Seven Technologies Holdings Limited Offer for Datong plc (4738E)

TIDMDTE

RNS Number : 4738E

Seven Technologies Holdings Limited

10 May 2013

Not for release, publication or distribution, in whole or in part, directly or indirectly in, into or from the united states, australia, canada, the republic of south africa or japan or any other jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction

10 May 2013

RECOMMENDED CASH offer by

SEVEN TECHNOLOGIES HOLDINGS LIMITED ("SEVEN")

FOR THE ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL OF

Datong PLC ("DATONG")

Summary

The Datong Board and the Seven Board are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Seven for the entire issued and to be issued share capital of Datong.

Highlights

   --      The Offer is being made at a price of 50 pence in cash for each Datong Share.

-- The Offer values the existing issued share capital of Datong at approximately GBP6.92 million.

-- The Offer Price represents a premium of approximately 28 per cent. to the Closing Price of 39 pence per Datong Share on 21 February 2013 (being the last Business Day prior to the commencement of the Offer Period), a premium of approximately 11 per cent. to the Closing Price of 45 pence per Datong Share on 9 May 2013 (being the last Business Day prior to the publication of this Announcement) and a premium of approximately 41 per cent. to the average price of 35.3 pence over the previous 12 months.

-- Seven is the parent company of Seven Technologies Limited ("STL"), a leading UK-based company in the field of specialist rugged computers and SCADA systems for use in hostile environments. STL was incorporated in 2003, began trading in 2005 and is headquartered in Northern Ireland. For the year ended 31 May 2012, STL had revenue of GBP9.2 million.

-- The Datong Directors, who have been so advised by Cavendish, consider the terms of the Offer to be fair and reasonable. In providing advice to the Datong Directors, Cavendish has taken into account the Datong Directors' commercial assessment of the Offer.

-- Seven has received Irrevocable Undertakings from those Datong Directors who have an interest in Datong Shares (other than Grant Ashley, who is a resident of the United States and is unable to give an irrevocable undertaking in relation to his interests in Datong Shares) to accept the Offer in respect of their entire holdings of 227,860 Datong Shares. These Datong Share interests represent, in aggregate, approximately 1.65 per cent. of the existing issued share capital of Datong.

-- In addition, other Datong Shareholders have given Irrevocable Undertakings to accept the Offer in respect of 8,277,978 Datong Shares representing, in aggregate, approximately 59.84 per cent. of the existing issued share capital of Datong.

-- Seven has therefore received, in aggregate, Irrevocable Undertakings to accept the Offer in respect of 8,505,838 Datong Shares, representing approximately 61.48 per cent. of the existing issued share capital of Datong.

-- The Offer is conditional upon, amongst other things, valid acceptances being received in respect of not less than 90 per cent. (or such lower percentage as Seven may, subject to the Code, decide) of the Datong Shares to which the Offer relates. Further details are set out in Appendix I to this Announcement.

-- The cash consideration payable to Datong Shareholders under the terms of the Offer will be funded by YFM and Seven's own cash resources. Full acceptance of the Offer would result in a maximum cash payment by Seven of approximately GBP6.92 million in cash for the existing issued share capital of Datong.

-- Seven will despatch the Offer Document and Form of Acceptance to Datong Shareholders and, for information only, to persons with information rights and participants in the Datong Share Option Scheme in hard copy form, and also publish it on Seven's website (http://www.Seventechnologies.co.uk ) and the Datong website (http://www.datong.co.uk/investor_relations.htm), as soon as practicable and in any event within 28 days of this Announcement.

Commenting on the Offer, Richard Moon, Chairman of Seven said:

"We are delighted that Datong will be joining Seven and we look forward to working with Mark Cook and his team to expand the range of offerings to our growing customer base. It is our intention to integrate the business into the Seven Group over the coming months".

Commenting on the Offer, Paul Lever, Chairman of Datong said:

"On behalf of the Board of Datong and its staff, we are excited by the agreement reached with Seven and look forward to a stronger future as a combined business."

Enquiries

 
 
   Seven Technologies Holdings Limited               Tel: 028 9263 
                                                     5620 
 Richard Moon 
 Gavin Williamson 
 
 BDO LLP, Financial Adviser to Seven               Tel: 020 7486 
                                                    5888 
 John Stephan 
 David Abbott 
 
 Datong plc                                        Tel: 0113 239 
                                                    5350 
 Paul Lever 
 Mark Cook 
 
 Cavendish Corporate Finance LLP, Rule 3 Adviser   Tel: 020 7908 
                                                    6000 
 Joe Stelzer 
 John Farrugia 
 
 Canaccord Genuity Limited, Nominated Adviser      Tel: 020 7523 
  and Broker                                        8350 
 Simon Bridges 
 Mark Whitmore

This summary should be read in conjunction with, and is subject to, the full text of this Announcement including the Appendices to this Announcement. In particular the Offer will be subject to the terms and conditions set out in Appendix I to this Announcement and to the further terms and conditions of the Offer to be set out in the Offer Document and the Form of Acceptance. Appendix II of this Announcement contains further details of the sources of information and bases of calculations set out in this summary and the Announcement. Appendix III includes details of Irrevocable Undertakings received from Datong Shareholders to accept the Offer in respect of their holdings of Datong Shares and Appendix IV to this Announcement contains definitions of certain expressions used in this summary and in this Announcement.

Terms used in this summary shall have the meaning given to them in the full Announcement.

This Announcement is for information purposes only and does not constitute, or form part of, an offer or an invitation to purchase, subscribe for, sell or issue any securities or a solicitation of any offer to purchase, subscribe for, sell or issue any securities. The Offer will be made solely by way of the Offer Document and, where appropriate, the related Form of Acceptance which together will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.

Datong Shareholders who accept the Offer may only rely on the Offer Document and, where appropriate, the related Form of Acceptance for all the terms and the conditions of the Offer. In deciding whether or not to accept the Offer in relation to their Datong Shares, Datong Shareholders should rely only on the information contained, and procedures described, in the Offer Document and the accompanying Form of Acceptance. Datong Shareholders are strongly advised to read the Offer Document being posted to them shortly, and in any event within 28 days of this Announcement, which contains important information with respect to the Offer.

Please be aware that addresses, electronic addresses and certain other information provided by Datong Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Datong may be provided to Seven during the Offer Period as required under Section 4 of Appendix 4 of the Code.

BDO, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Seven, as financial adviser in relation to the Offer, and is not acting for or advising any other person and accordingly will not be responsible to any other person other than Seven for providing the protections afforded to the clients of BDO or for providing advice in relation to the contents of this Announcement or any offer or arrangement referred to herein or in the Offer Document and Form of Acceptance. Neither BDO nor any of its affiliates owns or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of BDO in connection with this Announcement, any statement contained herein or otherwise.

Cavendish, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Datong and no one else in connection with the Offer and will not be responsible to anyone other than Datong for providing the protections afforded to customers of Cavendish or for providing advice in relation to the Offer or any other matter referred to herein.

