TIDMHRN
RNS Number : 6788D
Hornby PLC
21 February 2020
21 February 2020
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA,
AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR IN OR INTO ANY
OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR
BREACH OF ANY APPLICABLE LAW OR REGULATION.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION,
OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE
OR DISPOSE OF ANY SECURITIES IN HORNBY PLC OR ANY OTHER ENTITY IN
ANY SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.
Hornby PLC
("Hornby", the "Company")
Placing and Open Offer of 41,666,666 New Ordinary Shares to
raise GBP15.0 million
and
Amendment and Restatement of Sale and Purchase Agreement
relating to shares in LCD Enterprises Limited
and
Notice of General Meeting
Hornby PLC, the international models and collectibles group,
announces that it proposes to raise, in aggregate, approximately
GBP15.0 million (before expenses) through the issue of up to
41,666,666 New Ordinary Shares at an issue price of 36.0 pence per
New Ordinary Share, pursuant to a Placing and Open Offer.
The Placing is being conducted through an accelerated book
building process (the "Accelerated Book Build") which will be
launched immediately following the release of this announcement
(the "Announcement") and which is expected to close no later than
4.00 pm (GMT) today. Liberum Capital Limited ("Liberum Capital") is
acting as sole bookrunner in connection with the Placing and Open
Offer.
The Company also announces that, conditional on shareholder
approval, it has extended the lock-in period of the sale and
purchase agreement, entered into on November 2017 between the
Company, Lyndon Charles Davies and Catherine Enrico Davies in
respect of the acquisition by the Company of 49 per cent. of the
issued ordinary share capital of LCD Enterprises Limited, to 8
December 2023.
Highlights
The Placing and Open Offer
-- Approximately GBP15.0 million to be raised via a proposed
Placing and Open Offer at an issue price of 36.0 pence per New
Ordinary Share. Phoenix Asset Management Partners and Artemis
Investment Management LLP (in its capacity as investment adviser of
certain discretionary funds), who currently own 74.66 per cent. and
14.56 per cent. of the issued ordinary share capital of the
Company, respectively, have indicated that they are wholly
supportive of the Placing and Open Offer, intend to participate in
the Placing and have irrevocably undertaken to vote in favour of
the relevant resolutions at a to be convened general meeting
-- Net proceeds of the Placing and Open Offer expected to be utilised as follows:
o To reinvigorate the Group's key brands through accelerated
product development and additional capital expenditure
o To invest in digital marketing to more efficiently find
customers and establish a platform to build relationships with
customers.
o To upgrade central systems building a scalable operating
platform for future growth
o To strengthen the Group's Balance Sheet providing flexibility
to invest in further growth opportunities
-- Placing comprising:
o Firm Placing element of up to 37,177,974 New Ordinary Shares
to raise approximately GBP13.4 million
o Conditional Placing element of up to a further 4,488,692 New
Ordinary Shares to raise up to approximately GBP1.6 million,
subject to clawback to satisfy take-up of the Open Offer by
Qualifying Shareholders. Phoenix and Artemis are not Qualifying
Shareholders and, accordingly, will not participate in the Open
Offer
o Open Offer of up to 4,488,692 New Ordinary Shares to raise up
to approximately GBP1.6 million which is expected to be made on the
basis that:
-- Qualifying Shareholders may subscribe for 1 Open Offer Share
for every 3.006268641288 Existing Ordinary Shares held
-- Qualifying Shareholders may also make applications in excess
of their pro rata initial entitlement under an Excess Application
Facility
-- The Issue Price of 36.0 pence per New Ordinary Share is equal
to the Closing Price per Existing Ordinary Share on 20 February
2020 (being the latest practicable date prior to publication of
this Announcement)
The Amendment and Restatement of the Sale and Purchase
Agreement
-- On 8 December 2017 the Company completed the acquisition of
49 per cent. of the issued ordinary share capital of LCD
Enterprises, for a consideration of GBP1.6 million payable in cash
pursuant to the LCD SPA
-- LCD Enterprises holds majority interests in the Oxford
Diecast Group, which supplies diecast model vehicles and railway
products to the collector, gift and hobby markets globally
-- On 20 February 2020, the Company entered into the Amendment
and Restatement Agreement, a conditional agreement pursuant to
which the LCD SPA will be amended and restated such that the end of
the Lock-In Period relating to certain rights of the Company and
Lyndon Davies and Catherine Davies, is extended to 8 December 2023,
being the sixth anniversary of completion of the LCD SPA
-- The Amendment and Restatement Agreement is conditional on the
passing of an ordinary resolution by the Shareholders at a general
meeting of the Company which is expected to be held at 10.00 a.m.
on 10 March 2020. If the resolution is not approved by Shareholders
at the general meeting, the Amendment and Restatement Agreement
will not be implemented
Lyndon Davies, Chief Executive
"There is momentum at Hornby. A lot has changed over the last
two years and we continue to make good progress. The strengthening
of our balance sheet provides a solid foundation for the next steps
in our journey. We have a bold vision. We will take advantage of
technology within our products and how we engage with our
customers. We will fully harness the energy of the broad range
brands we own. These are sometimes forgotten, so it is worth
reminding all about the ammunition we have at our disposal -
Hornby, Scalextric, Airfix, Corgi, Humbrol, Jouef, Lima, Rivarossi,
Bassett-Lowke, Electrotren, Triang, MKD, Pocher. These are some of
the most powerful brands that exist in the markets in which we
operate. They have history, heritage and an exciting future. This
fundraise provides us with the means to take steps towards fully
realising their great potential."
The Accelerated Book Build
The Placing is being conducted by way of an Accelerated Book
Build led by Liberum Capital as sole bookrunner.
Completion of the Placing and Open Offer will be conditional
upon, inter alia, the approval of certain resolutions by
Shareholders at a general meeting of the Company, which is expected
to be held on 10 March 2020 (the "General Meeting") and Admission
occurring.
Accordingly, the Company expects to publish a circular (the
"Circular") in connection with the Placing and Open Offer shortly
following the successful closure of the Accelerated Book Build, in
order to convene the General Meeting to approve certain matters
necessary to implement the Placing and Open Offer and the Amendment
and Restatement of the SPA (the "Resolutions"). Full details of the
Open Offer, to be undertaken at the Issue Price, will also be
included in the Circular.
The Company has today entered into the Placing and Open Offer
Agreement with Liberum Capital which contains customary terms and
conditions, as will be described in more detail in the Circular.
Pursuant to the Placing and Open Offer Agreement, Liberum Capital
has conditionally agreed, as agent for the Company, to use its
reasonable endeavours to procure Placees for the Placing Shares at
the Issue Price.
Your attention is drawn to the detailed terms and conditions of
the Placing described in the Appendix to this Announcement (which
forms part of this Announcement).
The books for the Accelerated Book Build will open with
immediate effect. The books are expected to close no later than
4.00 pm (GMT) today. The timing of the closing of the books and the
making of allocations may be accelerated or delayed at Liberum
Capital's sole discretion. The Appendix to this Announcement
contains the detailed terms and conditions of the Placing and basis
on which investors may participate in the Accelerated Book Build.
The Placing is not being underwritten by Liberum Capital. Details
of the number of Placing Shares conditionally placed with
institutional and other investors pursuant to the Placing and gross
proceeds will be announced as soon as practicable after the close
of the Accelerated Book Build.
Investors who are invited, and who choose, to participate in the
Accelerated Book Build may do so by making an oral and legally
binding offer to acquire Placing Shares, will be deemed to have
read and understood this Announcement in its entirety, including
the Appendix, and to be making such offer on the terms and subject
to the conditions contained herein and to be making the
representations, warranties, undertakings and acknowledgements
contained in the Appendix to this Announcement.
The Placing Shares will be issued and credited as fully paid and
will rank pari passu with the Existing Ordinary Shares and Open
Offer Shares, including the right to receive all dividends and
other distributions (if any) declared, made or paid on or in
respect of such shares after the date of their issue.
Circular and Notice of General Meeting
The Company expects to publish a circular (the "Circular") later
today in connection with the Placing and Open Offer and the
Amendment and Restatement of the SPA, which will contain a notice
convening the General Meeting in order to approve certain matters
necessary to implement the Placing and Open Offer and the Amendment
and Restatement of the SPA. The Circular will be posted to
Shareholders later today and a copy will be made available on the
Company's website www.hornby.plc.uk .
The General Meeting is expected to be held at the offices of the
Company's solicitors, Taylor Wessing LLP, 5 New Street Square,
London EC4A 3TW at 10.00 a.m. on 10 March 2020. The actions that
Shareholders should take to vote on the Resolutions and/or apply
for Open Offer Shares will be set out in the Circular, along with
the recommendations of the Independent Directors.
Defined terms used in this Announcement will have the meaning
(unless the context otherwise requires) as set out in this
Announcement and in the Circular which is expected to be posted to
Shareholders today and which will be made available on the
Company's website www.hornby.plc.uk.
The information contained within this Announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
- ends -
For further information contact:
Hornby PLC
Lyndon Davies, CEO
Kirstie Gould, CFO 01843 233500
Liberum Capital Limited
Andrew Godber
Edward Thomas
Kane Collings 020 3100 2222
Financial PR Advisor
Scott Fulton 07788 144993
IMPORTANT INFORMATION
This Announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
plans and its current goals and expectations relating to its future
financial condition and performance and which involve a number of
risks and uncertainties. The Company cautions readers that no
forward-looking statement is a guarantee of future performance and
that actual results could differ materially from those contained in
the forward-looking statements. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements sometimes
use words such as "aim", "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", or other words of
similar meaning. By their nature, forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances, including, but not limited to, economic and
business conditions, the effects of continued volatility in credit
markets, market-related risks such as changes in the price of
commodities or changes in interest rates and foreign exchange
rates, the policies and actions of governmental and regulatory
authorities, changes in legislation, the further development of
standards and interpretations under International Financial
Reporting Standards (IFRS) applicable to past, current and future
periods, evolving practices with regard to the interpretation and
application of standards under IFRS, the outcome of pending and
future litigation or regulatory investigations, the success of
future explorations, acquisitions and other strategic transactions
and the impact of competition. A number of these factors are beyond
the Company's control. As a result, the Company's actual future
results may differ materially from the plans, goals, and
expectations set forth in the Company's forward-looking statements.
