's Statement is given by The Jupiter Unit Trust ABN 47 305 680 941, the trustee of which is Jupiter Civil Pty Ltd ACN 630 129 903 (Bidder), to shareholders in Calibre Group Limited ACN 100 255 623 (Calibre) under Part 6.5 of the Corporations Act 2001 (Cth) (Corporations Act). This Bidder's Statement contains the terms of the Offer made by the Bidder to acquire Your Calibre Shares along with certain disclosures required by the Corporations Act. The Offer is dated 17 December 2018 and is set out in full in section 9. You should read this Bidder's Statement in its entirety before deciding whether or not to accept the Offer. Defined terms and interpretation Capitalised terms and certain abbreviations used in this Bidder's Statement have the defined meanings set out in section 10.1. Section 10.2 also contains rules of interpretation that apply to this Bidder's Statement. Role of ASIC A copy of this Bidder s Statement was lodged with the Australian Securities and Investments Commission (ASIC) on 10 December 2018. Neither ASIC nor any of its officers takes any responsibility for the contents of this Bidder s Statement. Forward looking statements Certain statements in this Bidder's Statement relate to the future. Such forward looking statements are not based on historical facts but rather reflect the current assumptions and expectations of the Bidder concerning future events and circumstances including the operations of the Bidder and Calibre and the economic and regulatory environment in which the Bidder and Calibre will operate in future. Forward looking statements may generally be identified by the use of forward looking verbs such as aim, anticipate, believe, estimate, expect, foresee, intend or plan, by words denoting uncertainty such as likely, may, potential or should, or by derived or similar words. Similarly, statements that describe the expectations, objectives, plans or targets of the Bidder or Calibre may be forward looking statements. The assumptions and expectations on which forward looking statements are based are subject to a number of risks and uncertainties that could cause the actual outcomes, and the actual performance or results of the Bidder or Calibre to be materially different from the outcomes, or the performance or results of the Bidder or Calibre, expressed in, or implied by, such statements. These risks and uncertainties include among other things, general economic conditions, changes in law, regulation or government policy, the impact of increased competition and certain other operational and financial risks and uncertainties associated with carrying on business in the industries in which Calibre operates. All forward looking statements should be read in light of such risks and uncertainties. None of the Bidder and its officers, employees and advisers makes any representation or warranty that any outcome, performance, or result expressed in or implied by any forward looking statement in this Bidder's Statement will actually occur. You should treat all forward looking statements with caution and not place undue reliance on them. Any forward looking statements in this Bidder's Statement reflect the assumptions and expectations of the Bidder as at the date of this Bidder's Statement. Except as required by law, the Bidder and its officers, employees and advisers disclaim any obligation to revise or update any forward looking statements after the date of this Bidder's Statement to reflect any change in the assumptions or expectations on which those statements are based. Notices to persons outside Australia The distribution of this Bidder's Statement in some countries may be restricted by law or regulation. If you receive this Bidder's Statement outside Australia you should inform yourself of, and observe, any such restrictions. Jupiter Civil Pty Ltd Bidder s statement 2
This Bidder's Statement has been prepared having regard to Australian disclosure requirements and Australian accounting standards. These disclosure requirements and accounting standards may be different from those in other countries. If you are not an Australian resident taxpayer or are liable for tax outside Australia you should seek specific tax advice in relation to the Australian and overseas tax consequences of accepting the Offer. Privacy and personal information The Bidder and its share registry have collected personal information about Calibre Shareholders for the purpose of making the Offer and, if the Offer is successful, for the purpose of administering holdings of Calibre Shares. The personal information collected includes the names and addresses of Calibre Shareholders and details of their holdings of Calibre Shares. This personal information may be disclosed to professional advisers, printers, mailing houses and other organisations providing services to the Bidder in connection with the Offer, and to ASIC and other regulatory authorities. Individuals in respect of whom personal information is collected have certain rights to access that personal information. You should contact Calibre s share registry if you wish to request access to your personal information. Investment decisions This Bidder's Statement does not constitute financial product advice and has been prepared without reference to your individual investment objectives, financial situation or other circumstances. This Bidder's Statement should not be relied upon as the sole basis for any decision as to whether or not to accept the Offer and you should consider seeking independent financial, legal or other professional advice before making any such investment decision. Effect of rounding Certain amounts or figures in this Bidder's Statement are subject to the effect of rounding. Accordingly. the actual calculation of these amounts or figures may differ from the amounts or figures set out in this Bidder's Statement. Diagrams and data in charts, graphs and tables Diagrams appearing in this Bidder's Statement (if any) are illustrative only and may not be drawn to scale. Unless otherwise indicated, all data contained in charts, graphs and tables is based on information current at the date of this Bidder's Statement. References to currency Unless otherwise indicated, all references to $, A$, dollars or cents in this Bidder's Statement are to Australian currency. References to time Unless otherwise indicated, all references to time in this Bidder's Statement are to the time in Sydney, Australia. Websites Calibre maintains a website at www.calibregroup.com. Any references to these and any other websites are for information only and no material contained on any such website forms part of this Bidder's Statement. Date of this Bidder's Statement This Bidder's Statement is dated 17 December 2018. Jupiter Civil Pty Ltd Bidder s statement 3