Disclosure requirements of the Code

Under Rule 8.3(a) of the City Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. 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 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

Overseas jurisdictions

The Offer is not being made directly or indirectly, and securities of Datong will not be accepted for purchase from or on behalf of any Datong Shareholder, in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities or other laws or regulations of such jurisdiction or would require any registration, approval or filing with any regulatory authority not expressly contemplated by the terms of this Announcement.

US Holders should note that the Offer relates to the securities of a UK company, is subject to UK disclosure requirements (which are different from those of the US) and is proposed to be implemented under a takeover offer provided for under English company law. A transaction effected by means of a takeover offer is not subject to the proxy solicitation or tender offer rules under the US Exchange Act. Accordingly, the Offer will be subject to UK disclosure requirements and practices, which are different from the disclosure requirements of the US proxy solicitation or tender offer rules. The financial information included in this announcement and the Offer documentation has been or will have been prepared in accordance with International Financial Reporting Standards and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. If Seven exercises its right to implement the acquisition of the Datong Shares by way of a scheme of arrangement, such scheme will be made in compliance with applicable US tender offer and securities laws and regulations to the extent applicable.

The receipt of cash pursuant to the Offer by a US Holder as consideration for the transfer of its Datong Shares pursuant to the Offer may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. Each Datong Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Offer applicable to him.

It may be difficult for US Holders to enforce their rights and claims arising out of the US federal securities laws, since Seven and Datong are located in countries other than the US and some or all of their officers and directors may be residents of countries other than the US. US Holders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

The availability of the Offer in, and the release, publication or distribution of this Announcement in or into, jurisdictions other than the United Kingdom may be restricted by law. Therefore persons into whose possession this Announcement comes who are not resident in the United Kingdom should inform themselves about, and observe, any applicable restrictions. Datong Shareholders who are in any doubt regarding such matters should consult an appropriate independent adviser in the relevant jurisdiction without delay. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction.

In particular unless otherwise determined by Seven and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in or into, or by the use of mails or any means of instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national securities exchange of any Restricted Jurisdiction. Accordingly, except as required by applicable law, copies of this Announcement are not being, and may not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving this Announcement (including without limitation nominees, trustees or custodians) must not forward, distribute or send it into any Restricted Jurisdiction.

This Announcement has been prepared for the purposes of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Forward Looking Statements

This Announcement contains certain forward-looking statements with respect to (amongst other things) the financial condition, results of operations and business of Datong and certain plans and objectives of the directors of Seven. These forward-looking statements, without limitation, 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", "targets", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the directors of Seven and Datong in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this Announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements, which are not guarantees of future performance.

Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Announcement.

Neither Seven nor Datong, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

All subsequent oral or written forward-looking statements attributable to Seven or Datong or any of their respective members, directors, officers or employees or any persons replying on their behalf are expressly qualified in their entirety by the cautionary statement above. Other than in accordance with their legal or regulatory obligations (including under the AIM Rules and the Disclosure and Transparency Rules of the FCA), neither Seven or Datong is under any obligation, and Seven and Datong expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The statements contained in this Announcement are made as at the date of this Announcement, unless some other time is specified in relation to them, and service of this Announcement shall not give rise to any implication that there has been no change in the facts set out in this Announcement since such date. Nothing contained in this Announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Datong except where expressly stated.

Rule 2.10 Disclosure

In accordance with Rule 2.10 of the Code, Datong confirms that on 9 May 2013 it had 13,834,375 ordinary shares of 0.5 pence each in issue and admitted to trading on AIM with ISIN GB00B0JF2H60.

Publication on websites

A copy of this Announcement and the Offer Document, is and will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on Seven's website at http://Seventechnologies.co.uk and the Datong website http://www.datong.co.uk/investor_relations.htm, by no later than 12 noon on 13 May 2013 in the case of this Announcement and in the case of the Offer Document by 12 noon on the Business Day following its publication and will remain so during the course of the Offer.

For the avoidance of doubt, the content of the websites referred to above is not incorporated into and does not form part of this Announcement.

Copies of this Announcement and all future documents, announcements and information required to be sent to Datong Shareholders and, for information only, to persons with information rights and participants in the Datong Share Option Scheme will be sent to such persons (where required in hard copy form) and may also be requested by writing to Seven Technologies Holdings Limited, 298 Upper Newtownards Road, Belfast, Northern Ireland BT4 3EJ.

Not for release, publication or distribution, in whole or in part, directly or indirectly in, into or from the united states, australia, canada, the republic of South Africa or Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction

10 May 2013

RECOMMENDED CASH offer by

SEVEN TECHNOLOGIES HOLDINGS LIMITED

FOR THE ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL OF

Datong PLC

1. Introduction

2. The Offer

Seven is offering to acquire, subject to the conditions set out below and in Appendix I to this Announcement, and to the full terms and conditions to be set out in the Offer Document and accompanying Form of Acceptance, the entire issued and to be issued share capital of Datong, on the following basis:

   for each Datong Share                                                  50 pence in cash

The Offer values the existing issued share capital of Datong at approximately GBP6.92 million.

The Offer Price represents a premium of approximately 28 per cent. to the Closing Price of 39 pence per Datong Share on 21 February 2013 (being the last Business Day prior to the commencement of the Offer Period), a premium of approximately 11 per cent. to the Closing Price of 45 pence per Datong Share on 9 May 2013 (being the last Business Day prior to the publication of this Announcement) and a premium of approximately 41 per cent. to the average price of 35.3 pence over the previous 12 months.

The Offer is conditional upon, amongst other things, valid acceptances being received in respect of not less than 90 per cent. (or such lower percentage as Seven may, subject to the Code, decide) of the Datong Shares to which the Offer relates. Full details of the conditions to which the Offer is subject are set out in Appendix I to this Announcement.

The Offer extends to any Datong Shares which are unconditionally allotted or issued fully paid (or credited as fully paid) pursuant to the exercise of options granted under the Datong Share Option Scheme while the Offer remains open for acceptance (or such earlier date as Seven may, subject to the Code, and in accordance with the conditions and further terms of the Offer decide).

The Datong Shares will be acquired by Seven, pursuant to the Offer, fully paid and free from all liens, equities, charges, encumbrances, rights of pre-emption and any other interest of any nature whatsoever and together with all rights now or hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after 22 February 2013 (being the date on which the Formal Sale Process was announced).

Seven will despatch the Offer Document and Form of Acceptance to Datong Shareholders and, for information only, to persons with information rights and participants in the Datong Share Option Scheme in hard copy form and also publish it on its website (http://Seventechnologies.co.uk) and the Datong website (http://www.datong.co.uk/investor_relations.htm) as soon as practicable and in any event within 28 days of this Announcement.

The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable legal or regulatory requirements.

The Offer is being made in accordance with the requirements of the Code and is subject to the terms and conditions to be set out in the Offer Document and, where applicable, the Form of Acceptance.

3. The recommendation

The Datong Directors, who have been so advised by Cavendish, consider the terms of the Offer to be fair and reasonable. In providing advice to the Datong Directors, Cavendish has taken into account the Datong Directors' commercial assessment of the Offer.