Any forward-looking statements made in this Announcement by or on
behalf of the Company speak only as of the date they are made.
Except as required by the Financial Conduct Authority (the FCA),
the London Stock Exchange or applicable law, the Company expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained in
this Announcement to reflect any changes in the Company's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
This Announcement is for information purposes only and shall not
constitute an offer to buy, sell, issue, or subscribe for, or the
solicitation of an offer to buy, sell, issue, or subscribe for any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such 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
Liberum Capital Limited or by any of its affiliates or agents as
to, or in relation to, the accuracy or completeness of this
Announcement or any other written or oral information made
available to or publicly available to any interested party or its
advisers, and any liability therefore is expressly disclaimed.
Liberum Capital Limited, which is authorised and regulated in
the United Kingdom by the FCA, is acting for the Company and for
no-one else in connection with the Placing, and will not be
responsible to anyone other than the Company for providing the
protections afforded to its customers or for providing advice to
any other person in relation to the Placing or Open Offer any other
matter referred to herein.
The distribution of this Announcement and the offering of the
Placing Shares in certain jurisdictions may be restricted by law.
No action has been taken by the Company or Liberum Capital Limited
that would permit an offering of such shares or possession or
distribution of this Announcement or any other offering or
publicity material relating to such shares in any jurisdiction
where action for that purpose is required. Persons into whose
possession this Announcement comes are required by the Company and
Liberum Capital Limited to inform themselves about, and to observe
such restrictions.
Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
of the Appendix or this Announcement should seek appropriate advice
before taking any action.
The Placing Shares to which this Announcement relates may be
illiquid and / or subject to restrictions on their resale.
Prospective purchasers of the Placing Shares should conduct their
own due diligence on the Placing Shares. If you do not understand
the contents of this Announcement you should consult an authorised
financial adviser.
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.
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 Placing Shares have been subject to a product approval process,
which has determined that the Placing Shares 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 Placing Shares may decline and investors could lose all or
part of their investment; the Placing Shares offer no guaranteed
income and no capital protection; and an investment in the Placing
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 Placing and Open
Offer.
Furthermore, it is noted that, notwithstanding the Target Market
Assessment, Liberum Capital will only procure investors who meet
the criteria of professional clients and eligible
counterparties.
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 Placing Shares or
Open Offer Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Placing Shares and determining
appropriate distribution channels.
FURTHER DETAILS OF THE PROPOSED PLACING AND OPEN OFFER AND
PROPOSED AMMENT AND RESTATEMENT OF THE SALE AND PURCHASE
AGREEMENT
1 Introduction
Amendment and restatement of the LCD SPA
1.1 On 8 December 2017 the Company completed the acquisition of
49 per cent. of the issued ordinary share capital of LCD
Enterprises, for a consideration of GBP1.6 million payable in cash
pursuant to the LCD SPA. LCD Enterprises holds majority interests
in the Oxford Diecast Group, which supplies diecast model vehicles
and railway products to the collector, gift and hobby markets
globally.
1.2 The LCD SPA also contains rights in favour of the parties to
buy or sell (as applicable) certain LCD Enterprises shares in
specified circumstances as follows:
(a) if Lyndon Davies ceases to hold the position of Chief
Executive Officer of the Company for any reason other than his
death or incapacity, during the Lock-In Period, Lyndon Davies will
become entitled to acquire the 49 ordinary shares of GBP1.00 each
in the capital of LCD Enterprises that were acquired by the Company
from Lyndon Davies pursuant to the terms of the LCD SPA, for a
purchase price of GBP1,600,000;
(b) if, at the expiry of the Lock-In Period, Lyndon Davies
continues to hold the position of Chief Executive Officer of the
Company, the Company will become entitled to acquire the remaining
51 ordinary shares of GBP1.00 each in the capital of LCD
Enterprises held by Lyndon Davies and Catherine Davies for an
aggregate purchase price of GBP1,600,000 or at a price to be
negotiated (capped at GBP7 million) in the event that the
underlying after tax earnings (with extraordinary, exceptional and
non-recurring items deducted and added back) of LCD Enterprises and
the Oxford Diecast Group (as derived from the most recently
completed financial year of LCD Enterprises for which audited
accounts have been published), are materially (materially for this
purpose meaning a 10 per cent. increase or decrease) different to
those of the Oxford Diecast Group for the financial year ending on
31 December 2016; and
(c) in the event of the death or incapacity of Lyndon Davies
during the Lock-In Period, the Company will be obliged to purchase
the remaining 51 ordinary shares of GBP1.00 each in the capital of
LCD Enterprises held by Lyndon Davies and Catherine Davies at a
price of four times the underlying after tax earnings (with
extraordinary, exceptional and non-recurring items deducted and
added back) of LCD Enterprises and the Oxford Diecast Group (capped
at GBP7 million) as derived from the most recently completed
financial year of LCD Enterprises for which audited accounts have
been published.
1.3 For the duration of the Lock-in Period each of Lyndon Davies
and Catherine Davies have undertaken that each of them shall not
dispose of, or agree to dispose of, directly or indirectly, any of
their remaining shares in LCD Enterprises (the "Restricted Shares")
or any interest in or right to them or charge or agree to charge or
otherwise encumber any of the Restricted Shares or interest in
them.
1.4 On 20 February 2020, the Company entered into the Amendment
and Restatement Agreement, a conditional agreement pursuant to
which the LCD SPA will be amended and restated such that the end of
the Lock-In Period is extended to 8 December 2023, being the sixth
anniversary of completion of the LCD SPA.
1.5 The Amendment and Restatement Agreement is conditional on
the passing of an ordinary resolution by the Shareholders at the
General Meeting, which has been convened for 10.00 a.m. on 10 March
2020. If the resolution is not approved by Shareholders at the
General Meeting, the Amendment and Restatement Agreement will not
be implemented. Subject to the resolution being passed at the
General Meeting, it is expected that the Amendment and Restatement
Agreement will complete on 10 March 2020.
2 Background to and reasons for the PROPOSED PLACING and Open
Offer AND THE PROPOSED AMMENT AND RESTATEMENT AGREEMENT
The Progress of the Turnaround
2.1 As was most recently stated in the Company's Christmas
trading update announcement of 6 January 2020 and in the Company's
half-year results announcement for the period ended 30 September
2019, released on 28 November 2019 , the Company has been working
through a turnaround plan since Lyndon Davies joined as CEO on 3
October 2017. The strategy included a number of different strands,
but a key part was ending the discounting of product to rebuild
brand integrity. This strategy is starting to bear fruit as trust
is returning and sales are reverting to a growth trajectory. There
is still much work to do with regards to the turnaround, but the
Company has positive momentum and would like to capitalise on this
by investing at a faster rate. The Board believes that this will
allow the Company to accelerate the progress back to
profitability.
Accelerate Product Development
2.2 The future revenue and profitability of the Company will be
defined by the level of innovation and the quality of the products
delivered to its customers. Having learned from the first full year
of products designed by the restructured engineering teams, the
Board has confidence in the Company's ability to be more ambitious
about plans for its product lines over the next few years. It takes
between 1 1/2 - 2 years from inception to develop and deliver most
of the Company's products. The Company has found that its customers
appreciate the care and attention it pays to getting the details
right and maintaining industry leading quality standards. The
Company must continue to get these important aspects right, but it
must also accelerate the development of new products in order to
accelerate its sales. The Board believes that this will be
facilitated by increased investment.
2.3 The Company announced some exciting new innovations at the
start of this year at their trade previews including an app-based
Bluetooth analogue controller for its model railways. This is just
the start of the Company's pipeline of development and innovation
and the benefits of accelerating these types of product to market
are now becoming evident.
2.4 The Company is proposing to deploy part million of the
proceeds of the Placing and Open Offer to invest in both inventory
and capital expenditure, which the Board believes will accelerate
the next stage of the turnaround.
Build Modern Routes to Market
2.5 The Company's customers are increasingly researching,
finding and buying its products online. However, the Company's
online presence is one of the weakest parts of its infrastructure
but is perhaps becoming the most important portal for its
customers. This is a new challenge and the Company has been
studying it in detail. Following a great deal of work with various
technical advisors, it has become apparent that a significant
overhaul of the Company's website and its approach to engaging with
customers online is required. The Company also recognises it must
ramp up and modernise its efforts to find new customers through the
various social platforms online too.
2.6 In pursuit of the Company's aim to be the gold standard of
the industry, extra investment in people and infrastructure is
needed which was not budgeted for in the original turnaround plan.
The Company expects to deploy part of the proceeds of the Placing
and Open Offer on this as part of the turnaround. The Board expects
this investment to deliver benefits derived both from finding new
customers and from nurturing the loyalty of existing ones.
Upgrade Central Systems & Processes
2.7 Having been through approximately 2 years of streamlining
systems, people and processes in respect of central functions, the
Company has made a great deal of savings but has also identified
some bottlenecks in the basic infrastructure on which its business
runs. The Company has identified ways in which it will need to
upgrade its systems in order to make sure it can remain efficient
and keep staff focussed on the customer, as opposed to internal
administrative burdens. The Board believes the best way to ensure
the Company's infrastructure is effective and scalable is to
migrate and upgrade the Company's systems and processes to the
latest cost-effective technology. Furthermore, the Board believes
this project will assist with the upgrade of the Company's online
presence.
2.8 The Board anticipates that this aspect of the turnaround
will require investment to deliver savings in the back end of the
Company's business.
Improve Balance Sheet Strength & Efficiency
2.9 The Company's business has a seasonal working capital
profile requiring significant stock orders before Christmas to
ensure its customers receive timely deliveries over the Christmas
period. This absorbs cash, and the Company must strengthen its
balance sheet to make sure it has a margin of balance sheet surplus
to absorb any unforeseen events.
2.10 Part of the net proceeds of the Placing and Open Offer is
proposed to be deployed to temporarily pay back debt which will
then be drawn back down as the Company pays for deliveries before
Christmas. The Company has strong relationships with its two
current lenders, one of which is Phoenix which provides the Company
with a GBP9 million secured credit facility, and will keep the full
extent of its debt facilities in place. This means the Company will
have a much larger margin of safety during its peak working capital
requirements. This change will have the added benefit of saving
interest costs during the quieter parts of the year.