Table of contents 1 Summary of the Offer... 9 2 Information regarding the Bidder...13 2.1 Overview of the Bidder... 13 2.2 Ultimate controllers of the Bidder... 13 2.3 Funding... 13 2.4 Associates of the Bidder... 13 3 Information regarding Calibre...15 3.1 Overview of Calibre... 15 3.2 Directors of Calibre... 15 3.3 Financial results... 15 3.4 Disclaimer as to information about Calibre... 15 3.5 Publicly available information on Calibre... 15 4 Information regarding Calibre securities...16 4.1 Calibre s issued securities... 16 4.2 Calibre CRCPS... 16 4.3 Calibre Series B Notes... 16 4.4 Interests in Calibre securities... 16 4.5 Voting power in Calibre... 16 4.6 No pre-offer purchases... 17 4.7 No pre-offer benefits... 17 4.8 No escalation agreements... 17 5 Sources of cash for Your Calibre Shares...18 5.1 Total cash consideration... 18 5.2 Sources of cash consideration... 18 6 The Bidder s intentions regarding Calibre...19 6.1 Introduction... 19 6.2 Intentions for Calibre as a wholly-owned controlled entity... 19 6.3 Intentions for Calibre as a part owned controlled entity... 20 6.4 Other intentions... 21 7 Tax considerations...22 7.1 Introduction... 22 7.2 Australian resident shareholders... 22 7.3 Non-resident shareholders... 23 7.4 GST... 23 8 Other material information...24 8.1 Bid Implementation Agreement... 24 8.2 Date for determining holders of Calibre shares... 25 8.3 Consents... 25 8.4 Other material information... 26 9 Terms and conditions of the Offer...27 9.1 Offer... 27 9.2 Offer Period... 27 9.3 How to accept this Offer... 28 9.4 Validity of acceptances... 28 9.5 The effect of acceptance... 29 9.6 Payment of consideration... 31 9.7 Conditions of this Offer... 32 9.8 Nature and benefit of the condition... 34 9.9 Notice of status of the conditions... 34 9.10 Freeing the Offer of conditions... 34 9.11 Withdrawal of this Offer... 34 Jupiter Civil Pty Ltd Bidder s statement 4
9.12 Variation of this Offer... 35 9.13 No stamp duty or brokerage... 35 9.14 Governing laws... 35 10 Definitions and interpretation...36 10.1 Definitions... 36 10.2 Interpretation... 38 11 Approval of Bidder s Statement...40 Jupiter Civil Pty Ltd Bidder s statement 5
Key dates Date of this Bidder s Statement 17 December 2018 Date of Offer and date Offer opens 17 December 2018 Date of Offer conditions notice* 10 January 2019 Offer Period ends (unless extended) 7:00pm (Sydney time) on 17 January 2019 * This date is indicative only and may be changed as permitted by the Corporations Act Jupiter Civil Pty Ltd Bidder s statement 6
Director s letter Dear Calibre Shareholder, As director of Jupiter Civil Pty Ltd (trustee of the Bidder), I am pleased to present you with this Offer by Bidder to acquire all of your shares in Calibre Group Limited. If you accept the Offer, you will be paid $0.007 (seven tenths of a cent) cash for each Calibre Share you hold, subject to the Offer becoming or declared unconditional. Given Calibre is currently unlisted, there is a limited market for the sale of Calibre Shares. This Offer provides an opportunity for you to sell your shareholdings and realise a fixed cash value for Your Calibre Shares. Since Calibre s de-listing from the ASX in December 2015, there has been no other proposal to acquire Your Calibre Shares. As previously disclosed by Calibre, throughout 2018 Calibre conducted various processes seeking proposals to recapitalise Calibre or proposals to acquire all of the shares in Calibre as well as proposals to acquire one or more of the businesses of Calibre. The directors of Calibre sold the G&S business to DRA in July 2018. In relation to this Offer, Calibre s Independent Directors unanimously recommend this Offer in the absence of a Superior Proposal. The Resolution to be put to the EGM of Calibre (to be held on 17 December 2018), proposes to approve the issue of Calibre Shares to Margaret O Connor and John O Connor upon conversion of the CRCPS Series B and Series B Notes. This Resolution will allow the Bidder (pursuant to the Bid Implementation Agreement) to require Calibre to issue the specified number of Calibre Shares to Margaret O Connor and John O Connor so that the Bidder, Margaret O Connor and John O Connor collectively (when combined with acceptances under the Offer) have a shareholding of at least 90% in Calibre, allowing the Bidder to compulsorily acquire Your Calibre Shares (if you have not previously accepted the Offer). Further details of the Offer, including the full terms and conditions of the Offer, are set out in this Bidder s Statement, which you should read in full. The Offer is open for your acceptance until 7:00pm (Sydney time) on 17 January 2018, unless the Offer Period is extended. To accept the Offer please follow the instructions in this Bidder s Statement and the enclosed Acceptance Form. I encourage you to accept the Offer as soon as possible. If you have any questions about the Offer consult your financial, legal or other professional adviser. Thank you for your consideration of the Offer and we look forward to receiving your acceptance. Yours sincerely, David O Connor Director Jupiter Civil Pty Ltd as trustee for The Jupiter Unit Trust Jupiter Civil Pty Ltd Bidder s statement 7