Accordingly, the Datong Directors intend to recommend that Datong Shareholders accept the Offer, as those Datong Directors who have an interest in Datong Shares (other than Grant Ashley, who is a resident of the United States and is unable to give an irrevocable undertaking in relation to his interests in Datong Shares) have irrevocably undertaken to do, to the extent they are able, in respect of their entire holdings of 227,860 Datong Shares, representing, in aggregate, approximately 1.65 per cent. of the existing issued share capital of Datong.

4. Information on Seven

Seven is a holding company that was formed in 2012 to facilitate new investment into STL. STL is a leading UK-based company in the field of specialist electro-optics and rugged computer systems. It was incorporated in 2003, began trading in 2005 and is based in Northern Ireland. STL has a wide range of capabilities such as software, electronics and mechanical engineering which it employs to create bespoke solutions for rugged requirements, typically involving use in harsh conditions prone to extremely high or low temperatures.

In 2011, STL acquired Ultrafine Technology Limited, a London based company providing specialist equipment into the law enforcement and industrial inspection market. For the year ended 31 May 2012 Ultrafine had a turnover of approximately GBP1.2 million, in addition to STL's revenue of GBP9.2 million.

YFM invested GBP6.6 million of equity in Seven in April 2012 with the intention of accelerating the development and growth of STL. YFM's investment and advice is aimed at continuing Seven's development into a leading provider of highly sophisticated flexible technology solutions in international markets.

Further information on Seven and its directors will be contained in the Offer Document.

5. Information on YFMEP

YFMEP, through its subsidiaries YFMPE and YFMPF, has been managing funds specialising in transforming small businesses since 1982, investing up to GBP10 million of equity in fast-growing UK companies. YFMEP understands the sector in which Seven and Datong operate and has a strong track record of growing smaller UK businesses.

YFMEP invested in Seven through three of the funds it manages: Chandos Fund, British Smaller Companies VCT plc and British Smaller Companies VCT 2 plc.

Further information about YFMEP will be contained in the Offer Document. Additional information can also be found on its website, www.yfmep.com. The content of this website is not incorporated into and does not form part of this Announcement.

6. Information on Datong and current trading and prospects

Datong provides a range of covert surveillance, tracking and location systems to defence, security and law enforcement agencies to gather intelligence in the fight against terrorism, drug trafficking and organised crime on an international scale.

Datong is headquartered in Leeds, United Kingdom and has a subsidiary in Chantilly, United States. Datong employs 78 people.

On 4 December 2012, Datong announced its final results for the year ended 30 September 2012 which showed revenues of GBP9.69 million (2011: GBP11.75 million) with an operating loss before exceptional items of GBP0.03 million (2011: profit of GBP0.05 million). Net cash and cash equivalents at 30 September 2012 were GBP2.48 million and Datong had no debt.

On 19 December 2012 Datong announced a major UK contract win worth GBP7.5 million over the next two years.

On 28 February 2013, Datong announced that performance during the first part of the current financial year was solid and in line with management expectations, with current uncertainties in the US market and the expected delivery timescales on contracts driving the full year results to be more weighted to the second half year. Performance has remained in line with management expectations during the period since this announcement.

In the 2012 annual results statement, Datong announced that it expects to see a gradual reduction in the relative financial importance of its third party product business segment as Datong's territory distribution rights are gradually terminated reflecting the commercial growth of its partner. As expected, further territory rights have been terminated during the current financial year.

In the 2012 annual results statement, Datong announced that part of its strategy was to increase its operational presence within the strategically important US market. During the current financial year Datong has continued to progress this strategy changing its route to market for certain major US customers, now working through a direct sales workforce rather than through a distributor.

7. Background to the Offer and reasons for recommending the Offer

As announced by Datong on 22 February 2013, the Datong Directors decided that it would be in the best interests of Datong Shareholders for potential offerors to be sought by means of a Formal Sale Process. Cavendish was appointed to conduct the Formal Sale Process and a number of potentially interested parties were contacted.

The Datong Directors believe there is a strong commercial and cultural fit between Datong and Seven, both in terms of their strategies, products and service offerings, and that both companies will benefit from the additional scale and customer contacts available to them.

The Seven Board believes that Seven's products complement the solutions offered by Datong and that the two groups are an excellent fit, which would help ensure the continuity of jobs. Combining the two businesses will create a larger and stronger group within the specialist intelligence technology sector. A combination of the two businesses would open up a number of joint opportunities:

-- The greater scale would enable the Enlarged Group to tender for larger projects, both from capacity and financial strength perspectives;

-- Cross-selling products from each group into the other's markets, creating a group with a wider geographical spread and an enlarged customer base; and

-- Complementary strategic goals around expanding a UK customer base and growing market share in the US.

The Datong Directors believe that the terms of the Offer, which entitle Datong Shareholders to receive 50 pence in cash for each Datong Share, are attractive. The Offer Price represents a significant premium to the Datong Closing Price on the last trading day prior to the start of the Offer Period and the average price over the previous 12 months. The Datong Directors believe the Offer represents significant value for all Datong Shareholders and, given the limited liquidity in Datong Shares, provides an opportunity for Datong Shareholders to fully monetize their shareholdings at an attractive price.

8. Irrevocable undertakings

Those Datong Directors who have an interest in Datong Shares (other than Grant Ashley, who is a resident of the United States and is unable to give an irrevocable undertaking in relation to his interests in Datong Shares) have irrevocably undertaken to accept the Offer in respect of their entire holdings of 227,860 DatongShares, representing approximately 1.65 per cent. of the existing issued share capital of Datong.

In addition other Datong Shareholders have given Irrevocable Undertakings to accept the Offer in respect of 8,277,978 Datong Shares representing approximately 59.84 per cent. of the existing issued share capital of Datong.

Accordingly Seven has received, in aggregate, Irrevocable Undertakings to accept the Offer in respect of 8,505,838 Datong Shares, representing approximately 61.48 per cent. of the existing issued share capital of Datong.

Full details of the Irrevocable Undertakings are set out in Appendix III at the end of this Announcement and will be set out in the Offer Document.

9. Management, employees and locations

Seven attaches great importance to the specialised skills, knowledge and experience of the management and employees of Datong and in the view of the Seven Board they are a key attraction of the business. Seven has given assurances to the Datong Directors that, on the Offer becoming or being declared unconditional in all respects, the existing contractual and statutory employment rights of all management and employees of Datong will be honoured and pension obligations complied with.

To a large degree, the Offer is a recognition of the skills and success of Datong's employees. Therefore, subject to an operational review of the Enlarged Group, Seven currently expects Datong's employees to play an important role in the further development of both Datong and the Enlarged Group.

Furthermore, Seven does not currently intend to make changes to the terms and conditions of employment of Datong employees, change the locations of Datong places of business or redeploy any of its fixed assets.

The Datong management team will remain in place following the Offer becoming or being declared unconditional in all respects, with no planned changes to their current terms and conditions of employment.

Paul Lever, Grant Ashley, Richard Brearley and Brian Smith have undertaken to resign from office as non-executive directors of Datong upon the Offer becoming or being declared unconditional in all respects in which event contractual entitlement to unpaid remuneration will be dealt with in accordance with the terms of their letters of appointment.