Acquisitions
2.11 The Company has no current plans to acquire external brands
but does have a "wishlist" of specific, heritage brands were they
to become available for sale. The Company owns 49 per cent. of LCD
Enterprises which owns the long standing Oxford Diecast brand and
may have the opportunity to acquire the rest of this company in the
near future, as outlined in paragraph 2.12 .
Amendment and Restatement Agreement
2.12 The parties to the LCD SPA have agreed to enter into the
Amendment and Restatement Agreement to extend the period within
which the parties to the LCD SPA may exercise certain options as
described in paragraph 1.2 . After discussion with the owners of
LCD Enterprises (which include the Company's CEO, Lyndon Davies),
it was mutually agreed that the Board should continue to focus
capital and management resource on accelerating the Company's
return to profitability and that an acquisition by the Company of
the remaining 51 per cent. shareholding in LCD Enterprises at this
stage in the turnaround would absorb resources which could be put
to use in the existing brands. After thinking through the roadmap
in both businesses, it was deemed a better long term strategy for
all parties involved to maintain flexibility to consider the
acquisition at a later date.
Incentive Arrangements
2.13 Following completion of the Placing and Open Offer, the
Board intends to put in place appropriate incentive arrangements
for the executive team of the Group, in order to align their
interests with those of Shareholders. A further announcement in
connection with this will be made in due course.
3 Use of Proceeds
It is currently expected that the net proceeds of the Placing
and Open Offer, expected to be GBP14.7 million, will be utilised as
follows:
-- To reinvigorate the Group's key brands through accelerated
product development and additional capital expenditure.
-- To invest in a modern digital strategy.
-- To upgrade our central systems.
-- To reduce interest costs during non-peak working capital
months, provide a margin of safety on the balance sheet and allow
the business to do opportunistic acquisitions. The Company intends
to reduce the balance drawn on both the GBP12 million Asset Based
Lending facility with PNC Credit Limited and the GBP9 million loan
facility Phoenix Asset Management Partners. Both of these
facilities are intended to remain in place to continue to be drawn
upon as required going forwards.
4 Current trading and prospects
4.1 Revenue and gross profit for the 10 months ended 31 January
2020 are ahead of prior year and in line with management
expectations. The Directors expect this trend to continue to year
end. Whilst the operating loss for the 10 months ended 31 January
2020 has narrowed from the prior year the Company is in the middle
of the turnaround plan and further investment is required to
complete the transition and return to profitability.
4.2 As at 31 January 2020, the Company's cash balance was
GBP1,349,000 with GBP4,564,000 available to be drawn under the
Company's loan facilities.
5 Details of the PROPOSED Placing and Open Offer
5.1 The Company is proposing to raise, in aggregate,
approximately GBP15 million (before expenses) through the issue of
41,666,666 New Ordinary Shares pursuant to a Placing and an Open
Offer at the Issue Price. Under the Firm Placing, 37,177,974
Placing Shares are expected to be placed firm with the Firm Placees
and with a further 4,488,692 Placing Shares expected to be placed
conditionally pursuant to the Conditional Placing with the
Conditional Placees, subject to take-up of those shares by
Qualifying Shareholders under the Open Offer. Accordingly, up to
4,488,692 New Ordinary Shares are expected to be offered to
Qualifying Shareholders pursuant to the Open Offer at the Issue
Price. Phoenix and Artemis are not Qualifying Shareholders and,
accordingly, will not participate in the Open Offer. The
Conditional Placing is intended to ensure that any Open Offer
Shares not applied for under the Open Offer may instead be taken up
by the Conditional Placees pursuant to the Placing.
5.2 The Issue Price is equal to the Closing Price of 36.0 pence
per Ordinary Share on 20 February 2020.
5.3 The aggregate number of New Ordinary Shares to be issued
pursuant to the Placing and Open Offer is expected to, on
Admission, represent approximately 24.96 per cent. of the Enlarged
Share Capital.
5.4 The Placing and Open Offer could result in a proportionate
dilution of the holdings of existing Shareholders. On Admission,
Shareholders who do not participate in the Placing or the Open
Offer will experience an immediate dilution of approximately 24.96
per cent.
5.5 Application will be made to the London Stock Exchange for
the New Ordinary Shares to be admitted to trading on AIM. On the
assumption that, amongst other things, the necessary resolutions
are passed by Shareholders at the General Meeting, it is expected
that Admission of the New Ordinary Shares will become effective at
8.00 a.m. on 12 March 2020.
5.6 The New Ordinary Shares will be issued credited as fully
paid and will rank in full for all dividends and other
distributions declared, made or paid after Admission in respect of
Ordinary Shares and will otherwise rank on Admission pari passu in
all respects with the Existing Ordinary Shares. The New Ordinary
Shares are not being made available to the public and are not being
offered or sold in any jurisdiction where it would be unlawful to
do so.
The Open Offer
5.7 The Company considers it important that Shareholders who
have not taken part in the Placing to have an opportunity to
participate in the proposed fundraising in order that they are able
to maintain their existing proportional shareholding in the
Company. The Company will therefore provide all Qualifying
Shareholders other than Phoenix and Artemis with the opportunity to
subscribe for up to 4,488,692 Open Offer Shares at the Issue Price
pursuant to an Open Offer to raise, in aggregate, up to GBP1.6
million (before expenses). This will allow Qualifying Shareholders
to participate on a proportional basis.
5.8 Subject to fulfilment of the conditions set out below, the
Open Offer will provide Qualifying Shareholders with the
opportunity to apply to acquire Open Offer Shares at the Issue
Price pro rata to their holdings of Existing Ordinary Shares held
by Qualifying Shareholders as at the Open Offer Record Date on the
following basis:
1 Open Offer Share for every 3.006268641 Existing Ordinary
Shares held by Qualifying Shareholders
and in proportion for any other number of Existing Ordinary
Shares held by Qualifying Shareholders.
5.9 Entitlements to apply to acquire Open Offer Shares will be
rounded down to the nearest whole number and any fractional
entitlements to Open Offer Shares will be disregarded in
calculating an Open Offer Entitlement and will be aggregated and
made available to Qualifying Shareholders pursuant to the Excess
Application Facility.
5.10 The Open Offer will be conditional upon, inter alia, the
passing of the necessary resolutions at the General Meeting and
Admission. The proceeds of the Open Offer are anticipated to amount
to up to GBP1.6 million, before expenses. If the conditions of the
Open Offer are not satisfied, the Open Offer will not be
implemented and any Open Offer Entitlements admitted to CREST will
thereafter be disabled and application monies under the Open Offer
will be refunded to the applicants, by cheque (at the applicant's
risk) in the case of Qualifying Non-CREST Shareholders and by way
of a CREST payment in the case of Qualifying CREST Shareholders,
without interest, as soon as practicable, but within 14 days,
thereafter.
Excess Applications
5.11 The Open Offer will be structured to allow Qualifying
Shareholders to subscribe for Open Offer Shares at the Issue Price
pro rata to their holdings of the Existing Ordinary Shares held by
Qualifying Shareholders. Qualifying Shareholders will also be able
to make applications in excess of their pro rata initial
entitlement up to an amount equal to the total number of Open Offer
Shares available under the Open Offer less an amount equal to such
Qualifying Shareholder's Open Offer Entitlement. To the extent that
pro rata entitlements to Open Offer Shares are not subscribed for
by Qualifying Shareholders, such Open Offer Shares will be
available to satisfy such excess applications. Applications under
the Excess Application Facility may be allocated in such manner as
the Directors may determine, in their absolute discretion, and no
assurance can be given that any applications under the Excess
Application Facility by Qualifying Shareholders will be met in full
or in part or at all.
5.12 Qualifying Shareholders should note that the Open Offer is
not a rights issue. Qualifying Non-CREST Shareholders should be
aware that the Application Form is not a negotiable document and
cannot be traded. Qualifying Shareholders should also be aware that
in the Open Offer, unlike in a rights issue, any Open Offer Shares
not applied for will not be sold in the market nor will they be
placed for the benefit of Qualifying Shareholders who do not apply
under the Open Offer.
Overseas Shareholders
5.13 Certain Overseas Shareholders may not be permitted to
subscribe for Open Offer Shares pursuant to the Open Offer and
should refer to of Part 3 of the Circular.
Placing and Open Offer Agreement
5.14 A placing and open offer agreement has been entered into
between (1) the Company and (2) Liberum Capital in connection with
the Placing and Open Offer and pursuant to which Liberum Capital
has agreed, in accordance with its terms, to use reasonable
endeavours to place the Placing Shares with Placees. The terms of
the Placing and Open Offer Agreement provide that the Placing is
conditional, amongst other things, on:
(a) the passing of the necessary resolutions at the General Meeting;
(b) the conditions in the Placing and Open Offer Agreement being
satisfied or (if applicable) waived and the Placing and Open Offer
Agreement not having been terminated in accordance with its terms
prior to Admission; and
(c) Admission becoming effective by no later than 8.00 a.m. on
12 March 2020 (or such later time and/or date, being no later than
8.00 a.m. on 31 March 2020 as the Company and Liberum Capital may
agree in writing).
The Placing and Open Offer Agreement contains customary
warranties given by the Company to Liberum Capital as to matters
relating to the Group and its business and a customary indemnity
given by the Company to Liberum Capital in respect of liabilities
arising out of or in connection with the Placing and Open Offer.
Liberum Capital is entitled to terminate the Placing and Open Offer
Agreement in certain circumstances prior to Admission including
circumstances where there is a breach of warranty or on the
occurrence of certain force majeure events.
Admission, settlement and dealings
5.15 Application will be made to the London Stock Exchange for
the New Ordinary Shares, to be admitted to trading on AIM. Subject
to certain conditions, it is expected that Admission will become
effective and that dealings in respect of such New Ordinary Shares
will commence at 8.00 a.m. on 12 March 2020. Further information in
respect of settlement and dealings in the Open Offer Shares is set
out in Part 3 of the Circular.
5.16 The action to be taken for Qualifying Shareholders to apply
for Open Offer Shares is described in paragraph 10 of this Part
1.
6 Related party transactions
Amendment and Restatement Agreement
6.1 Lyndon Davies is a director of the Company. Catherine Davies
is a related party to Lyndon Davies.
6.2 The participation of Lyndon Davies and Catherine Davies in
the Amendment and Restatement Agreement is, for the purposes of AIM
Rule 13, considered a "Related Party Transaction". The LCD SPA
Independent Directors (in respect of the Amendment and Restatement
Agreement) consider, having consulted with the Company's nominated
adviser, Liberum Capital, that the terms of the Amendment and
Restatement Agreement are fair and reasonable insofar as
Shareholders are concerned.
