TIDMBWNG
RNS Number : 3160E
Brown (N.) Group PLC
05 November 2020
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, NEW ZEALAND
OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF
THE RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A
PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING HEREIN SHALL
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
PURCHASE ANY SECURITIES, OR CONSTITUTE OR FORM PART OF ANY OFFER TO
ACQUIRE ANY SECURITIES, IN ANY JURISDICTION. ANY DECISION TO
PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE
DISPOSE OF, ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT MUST BE
MADE SOLELY ON THE BASIS OF THE INFORMATION THAT IS CONTAINED IN
THE PROSPECTUS TO BE PUBLISHED BY THE COMPANY IN DUE COURSE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION WITHIN THE MEANING
OF REGULATION 596/2014/EU (THE "MARKET ABUSE REGULATION"). THE
PERSON RESPONSIBLE FOR MAKING THIS ANNOUNCEMENT IS THERESA CASEY,
COMPANY SECRETARY OF N BROWN GROUP PLC
5 November 2020
N Brown Group plc
("N Brown" or the "Group" or the "Company")
Placing and Open Offer to raise c. GBP100 million
Proposed Delisting and Admission to AIM
Recommended proposals for the approval of a related party
transaction
Amendments to the Articles of Association
Notice of General Meeting
Clear opportunity to strengthen the balance sheet and accelerate
profitable growth
N Brown, a top 10 UK clothing & footwear digital retailer,
today announces a proposed pre-emptive equity raise of c. GBP100
million which is fully supported by Lord Alliance of Manchester CBE
(the "Substantial Shareholder") (the "Capital Raising"), the
proposed delisting of its Ordinary Shares from the premium listing
segment of the Official List and from trading on the Main Market
and the admission of its Ordinary Shares to trading on AIM, and the
agreement of new and extended bank facilities conditional on
completion of the Capital Raising.
Highlights
-- The Group sees a compelling opportunity to derisk and
accelerate its refreshed strategy; by eliminating unsecured net
debt and bringing forward strategic investment
-- Intention to raise c. GBP100 million of new equity capital
alongside new extended facilities to strengthen the balance sheet
and allow targeted investments to accelerate delivery of growth
strategy to capitalise on the structural tailwinds in the Group's
markets
-- Pre-emptive Capital Raising to be completed by way of a
conditional placing to the Substantial Shareholder and his son,
Joshua Alliance, subject to clawback under the c. GBP100 million
open offer to all Qualifying Shareholders at a price of 57 pence
per share (equal to the 5 day closing average, rounded to the
nearest penny) and on the basis of 11 Open Offer Shares for every
18 Existing Ordinary Shares
-- An agreement with the Group's lending banks, subject to
completion of the Capital Raising, to extend the maturity of its
existing secured and unsecured facilities on revised terms and the
proposed cancellation of the CLBILS facilities, providing N Brown
greater flexibility on capital investment and returning capital to
shareholders at the appropriate time
-- Intention to cancel the admission of the Existing Ordinary
Shares to listing on the premium listing segment of the Official
List and to trading on the Main Market and apply for the admission
of all of the Company's issued and to be issued Ordinary Shares to
trading on AIM, with such cancellations and admission to take
effect simultaneously with the Capital Raising
The Capital Raising is conditional upon, inter alia, Shareholder
approval and the proposed cancellation of the admission of the
Company's Ordinary Shares to listing on the premium listing segment
of the Official List and to trading on the Main Market and the
Company's Enlarged Share Capital being admitted to trading on
AIM.
N.M. Rothschild & Sons Limited ("Rothschild & Co") is
acting as the Lead Financial Adviser and Joint Sponsor along with
Jefferies International Limited ("Jefferies") as Joint Financial
Adviser and Joint Sponsor to the Company. Jefferies is acting as
Global Co-ordinator in relation to the Capital Raising. Jefferies
and Shore Capital Stockbrokers Limited are acting as Joint
Corporate Brokers to N Brown. Shore Capital and Corporate Limited
is acting as proposed Nominated Adviser in relation to
Admission.
Steve Johnson, CEO of N Brown, commented:
"Having restructured the business and transitioned to more than
90% of revenues from digital, we now see a clear opportunity to
capitalise on various industry drivers, not least the increasing
trend towards online retail, and further improve our customer
proposition.
"The proposed capital raise will give us the firepower to invest
further in our digital capabilities and accelerate our growth
strategy, whilst significantly strengthening the Group's balance
sheet to provide us with ongoing flexibility and a strong platform
from which to deliver returns for all of our shareholders."
Capitalised terms not otherwise defined in this announcement
shall have the meaning set out in the Appendix to this
announcement.
N Brown's results for the six months ended 29 August 2020 have
also been released today in a separate announcement via RNS, which
is available on the Company's website at www.nbrown.co.uk .
For further information:
N Brown Group plc
Sian Scriven, Corporate Communications
Manager
Joint Sponsor and Lead Financial Adviser
to N Brown +44 (0) 7825 593
Rothschild & Co 118
Andrew Thomas / Alistair Allen / Adam
Young / Shannon Nicholls
+44 (0) 161 827 3800
Global Co-ordinator, Joint Sponsor, /
Joint Financial Adviser and Joint Corporate +44 (0) 20 7280 5000
Broker to N Brown
Jefferies
Philip Noblet / Lee Morton / Max Jones
/ Harry Le May +44 (0) 20 7029 8000
Proposed Nominated Adviser and Joint
Corporate Broker to N Brown
Shore Capital
Dru Danford / Stephane Auton / Daniel
Bush / John More
Financial PR Advisers +44 (0) 20 7408 4090
MHP Communications
Andrew Jaques / Simon Hockridge / James +44 (0) 203 128 8789
Midmer nbrown@mhpc.com
Rationale for the Proposed Capital Raising
The Group's refreshed strategy is showing encouraging progress,
with 92% of product revenue now digital, and management believes
that there are significant opportunities available for N Brown to
accelerate the drive towards profitable, digital growth over the
medium term:
-- Online retailing is expected to continue to take market
share, accelerated by the impact of COVID-19 on customer
behaviour;
-- N Brown's target markets continue to be underserved, offering
significant opportunity for growth through a streamlined and more
focused brand portfolio; and
-- The Group's new, refreshed customer-centric strategy will
attract a broader range of customers to the Group's brands and
flexible credit offering.
As a result, the Board is proposing the Capital Raising, which
it believes will allow significant shareholder value to be
delivered. In particular, it will allow N Brown to:
-- Accelerate the Group's strategy by making targeted
investments which are expected to achieve attractive returns
-- Eliminate all unsecured debt in the business, leaving a core
net cash trading position, providing the Group with increased
financial resilience to navigate the COVID-19 environment and
reducing the Group's total net indebtedness of GBP411.1 million as
at 29 August 2020
-- Cancel the CLBILS facilities which will:
o offer more freedom to invest in the business to support a more
rapid delivery of the Group's strategy
o give the Board the flexibility to pay dividends at the
appropriate time
-- Extend the Group's existing facilities by a further two years
and three months; without the Capital Raising, this extension will
be considerably more difficult and costly
As a result, the Board will put in place the following medium
term financial targets (the "Medium Term Financial Targets"):
-- 7 per cent. medium term average product revenue growth
-- 14 per cent. medium term EBITDA margin
The Board believes that the successful completion of the Capital
Raising will significantly strengthen the Group's balance sheet and
best position the Group to accelerate its strategy, for the benefit
of all Shareholders.