Subject to the operational review, Seven is considering making the remaining directors of Datong directors of Seven. All directors of Seven have their remuneration set by a remuneration committee and are considered for share options under the Seven share option scheme.

   10.       Datong Share Option Scheme

The Offer will extend to any Datong Shares which are unconditionally allotted or issued fully paid (or credited as fully paid) pursuant to the exercise of options granted under the Datong Share Option Scheme or otherwise while the Offer remains open for acceptance (or such earlier date as Seven may, subject to the Code, and in accordance with the conditions and further terms of the Offer, decide). To the extent that such options are not exercised in full, Seven will make appropriate proposals to Datong Optionholders in due course.

11. Compulsory acquisition and cancellation of Datong Shares trading on AIM

If the Offer becomes or is declared unconditional in all respects and sufficient acceptances are received and/or sufficient Datong Shares are otherwise acquired, Seven intends to apply the provisions of sections 974 to 991 (inclusive) of the Act to acquire compulsorily any outstanding Datong Shares to which the Offer relates and which have not been acquired or agreed to be acquired pursuant to the Offer or otherwise.

If the Offer is declared unconditional in all respects with 75 per cent. or more acceptances, Seven intends to procure the making of an application by Datong to the London Stock Exchange for the cancellation of the admission of the Datong Shares to trading on AIM. It is anticipated that such cancellation of trading will take effect no earlier than 20 Business Days after the Offer becomes or is declared unconditional in all respects.

The cancellation of the trading of the Datong Shares will significantly reduce the liquidity and marketability of any Datong Shares not asserted to the Offer and their value may be affected in consequence.

It is also intended that, following the Offer becoming or being declared unconditional in all respects, Datong will be re-registered as a private company.

12. Financing of the Offer

Full acceptance of the Offer, assuming the exercise before the Offer closes of all outstanding options under the Datong Share Option Scheme with an exercise price of less than 50 pence per Datong Share, will result in the payment of approximately GBP7.25 million in cash. The Offer will be financed by GBP1.37 million of cash resources available to Seven with the remainder from funds provided by YFM.

BDO is satisfied that the necessary financial resources are available to Seven sufficient to satisfy in full the cash consideration payment by Seven under the Offer.

Further information on the financing of the Offer will be set out in the Offer Document.

As soon as possible Seven intends to raise long term (more than 5 years) debt of up to GBP5.6 million and short term (1 year) debt of up to GBP1 million from a single bank on terms acceptable to Seven and YFM. The new debt would be used to refinance up to GBP5.3 million of YFM's investment in Seven, including an existing loan of GBP2 million. If Seven enters into any new financing agreements before the end of the Offer Period the details will be announced and the relevant documents will be put on display.

13. Offer-related arrangements

On 15 January 2013, Datong and Seven entered into a confidentiality agreement in a customary form in relation to the Offer, pursuant to which Seven undertook, subject to certain exceptions, to:

   --      keep confidential information relating to Datong and not to disclose it to third parties;

-- for a period of 2 years from the date of the confidentiality agreement, not use, and procure that no other member of the Seven Group use, confidential information directly or indirectly to:

o solicit or entice away or endeavour to solicit or entice away any person employed by Datong or by any member of the Datong Group at any time during the course of discussions regarding the Offer; or

o solicit or entice away or endeavour to solicit or entice away any distributor, agent, customer, supplier of Datong or of any other member of the Datong Group; or

o encourage, procure or assist any distributor, agent, customer or member of the Datong Group to restrict, vary or cease that relationship.

The obligations in the confidentiality agreement terminate 2 years from the date of Seven's acceptance of the terms of the confidentiality agreement.

14. Disclosure of interests in Datong Shares

As at the close of business on 9 May 2013, being the latest practicable date prior to the date of this Announcement, save for the Irrevocable Undertakings referred to in paragraph 8 above, neither Seven, nor any of the Seven directors, nor, so far as Seven is aware, any person acting, or deemed to be acting, in concert with Seven:

   --      had an interest in, or right to subscribe for, relevant securities of Datong;

-- had any short position in (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, relevant securities of Datong;

-- had procured an irrevocable commitment or letter of intent to accept or vote in favour of the Offer in respect of relevant securities of Datong; or

   --      had borrowed or lent any Datong Shares.

Furthermore, no arrangement exists with Seven or any person acting in concert with Seven in relation to the Datong Shares. For these purposes "arrangement" includes any indemnity or option arrangement, any agreement or any understanding, formal or informal, of whatever nature, relating to Datong Shares which may be an inducement to deal or refrain from dealing in such securities.

15. Overseas shareholders

The availability of the Offer or the distribution of this Announcement to Datong Shareholders who are not resident in the UK may be affected by the laws of their relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. Datong Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

This Announcement does not constitute an offer for sale for any securities or an offer or an invitation to purchase any securities. Datong Shareholders are advised to read carefully the Offer Document and related Form of Acceptance once these have been dispatched.

16. Structure of the Offer

The Offer is an offer for cash on the basis described in paragraph 2 above.

The Offer is proposed to be implemented by way of takeover offer within the meaning of Part 28 of the Act. Seven may, with the agreement of the Datong Directors and the Panel, elect to implement the Acquisition by way of a court-sanctioned scheme of arrangement under Part 26 of the Act. Any such scheme of arrangement will be implemented at a price per Datong Share of not less than 50 pence in cash and otherwise on the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Offer.

17. Other

Seven and Datong confirm that they both will, as soon as possible following the release of this Announcement be making an Opening Position Disclosure which discloses the details required to be disclosed by Rule 8 of the Code.

18. Documents on display

Copies of the documents referred to below will be available for inspection at the offices of Osborne Clarke at One London Wall, London, EC2Y 5EB, during normal business hours on any weekdays (Saturdays, Sundays and public holidays excepted) and online at Seven's website www.Seventechnologies.co.uk and Datong's website http://www.datong.co.uk/investor_relations.htm by no later than 12 noon on 13 May 2013 and remain available while the Offer remains open for acceptance:

   1.   the Irrevocable Undertakings; 
   2.   the confidentiality letter referred to in paragraph 13 above; 
   3.   the investment agreement between, amongst others, YFMPE, YFMPF and Seven 
   4.   the loan agreement between David Anderson, YFM and the Company

19. General

The Offer Document, containing the full terms of the Offer, will be posted to Datong Shareholders and, for information only, to persons with information rights and participants in the Datong Share Option Scheme, as soon as possible, but in any event, within 28 days of today's date. The Offer will be subject to the conditions, certain further terms set out in Appendix I to this Announcement and, together with certain further terms of the Offer, will also be set out in full in the Offer Document and, in the case of certificated Datong Shares, in the Form of Acceptance. In deciding whether to accept the Offer, Datong Shareholders should rely on the information contained in, and follow the procedures described in, the Offer Document and, if applicable, the Form of Acceptance.

The Offer will be governed by English law and will be subject to the jurisdiction of the courts of England and Wales. The Offer will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the FCA.