7 SUBSTANTIAL PROPERTY TRANSACTION
As Lyndon Davies is a director of the Company, and Catherine
Davies is a person "connected with" Lyndon Davies as defined under
section 252 of the Act, and due to the fact that the consideration
which will become payable in the event that either (i) the Company
purchases the remaining 51 per cent. stake in LCD Enterprises from
Lyndon Davies and Catherine Davies or (ii) Lyndon Davies
re-acquires the 49 per cent. stake in LCD Enterprises, will be in
excess of GBP100,000, these possible subsequent share transfers
constitute, collectively and individually, substantial property
transactions under sections 190 and 191 of the Act. Sections 190
and 191 of the Act require that any substantial property
transaction with a director of a company must be approved in
advance by shareholders at a general meeting of such company.
Consequently, completion of the Amendment and Restatement Agreement
is conditional upon obtaining the approval of Shareholders.
Resolution 1 is an ordinary resolution that seeks Shareholder
approval of the Amendment and Restatement Agreement.
8 GEneral meeting
8.1 The Directors currently have existing authorities to allot
shares and disapply pre-emption rights under section 551 and
section 570 of the Act which were obtained at the Company's Annual
General Meeting held on 25 September 2019. However, these are
insufficient to enable the Company to allot and issue the full
amount of New Ordinary Shares pursuant to the Placing and Open
Offer. Accordingly, in order for the Company to allot and issue the
New Ordinary Shares, the Company needs to first obtain approval
from its Shareholders to grant to the Board additional authority to
allot the New Ordinary Shares and disapply statutory pre-emption
rights which would otherwise apply to such allotment. The Company
is therefore also seeking Shareholder authority to increase the
Director's general authority to allot securities and disapply
pre-emption rights pursuant to sections 551 and 570 of the Act
respectively.
8.2 As previously described, the Company is also seeking
Shareholder approval of the Amendment and Restatement
Agreement.
8.3 A notice convening the General Meeting of the Company to be
held at the offices of the Company's solicitors, Taylor Wessing LLP
at 5 New Street Square, London EC4A 3TW on 10 March 2020 at
10.00.a.m. will be contained in the Circular to be posted to
Shareholders, at which the Resolutions will be proposed.
8.4 The Resolutions can be summarised as follows:
(a) Resolution 1 - this will be proposed as an ordinary
resolution and seeks the approval of Shareholders to the Amendment
and Restatement Agreement, which is a substantial property
transaction for the purposes of the Act;
(b) Resolution 2 - this will be proposed as an ordinary
resolution and seeks the approval of Shareholders to authorise the
Directors to allot the New Ordinary Shares in connection with the
Placing and Open Offer; and
(c) Resolution 3 - this will be proposed as a special resolution
and seeks the approval of Shareholders to authorise the Directors
to disapply pre-emption rights in connection with the allotment of
the New Ordinary Shares.
8.5 Save in respect of the allotment of the Placing Shares and
Open Offer Shares, the grant of options to employees under employee
share plans or other similar incentive arrangements and pursuant to
any exercise of existing options in respect of Ordinary Shares, the
Directors have no current intention to allot shares, or rights to
subscribe or convert into shares, in the capital of the
Company.
8.6 Shareholders should note that, if Resolution 1 is not passed
by Shareholders at the General Meeting, the Amendment and
Restatement Agreement will not be implemented.
8.7 Shareholders should note that, if the Resolutions 2 and 3
are not passed by Shareholders at the
General Meeting, the Placing and Open Offer will not be implemented.
9 Irrevocable undertakings
9.1 John Stansfield, a Director who holds 64,052 Existing
Ordinary Shares, representing 0.05 per cent. of the issued Existing
Ordinary Shares, has given an irrevocable undertaking to vote or,
where applicable, to procure the casting of votes by his connected
persons (as defined in section 252 of the Act), in favour of the
Resolutions in respect of his own (or, as applicable, his connected
persons') beneficial holding of Existing Ordinary Shares.
9.2 Lyndon Davies, a Director who holds 596,670 Existing
Ordinary Shares, representing 0.48 per cent. of the issued Existing
Ordinary Shares, has given an irrevocable undertaking to vote or,
where applicable, to procure the casting of votes by his connected
persons (as defined in section 252 of the Act), in favour of
Resolutions 2 and 3 in respect of his own (or, as applicable, his
connected persons') beneficial holding of Existing Ordinary
Shares.
9.3 Kirstie Gould, a Director who holds 41,276 Existing Ordinary
Shares, representing 0.03 per cent. of the issued Existing Ordinary
Shares, has given an irrevocable undertaking to vote or, where
applicable, to procure the casting of votes by her connected
persons (as defined in section 252 of the Act), in favour of the
Resolutions in respect of her own (or, as applicable, her connected
persons') beneficial holding of Existing Ordinary Shares.
9.4 James Wilson, a Director who holds 31,000 Existing Ordinary
Shares, representing 0.02 per cent. of the issued Existing Ordinary
Shares, has given an irrevocable undertaking to vote or, where
applicable, to procure the casting of votes by his connected
persons (as defined in section 252 of the Act), in favour of
Resolution 1 in respect of his own (or, as applicable, his
connected persons') beneficial holding of Existing Ordinary
Shares.
9.5 Phoenix (in its capacity as manager of certain discretionary
funds which hold, in aggregate 74.66 per cent. of the issued
ordinary share capital of the Company) has given an irrevocable
undertaking to vote or, where applicable, to procure the casting of
votes by its relevant funds, in favour of the Resolutions.
9.6 Artemis (in its capacity as manager of certain discretionary
funds which hold, in aggregate 14.56 per cent. of the issued
ordinary share capital of the Company) has given an irrevocable
undertaking to vote or, where applicable, to procure the casting of
votes by its relevant funds, in favour of the Resolutions.
10 Intentions of the directors in relation to the open offer
The Directors intend to subscribe for their full pro rata
entitlements under the Open Offer and do not intend to subscribe
for any further Shares under the Excess Application Facility.
11 Recommendations
Amendment and Restatement Agreement
11.1 Shareholders should note that, if Resolution 1 is not
passed by Shareholders at the General Meeting, the Amendment and
Restatement Agreement will not be implemented.
11.2 The LCD SPA Independent Directors consider the terms of the
Amendment and Restatement Agreement to be in the best interests of
Shareholders and of the Company as a whole.
11.3 Accordingly, the LCD SPA Independent Directors unanimously
recommend that Shareholders vote in favour of Resolution 1 at the
General Meeting. The LCD SPA Independent Directors confirm that
they have irrevocably committed to vote in favour of Resolution 1
in respect of their beneficial holdings amounting, in aggregate, to
136,328 Existing Ordinary Shares, representing approximately 0.11
per cent. of the existing issued Ordinary Share capital of the
Company.
Placing and Open Offer
11.4 Shareholders should note that, if the Resolutions 2 and 3
are not passed by Shareholders at the General Meeting, the Placing
and Open Offer will not be implemented.
11.5 The Independent Directors consider the terms of the Placing
and Open Offer to be in the best interests of Shareholders and of
the Company as a whole.
11.6 Accordingly, the Independent Directors unanimously
recommend that Shareholders vote in favour of Resolutions 2 and 3
at the General Meeting. The Independent Directors confirm that they
have irrevocably committed to vote in favour of Resolutions 2 and 3
in respect of their beneficial holdings amounting, in aggregate, to
701,998 Existing Ordinary Shares, representing approximately 0.56
per cent. of the existing issued Ordinary Share capital of the
Company.