Overview of the Capital Raising
In preparing for the Capital Raising, which the Independent
Directors believe is necessary for the future prosperity of the
Group, the Independent Directors have endeavoured to achieve an
outcome which is in the best interests of all N Brown's
shareholders and provides the greatest certainty of funds for the
Company. The Independent Directors have engaged extensively with
the Substantial Shareholder as the Independent Directors believe
that his support for the Capital Raising is crucial in order to
achieve the necessary certainty of funds and to pass the
Resolutions. The Substantial Shareholder has been clear with the
Independent Directors throughout the process that he is supportive
of the refreshed strategy and the Capital Raising. Having fully
evaluated a range of transaction structures, the Independent
Directors consider that the Open Offer structure (supported by the
Placees pursuant to the Placing) is the best way of facilitating
participation in the Capital Raising by all Qualifying Shareholders
in proportion to their existing shareholdings in the Company, by
way of their pre-emption rights, whilst
providing the Company with the greatest level of certainty of
funds, and allowing the Company to renegotiate and extend its debt
facilities.
In addition, the Placees have agreed to support the Capital
Raising at no cost to the Company (i.e. no fees or commissions are
to be paid to the Placees) pursuant to the Placing and the
Substantial Shareholder has irrevocably committed to support the
Capital Raising, including by voting in favour of all of the
Resolutions on which he is eligible to vote. The Company and the
Placees have agreed that an excess application facility will be
available to all Qualifying Shareholders as at the Record Date and
will be allocated on the basis of demand and Shareholders' pro-rata
holdings in the issued share capital as at the Record Date (subject
to the terms and conditions described in the Prospectus). As the
Independent Directors believe that the Substantial Shareholder's
support is critical to the successful outcome of the Capital
Raising, and that the Excess Application Facility provides all
Qualifying Shareholders with the opportunity to increase their
proportionate ownership of the issued share capital of the Company
(provided not all new shares are taken up by Shareholders
pre-emptively), the Independent Directors have agreed to recommend
this structure. The Company has also received confirmation that the
Placees are in possession of the necessary funds to undertake this
arrangement.
-- N Brown is proposing to raise gross proceeds of c. GBP100
million (approximately GBP94 million after deduction of estimated
fees and expenses) by way of the fully pre-emptive Capital Raising
comprising a Placing and Open Offer of 174,666,053 Open Offer
Shares (the "New Ordinary Shares") on the basis of 11 Open Offer
Shares for every 18 Existing Ordinary Shares
-- In each case, the New Ordinary Shares will be issued at 57 pence each (the "Offer Price")
-- The New Ordinary Shares will be issued credited as fully paid
and will rank pari passu in all respects with the Existing Ordinary
Shares
-- The Capital Raising is fully supported by the Substantial
Shareholder and his son, Joshua Alliance (the "Placees"), who have
agreed to subscribe for all of the Open Offer Shares (subject to
clawback to satisfy valid applications made by Qualifying
Shareholders under the Open Offer)
-- All members of the Concert Party (defined as the Substantial
Shareholder, Nigel Alliance, Joshua Alliance and the other persons
set out in the Prospectus) who would be entitled to participate in
the Open Offer have irrevocably undertaken not to take up their
pro-rata entitlements under the Open Offer (the "Concert Party
Basic Entitlement Shares")
-- All New Ordinary Shares not taken up by Qualifying
Shareholders under the Open Offer (other than those the subject of
the Open Offer Entitlements of the members of the Concert Party)
will fall into the Excess Application Facility
-- The Excess Application Facility will be available to all
Qualifying Shareholders as at the Record Date who have taken up
their Open Offer entitlement in full and will be allocated by the
Company in accordance with demand and Qualifying Shareholders'
pro-rata holdings in the issued share capital as at the Record Date
but subject to an Excess Share Allocation Cap, which respects the
relative sizes of the holdings of Ordinary Shares on the Record
Date of applicants for Excess Shares, including the aggregate
holdings of the Concert Party
-- The Directors intend to take-up their pro-rata entitlement in the Open Offer in full
With the potential for increasing his proportionate ownership,
the Substantial Shareholder has agreed with SCC and the Company to
enter into the New Relationship Agreement, which will take effect
from Admission. Under the New Relationship Agreement, for so long
as the Substantial Shareholder and his Shareholder Group holds
above 30 per cent. of the Ordinary Shares, the Substantial
Shareholder has the right to nominate two directors to the Board as
non-executive directors (subject to the Company's and SCC's
standard pre-appointment due diligence and vetting process, and to
the other Board members' approval of new director candidates (such
approval not to be unreasonably withheld or delayed)). The New
Relationship Agreement separately states that, in the event that
the Substantial Shareholder's shareholding and that of his
Shareholder Group equates to above 20 per cent. but not more than
30 per cent. of the Ordinary Shares, the Substantial Shareholder
has the right to nominate one director to the Board as a
non-executive director (subject to the Company's and SCC's standard
pre-appointment due diligence and vetting process, and to the other
Board members' approval of new director candidates (such approval
not to be unreasonably withheld or delayed)). Pursuant to the terms
of the New Relationship Agreement, the Proposed Director shall,
upon Admission, be appointed as a Nominated Director and the
Substantial Shareholder shall, upon Admission, be designated a
Nominated Director.
Notwithstanding that, under the New Relationship Agreement,
committees of the Board shall be comprised of and chaired by
independent directors, (being directors who, at the relevant time,
are considered by the Board to be independent, as determined by
reference to the UK Corporate Governance Code or following
agreement with SCC (with such agreement of SCC not having been
revoked due to a change in circumstances) and, as at the date of
this announcement, the independent directors are Matt Davies, Ron
McMillan, Lesley Jones, Gill Barr, Richard Moross, Michael Ross and
Vicky Mitchell), the Substantial Shareholder shall be entitled to
nominate one Nominated Director to be a member of the Remuneration
Committee. The Substantial Shareholder has notified the Company
that the first Nominated Director to be a member of the
Remuneration Committee will be the Proposed Director. A Nominated
Director will be subject to future re-election by Shareholders at
the first annual general meeting of the Company following their
appointment (save for in the event that such Nominated Director is
an existing Director). If the Substantial Shareholder has not
exercised his right to appoint a Nominated Director, the
Substantial Shareholder has the right to appoint one person as a
board observer, who shall have the right to attend Board meetings,
but shall not have the right to vote at such meetings.
The Group is also proposing the Rule 9 Waiver and the Whitewash
Resolution. The Independent Directors recommend that Shareholders
vote in favour of the Whitewash Resolution. Further details of the
Concert Party, the Rule 9 Waiver and the Whitewash Resolution are
contained in the Prospectus.
As a consequence of the issue of the Open Offer Shares, the
Substantial Shareholder would normally be required to make a
general offer to Shareholders pursuant to Rule 9 of the Code.
In accordance with Note 1 on the Notes on the Dispensations from
Rule 9, the Panel has been consulted and has agreed, subject to the
Whitewash Resolution being passed by the Independent Shareholders
(on a poll) at the General Meeting, to waive the requirement that
would otherwise arise under Rule 9 of the Code as a result of the
issue of the Open Offer Shares to the Substantial Shareholder. The
Whitewash Resolution will be passed if approved by a simple
majority of votes cast by Independent Shareholders on a poll.
The Board is seeking the approval of Shareholders at the General
Meeting for, inter alia, the Move to AIM, the Capital Raising, the
related party transaction which is part of the Capital Raising and
the Rule 9 Waiver. The Capital Raising and the Move to AIM are
inter-conditional and condi ti onal, inter alia, upon:
-- the Placing Agreement becoming unconditional by 8.00 a.m. on
23 December 2020 (or such later time and/or date as the Substantial
Shareholder and the Company may agree, being not later than 8.00
a.m. on 15 January 2021) and not having been terminated in
accordance with its terms prior to Admission; and
-- the Introduction Agreement becoming unconditional by 8.00
a.m. on 23 December 2020 (or such later time and/or date as Shore
Capital and the Company may agree, being not later than 8.00 a.m.
on 15 January 2021) and not having been terminated in accordance
with its terms prior to Admission.