Why you should accept the Offer The Independent Directors of Calibre unanimously recommend that you ACCEPT the Bidder s Offer The Independent Directors of Calibre unanimously recommend that you accept the Offer, in the absence of a Superior Proposal and subject to the Independent Expert concluding (and continuing to conclude) that the Offer is reasonable. The Independent Directors of Calibre intend to accept the Offer for Calibre Shares they own or control, subject to the same qualifications. Cash Offer and low liquidity If you accept the Offer, and the conditions of the Offer are satisfied, you will be paid a definite cash sum for your Calibre Shares and will be able to exit your shareholding. Calibre was previously listed on ASX until its de-listing in December 2015. Since that time, there has been limited liquidity opportunity to exit your shareholding. This Offer provides an opportunity for an exit in a single transaction. You have received no other offer or alternative proposal for Your Calibre Shares Since Calibre s de-listing in December 2015, there has been no other offer or alternative proposal to acquire Your Calibre Shares. This Offer is an opportunity for you to exit your shareholding in a single transaction. Adverse consequences associated with not accepting the Offer If you choose not to accept the Offer, you should be aware that: - if the Bidder becomes entitled to compulsorily acquire Your Calibre Shares, it intends to do so and if Your Calibre Shares are compulsorily acquired, you will still receive the Offer Price for Your Calibre Shares but at a later date than you would have received it if you had accepted the Offer; and - while there are many factors that will influence the price of Calibre Shares, in the absence of the Offer or a competing bid, the value of Calibre Shares could fall below the value implied by the Offer if Calibre becomes insolvent. No brokerage costs You will not incur any brokerage charges by accepting the Offer. Jupiter Civil Pty Ltd Bidder s statement 8
1 Summary of the Offer Question Who is the Bidder? What is the Bidder offering to buy? What is the relevance of the EGM and Resolution to the Offer? Can I accept the Offer in respect of some, but not all, of my Calibre Shares? Why should you accept the Offer? What is the Independent Expert s role? When will you be paid? Answer The Bidder is the Jupiter Unit Trust ABN 47 305 680 941, the trustee of which is Jupiter Civil Pty Ltd ACN 630 129 903. For information on the Bidder, please see section 2. The Bidder is offering to buy all Calibre Shares, on the terms set out in this Bidder s Statement. You may only accept this Offer in respect of all Your Calibre Shares. For the full terms of the Offer, please see section 9. The EGM of Calibre is to be held on 17 December 2018. The Resolution is to approve the issue of Calibre Shares to Margaret O Connor and John O Connor, for the purposes of item 7 of section 611 of the Corporations Act, pursuant to the conversion of the CRCPS Series B1, CRCPS Series B2 and Series B Notes. This approval is a condition of the Offer. If the Resolution at the EGM is passed, as well as all the other conditions of the Offer (outlined in section 9.7 of this Bidder s Statement) are satisfied or waived, the Bidder s intention is to convert (in any number the Bidder so chooses) the CRCPS and Notes held by Margaret O Connor and John O Connor. The purpose of this conversion is to allow the Bidder (combined with the holdings of Margaret O Connor and John O Connor, whom are Associates of the Bidder) to have a Relevant Interest in Calibre Shares of at least 90% to allow for the Bidder to avail itself of the compulsory acquisition provisions in Part 6A.1 of the Corporations Act. No, you cannot accept the Offer for part of Your Calibre Shares. You may only accept the Offer in respect of all of Your Calibre Shares. There are a number of reasons why you should accept the Offer: - the Independent Directors of Calibre unanimously recommend that you ACCEPT the Offer in the absence of a Superior Proposal and subject to the Independent Expert concluding and continuing to conclude that the Offer is reasonable; - the Offer allows you to sell your entire holding in a stock which has very low trading liquidity; - you will not incur brokerage charges in accepting the Offer; and - the price you may be able to obtain for Your Calibre Shares may be lower than the Offer Price if this Offer is not successful and there is no competing proposal. For more information, please see the section entitled Why you should accept the Offer on page 8 in the section immediately preceding this section 1. Calibre has engaged the Independent Expert to prepare a report on whether, in the expert s opinion, the Offer is fair and/or reasonable to Calibre Shareholders. Details of the Independent Expert s report and conclusions will be contained in Calibre s Target s Statement. If you accept the Offer and the Offer is, or becomes, unconditional, you Jupiter Civil Pty Ltd Bidder s statement 9
Question Answer will be paid on the earlier of: - one month after you accept the Offer, or one month after the conditions have been satisfied or waived (whichever is later); and - 21 days after the end of the Offer Period. Full details of when payments will be made are set out in section 5 of this Bidder s Statement. Do I have to pay any fees? No brokerage, charges or stamp duty will be payable by you on the acceptance of the Offer. What is the Bidder s Statement Close of the Offer Conditions to the Offer The Bidder s Statement describes the terms of the Offer for Your Calibre Shares and information relevant to your decision whether or not to accept the Offer. This Bidder s Statement is an important document. Should you have any doubt as to how to deal with this document, you should consult your financial, legal, tax or other professional adviser immediately. The Offer closes at 7:00pm (Sydney time) on 17 January 2019 unless it is extended in accordance with the Corporations Act. The Offer is subject to the following conditions: - minimum acceptance: at the end of the Offer Period, the Bidder has received valid acceptances of the Offers in respect of at least 75% (by number) of the Non-Associated Shares; - no Prescribed Occurrences: no Prescribed Occurrences occurring during the Offer Period (except for Permitted Actions); - no conversion of cumulative redeemable convertible preference shares: none of the CRCPS Series B1 or CRCPS B2 are converted to Calibre Shares without the prior written consent of the Bidder; - no conversion of convertible notes: none of the Series B Notes are converted into Calibre Shares without the prior written consent of the Bidder; - resolution: Calibre Shareholders approve the Resolution by the requisite majority at the EGM; - no regulatory action: no regulatory actions, of various kinds, occurring during the Offer Period (subject to certain exceptions); - acquisitions, disposals, capex: no acquisitions or capital expenditure by Calibre exceeding $100,000 in aggregate (except for purchases of assets in the ordinary course) or disposals by Calibre exceeding $100,000 in aggregate (except for sales of assets in the ordinary course) during the Offer Period; - financier undertakings: each lender or other financier to Calibre gives an undertaking to the Bidder and Calibre not to exercise, and not to state an intention to exercise any rights they may have to terminate any financing arrangement, require repayment of funds, or enforce security over assets of the Calibre Group as a result of the Offer; and - no dividends or distributions: no distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie) is announced, made, declared, paid or agreed during the Offer Period. Jupiter Civil Pty Ltd Bidder s statement 10