DEFINITIONS
The following definitions apply throughout this Announcement,
unless the context requires otherwise:
"Act" the Companies Act 2006 (as amended)
"Admission" the admission of the New Ordinary
Shares to trading on AIM becoming
effective in accordance with the
AIM Rules
"AIM" AIM, a market operated by the London
Stock Exchange
"AIM Rules" the AIM Rules for Companies published
by the London Stock Exchange from
time to time
"Amendment and Restatement the amendment and restatement agreement
Agreement" entered into between (1) the Company,
(2) Lyndon Charles Davies and (3)
Catherine Enrico Davies dated 20
February 2020 in connection with
the extension of the Lock In Period
from 3 years to 6 years from 8 December
2017
"Announcement" this announcement (including the
Appendix and information contained
therein)
"Application Form" the personalised application form
accompanying the Circular (where
appropriate) pursuant to which Qualifying
Non-CREST Shareholders (other than
certain Overseas Shareholders) may
apply to subscribe for Open Offer
Shares under the Open Offer
"Artemis" Artemis Investment Management LLP
(in its capacity as investment adviser
of certain discretionary funds)
"Board" or "Directors" the directors of the Company for
the time being as at the date of
this announcement
"Circular" the circular which is expected to
be dispatched to Shareholders in
connection with the Placing and
Open Offer and for the purpose of
convening the General Meeting
"certificated" or "in a share or other security not held
certificated form" in uncertificated form (i.e. not
in CREST)
"Closing Price" the closing middle market quotation
of the Existing Ordinary Shares,
as derived from the Daily Official
List of the London Stock Exchange
"Company" or "Hornby" Hornby PLC, a company incorporated
in England & Wales and with registered
number 01547390
"Conditional Placee(s)" any placee or placees who conditionally
agreed to subscribe for up to 4,488,692
Placing Shares, subject to clawback
by Qualifying Shareholders to satisfy
valid applications made by it or
them to subscribe for New Ordinary
Shares under the Open Offer and
"Conditional Placee" shall mean
any one of them
"Conditional Placing" the conditional placing by Liberum
Capital of 4,488,692 Placing Shares
at the Issue Price with the Conditional
Placees pursuant to the Placing
and Open Offer Agreement
"CREST" a relevant system (as defined in
the CREST Regulations) in respect
of which Euroclear is the Operator
(as defined in the CREST Regulations)
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI 2001/3755), including any
enactment or subordinate legislation
which amends or supersedes those
regulations and any applicable rules
made under those regulations or
any such enactment or subordinate
legislation for the time being in
force
"Enlarged Share Capital" the issued ordinary share capital
of the Company as enlarged by the
issue of the New Ordinary Shares
"EUR" or "Euros" the single European currency unit
"Excess Application Facility" the arrangement pursuant to which
Qualifying Shareholders may apply
for such number of Open Offer Shares
in excess of their Open Offer Entitlement
provided that they have agreed to
take up their Open Offer Entitlement
in full
"Existing Ordinary Shares" the 125,261,172 existing Ordinary
Shares in issue as at 20 February
2020 (being the latest practicable
date prior to publication of this
Announcement)
"FCA" the Financial Conduct Authority
in its capacity as the competent
authority for the purposes of Part
VI of FSMA
"Firm Placees" those placees whose Placing Shares
have been placed firm with them
pursuant to the Firm Placing and
"Firm Placee" shall mean any one
of them
"Firm Placing" the placing by Liberum Capital of
37,177,974 Placing Shares at the
Issue Price with the Firm Placees
pursuant to the Placing and Open
Offer Agreement
"FSMA" the Financial Services and Markets
Act 2000 (as amended)
"General Meeting" the general meeting of the Company
to be held at the offices of the
Company's solicitors, Taylor Wessing
LLP, 5 New Street Square, London
EC4A 3TW at 10.00 a.m. on 10 March
2020, or any adjournment thereof,
notice of which is set out at the
end the Circular
"Group" the Company and its subsidiary undertakings
"Independent Directors" the Directors other than James Wilson
"Irrevocable Undertakings" the irrevocable undertakings described
at paragraph 9 of this announcement
"Issue Price" the price at which the New Ordinary
Shares are to be issued and allotted
pursuant to the Placing and Open
Offer, being 36.0 pence per New
Ordinary Share
"LCD Enterprises" LCD Enterprises Limited, a company
incorporated in England & Wales
and with registered number 03005140
"LCD SPA" the sale and purchase agreement
entered into between (1) the Company,
(2) Lyndon Charles Davies and (3)
Catherine Enrico Davies dated 17
November 2017 in respect of the
acquisition by the Company of 49
per cent. of the issued ordinary
share capital of LCD Enterprises
"LCD SPA Independent Directors" the Directors other than Lyndon
Davies
"Liberum Capital" Liberum Capital Limited, the Company's
nominated advisor and broker in
connection with the Placing and
Open Offer
"Lock-In Period" the period beginning on the date
of the LCD SPA (being 17 November
2017) and ending on the third anniversary
of 8 December 2017
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" The 41,666,666 new Ordinary Shares
to be issued pursuant to the Placing
and the Open Offer
"Notice of General Meeting" the notice of General Meeting as
set out in the Circular
"Official List" the Official List of the FCA
"Open Offer" the conditional invitation made
by the Company to Qualifying Shareholders
to subscribe for the Open Offer
Shares at the Issue Price on the
terms and subject to the conditions
set out in Part 3 of the Circular
and, in the case of Qualifying Non-CREST
Shareholders, in the Application
Form
"Open Offer Entitlement" the entitlement of a Qualifying
Shareholder, pursuant to the Open
Offer, to apply to subscribe for
1 Open Offer Share for every 3.006268641
Existing Ordinary Shares registered
in its name as at the Open Offer
Record Date
"Open Offer Record Date" the record date in relation to the
Open Offer, being 5.00 p.m. on 19
February 2020
"Open Offer Shares" 4,488,692 New Ordinary Shares to
be issued by the Company to Qualifying
Shareholders in connection with
the Open Offer
"Ordinary Shares" the ordinary shares of 1 pence each
in the share capital of the Company
"Overseas Shareholders" Shareholders with registered addresses
in, or who are citizens, residents
or nationals of, jurisdictions outside
of the UK
"Oxford Diecast Group" Oxford Diecast Limited, a company
incorporated in England and Wales,
Oxford Diecast (HK) Limited, a company
incorporated in Hong Kong, and Oxford
Diecast USA LLC, a partnership incorporated
in USA
"Phoenix" Phoenix Asset Management Partners
Limited
"Placees" the Firm Placees and the Conditional
Placees
"Placing" the conditional placing by Liberum
Capital on behalf of the Company
of the Placing Shares with the Placees
pursuant to the Placing and Open
Offer Agreement, comprising the
Firm Placing and the Conditional
Placing
"Placing and Open Offer the conditional agreement dated
Agreement" 21 February 2020 entered into between
the Company and Liberum Capital
in respect of the Placing and Open
Offer
"Placing Shares" 37,177,974 New Ordinary Shares to
be placed for cash with Firm Placees
and up to 4,488,692 New Ordinary
Shares to be placed for cash with
Conditional Placees (subject to
clawback by Qualifying Shareholders
to satisfy valid applications made
by them to subscribe for New Ordinary
Shares under the Open Offer)
"Prospectus Regulation" the Prospectus Regulation Rules
Instrument published by the FCA
(FCA 2019/80), implementing the
EU Prospectus Regulation 2017/1129
"Qualifying Shareholders" holders of Existing Ordinary Shares
on the register of members of the
Company on the Open Offer Record
Date with the exclusion (subject
to exemptions) of: (i) persons with
a registered address or located
or resident in a Restricted Jurisdiction;
and (ii) Phoenix and Artemis, and
"Qualifying Shareholder" shall mean
any one of them
"Registrar" or "Receiving Link Asset Services, a trading name
Agent" of Link Market Services Limited,
a private limited company incorporated
in England & Wales under registered
number 02605568 and having its registered
office at The Registry, 34 Beckenham
Road, Beckenham, Kent, BR3 4TU,
United Kingdom the Company's registrar
and receiving agent. Link Asset
Services can be contacted on +44
(0)371 664 0321. Calls are charged
at the standard geographic rate
and will vary by provider. Calls
outside the United Kingdom will
be charged at the applicable international
rate. The helpline is open between
9.00 a.m. - 5.30 p.m., Monday to
Friday excluding public holidays
in England and Wales. Please note
that Link Asset Services cannot
provide any financial, legal or
tax advice and calls may be recorded
and monitored for security and training
purposes
"Regulatory Information has the meaning given in the AIM
Service" Rules
"Resolutions" the resolutions to be proposed at
the General Meeting, as set out
in the Notice of General Meeting
and "Resolution" shall be a reference
to any one of them
"Restricted Jurisdiction" any jurisdiction where local laws
or regulations may result in a significant
risk of civil, regulatory or criminal
exposure for the Company if information
or documentation concerning the
proposals set out in this announcement
sent or made available to Shareholders
in that jurisdiction including,
without limitation, the United States
of America, Canada, Australia, Japan
and the Republic of South Africa
"Shareholders" the holders of Existing Ordinary
Shares and "Shareholder" shall mean
any one of them
"uncertificated" or "in recorded on the register of members
uncertificated form" of the Company 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 "UK" the United Kingdom of Great Britain
and Northern Ireland
"United States" or "US" the United States of America
"US Securities Act" the US Securities Act of 1933, as
amended from time to time and the
rules and regulations promulgated
thereunder
"GBP" or "Pounds" UK pounds sterling, being the lawful
currency of the United Kingdom
APPIX: TERMS AND CONDITIONS OF THE PLACING
THIS ANNOUNCEMENT, INCLUDING THIS APPIX (TOGETHER, THE
"ANNOUNCEMENT") AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT
FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA, JAPAN, OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER
JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES
ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS APPIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE
FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS
WHO ARE IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA AND ARE
"QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2(1)(E) OF THE EU
PROSPECTUS REGULATION (WHICH MEANS REGULATION (EU) 2017/1129 (AS
AMED OR SUPERSEDED) (THE PROSPECTUS REGULATION); AND (B) IN THE
UNITED KINGDOM, PERSONS WHO ARE: (I) "INVESTMENT PROFESSIONALS"
WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND
MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE ORDER) OR
PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH
COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.") OF THE ORDER, AND
(II) "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86 OF FSMA AND (C)
PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH
PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS APPIX
AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR
RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT
OR INVESTMENT ACTIVITY TO WHICH THIS APPIX AND THE TERMS AND
CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT
PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS
APPIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION
OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT IS NOT AN OFFER
OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE
UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMED (THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR
AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. NO OFFERING OF SECURITIES IS
BEING MADE IN THE UNITED STATES. NO MONEY, SECURITIES OR OTHER
CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING
SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN
THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL,
TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING
SHARES (AS DEFINED BELOW).
Persons (the Placees) who are invited to and who choose to
participate in the Firm Placing or Conditional Placing (together
the Placing), by making (or on whose behalf there is made) an oral
or written offer to subscribe for Firm Placing Shares or
Conditional Placing Shares (together the Placing Shares), will be
deemed to have read and understood this Announcement, including
this Appendix, in its entirety and to be making such offer on the
terms and conditions, and to be providing the representations,
warranties, acknowledgements, and undertakings contained in this
Appendix. In particular each such Placee represents, warrants and
acknowledges to the Company and Liberum Capital that:
1. it is a Relevant Person (as defined above) and undertakes
that it will acquire, hold, manage or dispose of any Placing Shares
that are allocated to it for the purposes of its business;
2. in the case of any Placing Shares acquired by it as a
financial intermediary, as that term is used in Article 3(2) of the
Prospectus Regulation, (i) the Placing Shares acquired by it in the
Placing have not been acquired on behalf of, nor have they been
acquired with a view to their offer or resale to, persons in any
Member State of the European Economic Area other than Qualified
Investors or in circumstances in which the prior consent of Liberum
Capital has been given to the offer or resale; or (ii) where
Placing Shares have been acquired by it on behalf of persons in any
member state of the EEA other than Qualified Investors, the offer
of those Placing Shares to it is not treated under the Prospectus
Regulation as having been made to such persons;
3. it is acquiring the Placing Shares in an "offshore
transaction" as defined in and pursuant to Regulation S under the
Securities Act; and
4. it understands (or if acting for the account of another
person, such person has confirmed that such person understands) the
resale and transfer restrictions set out in this Appendix.
The Company and Liberum Capital will rely upon the truth and
accuracy of the foregoing representations, acknowledgements and
agreements.
This Announcement does not constitute an offer, and may not be
used in connection with an offer, to sell or issue or the
solicitation of an offer to buy or subscribe for Placing Shares in
any jurisdiction in which such offer or solicitation is or may be
unlawful. This Announcement and the information contained herein is
not for publication or distribution, directly or indirectly, to
persons in the United States, Australia, Canada, Japan or the
Republic of South Africa or in any other jurisdiction in which such
publication or distribution is unlawful. Persons into whose
possession this Announcement may come are required by the Company
to inform themselves about and to observe any restrictions of
transfer of this Announcement. No public offer of securities of the
Company is being made in the United Kingdom, the United States or
elsewhere.