The Placing Agreement is conditional, inter alia, upon:
-- all of the Resolutions having been passed by Shareholders at the General Meeting;
-- Delisting occurring prior to Admission; and
-- Admission having become effective by not later than 8.00 a.m.
on 23 December 2020 (or such later time and/or date as the
Substantial Shareholder and the Company may agree, being not later
than 15 January 2021).
The Introduction Agreement is conditional, inter alia, upon:
-- all of the Resolutions having been passed by Shareholders at the General Meeting;
-- the London Stock Exchange agreeing to admit the Enlarged Share Capital to trading on AIM; and
-- Admission having become effective by not later than 8.00 a.m.
on 23 December 2020 (or such later time and/or date as Shore
Capital and the Company may agree, being not later than 15 January
2021).
If any of the conditions is not satisfied or, if applicable,
waived, then the Capital Raising will not take place.
Use of Proceeds
The Board believes that the net proceeds of the Capital Raising
of approximately GBP94 million will leave the Group with a
significantly stronger balance sheet, enabling the Group to
accelerate the delivery of its refreshed strategy announced in June
2020. The Group will use approximately GBP77 million to fully repay
the current drawings under its existing Revolving Credit Facility
and CLBILS facilities which will eliminate all of the Group's
unsecured debt and bring it to a core net cash trading position,
giving it stronger foundations from which to grow the business,
including the funding of debtor book growth. This will also allow
the Group to cancel the CLBILS facilities which will allow the
Group greater flexibility to invest in the business as well as the
ability to recommence dividends at the appropriate time.
The Group intends to use the remaining approximately GBP18
million of net proceeds alongside ongoing cash generation to
accelerate its strategy to enhance growth prospects. This includes
pulling forward and enhancing the following targeted investments in
key areas which the Board expects to generate attractive
returns:
- New Financial Services platform:
o Providing credit to make shopping affordable is at the heart
of N Brown's business model and remains at the core of the strategy
moving forwards. N Brown's current credit platform is built on a
mainframe system which is robust but lacks flexibility to make
changes to enhance the customer proposition. Customers' behaviours
have evolved and are generally shifting towards a range of more
flexible payment products, which the Group's current system cannot
currently service
o To deliver more modern products, the Group needs to develop a
new Financial Services platform that has the flexibility to offer
these products. The Group is currently undertaking an extensive
discovery process to identify the optimal delivery approach for the
new platform, which will not only offer a broader suite of modern
flexible credit products which should help drive Product and
Financial Services income, but also have cost reduction
opportunities and the ability to reduce bad debt provisioning
o In addition to the core Financial Services platform, the Group
anticipates having to invest in other areas of the business
operating with legacy technology, including data and telephony
platforms to enable the business to successfully integrate the new
Financial Services platform
o The Group intends to spend GBP6 million to GBP8 million of the
net proceeds to begin developing this new platform and deliver it
between now and 2023
- Acceleration of the new digital front-end website experience:
o The existing N Brown websites are built on a legacy technology
stack, which has been built up over many years. The Group is
investing in a new front-end website with the aim of improving the
customer experience through a faster, cleaner website resulting in
better conversion rates and search optimisation benefits. It will
also iterate N Brown away from its complex, legacy web technology
stack, improving stability and pace of future change
o The first phase of work on this project is underway, which
replaces the core technology stack and builds a clean platform from
which to build. The next phase of work will focus on delivering
more specific functionality for each brand which will support
building a differentiated customer experience relevant to the brand
proposition
o The Group intends to spend GBP3 million to GBP5 million of the
net proceeds to begin delivery of this new experience between now
and 2023
- Accelerate customer acquisition:
o A core pillar of N Brown's strategy is having distinct brands
which attract a broad range of customers. With significant work
done on improving the brand and customer proposition, the Group is
focused on acquiring new customers in its core target segments,
particularly those where N Brown is under-represented today
o The Group will undertake a range of activities to accelerate
the acquisition of new customers, including expanding the presence
of the core retail brands through increased investment in brand
building activity and through more specific, targeted activity
through digital and social channels
o The Group intends to spend GBP4 million to GBP8 million of the
net proceeds to pull forward the acceleration of new customer
acquisition from 2023
The Group expects its capital expenditure to increase towards
historic levels of approximately GBP40 million from FY22, taking
into account the funding requirement to complete the new financial
services platform and new digital front-end website
experiences.
Proposed Move to AIM
The Substantial Shareholder has made his support for the Capital
Raising contingent upon N Brown seeking to cancel its admission of
the Existing Ordinary Shares to listing on the Official List
(premium listing segment) and to trading on the Main Market and the
Group applying for the admission of all its issued and to be issued
Ordinary Shares to trading on AIM.
The Independent Directors have given due consideration to this
and believe that there are a number of benefits that will be
secured by the Move to AIM and have therefore decided to recommend
that N Brown pursues the Move to AIM. The Independent Directors
believe that the benefits of the Move to AIM include:
o Securing the support of the Company's largest shareholder in
the Capital Raising, which is important in order to achieve the
necessary certainty of funds and to pass the Resolutions
o A more appropriate environment, better suited to the Group's
current market capitalisation and size, whilst also being a market
which is operated and regulated by the London Stock Exchange. AIM
is specifically designed for smaller companies, with a more
flexible regulatory regime and provides a more suitable environment
for growing companies. Being traded on AIM should simplify the
ongoing administrative and regulatory requirements of the
Company
o Launched in June 1995, AIM has an established reputation with
investors and analysts and is an internationally recognised market,
home to some of the UK's most successful digital retailers
o AIM offers greater flexibility with regard to corporate
transactions and should therefore enable the Group to agree and
execute certain transactions more quickly and cost effectively than
a company on the Official List. AIM will also provide the Group
with continuing access to the public equity capital markets should
it be appropriate to obtain equity funding in the future. Should
such opportunities or initiatives arise or become relevant to the
Group, they could entail significant additional complexity and
larger transaction costs if the Company were to remain on the
Official List
o Companies whose shares trade on AIM are deemed to be unlisted
for the purposes of certain areas of UK taxation. Following the
Move to AIM, individuals who hold Ordinary Shares may be eligible
for certain inheritance tax benefits. In addition, the UK
government abolished stamp duty on shares traded on AIM with effect
from 28 April 2014 which may help maintain or increase liquidity in
the trading of Ordinary Shares . Shareholders and prospective
investors should consult their own professional advisers on whether
an investment in an AIM security is suitable for them, or whether
the tax benefit referred to above is available to them
Subject to Shareholder approval, the Company anticipates that
the Delisting and the AIM Admission will take effect simultaneously
on or around 23 December 2020.
Banking Update
The Group has today announced an extension of its GBP500 million
securitisation facility to 15 December 2023, from an original
expiry date of 17 December 2021, which is not conditional on
Admission. The Securitisation is currently subject to amended terms
and covenants agreed with its lenders (the "COVID-19 Amendments")
following the outbreak of COVID-19 in the UK as announced on 19 May
2020. The COVID-19 Amendments are scheduled to fall away on 18
December 2020.
With effect from Admission, the Group's banks have agreed to
extend the RCF from 1 October 2021 to 31 December 2023. Given the
receipt of the net proceeds of the Capital Raising significantly
increasing liquidity on Admission, the Group has decided to agree
to a more appropriately sized RCF of GBP100 million (currently
GBP125 million) and will also terminate the CLBILS facilities to
allow it flexibility to resume paying dividends at the appropriate
time and increase capital expenditure immediately to accelerate its
strategy. The agreed amendments to the RCF, and the intention to
terminate the CLBILS facilities (together the "Financing
Amendments"), are all conditional on the completion of the Capital
Raising.