Question What happens if the conditions to the Offer are not satisfied? Will the Bidder proceed with compulsory acquisition if the conditions to the Offer are satisfied or freed? How is the Bidder funding the Offer? How do I accept the Offer? Answer If the conditions of the Offer as set out above are not satisfied by the closing date, the Offer will lapse, any acceptances will be cancelled and you will retain your Calibre Shares even if you have accepted the Offer. Yes. The Bidder s present intention is to proceed with compulsory acquisition in accordance with Part 6A.1 of the Corporations Act (Compulsory acquisitions and buy-outs following takeover bid), in the event the Offer is successful. Under the Corporations Act, the Bidder will be entitled to proceed with compulsory acquisition of any Calibre Shares not held by it following the close of the Offer if the following occurs during or at the end of the Offer Period: - the Bidder and its Associates have a Relevant Interest in at least 90% of Calibre Shares; and - the Bidder and its Associates have acquired at least 75% of the Calibre Shares which it has offered to acquire under the Offer (excluding Calibre Shares held by the Bidder or its Associates at the beginning of the Offer Period). The Offer is subject to a minimum acceptance condition that mirrors the 75% compulsory acquisition threshold described above. Under the Bid Implementation Agreement, during the last 5 Business Days of the Offer Period, and subject to the Offer being unconditional (except for the Prescribed Occurrences condition), the Bidder may give a notice to Calibre requiring it to convert a specified number of CRCPS Series B and/or Series B Notes into Calibre Shares, and Calibre must comply with that notice by the end of the Offer Period and convert that specified number of securities. The Bidder s current intention is, in that circumstance, to provide a notice that requires conversion of a number of Series B Notes and/or CRCPS Series B to ensure that the Bidder and its Associates (which include John O Connor and Margaret O Connor) together have, when aggregated with acceptances received under the Offer, Relevant Interests in at least 90% of Calibre Shares, thus satisfying the 90% compulsory acquisition threshold. Ordinarily, conversion of the CRCPS Series B and/or Series B Notes in these circumstances would constitute a breach the 20% threshold in section 606 of the Corporations Act. However, if the Resolution is passed at the EGM (which is a condition of the Offer), this conversion will be permitted pursuant to section 611 item 7 of the Corporations Act. The Bidder has arranged for funding from David O Connor and John Paul O Connor (whom are both controllers of the Bidder). Full details of how the Bidder will fund the Offer are set out in section 5 of this Bidder s Statement. To accept the Offer, you should follow the instructions set out in section 9.3 of this Bidder s Statement. Jupiter Civil Pty Ltd Bidder s statement 11
Question Can I withdraw my acceptance of the Offer? Can the Offer Period be extended? What happens if you do not accept the Offer? What are the tax implications of accepting the Offer? What if you are a foreign shareholder? Where to go for further information on how to accept the Offer? Important notice Answer Your acceptance of the Offer can only be withdrawn in certain circumstances described in the Corporations Act as set out in section 9.11 of this Bidder s Statement. Yes, the Offer Period may be extended at the election of the Bidder and as required under the Corporations Act. Calibre and the Bidder have also agreed in the Bid Implementation Agreement to keep the Offer open until 17 January 2019. The Bidder requires the consent of the Target to extend the Offer Period to longer than 3 months. The Bidder will give written notice of any extension of the Offer Period in accordance with the Corporations Act. If you do not accept the Offer, you will remain a Calibre Shareholder and will not be paid the cash consideration under the Offer. If the Bidder becomes entitled to compulsorily acquire Your Calibre Shares, it intends to proceed with the compulsory acquisition. If Your Calibre Shares are compulsorily acquired by the Bidder following the Offer, it will be on the same terms (including the same consideration for each Calibre Share acquired) as the Offer. Please refer to section 7 of this Bidder s Statement for an overview of the Australian taxation treatment for certain Calibre Shareholders accepting the Offer. Calibre Shareholders should not rely on that description as advice for their own affairs and the Bidder recommends you should consult your taxation adviser for detailed taxation advice before making a decision as to whether or not to accept the Offer. Foreign shareholders will receive the same cash consideration as stipulated under the Offer, which will be paid in Australian dollars. However, the tax implications under the Offer for those foreign shareholders may be different to those relating to Australian resident shareholders. For further information on how to accept the Offer, please see the enclosed Acceptance Form. The information in this section 1 is a summary only of the Bidder s Offer and is qualified by the detailed information set out elsewhere in this Bidder s Statement. You should read the entire Bidder s Statement and the Target s Statement before deciding whether to accept the Offer. Jupiter Civil Pty Ltd Bidder s statement 12