The bases and sources of certain financial information contained in this announcement are set out in Appendix 2. Certain terms used in this announcement are defined in Appendix 4.

This Announcement is for information purposes only and does not constitute, or form part of, an offer or an invitation to purchase, subscribe, sell or issue for any securities or a solicitation of any offer to purchase, subscribe for, sell or issue any securities. The Offer will be made solely by way of the Offer Document and, where appropriate, the related Form of Acceptance which together will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted.

Datong Shareholders who accept the Offer may only rely on the Offer Document and, where appropriate, the related Form of Acceptance for all the terms and the condition of the Offer. In deciding whether or not to accept the Offer in relation to their Datong Shares, Datong Shareholders should rely only on the information contained, and procedures described, in the Offer Document and the accompanying Form of Acceptance. Datong Shareholders are strongly advised to read the Offer Document being posted to them shortly, and in any event within 28 days of this Announcement, which contains important information with respect to the Offer.

Cavendish and BDO have given their respective written consents to the release of this Announcement containing references to their names in the form and context in which they appear.

BDO which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Seven, as financial adviser in relation to the Offer, and is not acting for or advising any other person and accordingly will not be responsible to any other person other than Seven for providing the protections afforded to the clients of BDO or for providing advice in relation to the contents of this Announcement or any offer or arrangement referred to herein or in the Offer Document and Form of Acceptance. Neither BDO nor any of its affiliates owns or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of BDO in connection with this Announcement, any statement contained herein or otherwise.

The Seven Directors, accept responsibility for the information contained in this document, save for the information for which the Datong Directors accept responsibility in accordance with the following paragraph. Save as aforesaid, to the best of the knowledge and belief of the Seven Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

The Datong Directors accept responsibility for the information contained in this document relating to Datong, themselves and their immediate families, related trusts and connected persons. To the best of the knowledge and belief of the Datong Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

Forward looking statements

Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Announcement.

Overseas jurisdictions

US Holders should note that the Offer relates to the securities of a UK company, is subject to UK disclosure requirements (which are different from those of the US) and is proposed to be implemented under a takeover offer under English company law. A transaction effected by means of a takeover offer is not subject to the proxy solicitation or tender offer rules under the US Exchange Act. Accordingly, the Offer will be subject to UK disclosure requirements and practices, which are different from the disclosure requirements of the US proxy solicitation or tender offer rules. The financial information included in this announcement and the Offer documentation has been or will have been prepared in accordance with International Financial Reporting Standards and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. If Seven exercises its right to implement the acquisition of the Datong Shares by way of a scheme of arrangement, such scheme will be made in compliance with applicable US tender offer and securities laws and regulations to the extent applicable.

In particular, unless otherwise determined by Seven and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in or into, or by the use of mails or any means of instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national securities exchange of any Restricted Jurisdiction. Accordingly, except as required by applicable law, copies of this Announcement are not being, and may not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving this Announcement (including without limitation nominees, trustees or custodians) must not forward, distribute or send it into any Restricted Jurisdiction.

The attention of Datong Shareholders is drawn to the fact that under the Code there are certain UK dealing disclosure requirements in respect of relevant securities during an offer period. An Offer Period was deemed to have commenced at 0700 on 22 February 2013 when the Formal Sale Process was announced.

This Announcement has been prepared for the purposes of complying with English Law and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. on the 10(th) Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. on the 10(th) 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 Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. on the Business Day following the date of the relevant dealing.

APPENDIX I

CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER

The Offer, which will comply with the applicable rules and regulations of the London Stock Exchange and the Code and will be governed by English law and subject to the jurisdiction of the courts of England, will be subject to the terms and conditions set out below, in the Offer Document and (in respect of certificated Datong Shares) in the Form of Acceptance:

a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. on the First Closing Date or such later time(s) and/or date(s) as Seven may, with the consent of the Panel or subject to the Code, decide in respect of not less than 90 per cent. (or such lower percentage as Seven may decide) in nominal value of the Datong Shares to which the Offer relates and not less than 90 per cent. (or such lower percentage as Seven may decide) of the voting rights carried by the Datong Shares to which the Offer relates, provided that this condition will not be satisfied unless Seven and/or any of its wholly-owned subsidiaries shall have acquired or agreed to acquire whether directly or indirectly (whether pursuant to the Offer or otherwise), Datong Shares carrying, in aggregate, more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Datong (including for this purpose, to the extent (if any) required by the Panel, any voting rights attaching to any Datong Shares which may be unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding conversion or subscription rights or otherwise). For the purpose of this condition:

(i) the expression "Datong Shares to which the Offer relates" shall be construed in accordance with sections 974 to 991 (inclusive) of the Act;

(ii) Datong Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry on being entered into the register of members of Datong; and

(iii) valid acceptances shall be treated as having been received in respect of any Datong Shares that Seven shall, pursuant to section 979(8) and, if applicable, section 979(9) of the Act, be treated as having acquired or unconditionally contracted to acquire by virtue of acceptances of the Offer;

   b)      no central bank, government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body, or any court, institution, investigative body, association, trade agency or professional or environmental body or any other similar person or body in any jurisdiction (each, a "Relevant Authority") having taken, instituted, implemented or threatened in writing (and, in each case, not having withdrawn the same) any action, proceeding, suit, investigation, enquiry or reference or enacted or made any statute, regulation, decision or order (and, in each case, not having withdrawn the same) which, in each and any case, would or might reasonably be expected to be material in the context of the Datong Group or the Seven Group in each case when taken as a whole to:

(i) restrict or restrain, prohibit, delay, impose additional adverse conditions or obligations with respect to, or otherwise interfere with the implementation of, the Offer or the acquisition of any Datong Shares by Seven or any matters arising therefrom;

(ii) result in a delay in the ability of Seven, or render Seven unable, to acquire some or all of the Datong Shares;

(iii) require, prevent or delay the divestiture by any member of the Seven Group or any member of the Datong Group of all or any portion of their respective businesses, assets or properties or impose any limitation on the ability of any of them to conduct their businesses or own their respective assets or properties or any part thereof;

(iv) impose any limitation on, or result in a delay in, the ability of any member of the Seven Group to acquire or hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities of any member of the Datong Group or on the ability of any member of the Datong Group to hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities or to exercise management control over any other member of the Datong Group;

(v) require any member of the Seven Group or the Datong Group (other than Datong) to offer to acquire any shares or other securities or rights thereover in any member of the Datong Group owned by any third party;

(vi) make the Offer or its implementation or the proposed acquisition by Seven of any shares or other securities in Datong or the acquisition or control of Datong or any member of the Datong Group, illegal, void or unenforceable in or under the laws of any jurisdiction or directly or indirectly restrict or delay, prohibit or otherwise interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge, the Offer or the acquisition of any shares in Datong, or control of Datong, by Seven;

(vii) result in any member of the Datong Group ceasing to be able to carry on business under any name under which it presently does so;

(viii) impose any limitation on the ability of any member of the Seven Group or of the Datong Group to conduct or co-ordinate or integrate its business, or any part of it, with the business of any other member of the Seven Group or of the Datong Group; or