Should the Capital Raising not complete, the Group has fully
agreed with its banks to put in place alternative financing
arrangements (the "Alternative Refinancing Agreement"). Under the
Alternative Refinancing Agreement, the Group will extend the RCF
until 31 May 2022, consisting of a facility size of GBP100 million
until 1 October 2021, which then drops to GBP50 million for the
remainder of the term. As a result, and particularly given there is
no injection of new equity, the Group will keep the CLBILS
facilities in place. Whilst the Alternative Refinancing Agreement
will enable the Company to continue to trade, it will not give the
Group certainty of a longer-term bank deal, the necessary funding
to accelerate its strategy, or to consider paying dividends in the
foreseeable future.
Dividend Policy
On Admission, the Group will terminate the CLBILS facilities to
allow it flexibility to resume paying dividends at the appropriate
time. The Directors and the Proposed Director recognise that
dividends are an important part of the Company's returns to
shareholders and will consider implementing a new dividend policy
in due course.
If Admission does not occur, the Group will continue to have
access to the CLBILS facilities. A condition of being included in
this scheme is the cessation of any dividends to shareholders
whilst any facilities guaranteed by the CLBIL scheme are drawn.
The Board believes that the successful completion of the Capital
Raising and the Move to AIM represents the best option available to
the Group. The Capital Raising will provide the Group with a
significantly stronger balance sheet and enable the Group to
accelerate the delivery of its refreshed strategy, both of which
the Board believes are necessary for the long-term success of the
Group.
If the Resolutions are not passed by the requisite percentage of
members of the Company, the Capital Raising and Admission cannot be
implemented and the Ordinary Shares will not be admitted to trading
on AIM and the Existing Ordinary Shares will continue to be
admitted to listing on the premium listing segment of the Official
List and to trading on the Main Market. In such circumstances, the
proposed amendments to the financing facilities outlined above
would fall away and the Alternative Refinancing Agreement would be
implemented on less attractive financing terms and the Group would
not have enough liquidity to be able to make the required
investments to be able to accelerate its strategy, and thus would
not be able to put in place the Medium Term Financial Targets
which, if achieved, the Board expects will generate significant
shareholder value. In the absence of the Capital Raising, the Group
would need to review its medium term financing arrangements again
in 2021. The Board strongly believes that the Alternative
Refinancing Agreement is not in the best long-term interests of the
Group or its Shareholders.
The Company expects to send a combined prospectus, circular and
AIM admission document in connection with the Capital Raising, the
Delisting and the Move to AIM (the "Prospectus") to Shareholders
later today, in order to convene the General Meeting. Full details
of the Placing and Open Offer will be included in the Prospectus.
The Prospectus will be submitted to the National Storage Mechanism
and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism. The
Prospectus will also be available on the Company's website at
www.nbrown.co.uk.
Market soundings, as defined in the Market Abuse Regulation,
were taken in respect of the Capital Raising, the Delisting and the
Move to AIM with the result that certain persons became aware of
inside information, as permitted by the Market Abuse Regulation.
That inside information is set out in this announcement and the
announcement today of the Company's interim results for the six
months to 29 August 2020, in accordance with paragraph 7 of article
17 of the Market Abuse Regulation. Therefore, those persons that
received inside information in a market sounding are no longer in
possession of inside information relating to the Company and its
securities.
An indicative timetable for the Capital Raising, the Delisting
and the Move to AIM is set out below. The times and dates set out
in the indicative timetable and mentioned throughout this
announcement are times and dates in London and may be adjusted by
the Company.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Event Time and date
Record Date for Open Offer Entitlements 6.00 p.m. on 3 November
and Excess Entitlements under the 2020
Open Offer
Announcement of the Capital Raising 5 November 2020
Ex-entitlement date for the Open 5 November 2020
Offer
Publication and posting of the Prospectus, 5 November 2020
the Form of Proxy and (to Qualifying
Non-CREST Shareholders only) the
Application Form
Open Offer Entitlements and Excess As soon as practical
Entitlements enabled in CREST and after 8.00 a.m. on 6
credited to stock accounts of Qualifying November 2020
CREST Shareholders in CREST
Latest time and date for receipt 10.00 a.m. on 19 November
of Forms of Proxy/CREST Proxy Instructions 2020
General Meeting 10.00 a.m. on 23 November
2020
Announcement of results of General 23 November 2020
Meeting through RIS
Publication of AIM Schedule One No later than 23 November
announcement 2020
Pre-cancellation notice period 24 November - 22 December
2020
Recommended latest time for requesting 4.30 p.m. on 8 December
withdrawal of Open Offer Entitlements 2020
and Excess Entitlements from CREST
(i.e. if your Open Offer Entitlements
are in CREST and you wish to convert
them to certificated form)
Latest time and date for depositing 3.00 p.m. on 9 December
Open Offer Entitlements and Excess 2020
Entitlements into CREST (i.e. your
Open Offer Entitlements are represented
by an Application Form and you wish
to convert them to uncertificated
form)
Latest time and date for splitting 3.00 p.m. on 10 December
of Application Forms (to satisfy 2020
bona fide market claims only)
Latest time and date for receipt 11.00 a.m. on 14 December
of completed Application Forms and 2020
payment in full under the Open Offer
or settlement of relevant CREST
instructions (as appropriate)
Announcement of results of Open 15 December 2020
Offer through RIS
Last day of dealings in the Ordinary 22 December 2020
Shares on the Main Market
Cancellation of listing of the Ordinary 8.00 a.m. on 23 December
Shares on the Official List 2020
Admission and commencement of dealings 8.00 a.m. on 23 December
in the Ordinary Shares on AIM 2020
New Ordinary Shares credited to 23 December 2020
CREST accounts (uncertificated holders
only)
Despatch of definitive share certificates no later than 6 January
in respect of the New Ordinary Shares 2021
(where applicable)
Principal terms of the Placing
Pursuant to the Placing Agreement (which is a direct agreement
with the Company and none of the Banks are party to it), the
Placees have, subject to certain conditions, irrevocably agreed to
subscribe for all of the Open Offer Shares at the Offer Price
subject to clawback to satisfy valid applications made by
Qualifying Shareholders under the Open Offer. All members of the
Concert Party who would be entitled to participate in the Open
Offer have irrevocably undertaken not to take up their Open Offer
Entitlements (or participate in the Excess Application Facility)
and the Open Offer Shares the subject of the Open Offer
Entitlements of the members of the Concert Party shall not be
Excess Shares or otherwise available under the Excess Application
Facility and will, instead, be subscribed for by the Placees on the
terms and subject to the conditions of the Placing Agreement and in
proportions to be agreed between the Substantial Shareholder and
the Proposed Director and notified to the Company (at any time
prior to 3.00 p.m. on 16 December 2020) and, in the absence of such
notification, 100 per cent. to the Substantial Shareholder.
The Substantial Shareholder is entitled to assign his rights
under the Placing Agreement to subscribe for New Ordinary Shares
under the Placing as described below, up to a maximum of 15,789,473
Open Offer Shares, to one or more other members of the Concert
Party provided that, if such assignee fails to make payment for
such Open Offer Shares, the assignment shall be treated as not
having taken place and the Substantial Shareholder shall be obliged
to subscribe and pay for such Open Offer Shares (in addition to any
other subscription and payment obligation that the Substantial
Shareholder has under the Placing Agreement). The Company
understands that the Significant Shareholder has assigned the right
to subscribe for 15,789,473 Open Offer Shares in favour of certain
members of the Concert Party who are relatives or related trusts of
Nigel Alliance (including Joshua Adam Senior).