2 Information regarding the Bidder 2.1 Overview of the Bidder The Bidder is an Australian unit trust established in New South Wales. The Bidder has not undertaken any trading or other activities other than in connection with the Offer. The Bidder s trustee is Jupiter Civil Pty Ltd. Both the units in The Jupiter Unit Trust and the shares in Jupiter Civil Pty Ltd are ultimately controlled by David and John Paul O Connor. Both David O Connor and John Paul O Connor have ultimate control over these trusts (being the appointers) and are the main beneficiaries. These discretionary trusts are: Yalga Supremacy Pty Ltd as trustee for Yalga Trust (David O Connor); and Glendalough Industries Pty Ltd as trustee for Glendalough Industries Trust (John Paul O Connor). 2.2 Ultimate controllers of the Bidder David O Connor David O Connor is the Executive General Manager Strategy and Growth Calibre Group and is an employee of Calibre. He is responsible for the implementation of Calibre s operational strategies as well as ensuring that Calibre performs to customer expectations and in accordance with Calibre s safety standards. David O Connor has worked in a number of roles as an employee of Calibre since Diona Pty Ltd (Diona) was acquired by Calibre. He is the son of Margaret O Connor and John O Connor (see details in section 2.4). John Paul O Connor John Paul O Connor is the National Operations Manager Diona and is an employee of Calibre. He is also the son of Margaret O Connor and John O Connor (see details in section 2.4). 2.3 Funding Funding for the acquisition by the Bidder of the Calibre Shares it acquires under the Offer will be provided by both David O Connor and John Paul O Connor. Further details of these funding arrangements are set out in section 5. 2.4 Associates of the Bidder Margaret O Connor and John O Connor are Associates of the Bidder and the parents of David O Connor and John Paul O Connor. As at the date of this Bidder s Statement, Margaret O Connor and John O Connor do not hold Calibre Shares. Calibre acquired Diona from Margaret O Connor and John O Connor in November 2015 as a key strategy to pivot its sector concentration from the resources market to diversify and grow into the utilities and infrastructure sectors. Diona was a successful acquisition and contributes over 50% of Calibre s revenues from non-resource clients. Diona continues to provide strong revenues and earnings, offsetting the downturn experienced in the Professional Services business. As noted in Calibre s 2018 Annual Report, Diona contributed an EBITDA of $14.8m and was awarded four major contracts exceeding $105 million in total. Margaret O Connor and John O Connor were paid $45 million in consideration for the acquisition of Diona with two additional earn-out instalments payable upon the delivery of increased earnings in the FY16 and FY17 periods. Diona was able to deliver these increased earnings and as such, the FY16 earn-out was $14.4 million and was paid in cash. The FY17 earn-out was $30 million. Calibre was unable to pay this amount in cash and so Margaret O Connor and John O Connor agreed to subscribe for convertible notes totalling $25 million instead of a $25 million cash payment, with the remaining $5 million being paid by way of a cash payment. Jupiter Civil Pty Ltd Bidder s statement 13
The $25 million convertible notes were issued in two tranches: a $15 million Series A tranche and a $10 million Series B tranche (in equal proportions to both Margaret O Connor and John O Connor). The Series A tranche of convertible notes were due to mature on 31 October 2018. Margaret O Connor and John O Connor agreed to exchange the Series A convertible notes for the CRCPS Series B to accommodate the financial position of Calibre. Jupiter Civil Pty Ltd Bidder s statement 14
3 Information regarding Calibre 3.1 Overview of Calibre Calibre is incorporated in Western Australia with its head office in Sydney. Calibre is a diversified professional service and built environment provider operating across multiple markets and industries. Calibre has two core business divisions, being Professional Services and Diona. Diona operates a civil engineering and construction business and services the growing Australian east coast infrastructure market. Diona is an accredited service provider to a number of important clients, including: Energy Australia, Energex, TransGrid, Sydney Water, Queensland Urban Utilities, Brisbane Water, APA, Jemena and Telstra. Diona has a reputation of being a go-to provider in delivering complex infrastructure projects in challenging urban environments. The Professional Services business of Calibre is responsible for the delivery of integrated services across the entire asset lifecycle delivering to the resources, urban development and infrastructure markets. 3.2 Directors of Calibre As at the date of this Bidder s Statement, there are five directors of Calibre, being: (c) (d) (e) Geoffrey Tomlinson; Peter Massey; Raymond Munro; Graham Smith; and Dod Wales. Profiles of Calibre s directors are available on Calibre s website at http://www.calibregroup.com/why-calibre/our-board. The Independent Directors consist of all of the above-named directors except Peter Massey. 3.3 Financial results On 26 September 2018, Calibre issued its full year results for the financial year ended 30 June 2018. The financial results are available on Calibre s website at http://www.calibregroup.com/assets/documents/reports-presentations/2018-annualreport.pdf. 3.4 Disclaimer as to information about Calibre Information in this Bidder s Statement concerning Calibre and its business has not been independently verified by Calibre. Accordingly, the Bidder does not make any representation or warranty, express or implied, as to the accuracy or completeness of such information. Further information relating to Calibre s business will be provided in Calibre s Target Statement. 3.5 Publicly available information on Calibre Calibre is required to lodge various documents with ASIC. Copies of documents lodged with ASIC by Calibre may be obtained from, or inspected at, an ASIC office. Further information about Calibre is available at www.calibregroup.com. Jupiter Civil Pty Ltd Bidder s statement 15
