Ann: TAKEOVER: FIN: Related Takeover Documents

• Release Date: 04/03/15 08:39
• Summary: TAKEOVER: FIN: Related Takeover Documents
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					FIN
04/03/2015 08:39
TAKEOVER
NOT PRICE SENSITIVE
REL: 0839 HRS Finzsoft Solutions Limited

TAKEOVER: FIN: Related Takeover Documents

23 February 2015

Dear Shareholders

FINZSOFT SOLUTIONS LIMITED ('Company') - TAKEOVER OFFER

You will have received a full takeover offer dated 26 February 2015 from
Silverlake HGH Limited (Silverlake HGH).  Silverlake HGH has offered to
purchase all of the ordinary shares (Shares) and certain rights of the
vendors of Sush Global Solutions Limited to be issued shares in the Company
(Sush Entitlements).

Silverlake HGH's offer document, this letter and the Independent Advisers'
Reports referred to below have been sent to all of the Company's equity
security holders by Silverlake.  You are receiving this letter as part of
this bundle of documents.  You should carefully read all of this information
and take advice as required before making any decision in relation to the
takeover offer.

Silverlake HGH has offered to pay a total of $3.00 in cash for each Share,
and $818,000 in aggregate in cash for the Sush Entitlements.  The Share offer
price represents a discount of 15.5% to the volume weighted average price per
Share in the three month period prior to the date of the offer.  The offer
price is also below the value assessed by KordaMentha in their Independent
Adviser's Report (see further below).

This letter is accompanied by a Target Company Statement which has been
prepared by the Company in accordance with Rule 46 of the Takeovers Code, an
Independent Adviser's Report on the merits of the takeover offer commissioned
by the Company and prepared by KordaMentha (as required by Rule 21 of the
Takeovers Code), and an independent report commissioned by Silverlake HGH and
prepared by Lonergan Edwards & Associates Limited relating to the fairness
and reasonableness of the consideration and terms of the takeover offer as
between the holders of Shares and the Sush Entitlements (as required by Rule
22 of the Takeovers Code).  The Target Company Statement and Independent
Advisers' Reports provide information which you may find useful in deciding
whether to accept Silverlake HGH's offer.

Independent Adviser's Report

KordaMentha has undertaken a detailed analysis of the Company's value in
their Independent Adviser's Report.  Shareholders should read this report
carefully before making any decision in relation to the offer or their
investment in the Company generally.

KordaMentha has assessed the value of the Company's shares within a range of
$3.35 and $4.55 per Share.  Silverlake HGH's offer is at a discount of
between 10.4% and 34% to the valuation range provided by KordaMentha.

Silverlake HGH has also offered to purchase the Sush Entitlements.  As the
Sush Entitlements are personal to their holders and are not generally
transferable, acceptances received in respect of these entitlements will not
be accepted for transfer by the Board. The Sush Entitlement holders should
take legal and financial advice prior to making any decision in connection
with Silverlake HGH's Offer.

Independent directors' recommendation

The independent directors of the Company have considered Silverlake HGH's
takeover offer in light of KordaMentha's Independent Adviser's Report.
Silverlake HGH's offer price for the Shares represents a discount of 15.5% to
the volume weighted average price per Share during the three month period
preceding the takeover offer, and is below KordaMentha's assessed value of
the Shares.  Given this and other relevant factors addressed below, the
independent directors of the Company recommend that shareholders should not
accept Silverlake HGH's takeover offer.

As shareholders will be aware, the Company has for some time been pursuing
various options for a new capital structure capable of supporting the
Company's intended Asian growth strategy.  Silverlake HGH's takeover offer
results to a considerable degree from this strategy.  Despite the
recommendation above, the independent directors are fully supportive of
Silverlake HGH's takeover offer being made for the medium and long term
future of the business as we consider it is in the Company's interests to
have a substantial cornerstone shareholder operating in the same industry
which will provide the Company with growth opportunities, particularly in
respect of its international growth plans.  Silverlake HGH is part of the
Silverlake group of companies which has an extensive business network and
client base across Asia, which it is hoped will support and assist the
Company's Asian expansion strategy.  As indicated at paragraph 5 below, given
the lock-up arrangements between Silverlake HGH and Holliday Group Holdings
(ICT Investments) Limited (Holliday Group), the takeover offer will proceed
unless the offer is withdrawn with the consent of the Takeovers Panel. While
the independent directors do not recommend that shareholders accept the offer
on the basis of its value, we are nonetheless of the view that the change of
ownership which will result from the takeover will be of benefit to the
Company going forward.