(ix) otherwise adversely affect the business, assets or profits of any member of the Seven Group or the Datong Group,

and all applicable waiting and other time periods during which any such Relevant Authority could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or otherwise intervene having expired, lapsed or been terminated;

c) all authorisations, orders, grants, recognitions, consents, confirmations, clearances, licences, permissions and approvals ("authorisations") required by law in any jurisdiction for or in respect of the Offer and the proposed acquisition of any shares or securities, directly or indirectly, in, or control of, Datong or any member of the Datong Group by any member of the Seven Group having been obtained in terms and/or form satisfactory to Seven (acting reasonably) from all appropriate Relevant Authorities or (without prejudice to the generality of the foregoing) from any persons or bodies with whom any member of the Datong Group has entered into contractual arrangements, in each case where the absence of such authorisations would have a material adverse effect on the Datong Group or the Seven Group in each case when taken as a whole, and such authorisations remaining in full force and effect and there being no notice of any intention to revoke, suspend, materially modify or not to renew the same in each case where the absence of such authorisations would have a material adverse effect on the Datong Group or the Seven Group in each case when taken as a whole;

d) save as Disclosed, there being no provision of any agreement, permit, lease, licence or other instrument to which any member of the Datong Group is a party or by or to which it or any of its assets may be bound or subject which, as a consequence of the making or implementation of the Offer or the acquisition by Seven directly or indirectly of Datong or because of a change in the control of Datong or any member of the Datong Group, would or might reasonably be expected to result, to an extent in each case which would be material in the context of the Datong Group taken as a whole, in:

(i) any monies borrowed by, or other indebtedness (actual or contingent) of, or grant available to, any member of the Datong Group becoming repayable or capable of being declared repayable immediately or earlier than the stated maturity or repayment date or the ability of any member of the Datong Group to borrow moneys or incur indebtedness being or becoming capable of being withdrawn or inhibited;

(ii) any such agreement, arrangement, permit, lease, licence or other instrument or any right, interest, liability or obligation of any member of the Datong Group therein, being terminated or adversely modified or affected or any adverse action being taken or any onerous obligation or liability arising thereunder that is material in the context of the Offer;

(iii) any mortgage, charge or other security interest being created over the whole or any part of the business, property or assets of any member of the Datong Group or any such security (whenever arising) becoming enforceable;

(iv) the value of any member of the Datong Group or its financial or trading position being prejudiced or adversely affected to an extent which is material in the context of the Offer;

(v) any assets or interests of any member of the Datong Group being or falling to be charged or disposed of or any right arising under which any such asset or interest could be required to be disposed of or charged;

(vi) the rights, liabilities, obligations or interests of any member of the Datong Group in or with any other person, firm or company (or any arrangement relating to such interest or business) being terminated or adversely modified or affected;

(vii) any member of the Datong Group ceasing to be able to carry on business under any name under which it currently does so; or

(viii) the creation of any material liability, actual or contingent, by any member of the Datong Group other than liabilities incurred in the ordinary course of business;

e) since 30 September 2012, being the date of Datong's last audited financial statements, save as Disclosed, no member of the Datong Group having:

(i) (save for Datong Shares issued pursuant to the exercise of options granted under the Datong Share Option Scheme or as between Datong and wholly-owned subsidiaries of Datong ("Intra-Datong Group Transactions")) issued or agreed to issue or authorised the issue of additional shares of any class or securities convertible into or rights, warrants or options to subscribe for or acquire any such shares or convertible securities;

(ii) other than to another member of the Datong Group, recommended, declared, paid or made or proposed to recommend, declare, pay or make any dividend, bonus or other distribution (whether payable in cash or otherwise) other than dividends lawfully paid to Datong or wholly-owned subsidiaries of Datong;

(iii) save for Intra-Datong Group Transactions, merged or demerged with or acquired any body corporate, partnership or business;

(iv) save for Intra-Datong Group Transactions, (other than in the ordinary course of business) acquired, or disposed of, transferred, mortgaged or charged or created any security interest over any asset or any right, title or interest in any asset (including shares and trade investments) or authorised or announced any intention to do so which, in any such case, is material in the context of the Datong Group taken as a whole;

(v) save for Intra-Datong Group Transactions, issued or authorised the issue of any debentures or incurred or increased any indebtedness (other than in the ordinary course of business and which is material in the context of the Datong Group) or made, authorised or announced an intention to propose any change in its share or loan capital;

(vi) entered into or varied or announced its intention to enter into or vary any contract, transaction, commitment or arrangement (whether in respect of capital expenditure or otherwise) which is of a long term or unusual nature or which involves or could involve an obligation of a nature or magnitude which, in any such case, is material in the context of the Datong Group taken as a whole;

(vii) save for transactions in the ordinary course of business entered into, implemented or authorised any reconstruction, amalgamation, scheme of arrangement or other transaction or arrangement or announced any intention to do so to an extent in each case which is material in the context of the Datong Group taken as a whole;

(viii) entered into, or varied in any material respect the terms of, any contract or agreement with any of the directors of Datong or any of its subsidiaries;

(ix) taken any corporate action or had any legal proceedings started or threatened in writing against it or had any petition presented for its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets and/or revenues or any analogous proceedings in any jurisdiction;

(x) other than in respect of claims between Datong and its wholly owned subsidiaries, waived or compromised any claim other than in the ordinary course of business;

   (xi)    made any material amendment to its memorandum or articles of association;

(xii) purchased, redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital;

(xiii) been unable or admitted in writing that it is unable to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business; and

(xiv) entered into any contract, commitment or agreement with respect to any of the transactions, matters or events referred to in this condition (e) or announced an intention to do so in each case which is not in the ordinary course of business and is material in the context of the Datong Group taken as a whole;

f) since 30 September 2012, being the date of Datong's last audited financial statements, save as Disclosed:

(i) no litigation, arbitration, prosecution or other legal proceedings having been instituted, announced or threatened in writing or remaining outstanding by or against any member of the Datong Group or to which any member of the Datong Group is or may become a party (whether as claimant, respondent or otherwise) which, in any such case, would or might reasonably be expected adversely to affect any member of the Datong Group to an extent which is material in the context of the Datong Group taken as a whole;

(ii) no adverse change having occurred in the business, assets, financial, trading position or profits of the Datong Group in each case which is material in the context of the Datong Group taken as a whole;

(iii) no contingent or other liability of any member of the Datong Group having arisen which might reasonably be expected to materially and adversely affect the Datong Group taken as a whole;

(iv) no investigation by any Relevant Authority (excluding, for the avoidance of doubt, any investigation by the Office of Fair Trading and/or Competition Commission and/or any national or supranational anti-trust or merger control authority as a result of the Offer) having been threatened in writing, announced, implemented or instituted or remaining outstanding which in any case would be likely to have a material adverse effect on the financial position of the Datong Group taken as a whole;

   g)       save as Disclosed, Seven not having discovered that:

(i) any business, financial or other information concerning any member of the Datong Group publicly disclosed at any time by or on behalf of any member of the Datong Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading which, in any such case, is material in the context of the Datong Group taken as a whole; or

(ii) any member of the Datong Group is other than in its ordinary course of business subject to any liability, actual or contingent, which is not Disclosed and which is material in the context of the Datong Group taken as a whole.