In particular, the Placing Shares referred to in this
Announcement have not been and will not be registered under the
Securities Act or any laws of or with any securities regulatory
authority of any state or other jurisdiction of the United States,
and may not be offered, sold, pledged or otherwise transferred
within the United States except pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act and the securities laws of any state or other
jurisdiction of the United States. The Placing Shares are being
offered and sold only outside the United States in accordance with
Regulation S.
The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or
territory of Canada; no prospectus has been lodged with or
registered by the Australian Securities and Investments Commission
or the Japanese Ministry of Finance or the South African Reserve
Bank; and the Placing Shares have not been, nor will they be,
registered under or offered in compliance with the securities laws
of any state, province or territory of Australia, Canada, Japan or
the Republic of South Africa. Accordingly, the Placing Shares may
not (unless an exemption under the relevant securities laws is
applicable) be offered, sold, resold or delivered, directly or
indirectly, in or into Australia, Canada, Japan or the Republic of
South Africa or any other jurisdiction outside the United
Kingdom.
Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
of this Appendix or the Announcement of which it forms part should
seek appropriate advice before taking any action.
This Announcement should be read in its entirety. In particular,
you should read and understand the information provided in the
"Important Notices" section of this Announcement.
By participating in the Placing, each person who is invited to
and who chooses to participate in the Placing will be deemed to
have read and understood this Announcement in its entirety, to be
participating, making an offer and acquiring Placing Shares on the
terms and conditions contained herein and to be providing the
representations, warranties, indemnities, acknowledgements and
undertakings contained in this Appendix.
In this Appendix, unless the context otherwise requires,
"Placee" means a Relevant Person (including individuals, funds or
others) on whose behalf a commitment to subscribe for Placing
Shares has been given.
Details of the Placing and Open Offer Agreement and the Placing
Shares
Liberum Capital has entered into the Placing and Open Offer
Agreement with the Company under which Liberum Capital has
conditionally agreed on the terms and subject to the conditions set
out therein, as agent for the Company, to use its reasonable
endeavours to place the Placing Shares at the Issue Price with
certain institutional investors. The Placing is not being
underwritten by Liberum Capital or any other person.
The number of Placing Shares at the Issue Price will be
determined following completion of the Accelerated Book Build as
set out in this Announcement.
The Firm Placing Shares are not subject to clawback and do not
form part of the Conditional Placing and Open Offer.
The Conditional Placing Shares are being offered, subject to
clawback in respect of valid applications received for Open Offer
Shares by Qualifying Shareholders pursuant to the Open Offer.
Further details of the Placing procedure and terms on which the
Firm Placing Shares and Conditional Placing Shares are being
offered are set out below.
All of the Placing Shares will, when issued, be credited as
fully paid and will rank pari passu in all respects with each
other, the Open Offer Shares and the Existing Ordinary Shares,
including the right to receive all dividends and other
distributions (if any) declared, made or paid on or in respect of
such Ordinary Shares after the date of issue of the Placing
Shares.
Application for admission to trading
Application will be made for admission of the Firm Placing
Shares and Conditional Placing Shares to trading on AIM, alongside
the Open Offer Shares. It is expected that settlement of such
shares and Admission will become effective on or around 8.00 a.m.
on 12 March 2020 and that dealings in the Placing Shares and Open
Offer Shares will commence at that time.
Accelerated Book Build
Liberum Capital will today commence an Accelerated Book Building
process in respect to the Placing to determine demand for
participation in the Placing by any Placees at the Issue Price.
This Appendix gives details of the terms and conditions of, and the
mechanics of participation in, the Accelerated Book Build. No
commissions will be paid to Placees or by Placees in respect of any
Placing Shares.
Liberum Capital and the Company shall be entitled to effect the
Placing (in whole or in part) by such alternative method to the
Accelerated Book Build as they may, in their sole discretion,
determine.
Participation in, and principal terms of, the Placing
1. Liberum Capital is acting as nominated adviser and sole
bookrunner to the Placing, as agent for and on behalf of the
Company. Liberum Capital is regulated by the FCA, is acting
exclusively for the Company and no one else in connection with the
matters referred to in this Announcement and will not be
responsible to anyone other than the Company for providing the
protections afforded to the customers of Liberum Capital or for
providing advice in relation to the matters described in this
Announcement.
2. Liberum Capital is arranging the Accelerated Book Build and
Placing as an agent of the Company.
3. Participation in the Accelerated Book Build will only be
available to persons who may lawfully be, and are, invited to
participate by Liberum Capital. Liberum Capital and its affiliates
are entitled to enter bids in the Accelerated Book Build as
principal.
4. The Accelerated Book Build will establish the number of
Placing Shares to be issued at the Issue Price, which will be
agreed between Liberum Capital and the Company following completion
of the Accelerated Book Build. The number of Placing Shares will be
announced on a Regulatory Information Service following the
completion of the Accelerated Book Build.
5. To bid in the Accelerated Book Build, prospective Placees
should communicate their bid by telephone to their usual sales
contact at Liberum Capital. Each bid should state the number of
Placing Shares which the prospective Placee wishes to subscribe for
at the Issue Price. Bids may be scaled down by Liberum Capital on
the basis referred to in paragraph 9 below.
6. The Accelerated Book Build is expected to close no later than
4.00 p.m. (London) today but may be closed earlier or later at the
discretion of Liberum Capital. Liberum Capital may, in agreement
with the Company, accept bids that are received after the
Accelerated Book Build has closed.
7. Each Placee's allocation of Firm Placing Shares and
Conditional Placing Shares will be confirmed to Placees orally, or
by email, by Liberum Capital following the close of the Accelerated
Book Build. A bookrunner's oral or emailed confirmation to such
Placee will constitute an irrevocable legally binding commitment
upon such person (who will at that point become a Placee) in favour
of Liberum Capital and the Company, under which it agrees to
subscribe for the number of Placing Shares allocated to it at the
Issue Price (and in the respective numbers of Firm Placing Shares
and Conditional Placing Shares (subject to clawback) so allocated)
on the terms and conditions set out in this Appendix and in
accordance with the Company's Articles of Association. Each Placee
acknowledges that the Conditional Placing Shares are being offered
subject to clawback by Qualifying Shareholders who have made valid
applications for Open Offer Shares under the Open Offer in
accordance with the procedure described in the paragraph entitled
"Placing Procedure" below. Accordingly, any bid made in the
Accelerated Bookbuild and the subsequent apportionment of
Conditional Placing Shares allocated to a Placee in the Conditional
Placing will be subject to scale back, depending on the number of
Open Offer Shares to be issued in order to satisfy valid
applications received from Qualifying Shareholders.
8. The Company will make a further announcement following the
close of the Accelerated Book Build detailing the number of Firm
Shares and Conditional Placing Shares (subject to clawback) to be
issued at the Issue Price.
9. Subject to paragraphs 5 and 6 above, Liberum Capital may
choose to accept or reject bids, either in whole or in part, on the
basis of allocations determined at its discretion (in consultation
with the Company) and may scale down any bids for this purpose on
such basis as they may determine. Liberum Capital may also,
notwithstanding paragraphs 5 and 6 above, subject to the prior
consent of the Company: (i) allocate Placing Shares after the time
of any initial allocation to any person submitting a bid after that
time; and (ii) allocate Placing Shares after the Accelerated Book
Build has closed to any person submitting a bid after that
time.
10. A bid in the Accelerated Book Build will be made on the
terms and subject to the conditions in this Announcement and will
be legally binding on the Placee on behalf of which it is made and,
except with the consent of Liberum Capital, will not be capable of
variation or revocation after the time at which it is submitted.
Each Placee will also have an immediate, separate, irrevocable and
binding obligation, owed to Liberum Capital, to pay to Liberum
Capital (or as Liberum Capital may direct) in cleared funds an
amount equal to the product of the Issue Price and the number of
Firm Placing Shares and, once apportioned after clawback in
accordance with the Placing Procedure outlined below, any
Conditional Placing Shares for which such Placee has agreed to
subscribe. Each Placee's obligations will be owed to Liberum
Capital.
11. Except as required by law or regulation, no press release or
other announcement will be made by Liberum Capital or the Company
using the name of any Placee (or its agent), in its capacity as
Placee (or agent), other than with such Placee's prior written
consent.
12. Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed, settlement for all Placing
Shares to be acquired pursuant to the Placing will be required to
be made at the same time, on the basis explained below under
"Registration and Settlement".
13. All obligations under the Accelerated Book Build and Placing
will be subject to fulfilment of the conditions referred to below
under "Conditions of the Placing" and to the Placing not being
terminated on the basis referred to below under "Right to terminate
under the Placing and Open Offer Agreement".
14. By participating in the Accelerated Book Build, each Placee
agrees that its rights and obligations in respect of the Placing
will terminate only in the circumstances described below and will
not be capable of rescission or termination by the Placee.
15. To the fullest extent permissible by law and the applicable
rules of the FCA, neither Liberum Capital nor any of its affiliates
shall have any liability to Placees (or to any other person whether
acting on behalf of a Placee or otherwise whether or not a
recipient of these terms and conditions) in respect of the Placing.
Each Placee acknowledges and agrees that the Company is responsible
for the allotment of the Placing Shares to the Placees and Liberum
Capital shall have no liability to the Placees for the failure of
the Company to fulfil those obligations. In particular, neither
Liberum Capital nor any of its affiliates shall have any liability
(including to the extent permissible by law, any fiduciary duties)
in respect of Liberum Capital's conduct of the Accelerated Book
Build or of such alternative method of effecting the Placing (in
whole or in part) as Liberum Capital and the Company may agree.
Conditions of the Placing
Completion of both the Firm Placing and Conditional Placing is
conditional on, inter alia:
(a) the issue of the Circular by the Company by 5.00 p.m. on 21 February 2020;
(b) the passing of Resolutions 2 and 3 set out in the notice of
general meeting contained in the Circular (without material
amendment) ;
(c) the Company having complied with its obligations under the
Placing and Open Offer Agreement to the extent that such
obligations fall to be performed prior to Admission;
(d) none of the warranties or undertakings in the Placing and
Open Offer Agreement being untrue, inaccurate or misleading in any
material respect;
(e) Admission becoming effective by no later than 8.00 a.m. on
12 March 2020 (or such later date as the Company and Liberum
Capital may agree (being not later than 8.00 a.m. on 31 March
2020).