Principal terms of the Open Offer
Under the Open Offer, Qualifying Shareholders are being given
the opportunity to subscribe for Open Offer Shares pro rata to
their holdings of Existing Ordinary Shares on the basis of:
11 Open Offer Shares for every 18 Existing Ordinary Shares
held by them and registered in their name at the Record Date
and, through the Excess Application Facility, to apply for Excess
Shares, in each case on the terms and subject to the conditions set
out in the Prospectus (and, in the case of Qualifying Non-CREST
Shareholders, the Application Form). All members of the Concert
Party who would be entitled to participate in the Open Offer have
irrevocably undertaken not to take up their Open Offer Entitlements
(or participate in the Excess Application Facility) and, pursuant
to the Placing Agreement, the Placees have, subject to certain
conditions, irrevocably agreed to subscribe for all of the Open
Offer Shares at the Offer Price subject to clawback to satisfy
valid applications made by Qualifying Shareholders under the Open
Offer (including, for the avoidance of doubt, pursuant to the
Excess Application Facility).
Qualifying Shareholders may apply for any whole number of Open
Offer Shares up to their Open Offer Entitlement and, if they take
up their Open Offer Entitlement in full, for Excess Shares under
the Excess Application Facility. Fractions of Open Offer Shares
will not be allotted, and each Qualifying Shareholder's Open Offer
Entitlement under the Open Offer will be rounded down to the
nearest whole number. Accordingly, Qualifying Shareholders with
fewer than 18 Existing Ordinary Shares will not have the
opportunity to participate in the Open Offer. Any fractional
entitlements to New Ordinary Shares will be aggregated and made
available under the Excess Application Facility. Holdings of
Existing Ordinary Shares in certificated and uncertificated form
will be treated as separate holdings for the purpose of calculating
Open Offer Entitlements.
Shareholders should be aware that the Open Offer is not a rights
issue. As such, Qualifying Non-CREST Shareholders should note that
their Application Forms are not negotiable documents and cannot be
traded. Qualifying CREST Shareholders should note that, although
the Open Offer Entitlements will be admitted to CREST, and be
enabled for settlement, the Open Offer Entitlements will not be
tradeable or listed and applications in respect of the Open Offer
may only be made by the Qualifying Shareholder originally entitled
or by a person entitled by virtue of a bona fide market claim by
Euroclear's Claims Processing Unit. Open Offer Shares for which
application has not been made under the Open Offer will not be sold
in the market for the benefit of those who do not apply under the
Open Offer and Qualifying Shareholders who do not apply to take up
their entitlements will have no rights, and will not receive any
benefit, under the Open Offer. Any Open Offer Shares which are not
applied for under the Open Offer will be subscribed for by the
Placees pursuant to and subject to the terms and conditions of the
Placing Agreement and in proportions to be agreed between the
Substantial Shareholder and the Proposed Director and notified to
the Company (at any time prior to 3.00 p.m. on 16 December 2020)
and, in the absence of such notification, 100 per cent. to the
Substantial Shareholder, with the proceeds retained for the benefit
of N Brown.
Excess Application Facility and Allocations
The Excess Application Facility will enable Qualifying
Shareholders who have taken up their Open Offer Entitlement in full
to apply for Excess Shares. Qualifying Shareholders can apply for a
maximum number equal to the number of Open Offer Shares less their
Open Offer Entitlement. Excess Shares will, subject to their
availability, be allocated in accordance with demand but subject to
an Excess Share Allocation Cap, which respects the relative sizes
of the holdings of Ordinary Shares on the Record Date of applicants
for Excess Shares, including the aggregate holdings of the Concert
Party. For these purposes, the members of the Concert Party will
collectively be regarded and treated as a single Qualifying
Shareholder which has taken up all of the Open Offer Entitlements
of the members of the Concert Party and applied for the maximum
aggregate number of Excess Shares for which the members of the
Concert Party could therefore apply.
The Excess Share Allocation Cap for each Excess Share Applicant
will be calculated as follows:
(a) the number of available Excess Shares
multiplied by
(b) the number of Ordinary Shares held by the relevant Excess
Share Applicant on the Record Date divided by the aggregate number
of Ordinary Shares held by all Excess Share Applicant s
plus, in respect only of those Excess Share Applicants whose
applications for Excess Shares exceed the product of (a) and (b)
above:
(c) the aggregate number (if any) of New Ordinary Shares, by
which individual applications for Excess Shares by Excess Share
Applicants fall short of the respective products of (a) and (b)
above
multiplied by
(d) the number of Ordinary Shares held by the relevant Excess
Share A pplicant on the Record Date divided by the aggregate number
of Ordinary Shares held by all Excess Share Applicant s whose
applications exceed the respective products of (a) and (b) above
.
For the avoidance of doubt , the Open Offer Shares the subject
of the Open Offer Entitlements of the members of the Concert Party
shall not be Excess Shares or otherwise available under the Excess
Application Facility, and :
(a) any Excess Shares for which there is insufficient demand to
be allocated to any Qualifying Shareholder (other than the Concert
Party members) under the above mechanism; and
(b) the number of Excess Shares which are treated as allocated
to the Concert Party under the above mechanism
will, in each case, be subscribed for by the Placees on the
terms and subject to the conditions of the Placing Agreement and in
proportions to be agreed between the Substantial Shareholder and
the Proposed Director and notified to the Company (at any time
prior to 3.00 p.m. on 16 December 2020) and, in the absence of such
notification, 100 per cent. to the Substantial Shareholder, and
will not be allocated to Qualifying Shareholders under the Open
Offer.
Applications under the Excess Application Facility will be
scaled back in accordance with the Excess Share Allocation Caps. As
a result, no assurance can be given that the applications for
Excess Shares by Qualifying Non-CREST Shareholders will be met in
full or in part or at all. Excess monies in respect of applications
which are not met in full will be returned to the applicant (at the
applicant's risk) without interest as soon as practicable
thereafter by way of cheque or CREST payment, as appropriate.
The Company will meet all applications from Qualifying
Shareholders under the Excess Application Facility, subject to pro
rata scaling as may be necessary due to demand, as mentioned
above.
General Meeting
Set out at the end of the Prospectus is a notice convening the
General Meeting to be held at the Company's offices at Griffin
House, 40 Lever Street, Manchester, M60 6ES at 10.00 a.m. on 23
November 2020, at which the Resolutions will be proposed. The
Resolutions are set out in full in the Notice of General
Meeting.
Your attention is drawn to the fact that the Capital Raising,
the Delisting and the Move to AIM are conditional, inter alia, upon
the Resolutions being passed at the General Meeting.
Voting on the Resolutions will be by way of poll. Please refer
to the notes contained in the Notice of General Meeting.
Whether or not you intend to be present at the General Meeting,
you are asked to complete and return the Form of Proxy in
accordance with the instructions printed on it as soon as possible
and, in any event, so as to be received by the Registrar, Link
Group, PXS 1, 34 Beckenham Road, Beckenham, Kent, BR3 4ZF, by not
later than 10.00 a.m. on 19 November 2020 (or, in the case of an
adjournment, not later than 48 hours before the time fixed for the
holding of the adjourned meeting) or, alternatively, you can submit
your voting instruction via the registrars' website
www.signalshares.com by not later than 10.00 a.m. on 19 November
2020 (or, in the case of an adjournment, not later than 48 hours
before the time fixed for the holding of the adjourned meeting). If
you are a member of CREST, you may be able to use the CREST
electronic proxy appointment service. Proxies sent electronically
must be sent as soon as possible and, in any event, so as to be
received by not later than 10.00 a.m. on 19 November 2020 (or, in
the case of an adjournment, not later than 48 hours before the time
fixed for the holding of the adjourned meeting). Completion and
return of a Form of Proxy will not preclude you from attending and
voting in person at the General Meeting, should you so wish.