4 Information regarding Calibre securities 4.1 Calibre s issued securities According to information provided by Calibre to the Bidder, as at the date of this Bidder s Statement, Calibre s issued securities consisted of 340,969,545 Calibre Shares. 4.2 Calibre CRCPS According to information provided by Calibre to the Bidder, as at the date of this Bidder s Statement, Calibre had 2,481,180,762 CRCPS on issue. These are held as follows: (c) 33,333,334 CRCPS Series A held by the subscribers in the schedule to the subscription agreement relating to the CRCPS Series A; 1,223,923,714 CRCPS Series B held by John O Connor (father of David O Connor and John Paul O Connor) (CRCPS Series B1); and 1,223,923,714 CRCPS Series B held by Margaret O Connor (mother of David O Connor and John Paul O Connor) (CRCPS Series B2). The Offer is also made for any Calibre Shares issued pursuant to conversion of CRCPS Series A (but not Calibre Shares issued pursuant to conversion of CRCPS Series B). The CRCPS Series A (if fully converted) will, as at 17 January 2019, convert into 38,463,333 Calibre Shares (plus 10,084,140 Calibre Shares if the CRCPS Series A holder elects to receive accrued distributions in the form of Calibre Shares on 17 January 2019). 4.3 Calibre Series B Notes According to information provided by Calibre to the Bidder, as at the date of this Bidder s Statement, Calibre had 66,666,668 Series B Notes on issue. These are held in equal proportions by John O Connor and Margaret O Connor. 4.4 Interests in Calibre securities As at the date of this Bidder s Statement, the Bidder had a Relevant Interest in 80,000 Calibre Shares (held by John Paul O Connor), representing approximately 0.02% of Calibre Shares on issue. 4.5 Voting power in Calibre The Bidder s voting power in Calibre is determined by reference to the total number of shares that the Bidder has a Relevant Interest in and those Calibre Shares that its Associates have a Relevant Interest. The Bidder s Associates with respect to Calibre are (and their current holding of Calibre Shares): (c) (d) David O Connor NIL Calibre Shares held; John Paul O Connor 80,000 Calibre Shares held (which the Bidder has a Relevant Interest in); John O Connor NIL Calibre Shares held; Margaret O Connor NIL Calibre Shares held; Accordingly, the Bidder s voting power in Calibre as at the Business Day before the date of the Offer is 0.02%. As set out above in section 1 under the question Will the Bidder proceed with compulsory acquisition if the conditions to the Offer are satisfied or freed?, Calibre has an obligation to convert a number of Series B Notes or CRCPS Series B into Calibre Shares as specified by the Bidder during the last 5 Business Days of the Offer Period. These Calibre Shares will be held by John O Connor and Margaret O Connor, who are both Associates of the Bidder. The Bidder will also have a Relevant Interest in these Calibre Shares. Calibre will seek approval from Jupiter Civil Pty Ltd Bidder s statement 16
Calibre Shareholders of the acquisition by John O Connor and Margaret O Connor of those Calibre Shares (and the acquisition by the Bidder of a relevant interest in those Calibre Shares) at the EGM. 4.6 No pre-offer purchases During the period of 4 months before the date of this Bidder s Statement, and the period from the date of this Bidder s Statement to the Business Day before the date of the Offer, neither the Bidder nor any of its Associates provided, or agreed to provide, consideration for Calibre Shares under a purchase or agreement. 4.7 No pre-offer benefits Other than as disclosed above in this section 4, during the period of 4 months before the date of this Bidder s Statement, and the period from the date of this Bidder s Statement to the Business Day before the date of the Offer, neither the Bidder nor any of its Associates gave, or offered to give, or agreed to give a benefit to another person which was likely to induce the other person, or an Associate of the other person, to: accept the Offer; or dispose of Calibre Shares, and which is not offered to all holders of Calibre Shares under the Offer. 4.8 No escalation agreements Neither the Bidder nor any of its Associates has entered into any escalation agreement that is prohibited by section 622 of the Corporations Act. Jupiter Civil Pty Ltd Bidder s statement 17
5 Sources of cash for Your Calibre Shares 5.1 Total cash consideration The total consideration for the acquisition of Calibre Shares to which the Offer relates will be satisfied wholly in cash. As at the date of this Bidder s Statement, Calibre has 340,969,545 Calibre Shares on issue. As noted above in section 4.2, the CRCPS Series A (if fully converted) will convert into 38,463,333 Calibre Shares (plus 10,084,140 Calibre Shares if the CRCPS Series A holder elects to receive accrued distributions in the form of Calibre Shares on 17 January 2019). If acceptances are received in respect of the Calibre Shares to which the Offer relates (other than those Calibre Shares in which the Bidder currently has a Relevant Interest) or if the Bidder becomes entitled to and exercises the right of compulsory acquisition under the Corporations Act, the amount of cash that the Bidder would be required to pay under the Offer would be approximately $2.73 million. 