If: (i) any of the conditions contained in the Placing and Open
Offer Agreement in relation to the Placing Shares are not fulfilled
or waived by Liberum Capital by the respective time or date where
specified (or such later time or date as the Company and Liberum
Capital may agree, but not being later than 8.00 a.m. on 31 March
2020); (ii) any of such conditions becomes incapable of being
fulfilled and Liberum has not exercised its rights to waive or
extend the time for fulfilment of such conditions; or (iii) the
Placing and Open Offer Agreement is terminated in its entirety in
the circumstances specified below, the Placing will lapse and the
Placee's rights and obligations hereunder in relation to the
Placing Shares shall cease and terminate at such time and each
Placee agrees that no claim can be made by the Placee against
Liberum Capital in respect thereof.
Liberum Capital may, at its discretion and upon such terms as it
thinks fit, waive, or extend the period for, compliance by the
Company with the whole or any part of any of the Company's
obligations in relation to the conditions in the Placing and Open
Offer Agreement save that the above condition relating to Admission
taking place may not be waived. Any such extension or waiver will
not affect Placees' commitments as set out in this
Announcement.
Neither Liberum Capital nor the Company shall have any liability
to any Placee (or to any other person whether acting on behalf of a
Placee or otherwise) in respect of any decision they may make as to
whether or not to waive or to extend the time and/or date for the
satisfaction of any condition to the Placing nor for any decision
they may make as to the satisfaction of any condition or in respect
of the Placing generally and by participating in the Placing, each
Placee agrees that any such decision is within the absolute
discretion of Liberum Capital.
Right to terminate under the Placing and Open Offer
Agreement
Liberum Capital is entitled, at any time before Admission, to
terminate its obligations under the Placing and Open Offer
Agreement by giving notice to the Company in certain circumstances,
including, inter alia:
(a) a material breach of the warranties given by the Company in
the Placing and Open Offer Agreement; or
(b) the Company has failed to comply with its obligations under
the Placing and Open Offer Agreement, the Companies Act, FSMA, the
FS Act , MAR, the AIM Rules or other applicable law; or
(c) in Liberum Capital's opinion, there having been a material
adverse change in the financial position and/or prospects of the
Group; or
(d) the occurrence of a force majeure event which, in the
opinion of Liberum Capital, will or is likely to be prejudicial to
the Group or the Placing.
Following Admission, the Placing and Open Offer Agreement is not
capable of termination to the extent that it relates to the Placing
of the Placing Shares. The rights and obligations of the Placees
shall terminate only in the circumstances described in these terms
and conditions and will not be subject to termination by the Placee
or any prospective Placee at any time or in any circumstances. By
participating in the Placing, Placees agree that the exercise by
Liberum Capital of any right of termination or other discretion
under the Placing and Open Offer Agreement shall be within the
absolute discretion of Liberum Capital, and that it need not make
any reference to Placees and that it shall have no liability to
Placees whatsoever in connection with any such exercise.
No Prospectus
The Placing Shares are being offered to a limited number of
specifically invited persons only and will not be offered in such a
way as to require a prospectus in the United Kingdom or in any
other jurisdiction. No offering document, admission document or
prospectus has been or will be submitted to be approved by the FCA
in relation to the Placing, and any Placees' commitments will be
made solely on the basis of the information contained in the
Announcement (including this Appendix) and the Exchange Information
(as defined further below).
Each Placee, by accepting a participation in the Placing, agrees
that the content of this Announcement is exclusively the
responsibility of the Company and confirms that it has neither
received nor relied on any other information (other than the
Exchange Information), representation, warranty, or statement made
by or on behalf of the Company or Liberum Capital or any other
person and neither Liberum Capital nor the Company nor any other
person will be liable for any Placee's decision to participate in
the Placing based on any other information, representation,
warranty or statement which the Placees may have obtained or
received and, if given or made, such information, representation,
warranty or statement must not be relied upon as having been
authorised by any of Liberum Capital, the Company, or their
respective officers, directors, employees or agents.
Each Placee acknowledges and agrees that it has relied on its
own investigation of the business, financial or other position of
the Company in accepting a participation in the Placing. Neither
the Company nor Liberum Capital is making any undertaking or
warranty to any Placee regarding the legality of an investment in
the Placing Shares by such Placee under any legal, investment or
similar laws or regulations. No Placee should consider any
information in this Announcement to be legal, tax or business
advice. Each Placee should consult its own solicitor, tax adviser
and financial adviser for independent legal, tax and financial
advice regarding an investment in the Placing Shares. Nothing in
this paragraph shall exclude the liability of any person for
fraudulent misrepresentation.
Placing Procedure
Placees shall acquire the Firm Placing Shares and Conditional
Placing Shares to be issued pursuant to the Placing (after
clawback) and any allocation of the Firm Placing Shares and
Conditional Placing Shares (subject to clawback) to be issued
pursuant to the Placing will be notified to them on or around 10
March 2020 (or such other time and/or date as the Company and
Liberum Capital may agree).
Placees will be called upon to subscribe for, and shall
subscribe for, the Conditional Placing Shares only to the extent
that valid applications by Qualifying Shareholders under the Open
Offer are not received by 11.00 a.m. on 9 March 2020 (or by such
later time and/or date as the Company may agree with Liberum
Capital) or if applications have otherwise not been deemed to be
valid in accordance with the terms and conditions of the Circular
and, in respect of qualifying non-CREST holders only, the
Application Form.
Payment in full for any Firm Placing Shares and Conditional
Placing Shares so allocated in respect of the Placing at the Issue
Price must be made by no later than 11.00 am on 9 March 2020 (or
such other date as shall be notified to each Placee by Liberum
Capital) on the closing date for the Open Offer (or such other time
and/or date as the Company and Liberum Capital may agree). Liberum
Capital will notify Placees if any of the dates in these terms and
conditions should change, including as a result of delay in the
crediting of the Open Offer Entitlements in CREST, Admission or
otherwise.
Registration and Settlement
Settlement of transactions in the Placing Shares (ISIN:
GB00B01CZ652) following Admission will take place within the system
administered by Euroclear UK & Ireland Limited (CREST) provided
that, subject to certain exceptions, Liberum Capital reserves the
right to require settlement for, and delivery of, the Placing
Shares (or a portion thereof) to Placees by such other means that
they deem necessary if delivery or settlement is not possible or
practicable within CREST within the timetable set out in this
Announcement or would not be consistent with the regulatory
requirements in any Placee's jurisdiction. Each Placee agrees that
it will do all things necessary to ensure that delivery and payment
is completed in accordance with either the standing CREST or
certificated settlement instructions that it has in place with
Liberum Capital.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two (2) percentage points above LIBOR as
determined by Liberum Capital.
Each Placee is deemed to agree that, if it does not comply with
these obligations, Liberum Capital may sell any or all of the
Placing Shares allocated to that Placee on such Placee's behalf and
retain from the proceeds, for Liberum Capital's account and benefit
(as agent for the Company), an amount equal to the aggregate amount
owed by the Placee plus any interest due. The relevant Placee will,
however, remain liable for any shortfall below the aggregate amount
owed by it and may be required to bear any stamp duty or stamp duty
reserve tax or securities transfer tax (together with any interest
or penalties) which may arise upon the sale of such Placing Shares
on such Placee's behalf. By communicating a bid for Placing Shares,
each Placee confers on Liberum Capital all such authorities and
powers necessary to carry out any such sale and agrees to ratify
and confirm all actions which Liberum Capital lawfully takes in
pursuance of such sale.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the trade confirmation
or contract note is copied and delivered immediately to the
relevant person within that organisation.
The relevant settlement details are as follows:
Insofar as Placing Shares are registered in a Placee's name or
that of its nominee or in the name of any person for whom a Placee
is contracting as agent or that of a nominee for such person, such
Placing Shares should, subject as provided below, be so registered
free from any liability to UK stamp duty or stamp duty reserve tax
or securities transfer tax. Placees will not be entitled to receive
any fee or commission in connection with the Placing.