Seven reserves the right to waive all or any of conditions (b) to (g) (inclusive) above, in whole or in part. Conditions (b) to (g) (inclusive) must be fulfilled or waived by midnight on the First Closing Date and the date on which condition (a) is fulfilled (or such later date as the Panel may agree). Seven shall be under no obligation to waive or treat as fulfilled any of conditions (b) to (g) (inclusive) by a date earlier than the latest date specified above for the fulfilment thereof notwithstanding that the other conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.

Seven may, with the agreement of the Datong Directors and the Panel, elect to implement the Acquisition by way of a court-sanctioned scheme of arrangement under Part 26 of the Act. Any such scheme of arrangement will be implemented at a price per Datong Share of not less than 50 pence in cash and otherwise on the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Offer.

If Seven is required by the Panel to make an offer for Datong Shares under the provisions of Rule 9 of the Code, Seven may make such alterations to the conditions as are necessary to comply with the provisions of that Rule.

If the Offer lapses, it will cease to be capable of further acceptance and accepting Datong Shareholders and Seven will cease to be bound by acceptances submitted on or before the time when the Offer lapses.

Under Rule 13.5 of the Code, Seven may not invoke a condition to the Offer so as to cause the Offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the condition are of material significance to Seven in the context of the Offer. The conditions contained in paragraph (a) of Appendix 1 are not subject to this provision of the Code.

APPENDIX II

SOURCES OF INFORMATION AND BASES FOR CALCULATIONS

In this Announcement, unless otherwise stated or the context otherwise requires, the following bases and sources have been used:

a) Unless otherwise stated, financial information relating to Datong has been extracted or derived (without material adjustment) from the audited financial statements of Datong for the years ended 30 September 2011 and 30 September 2012.

b) On the Latest Practicable Date Datong had in issue 13,834,375 ordinary shares of 0.5 pence each.

c) On the Latest Practicable Date there were 1,206,010 outstanding options granted under the Datong Share Option Scheme.

d) The value of the entire issued share capital of the Company of approximately GBP6.92 million is calculated on the basis of the existing issued share capital of Datong as set out in (b) above multiplied by the Offer Price.

e) The value of the total cash payment of GBP7.25 million payable by Seven assumes full acceptance of the Offer of the existing issued share capital of Datong as set out in (b) above multiplied by the Offer Price and the exercise of all outstanding Datong Share Options with an exercise price of less than 50 pence per Datong Share (being 668,000 Datong Shares) under the Datong Share Option Scheme before the Offer closes multiplied by the Offer Price.

f) Unless otherwise stated, financial information relating to STL and Ultrafine has been extracted or derived (without material adjustment) from the audited abbreviated accounts of each of STL and Ultrafine respectively for the year ended 31 May 2012.

g) The prices of Datong Shares on a particular date are derived from the Closing Price for that date.

APPENDIX III

IRREVOCABLE UNDERTAKINGS

Set out below are the details of the Irrevocable Undertakings received by Seven to accept, or procure the acceptance of, the Offer from Datong Shareholders in respect of 8,505,838 Datong Shares representing approximately 61.48 per cent. of the existing issued share capital of Datong.

 
                                                              Percentage of 
                                    Number of Datong          existing issued 
                                    Shares subject to          share capital 
 Shareholder                   the irrevocable undertaking       of Datong 
 Paul Lever(1)                                      81,750               0.59 
 Stephen Ayres(1)                                   20,000               0.14 
 Brian Smith(1)                                    126,110               0.91 
 Investec Bank plc(2)                            6,252,728              45.20 
 Miton Capital Partners(3)                       1,300,000               9.40 
 Octopus Investments 
  Limited(2)                                       468,750               3.39 
 AXA Investment Managers 
  UK Limited(4)                                    256,500               1.85

Notes:

1. This irrevocable undertaking to accept the Offer remains binding, even if a higher competing offer is announced by a third party, unless the Offer lapses or is withdrawn or Seven announces that it does not intend to proceed with the Offer or a scheme of arrangement.

2. This irrevocable undertaking will lapse if the Offer lapses or is withdrawn. In addition this irrevocable undertaking will fall away in the event of an offer from a third party which is at a price of 15 per cent. or more in excess of the Offer Price.

3. This irrevocable undertaking will lapse if the Offer lapses or is withdrawn. In addition this irrevocable undertaking will fall away in the event of an offer from a third party.

4. This irrevocable undertaking will lapse on 30 June 2013 or if the Offer lapses or is withdrawn. In addition this irrevocable undertaking will fall away in the event of an offer from a third party which is at a price of 5 per cent. or more in excess of the Offer Price.

Grant Ashley, a director of Datong, is a resident of the United States and is therefore unable to give an irrevocable undertaking although he has recommended the Offer along with the other Datong Directors.