In light of public health advice in response to the COVID-19
outbreak, including to limit travel and public gatherings, the
Company strongly encourages all Shareholders to submit their Form
of Proxy in advance of the meeting, appointing the Chairman of the
General Meeting as proxy rather than a named person. If the current
Stay Alert Guidance continues to apply on the date of the General
Meeting, Shareholders will not be allowed to attend the General
Meeting in person and anyone who attempts to do so will be refused
entry. This situation is constantly evolving, and the UK Government
may change current restrictions or implement further measures
relating to the holding of general meetings during the affected
period. Any changes to the General Meeting (including any change to
the location of the General Meeting) will be communicated to
Shareholders before the meeting through our website at
www.nbrown.co.uk and, where appropriate, by announcement made by
the Company to a RIS.
Related Party Transaction
Pursuant to the Placing Agreement, the Substantial Shareholder,
who (together with his associates (as defined in the Listing
Rules)) holds 96,643,694 Existing Ordinary Shares (representing
33.81 per cent. of the Company's issued ordinary share capital as
at 4 November 2020 (being the last practicable date prior to the
publication of the Prospectus)) and the Proposed Director have,
subject to certain conditions, irrevocably agreed to subscribe for
all of the New Ordinary Shares at the Offer Price (subject to
clawback to satisfy valid applications made by Qualifying
Shareholders under the Open Offer) in proportions to be agreed
between the Substantial Shareholder and the Proposed Director and
notified to the Company (at any time prior to 3.00 p.m. on 16
December 2020) and, in the absence of such notification, 100 per
cent. to the Substantial Shareholder. To the extent that the
Proposed Director fails to subscribe and pay for his proportion of
the Open Offer Shares, the Substantial Shareholder shall subscribe
and pay for such Open Offer Shares. The Placing will result in the
Substantial Shareholder and the Proposed Director being interested
in not more than 58.9 per cent., in aggregate, of the enlarged
issued
ordinary share capital of the Company immediately following
completion of the Capital Raising (assuming no options granted
under the Share Incentive Schemes are exercised between 4 November
2020 (being the latest practicable date prior to the publication of
the Prospectus) and the issue of the New Ordinary Shares).
As a consequence of the Substantial Shareholder being a director
of the Company, the current interest of the Substantial Shareholder
in the Company and the relationship between the Proposed Director
and the Substantial Shareholder, their proposed subscription,
pursuant to the Placing Agreement, for the Ordinary Shares the
subject of the Open Offer Entitlements of the members of the
Concert Party who would be entitled to participate in the Open
Offer (who have irrevocably undertaken not to take up those Open
Offer Entitlements) constitutes a related party transaction for the
purposes of Chapter 11 of the Listing Rules and such transactions
require the prior approval of independent Shareholders. The
Substantial Shareholder is not entitled to vote and he has
undertaken to take all reasonable steps to ensure that he and his
associates will abstain from voting, on the relevant resolution at
the General Meeting. T he Proposed Director has undertaken to take
all reasonable steps to ensure that his associates will abstain
from voting on the relevant resolution at the General Meeting. T he
other members of the Concert Party who are eligible to vote at the
General Meeting have also undertaken to take all reasonable steps
to ensure that they and their associates will abstain from voting
on the relevant resolution at the General Meeting.
IMPORTANT NOTICES
This announcement is not intended to, and does not constitute,
an offer to sell or the solicitation of an offer to subscribe for
or buy, or an invitation to subscribe for or to purchase any
securities, or an offer to acquire via tender offer or otherwise
any securities, or the solicitation of any vote, in any
jurisdiction.
This announcement has been issued by and is the sole
responsibility of the Company. No representation or warranty,
express or implied, is or will be made as to, or in relation to,
and no responsibility or liability is or will be accepted by any of
the Banks (as defined below) or by any of their respective
affiliates or agents or any of their respective directors,
officers, employees, members, agents, advisers, representatives or
shareholders as to, or in relation to, the accuracy or completeness
of this announcement or any other written or oral information made
available to any interested party or its advisers, and any
liability therefore is expressly disclaimed.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this announcement. The Prospectus will give
further details of the New Ordinary Shares being offered pursuant
to the Capital Raising and will, following publication, be
available on the Company's website. This announcement is not a
prospectus (or a prospectus equivalent document) but comprises an
advertisement for the purposes of paragraph 3.3.1 of the Prospectus
Regulation Rules made under Part VI of the FSMA, as amended and has
been prepared solely in connection with the Capital Raising.
Investors should not acquire any New Ordinary Shares referred to in
this announcement except on the basis of the information contained
in the Prospectus expected to be published by the Company in
connection with the Capital Raising. This announcement is for
informational purposes only and does not purport to be complete. No
reliance may be placed by any person for any purpose on the
information contained in this announcement or its accuracy or
completeness. The information in this announcement is subject to
change.
Each of the Banks is authorised and regulated in the United
Kingdom by the FCA. None of the Banks will regard any person
(whether or not a recipient of this document) other than the
Company as its customer in relation to the Capital Raising and none
of them will be responsible for providing the protections afforded
to its customers to any other person or for providing advice to any
other person in relation to the Capital Raising.
This announcement may contain certain forward-looking
statements, beliefs or opinions, with respect to the financial
condition, results of operations and business of the Company and
the Group. This announcement includes statements that are, or may
be deemed to be, "forward-looking statements". The words "believe,"
"estimate," "target," "anticipate," "expect," "could," "would,"
"intend," "aim," "plan," "predict," "continue," "assume,"
"positioned," "may," "will," "should," "shall," "risk", their
negatives and other similar expressions that are predictions of or
indicate future events and future trends identify forward-looking
statements. An investor should not place undue reliance on
forward-looking statements because they involve known and unknown
risks, uncertainties and other factors that are in many cases
beyond the control of the Company or the Group. By their nature,
forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that may or may
not occur in the future. The Company cautions investors that
forward-looking statements are not guarantees of future performance
and that its actual results of operations and financial condition,
and the development of the industry in which it operates, may
differ materially from those made in or suggested by the
forward-looking statements contained in this announcement.
Past performance of the Company cannot be relied on as a guide
to future performance. A variety of factors may cause the Company's
or the Group's actual results to differ materially from the
forward-looking statements contained in this announcement. The
contents of this announcement are not to be construed as legal,
business, financial or tax advice. Each investor or prospective
investor should consult his, her or its own legal adviser, business
adviser, financial adviser or tax adviser for legal, financial,
business or tax advice.
The Company, the Banks and any of their respective directors,
officers, employees, agents, affiliates and advisers expressly
disclaim any obligation to supplement, amend, update or revise any
of the forward-looking statements made herein, except where
required to do so under applicable law.
The New Ordinary Shares have not been, and will not be,
registered under the Securities Act, or under the securities laws
of any State or other jurisdiction of the United States and may not
be offered, sold, pledged, taken up, resold, transferred or
delivered, directly or indirectly, in or into the United States
except pursuant to an applicable exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and in compliance with any applicable securities
laws of any State or other jurisdiction of the United States. There
will be no public offer of the New Ordinary Shares in the United
States.
The Open Offer (subject to certain limited exceptions) is only
being extended to Qualifying Shareholders, and as such the Capital
Raising (subject to certain limited exceptions) is not being
extended into the United States or any other Excluded Territory.