5.2 Sources of cash consideration The cash consideration of $0.007 (seven tenths of a cent) per Calibre Share payable under the Offer will be paid by the Bidder. The maximum amount of cash that the Bidder will be required to pay under the Offer will be $2,726,619.13. This amount will be obtained from John Paul O Connor and David O Connor (through their respective family trusts see below). Funding from John Paul O Connor John Paul O Connor will enter into a personal loan to borrow $1,500,000 from Margaret O Connor. John Paul O Connor will lend the funds to his family trust, Glendalough Industries Trust. Glendalough Industries Trust will then lend the funds to the Bidder. Margaret O Connor has uncommitted cash in excess of $1,500,000 for the purposes of providing this loan. Funding from David O Connor David O Connor will obtain his proportion of funding required for the Offer from one of two alternative sources. David O Connor may enter into a personal loan to borrow $1,500,000 from Margaret O Connor. In addition to the above loan to John Paul O Connor, Margaret O Connor has additional uncommitted cash in excess of $1,500,000 for the purposes of providing this loan. Alternatively, David O Connor will borrow $1,500,000 from the Buckland Park Partnership (the partners of which consist of members of the O Connor family or entities controlled by them). The Buckland Park Partnership will source these funds via a loan facility with Perpetual Corporate Trust Limited as custodian for the Hadden Ridge Road Sub-Trust secured against a property in NSW. David O Connor will be the sole guarantor of the facility. The facility is subject to execution of formal loan documents. Regardless of which option David O Connor decides to proceed with, he will then loan the funds to his family trust, Yalga Trust. Yalga Trust will then lend funds to the Bidder to fund the Offer. Excess funds As noted above, the Bidder will have $3,000,000 in funds available to complete the bid, which is in excess of the maximum amount of cash the Bidder requires to pay under the Offer. Any excess funds will remain with the Bidder. Jupiter Civil Pty Ltd Bidder s statement 18
6 The Bidder s intentions regarding Calibre 6.1 Introduction The Bidder has been established for the purpose of making the Offer. Accordingly, the intentions of the Bidder are the same as the intentions of its two ultimate controllers, David O Connor and John Paul O Connor. This section sets out the Bidder s intentions in relation to the following: (c) the continuation of the business of Calibre; any major changes to the business of Calibre; and the future employment of the present employees of Calibre. As a result of David O Connor and John Paul O Connor s employment with Calibre, (see section 2.2 for details) information about Calibre known to them may as a matter of law be imputed to or known by the Bidder. However, the Bidder is not aware of any information that is material to the price or value of Calibre Shares that is not in the public domain or which is not otherwise set out in this Bidder s Statement. The intentions set out in this section 6 are based on the basis of facts and information concerning Calibre, its business and the general business environment which is known to the Bidder at the time of preparing this Bidder s Statement. Final decisions will only be reached by the Bidder in light of material information and circumstances at the relevant time. Accordingly, the statements in this section are statements of current intention only and accordingly may vary as new information becomes available or circumstances change. Except as set out below, the Bidder has not formed any other intentions in relation to Calibre. 6.2 Intentions for Calibre as a wholly-owned controlled entity Without limiting the comments in section 6.1, this section 6.2 describes the Bidder s specific intentions if the Bidder and its Associates acquire a Relevant Interest in at least 90% (by number) of Calibre Shares, and so becomes entitled to proceed to compulsory acquisition of the outstanding Calibre Shares in accordance with Part 6A.1 of the Corporations Act (Compulsory acquisitions and buy-outs following takeover bid). The Bidder intends to acquire a Relevant Interest in 90% of Calibre Shares by a conversion of a specified number of Series B Notes, CRCPS Series B1 and/or CRCPS Series B2 (see section 1 under the question Will the Bidder proceed with compulsory acquisition if the conditions to the Offer are satisfied or freed? for further details). Failing that, the Bidder may also seek to proceed to compulsory acquisition in accordance with Part 6A.2 of the Corporations Act (General compulsory acquisition and buyouts) if that becomes available (in circumstances where reliance on Part 6A.1 was not possible). (c) Corporate matters The Bidder intends to: (i) (ii) (iii) proceed with compulsory acquisition of the outstanding Calibre Shares in accordance with the provisions of Part 6A.1 of the Corporations Act; pay down Calibre s existing debt facilities; and review and replace some of the existing members of the board of Calibre with its own nominees with appropriate expertise and experience. Employee ownership The Bidder intends to give employees an opportunity to acquire interests in Calibre through an employee share/option scheme if Calibre is privatised following the Offer. Continuation of current strategy Jupiter Civil Pty Ltd Bidder s statement 19
(d) The Bidder intends to continue to implement and execute the strategy of Calibre as described in its 2018 Annual Report. Impact on employees Subject to the statements made about existing members of the board of Calibre and the review described above, the Bidder intends to maintain the current employment arrangements (to the extent practicable) of all Calibre employees including senior executives, such as Peter Massey (Calibre s CEO and managing director) and Craig Allen (Calibre s CFO). Following completion of the Offer, the Bidder will consider whether, in order to further develop Calibre s operations, additional management and technical resources from external sources will be required. 6.3 Intentions for Calibre as a part owned controlled entity This section 6.3 describes the Bidder s intentions if the condition in section 9.7 is freed by the Bidder and as a result, Calibre becomes a controlled entity of the Bidder but the Bidder is not entitled to proceed to compulsory acquisition in accordance with Part 6A.1 of the Corporations Act. In that circumstance, the Bidder s current intentions are as follows: Corporate matters After the end of the Offer Period, the Bidder intends to, subject to the Corporations Act and the constitution of Calibre, take steps to reconstitute the Calibre board so that its nominees are in at least the majority. The Bidder has not made any decision on who would be nominated for appointment to the board of directors of Calibre in this case. It is also possible that, even if the Bidder is not entitled to proceed to compulsory acquisition of minority holdings after the end of the Offer Period under Part 6A.1 of the Corporations Act, it may subsequently become entitled to exercise rights of general compulsory acquisition