Andrew Holliday is the managing director of the Company.  He is also a
director and has a shareholding interest in Silverlake HGH.  As such, Mr
Holliday is interested in the takeover offer and has excused himself from the
Board in relation to the Board's consideration of the takeover offer.  This
interest is referred to in the Target Company Statement.  Andrew Holliday
makes no recommendation in relation to the takeover offer.

Factors for shareholders to consider

Despite their recommendation that shareholders should not accept Silverlake
HGH's takeover offer, the independent directors draw your attention to the
following matters which may be relevant to any decision as to whether to
accept the offer:

1. Silverlake HGH's offer is between 10.4% and 34% lower than KordaMentha's
assessed valuation range of $3.35 to $4.55 per Share.  This valuation takes
account of the potential for the Company's successful expansion into Asia.
Shareholders should weigh this potential value against the risks associated
with the Company's Asian business strategy.

2. In their Independent Adviser Report, KordaMentha comment that the recent
uplift in the Company's share value is due principally to the new project
with St George Bank.  This project is expected to continue into 2016, however
once this project has been completed, the Company expects revenues will
reduce back to the levels comparable to those experienced before commencement
of the St George project unless new projects come on line over this period.
While there is also potential for the Company's Asian expansion strategy to
lift the turnover and value of the Company and its business, it could take
some time for this part of the Company's business to deliver regular client
work and stable returns.  Shareholders should weigh these factors in
considering whether to accept Silverlake HGH's offer.

3. The Company understands that Silverlake HGH does not currently intend to
make any material changes to the Finzsoft Group's business, material assets
or capital structure.  It is understood that Silverlake HGH intends both to
appoint a new independent director to the Board, and to continue to support
Andrew Holliday remaining as the managing director of the Company.  In the
longer term, Silverlake HGH may make changes to the Group's business and/or
capital structure, depending on the requirements of the business, economic
conditions and other relevant factors.

4. The KordaMentha report refers to certain financial forecasts and
projections in respect of the Company's business.  While these financial
projections themselves are not set out in full in the KordaMentha report,
they are referred to by KordaMentha in summary form.  Management have
provided this information to KordaMentha in order to ensure that shareholders
have the opportunity to consider all information which may potentially be
relevant to the Company's general trading prospects in the context of the
current takeover offer.  The independent directors emphasise that, although
reasonable care was taken in preparing this forecast financial information,
it was not prepared in anticipation or contemplation of the current takeover
offer, and has not been independently reviewed or audited.  The relevant
statements and information set out in the KordaMentha report should not be
relied upon by shareholders as being accurate or otherwise indicative of the
Company's likely trading performance.

5. Silverlake HGH's takeover offer is conditional on the receipt by
Silverlake HGH of acceptances which confer on Silverlake HGH 65% or more of
the voting rights in the Company.  Silverlake HGH has entered into a lock-up
agreement dated 18 December 2014 with Holliday Group under which Holliday
Group has agreed to accept Silverlake HGH's takeover offer in respect of all
of its 5,646,438 Shares.  Holliday Group holds approximately 65.92% of the
voting rights in Finzsoft.  Accordingly, the 65% acceptance condition to the
offer will be satisfied once Holliday Group accepts the takeover offer and
the offer will accordingly be able to be declared unconditional once this
occurs.

6. The Company's Shares are relatively illiquid for a listed company.  Share
trading has historically been very limited.  Depending on the number of
shareholders (other than Holliday Group) who accept the offer, the
tradability of the Shares may be further limited by the corresponding
decrease in the available free float of Shares.  Although the Company is not
currently aware of the prospect of future capital raising activity, the
possible dilutive effect of any such capital raising should also be borne in
mind in considering whether to accept the offer.

7. Shareholders who wish to liquidate their investment in the Company may
wish to take advantage of the Silverlake HGH offer.  You will not pay any
brokerage fees if you accept the offer.

Action required

The independent directors encourage individual shareholders to form their own
conclusions on the offer by reading the Target Company Statement and the
Independent Advisers' Reports which accompany this letter before acting on
the offer.  Shareholders should also consult their financial advisors and
take advice on the merits of the offer as required.

Shareholders who wish to accept the Silverlake HGH offer should follow the
instructions set out in Silverlake HGH's offer document.  Shareholders who
accept the offer will not be able to withdraw their acceptances unless the
offer is withdrawn with the consent of the Takeovers Panel or the offer
otherwise lapses.  Shareholders who do not wish to accept the offer do not
need to do anything.

Yours sincerely

Brent Impey
Independent Chairman
End CA:00261441 For:FIN    Type:TAKEOVER   Time:2015-03-04 08:39:40