This announcement is for information purposes only and is not
intended to and does not constitute or form part of any offer or
invitation to sell, allot or issue, or any offer or invitation to
purchase or subscribe for, or any solicitation to purchase or
subscribe for, or an offer to acquire, any securities of the
Company in the United States, Australia, Canada, Japan, New
Zealand, the Republic of South Africa or in any other jurisdiction
where the extension or availability of the Capital Raising would
result in a requirement to comply with any governmental or other
consent or any registration filing or other formality which the
Company regards as unduly onerous or otherwise breach any
applicable law or regulation. This announcement and any other
document relating to the Capital Raising may not be sent into,
distributed or otherwise disseminated (including by custodians,
nominees or trustees or others that may have a contractual or legal
obligation to forward such documents) in the United States by use
of the mails or by any means or instrumentality of interstate or
foreign commerce (including, without limitation, email, facsimile
transmission, the internet or other form of electronic
transmission) or any facility of a national securities exchange of
the United States.
Information for Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the "MiFID
II Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the MiFID II Product
Governance Requirements) may otherwise have with respect thereto,
the New Ordinary Shares have been subject to a product approval
process, which has determined that they are: (i) compatible with an
end target market of retail investors and investors who meet the
criteria of professional clients and eligible counterparties, each
as defined in MiFID II; and (ii) eligible for distribution through
all distribution channels as are permitted by MiFID II (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
distributors should note that: the price of the New Ordinary Shares
may decline and investors could lose all or part of their
investment; the New Ordinary Shares offer no guaranteed income and
no capital protection; and an investment in the New Ordinary Shares
is compatible only with investors who do not need a guaranteed
income or capital protection, who (either alone or in conjunction
with
an appropriate financial or other adviser) are capable of
evaluating the merits and risks of such an investment and who have
sufficient resources to be able to bear any losses that may result
therefrom. The Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling
restrictions in relation to the Capital Raising.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to the New Ordinary
Shares. Each distributor is responsible for undertaking its own
target market assessment in respect of the New Ordinary Shares and
determining appropriate distribution channels.
APPIX
"Admission" the admission of the Enlarged Share Capital
to trading on AIM
"AIM" AIM, the market of that name operated by
the London Stock Exchange
"Application Form" the application form accompanying the Prospectus
on which Qualifying Non-CREST Shareholders
may apply for Open Offer Shares under the
Open Offer
"Articles" or "Articles the articles of association of the Company
of Association" which were adopted by special resolution
passed on 2 July 2013 (and as amended from
time to time after that date)
"Banks" Jefferies, Rothschild & Co, SCC and SCS
"Board" or "Directors" the board of directors of the Company
"Business Day" a day other than a Saturday or Sunday on
which banks are generally open for non-automated
business in the City of London
"Capital Raising" the Placing and Open Offer
"certificated" or a share or other security not in uncertificated
"in certificated form" form (that is, not in CREST)
"Chairman" the chairman of the Board
"City Code" or "Code" the UK City Code on Takeovers and Mergers,
as amended, supplemented or replaced
"Company" or "N Brown" N Brown Group plc
"Concert Party" the Substantial Shareholder , Nigel Alliance,
the Proposed Director and the other persons
set out or referred to in paragraph 5(a)
of Part 11 (Additional information) of the
Prospectus
"CREST" the relevant system (as defined in the CREST
Regulations) for paperless settlement of
sales and purchases of securities and the
holding of shares in uncertificated form
in respect of which Euroclear is the operator
(as defined in the CREST Regulations)
"CREST Manual" the rules governing the operation of CREST
as published by Euroclear
"CREST Proxy Instruction" has the meaning ascribed to it in the notes
to the Notice of General Meeting
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI2001/3755)
"Delisting" the proposed cancellation of the listing
of the Existing Ordinary Shares to the Official
List and to trading on the Main Market
"Enlarged Share Capital" the Ordinary Shares in issue in the capital
of the Company immediately after Admission
"Euroclear" Euroclear UK & Ireland Limited, the operator
(as defined in the CREST Regulations) of
CREST
"Excess Application the arrangement pursuant to which Qualifying
Facility" Shareholders may apply for Open Offer Shares
in excess of their Open Offer Entitlement
(up to a maximum number of Open Offer Shares
equal to the number of Open Offer Shares
less their Open Offer Entitlement), provided
they have agreed to take up their Open Offer
Entitlement in full and which may be subject
to scaling back in accordance with the provisions
of the Prospectus
"Excess Entitlement" in respect of each Qualifying Shareholder,
the entitlement (in addition to his Open
Offer Entitlement) to apply for Open Offer
Shares up to the number of Open Offer Shares
less their Open Offer Entitlement pursuant
to the Excess Application Facility, which
is conditional upon such Qualifying Shareholder
agreeing to take up his Open Offer Entitlement
in full and which may be subject to scaling
back in accordance with the provisions of
the Prospectus
"Excess Share Allocation the Excess Share Allocation Cap referred
Cap" to in the section "The Excess Application
Facility" in Part 2 (Terms and conditions
of the Open Offer) of the Prospectus
"Excess Share Applicant" (a) each Qualifying Shareholder who has
(i) taken up its Open Offer Entitlement
in full and (ii) applied for Excess Shares
under the Excess Application Facility and
(b) the members of the Concert Party (who
will collectively be regarded and treated
for the purposes of the Excess Application
Facility as a single Qualifying Shareholder
which has taken up all of the Open Offer
Entitlements of the members of the Concert
Party and applied for the maximum aggregate
number of Excess Shares for which the members
of the Concert Party could therefore apply)
"Excess Shares" the Open Offer Shares the subject of the
Open Offer Entitlements not taken up by
Qualifying Shareholders (excluding members
of the Concert Party) provided that the
Open Offer Shares the subject of the Open
Offer Entitlements of the members of the
Concert Party shall not be Excess Shares
or otherwise available under the Excess
Application Facility
"Excluded Territories" each of Australia, Canada, Japan, South
Africa, New Zealand and the United States,
and any other jurisdiction where the availability
of the Capital Raising would breach any
applicable laws or regulations and "Excluded
Territory" shall mean any of them
"Executive Directors" the executive directors of the Company
"Existing Ordinary the 285,817,178 Ordinary Shares in issue
Shares" at the date of the Prospectus
"FCA" the UK Financial Conduct Authority
"Form of Proxy" the form of proxy for use in connection
with the General Meeting
"FSMA" the Financial Services and Markets Act 2000,
as amended
"FY" financial year
"General Meeting" the general meeting of the Company proposed
to be held at Griffin House, 40 Lever Street,
Manchester, M60 6ES at 10.00 a.m. on 23
November 2020 to approve the Resolutions,
the notice of which is set out at the end
of the Prospectus
"Group" the Company and its Subsidiaries from time
to time
"HMRC" HM Revenue and Customs
"IFRS" International Financial Reporting Standards
as adopted by the EU
"Independent Directors" all Directors other than the Substantial
Shareholder
"Independent Shareholders" all Shareholders other than the members
of the Concert Party
"Information Sharing the agreement dated 5 November 2020 between
Agreement" the Company, Nigel Alliance and Joshua Adam
Senior, details of which are set out in
paragraph 8(j) of Part 11 (Additional information)