under Part 6A.2 of the Corporations Act. For example, this may occur as a result of acquisitions of Calibre Shares in reliance on the 3% creep exception in item 9 of section 611 of the Corporations Act. If this opportunity arises, the Bidder intends to exercise those rights to the extent it is able to do so. Limitations in giving effect to intentions The Bidder would only make a decision on the above matters in this section 6 following receipt of appropriate legal and financial advice. The Bidder s intentions must be read as being subject to the legal obligation of Calibre directors, including any nominees of the Bidder, to have regard to the interests of Calibre and all Calibre Shareholders. In particular, if the Bidder controls (but does not own 100%) of Calibre, the Bidder will be a related party of Calibre within the meaning of Chapter 2E of the Corporations Act. The Bidder s ability to implement its intentions would therefore be subject to its obligations and the obligations of Calibre, to comply with applicable provisions of the Corporations Act relating to transactions between related parties. Calibre may also remain subject to Chapter 6 of the Corporations Act in that circumstance (if it has more than 50 shareholders), which will reduce the flexibility of Calibre s capital structure and affect its ability to raise equity. Calibre Shareholders should be aware of the following if the conditions in section 9.7 are freed by the Bidder and Calibre becomes a controlled entity of the Bidder but the Bidder is not entitled to proceed to compulsory acquisition in accordance with Part 6A.1 of the Corporations Act: (i) since Calibre s de-listing from ASX in December 2015, there is a limited market for the trading of Calibre Shares. Given the extremely dilutive effect Jupiter Civil Pty Ltd Bidder s statement 20
(ii) 6.4 Other intentions of any conversion of CRCPS Series B and Series B Notes (which will be permitted if the Resolution at the EGM is passed), the Bidder believes an alternative offer for Your Calibre Shares may be unlikely to arise. The Bidder recommends that Shareholders carefully consider and accept the Offer; and the payment of dividends by Calibre will be at the discretion of the Calibre Board, the majority of which will comprise of the Bidder s nominees. The Bidder s intention in relation to dividends is that no dividends will be paid until Calibre s debt position is improved to the satisfaction of Calibre s financiers. Subject to the matters described above in this section 6 and elsewhere in this Bidder s Statement, it is the intention of the Bidder, on the basis of the facts and information concerning Calibre that are known to it and the existing circumstances affecting the assets and operations of Calibre as at the date of this Bidder s Statement, that the business of Calibre will be conducted in materially the same manner as at the date of this Bidder s Statement, there will be no redeployment of the fixed assets of Calibre and the present employees of Calibre will continue to be employed by Calibre. Jupiter Civil Pty Ltd Bidder s statement 21
7 Tax considerations 7.1 Introduction Sections 7.2 and 7.3 below contain a general description of the Australian income tax and goods and services tax (GST) consequences to certain Calibre Shareholders of the acceptance of the Offer. The comments set out below are relevant only to those Calibre Shareholders who: (c) (d) (e) hold their Calibre Shares as capital assets for investment purposes and not for the purposes of speculation or a business of dealing in securities (e.g. as trading stock); are not subject to the Taxation of Financial Arrangements rules in Division 230 of the Income Tax Assessment Act 1997 (Cth); did not acquire their Calibre Shares in return for services or as the result of an employee share plan or employee share option plan; are not a bank, insurance company, tax exempt organisation or superannuation fund; or are non-residents who currently hold, or have held, at any time Calibre Shares through a permanent establishment in Australia. Calibre Shareholders who are not resident in Australia for tax purposes should take into account the tax consequences under the laws of their country of residence and any double taxation agreements applicable, as well as under Australian law, of acceptance of the Offer. The following description of the Australian income tax and GST implications of acceptance of the Offer is based upon the Australian law and administrative practices of the ATO in effect at the date of this Bidder s Statement, but it is not tax advice, it is general in nature and it is not intended to be an authoritative or complete statement of the laws applicable to the particular circumstances of every Calibre Shareholder. Calibre Shareholders should seek independent professional advice in relation to their own particular circumstances. 7.2 Australian resident shareholders Calibre Shareholders who accept the Offer Acceptance of the Offer will involve the disposal of Calibre Shares by a Calibre Shareholder by way of transfer to the Bidder. This change in the ownership of the Calibre Shares will constitute a capital gains tax (CGT) event for Australian CGT purposes. The date of disposal for CGT purposes will be the date the contract to dispose of the Calibre Shares is formed. Compulsory Acquisition If a Calibre Shareholder does not dispose of their Calibre Shares under the Offer and their Calibre Shares are compulsorily acquired in accordance with Part 6A.1 of the Corporations Act, those Calibre Shareholders will also be treated as having disposed of their Calibre Shares for CGT purposes. The date of disposal for CGT purposes will be the date when the Calibre Shareholder ceases to be the owner of the Calibre Shares. Calculation of the capital gain or capital loss A Calibre Shareholder who is an Australian resident may make a capital gain or capital loss on the transfer of Calibre Shares. A Calibre Shareholder will make a capital gain if the capital proceeds from the disposal of the Calibre Shares are more than the cost base of those Calibre Shares. A Calibre Shareholder will make a capital loss if the capital proceeds are less than the reduced cost base of those Calibre Shares. Jupiter Civil Pty Ltd Bidder s statement 22