APPENDIX IV

DEFINITIONS

 
 The following definitions apply throughout this Announcement, 
  unless the context requires otherwise: 
 "Acquisition"                the proposed acquisition of Datong by 
                               Seven pursuant to the Offer 
 "Act"                        the Companies Act 2006, as amended from 
                               time to time 
 "acting in concert"          has the same meaning given by the Code 
 "AIM"                        AIM, the market of that name operated 
                               by London Stock Exchange 
 "AIM Cancellation"           the proposed cancellation of the Datong 
                               Shares to trading on AIM 
 "AIM Rules"                  the rules governing the admission to, 
                               and operation of, AIM as set out in 
                               the AIM Rules for Companies published 
                               by the London Stock Exchange from time 
                               to time 
 "Announcement"               this announcement 
 "Australia"                  the commonwealth of Australia, its, 
                               states, territories or possessions 
 "BDO"                        BDO LLP, which is authorised and regulated 
                               in the UK by the Financial Conduct Authority 
                               to carry on investment business, the 
                               financial adviser to Seven in respect 
                               of the Offer 
 "Business Day"               a day on which banks are open for business 
                               in London (excluding Saturdays, Sundays 
                               and public holidays) 
 "Canada"                     Canada, its possessions, provinces and 
                               territories and all areas subject to 
                               its jurisdiction or any political sub-division 
                               thereof 
 "Cavendish "                 Cavendish Corporate Finance LLP, which 
                               is authorised and regulated in the UK 
                               by the Financial Conduct Authority to 
                               carry on investment business, the independent 
                               financial adviser under the Code to 
                               Datong 
 "certificated" or "in        not in uncertificated form 
  certificated form" 
 "City Code" or "Code"        The City Code on Takeovers and Mergers 
                               (as amended or interpreted from time 
                               to time by the Panel) 
 "Closing Price"              the closing middle market quotation 
                               of a Datong Share on the relevant date 
                               as derived from the AIM Appendix to 
                               the Daily Official List 
 "CREST"                      the relevant system (as defined in the 
                               Regulations) in respect of which Euroclear 
                               UK & Ireland Limited is the operator 
 "Daily Official List"        the Daily Official list of the London 
                               Stock Exchange 
 "Datong" or "Target"         Datong plc 
 "Datong Directors"           the directors of Datong at the date 
  or "Datong Board"            of this Announcement being Paul Lever, 
                               Mark Cook, Stephen Ayres, Brian McQueen 
                               Smith, Grant Ashley and Richard Brearley 
 "Datong Group"               Datong and its subsidiary undertakings 
                               at the date of this Announcement 
 "Datong Optionholders"       holders of options in the Datong Share 
                               Option Scheme 
 "Datong Shareholders"        the holders of Datong Shares 
 "Datong Shares"              the existing unconditionally allotted 
                               or issued and fully paid (or credited 
                               as fully paid) ordinary shares of 0.5 
                               pence each in the capital of Datong 
                               and any further shares which are unconditionally 
                               allotted or issued fully paid or credited 
                               as fully paid before the date on which 
                               the Offer ceases to be open for acceptance 
                               (or such earlier date as Seven may, 
                               subject to the Code, decide) but excluding 
                               any such shares held or which become 
                               held in treasury 
 "Datong Share Option         Datong plc Enterprise Management Incentive 
  Scheme"                      Share Option Scheme 
 "Disclosed"                             (i) as disclosed in Datong's report 
                                          and accounts for the year ended 30 September 
                                          2012; (ii) as publicly announced by 
                                          Datong (by the delivery of an announcement 
                                          to an authorised Regulatory Information 
                                          Service) prior to 5.00pm on 9 May 2013; 
                                          (iii) as disclosed in this Announcement; 
                                          or (iv) as otherwise disclosed in writing, 
                                          or in the documentation or written information 
                                          provided (including in the electronic 
                                          data room established by Datong in connection 
                                          with the Offer), to Seven or its advisers 
                                          by or on behalf of Datong prior to 5.00pm 
                                          on 9 May 2013 in the context of the 
                                          Offer 
 "Enlarged Group"             the Seven Group and the Datong Group 
                               following completion of the Acquisition 
 "First Closing Date"         the date which is 21 days after the 
                               day of posting of the Offer Document 
 "Form of Acceptance"         the form of acceptance and authority 
                               for use by holders of Datong Shares 
                               in certificated form in connection with 
                               the Offer 
 "Formal Sale Process"        the process which commenced and was 
                               announced by Datong on 22 February 2013 
 "FCA"                        the Financial Conduct Authority 
 "FSMA"                       the Financial Services and Markets Act 
                               2000, as amended from time to time 
 "Irrevocable Undertakings"   the irrevocable undertakings given by 
                               certain Datong Shareholders as described 
                               in Appendix III of this Announcement 
 "Japan"                      Japan, its cities, prefectures, territories 
                               and possessions 
 "Latest Practicable          9 May 2013, being the latest practicable 
  Date"                        date prior to the publication of this 
                               Announcement 
 "London Stock Exchange"      London Stock Exchange PLC 
 "Offer"                      the recommended cash offer of not less 
                               than 50 pence per Datong Share to be 
                               made by Seven to acquire the entire 
                               issued and to be issued ordinary share 
                               capital of Datong on the terms and subject 
                               to the conditions to be set out in the 
                               Offer Document and the Form of Acceptance 
                               (including, where the context so requires, 
                               any subsequent waiver, revision, variation, 
                               extension or renewal thereof) 
 "Offer Document"             the document to be sent to Datong Shareholders 
                               containing the terms of the Offer 
 "Offer Period"               the period commencing 22 February 2013 
                               until whichever of the following shall 
                               be the later (a) the First Closing Date 
                               and (b) the date on which the Offer 
                               lapses or is withdrawn and (c) the date 
                               on which the Offer becomes unconditional 
                               as to acceptances 
 "Offer Price"                50 pence per Datong Share 
 "Panel"                      the Panel on Takeovers and Mergers 
 "Regulations"                the Uncertificated Securities Regulations 
                               2011 (S.I. 2001 No. 3755) as amended 
                               from time to time 
 "Relevant Authorities"       government or governmental, quasi-governmental, 
                               supranational, statutory or regulatory 
                               body, or any court, institution, investigative 
                               body, association, trade agency or professional 
                               or environmental body or (without prejudice 
                               to the generality of the foregoing) 
                               any other person or body in any jurisdiction 
                               (each, a "Relevant Authority") 
 "Restricted Jurisdiction"    the United States, Canada, Australia, 
                               the Republic of South Africa or Japan 
                               or any other country or jurisdiction 
                               if making the Offer in such jurisdiction 
                               would constitute a violation of the 
                               relevant laws of, or require registration 
                               of the Offer in, such jurisdiction 
 "SCADA"                      supervisory control and data acquisition 
 "Seven"                      Seven Technologies Holdings Limited 
 "Seven Group"                Seven and its subsidiary undertakings 
                               at the date of this Announcement 
 "Seven Board" or "Seven      the directors of Seven at the date of 
  Directors"                   this Announcement, being Richard Moon, 
                               Gavin Williamson, David Anderson, James 
                               Hook and Paul Cannings 
 "STL"                        Seven Technologies Limited, a wholly 
                               owned subsidiary of Seven 
 "Ultrafine"                  Ultrafine Technology Limited, a wholly 
                               owned subsidiary of Seven 
 "uncertificated" or          recorded on the relevant register of 
  "in uncertificated           the share or security concerned as being 
  form"                        held in uncertificated form in CREST, 
                               and title to which, by virtue of the 
                               Regulations, may be transferred by means 
                               of CREST 
 "United Kingdom" or          the United Kingdom of Great Britain 
  "UK"                         and Northern Ireland 
 "United States" or           the United States of America, its territories 
  "US"                         and possessions, any states of the United 
                               States and the District of Columbia 
 "US Exchange Act"            the United States Securities Exchange 
                               Act of 1934 and the rules and regulations 
                               promulgated thereunder 
 "US Holders"                 holders of Datong Shares ordinarily 
                               resident in the US or with a registered 
                               address in the US, and any custodian, 
                               nominee or trustee holding of Datong 
                               Shares for persons in the US or with 
                               a registered address in the US 
 "US Securities Act"          the United States Securities Act 1933, 
                               as amended and the rules and regulations 
                               promulgated died under such Act 
 "YFM"                        funds managed and advised by YFMPE and 
                               YFMPF 
 "YFMEP"                      YFM Equity Partners Limited 
 "YFMPE"                      YFM Private Equity Limited, a wholly 
                               owned subsidiary of YFMEP 
 "YFMPF"                      YFM Private Finance Limited, a wholly 
                               owned subsidiary of YFMEP 
 "GBP", "p", "pence"          the lawful currency for the time being 
  or "sterling"                in the UK

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "associated undertaking" and "undertaking" has the meaning given by the Act.

In this Announcement, the singular includes the plural and vice versa, unless the context otherwise requires.

All times referred to are London time, unless otherwise stated.

END

This information is provided by RNS

The company news service from the London Stock Exchange

END

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