of the Prospectus
"Introduction Agreement" the agreement dated 5 November 2020 between
SCC, SCS and the Company, details of which
are set out in paragraph 8(h) of Part 11
(Additional information) of the Prospectus
"Irrevocable Undertakings" the irrevocable undertakings entered into
on or around the date of the Prospectus
between the Company and the members of the
Concert Party who would be entitled to participate
in the Open Offer, and between the Company
and certain Directors, summaries of which
are set out in paragraph 8(e) of Part 11
(Additional information) of the Prospectus
"Jefferies" Jefferies International Limited, which is
authorised and regulated in the United Kingdom
by the FCA
"Joint Sponsors" Jefferies and Rothschild & Co
"Latest Practicable 4 November 2020
Date"
"LIBOR" the London Interbank Offered Rate
"Listing Rules" the listing rules of the FCA made under
section 73A(1) of FSMA
"London Stock Exchange" London Stock Exchange plc
"Main Market" the London Stock Exchange's main market
for listed securities
"Market Abuse Regulation" Regulation (EU) No 596/2014 of the European
Parliament and of the Council of 16 April
2014 on market abuse and its implementing
legislation
"member" has the meaning ascribed to it in the 2006
Act
"Money Laundering the Money Laundering, Terrorist Financing
Regulations" and Transfer of Funds (Information on the
Payer) Regulations 2017, as amended
"Move to AIM" the proposed Delisting and Admission
"New Ordinary Shares" the Open Offer Shares
"New Relationship the conditional relationship agreement dated
Agreement" 5 November 2020 and made between the Company,
the Substantial Shareholder and SCC, to
take effect from Admission
"Nominated Director" a non-executive director appointed to the
Board by the Substantial Shareholder pursuant
to the terms of the New Relationship Agreement
"Nomination Committee" the nomination committee of the Board
"Non-Executive Directors" the non-executive directors of the Company
(including the Chairman)
"Notice of General the notice convening the General Meeting
Meeting" which is set out at the end of the Prospectus
"Offer Price" 57 pence per New Ordinary Share
"Official List" the official list of the FCA
"Open Offer" the offer to Qualifying Shareholders constituting
an offer to apply for the Open Offer Shares
at the Offer Price on the terms and subject
to the conditions set out in the Prospectus
and, in the case of Qualifying Non-CREST
Shareholders, the Application Form
"Open Offer Entitlement" the pro rata entitlement of Qualifying Shareholders
to subscribe for 11 Open Offer Shares for
every 18 Existing Ordinary Shares registered
in their name as at the Record Date, on
and subject to the terms of the Open Offer
"Open Offer Shares" the 174,666,053 new Ordinary Shares to be
offered to Qualifying Shareholders pursuant
to the Open Offer
"Ordinary Shares" the ordinary shares of 11 1/19 pence each
in the capital of the Company from time
to time, ISIN GB00B1P6ZR11
"Overseas Shareholders" Shareholders with registered addresses outside
the United Kingdom or who are citizens or
residents of countries outside the United
Kingdom
"Placees" the Substantial Shareholder and the Proposed
Director
"Placing" the conditional subscription for all of
the Open Offer Shares at the Offer Price
by the Placees pursuant to and on the terms
and subject to the conditions of the Placing
Agreement and in proportions to be agreed
between the Substantial Shareholder and
the Proposed Director and notified to the
Company (at any time prior to 3.00 p.m.
on 16 December 2020) and, in the absence
of such notification, 100 per cent. to the
Substantial Shareholder, and subject to
clawback to satisfy valid applications made
by Qualifying Shareholders under the Open
Offer
"Placing Agreement" the placing agreement entered into on or
around the date of the Prospectus between
the Placees and the Company, a summary of
which is set out in paragraph 8(g) of Part
11 (Additional information) of the Prospectus
"Pound", "Pounds Sterling" the lawful currency of the United Kingdom
or "Sterling"
"Proposed Director" Joshua Jacob Moshe Alliance, the Substantial
Shareholder's son
"Prospectus Regulation" Regulation (EU) 2017/1129 of the European
Parliament and the Council on the prospectus
to be published when securities are offered
to the public or admitted to trading on
a regulated market, and repealing Directive
2003/71/EC
"PR Regulation" Commission Delegated Regulation (EU) 2019/980
"Prospectus Regulation the prospectus regulation rules issued by
Rules" or "PRR" the FCA in relation to offers of securities
to the public and admission of securities
to trading on a regulated market
"Qualifying CREST Qualifying Shareholders holding Ordinary
Shareholders" Shares in uncertificated form on the Record
Date
"Qualifying Non-CREST Qualifying Shareholders holding Ordinary
Shareholders" Shares in certificated form on the Record
Date
"Qualifying Shareholders" holders of Ordinary Shares on the register
of members of the Company at the Record
Date with the exclusion of Overseas Shareholders
with a registered address or resident in
any Excluded Territory
"RCF" the revolving credit facility referred to
in paragraph 8(a) of Part 11 (Additional
information) of the Prospectus
"Receiving Agent" Link Group, Corporate Actions, The Registry,
or "Link" 34 Beckenham Road, Beckenham, Kent, BR3
4TU
"Record Date" 6.00 p.m. on 3 November 2020
"Registrar" Link Group, The Registry, 34 Beckenham Road,
Beckenham, Kent, BR3 4TU (a trading name
of Link Market Services Limited)
"Regulation S" Rules 901 to 905 (including Preliminary
Notes) of Regulation S promulgated under
the Securities Act
"Relationship Agreement" the existing relationship agreement dated
22 October 2014 between the Substantial
Shareholder and the Company, details of
which are set out in paragraph 3 of Part
5 (Directors, Proposed Director, senior
management and corporate governance) of
the Prospectus
"Remuneration Committee" the remuneration committee of the Board
"Resolutions" the resolutions set out in the Notice of
General Meeting
"RIS" any channel recognised as a channel for
the dissemination of regulatory information
by listed companies, as defined in the Listing
Rules
"Rothschild & Co" N.M. Rothschild & Sons Limited, which is
authorised and regulated in the United Kingdom
by the FCA
"Rule 9 Waiver" the waiver by the Panel of the obligation
of the members of the Concert Party to make
a general offer for the Company in accordance
with Rule 9 of the City Code as would otherwise
arise upon the Concert Party's aggregate
interest in the Company increasing as a
result of the Placees' participation in
the Placing
"SCC" Shore Capital and Corporate Limited, which
is authorised and regulated in the United
Kingdom by the FCA
"SCS" Shore Capital Stockbrokers Limited, which
is authorised and regulated in the United
Kingdom by the FCA
"SEC" the United States Securities and Exchange
Commission
"Securities Act" US Securities Act 1933, as amended
"Securitisation" the private revolving securitisation of
customer receivables referred to in paragraph
8(c) of Part 11 (Additional information)
of the Prospectus
"SEDOL" the London Stock Exchange Daily Official
List
"Shareholder" a holder of Ordinary Shares from time to
time
"Shares" shares in the capital of the Company
"Shore Capital" SCC or SCS (as the context permits)
"Subsidiary" has the meaning given to it in section 1159
of the 2006 Act and includes group companies
included in the consolidated financial statements
of the Group from time to time
"Substantial Shareholder" Lord Alliance of Manchester CBE
"Takeover Panel" the UK Panel on Takeovers and Mergers
"UK Corporate Governance the UK Corporate Governance Code issued
Code" by the Financial Reporting Council, as amended
"uncertificated" or in relation to a share or other security,
"in uncertificated title to which is recorded in the relevant
form" register of the share or security concerned
as being held in uncertificated form in
CREST and title to which, by virtue of the
CREST Regulations, may be transferred by
means of CREST
"United Kingdom" or the United Kingdom of Great Britain and
"UK" Northern Ireland
"United States" or the United States of America, its territories
"US" and possessions, any state of the United
States and the District of Columbia
"Whitewash Resolution" resolution 6 set out in the Notice of General
Meeting
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END
IOEZZMGMGKMGGZG
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