Representations, Warranties and Further Terms
By participating in the Placing each Placee (and any person
acting on such Placee's behalf) makes the following
representations, warranties, acknowledgements, agreements and
undertakings (as the case may be) to the Company and Liberum
Capital:
1. it represents and warrants that it has read and understood
this Announcement, including the Appendix, in its entirety and that
its subscription for Placing Shares is subject to and based upon
all the terms, conditions, representations, warranties,
acknowledgements, agreements and undertakings and other information
contained herein and undertakes not to redistribute or duplicate
this Announcement;
2. it acknowledges that no offering document, admission document
or prospectus has been prepared in connection with the Placing and
represents and warrants that it has not received and will not
receive a prospectus, admission document or other offering document
in connection therewith;
3. it acknowledges that the Existing Ordinary Shares are
admitted to trading on AIM, and the Company is therefore required
to publish certain business and financial information in accordance
with the AIM Rules and EU Regulation 596/2014 (collectively
"Exchange Information");
4. it acknowledges that none of Liberum Capital, the Company,
any of their respective affiliates or any person acting on behalf
of any of them has provided, and will not provide it, with any
material regarding the Placing Shares or the Company other than
this Announcement; nor has it requested any of Liberum Capital, the
Company, any of their respective affiliates or any person acting on
behalf of any of them to provide it with any such information;
5. it acknowledges that the content of this Announcement is
exclusively the responsibility of the Company, and that none of
Liberum Capital, their respective affiliates or any person acting
on behalf of any of them has or shall have any liability for any
information, representation or statement contained in this
Announcement or any information previously or concurrently
published by or on behalf of the Company, and will not be liable
for any Placee's decision to participate in the Placing based on
any information, representation or statement contained in this
Announcement or otherwise. Each Placee further represents, warrants
and agrees that the only information on which it is entitled to
rely and on which such Placee has relied in committing itself to
acquire the Placing Shares is contained in this Announcement and
any Exchange Information, such information being all that it deems
necessary to make an investment decision in respect of the Placing
Shares and that it has neither received nor relied on any other
information given or representations, warranties or statements made
by any of Liberum Capital or the Company, or, if received, it has
not relied upon any such information, representations, warranties
or statements (including any management presentation that may have
been received by any prospective Placee) and neither Liberum
Capital nor the Company will be liable for any Placee's decision to
accept an invitation to participate in the Placing based on any
other information, representation, warranty or statement. Each
Placee further acknowledges and agrees that it has relied solely on
its own investigation of the business, financial or other position
of the Company in deciding to participate in the Placing and it
will not rely on any investigation that Liberum Capital, its
affiliates or any person acting on behalf of any of them has or may
have conducted;
6. it represents and warrants that it has neither received nor
relied on any unpublished price sensitive information concerning
the Company in accepting this invitation to participate in the
Placing;
7. it acknowledges that none of Liberum Capital, its affiliates
or any person acting on behalf of any of them has or shall have any
liability for the Exchange Information, any publicly available or
filed information or any representation relating to the Company,
provided that nothing in this paragraph excludes the liability of
any person for fraudulent misrepresentation made by that
person;
8. it represents and warrants that it is acquiring the Placing
Shares in an "offshore transaction" as defined in and pursuant
Regulation S under the Securities Act;
9. it acknowledges that it is acquiring the Placing Shares for
its own account or for one or more accounts for which, in each
case, it exercises sole investment discretion, for investment
purposes and not with a view to any distribution or for resale in
connection with, the distribution thereof in whole or in part, in
the United States and that it has full power to make the
acknowledgements, representations and agreements herein on behalf
of each such account;
10. it acknowledges that the Placing Shares have not been and
will not be registered under the Securities Act or with any state
or other jurisdiction of the United States, nor approved or
disapproved by the US Securities and Exchange Commission, any state
securities commission in the United States or any other United
States regulatory authority, and agrees not to reoffer, resell,
pledge or otherwise transfer the Placing Shares except pursuant to
an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act;
11. unless otherwise specifically agreed in writing with Liberum
Capital, it represents and warrants that neither it nor the
beneficial owner of such Placing Shares will be a resident of the
United States, Australia, Canada, Japan or the Republic of South
Africa;
12. it acknowledges that the Placing Shares have not been and
will not be registered under the securities legislation of the
United States, Australia, Canada, Japan or the Republic of South
Africa and, subject to certain exceptions, may not be offered,
sold, taken up, renounced or delivered or transferred, directly or
indirectly, within those jurisdictions;
13. it represents and warrants that the issue to it, or the
person specified by it for registration as holder, of Placing
Shares will not give rise to a liability under any of sections 67,
70, 93 or 96 of the Finance Act 1986 (depositary receipts and
clearance services) and that the Placing Shares are not being
acquired in connection with arrangements to issue depositary
receipts or to transfer Placing Shares into a clearance system;
14. it represents and warrants that: (i) it has complied with
its obligations in connection with money laundering and terrorist
financing under the Proceeds of Crime Act 2002, the Terrorism Act
2000 (as amended), the Terrorism Act 2006 and the Money Laundering,
Terrorist Financing and Transfer of Funds (Information on the
Payer) Regulations 2017 and (ii) it is not a person: (a) with whom
transactions are prohibited under the Foreign Corrupt Practices Act
of 1977 or any economic sanction programmes administered by, or
regulations promulgated by, the Office of Foreign Assets Control of
the U.S. Department of the Treasury; (b) named on the Consolidated
List of Financial Sanctions Targets maintained by HM Treasury of
the United Kingdom; or (c) subject to financial sanctions imposed
pursuant to a regulation of the European Union or a regulation
adopted by the United Nations (together, the Regulations); and, if
making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the
identity of the third party as required by the Regulations and, if
making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the
identity of the third party as required by the Regulations and has
obtained all governmental and other consents (if any) which may be
required for the purpose of, or as a consequence of, such purchase,
and it will provide promptly to Liberum Capital such evidence, if
any, as to the identity or location or legal status of any person
which Liberum Capital may request from it in connection with the
Placing (for the purpose of complying with such Regulations or
ascertaining the nationality of any person or the jurisdiction(s)
to which any person is subject or otherwise) in the form and manner
requested by Liberum Capital on the basis that any failure by it to
do so may result in the number of Placing Shares that are to be
purchased by it or at its direction pursuant to the Placing being
reduced to such number, or to nil, as Liberum Capital may decide at
its sole discretion;
15. it represents and warrants that, to the extent it has
received any inside information (for the purposes of the Market
Abuse Regulation (EU Regulation No. 596/2014 ("MAR " )) and section
56 of the Criminal Justice Act 1993) in relation to the Company and
its securities, it has not: (a) dealt (or attempted to deal) in the
securities of the Company; (b) encouraged, recommended or induced
another person to deal in the securities of the Company; or (c)
unlawfully disclosed inside information to any person, prior to the
information being made publicly available;
16. it acknowledges that it has consented to receive information
in respect of securities of the Company and other price-affected
securities (as defined in FSMA) which makes it an "insider" for the
purposes of Part V of FSMA and MAR, and it agrees not to deal in
any securities of the Company until such time as the inside
information (as defined in FSMA) of which it has been made aware
has been made public for purposes of FSMA or it has been notified
by Liberum Capital or the Company that the proposed Placing will
not proceed and any unpublished price sensitive information of
which it is aware has been publicly announced, and, other than in
respect of its knowledge of the proposed Placing, it has neither
received nor relied on any confidential price sensitive information
concerning the Company or the Placing Shares;
17. if a financial intermediary, as that term is used in Article
5(1) of the Prospectus Regulation, it represents and warrants that
the Placing Shares purchased by it in the Placing will not be
acquired on a non-discretionary basis on behalf of, nor will they
be acquired with a view to their offer or resale to, persons in a
Member State of the European Economic Area other than Qualified
Investors, or in circumstances in which the prior consent of
Liberum Capital has been given to the offer or resale;
18. it represents and warrants that it has not offered or sold
and, prior to the expiry of a period of six (6) months from
Admission, will not offer or sell any Placing Shares to persons in
the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
business or otherwise in circumstances which have not resulted and
which will not result in an offer to the public in the United
Kingdom within the meaning of section 85(1) of the Financial
Services and Markets Act 2000 (FSMA);
19. it represents and warrants that it has not offered or sold
and will not offer or sell any Placing Shares to persons in the
European Economic Area prior to Admission except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes
of their business or otherwise in circumstances which have not
resulted in and which will not result in an offer to the public in
any member state of the European Economic Area within the meaning
of the Prospectus Regulation;
20. it represents and warrants that it has only communicated or
caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the FSMA) relating to
the Placing Shares in circumstances which do not require the
approval of the communication by an authorised person under section
21(1) of the FSMA;
21. it represents and warrants that it has complied and will
comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Placing Shares in, from or
otherwise involving, the United Kingdom;
22. if in a Member State of the European Economic Area, unless
otherwise specifically agreed with Liberum Capital in writing, it
represents and warrants that it is a Qualified Investor within the
meaning of the Prospectus Regulation;
23. if in the United Kingdom, it represents and warrants that it
is (a) a person who is (i) an investment professional within the
meaning of Article 19(5) of the Order or who falls within Article
49(2)(A) to (D) ("High Net Worth Companies, Unincorporated
Associations, etc.") of the Order and (ii) a "qualified investor"
as defined in section 86 of FSMA or (b) a person to whom this
Announcement may otherwise be lawfully communicated;
24. it represents and warrants that it and any person acting on
its behalf is entitled to acquire the Placing Shares under the laws
of all relevant jurisdictions and that it has all necessary
capacity and has obtained all necessary consents and authorities
and taken any other necessary actions to enable it to commit to
this participation in the Placing and to perform its obligations in
relation thereto (including, without limitation, in the case of any
person on whose behalf it is acting, all necessary consents and
authorities to agree to the terms set out or referred to in this
Announcement) and will honour such obligations;
25. where it is acquiring Placing Shares for one or more managed
accounts, it represents and warrants that it is authorised in
writing by each managed account: (a) to acquire the Placing Shares
for each managed account; (b) to make on its behalf the
representations, warranties, acknowledgements, undertakings and
agreements in this Appendix and the Announcement of which it forms
part; and (c) to receive on its behalf any investment letter
relating to the Placing in the form provided to you by Liberum
Capital;
26. it undertakes that it (and any person acting on its behalf)
will make payment for the Placing Shares allocated to it in
accordance with this Announcement on the due time and date set out
herein, failing which the relevant Placing Shares may be placed
with other subscribers or sold as Liberum Capital may in its sole
discretion determine and without liability to such Placee and it
will remain liable for any shortfall below the net proceeds of such
sale and the placing proceeds of such Placing Shares and may be
required to bear the liability for any stamp duty or stamp duty
reserve tax or security transfer tax (together with any interest or
penalties due pursuant to or referred to in these terms and
conditions) which may arise upon the placing or sale of such
Placee's Placing Shares on its behalf;
27. it acknowledges that none of Liberum Capital, its
affiliates, or any person acting on behalf of any of them, is
making any recommendations to it, advising it regarding the
suitability of any transactions it may enter into in connection
with the Placing and that participation in the Placing is on the
basis that it is not and will not be treated for these purposes as
a client of Liberum Capital and that Liberum Capital has no duties
or responsibilities to it for providing the protections afforded to
its clients or customers or for providing advice in relation to the
Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing and Open Offer
Agreement nor for the exercise or performance of any of its rights
and obligations thereunder including any rights to waive or vary
any conditions or exercise any termination right;
28. it undertakes that the person whom it specifies for
registration as the holder of the Placing Shares will be (i) itself
or (ii) its nominee, as the case may be. Neither Liberum Capital
nor the Company will be responsible for any liability to stamp duty
or stamp duty reserve tax resulting from a failure to observe this
requirement. Each Placee and any person acting on behalf of such
Placee agrees to participate in the Placing and it agrees to
indemnify the Company, Liberum Capital in respect of the same on
the basis that the Placing Shares will be allotted to the CREST
stock account of Liberum Capital who will hold them as nominee on
behalf of such Placee until settlement in accordance with its
standing settlement instructions;
29. it acknowledges that these terms and conditions and any
agreements entered into by it pursuant to these terms and
conditions shall be governed by and construed in accordance with
the laws of England and Wales and it submits (on behalf of itself
and on behalf of any person on whose behalf it is acting) to the
exclusive jurisdiction of the English courts as regards any claim,
dispute or matter arising out of any such contract, except that
enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest
chargeable thereon) may be taken by the Company or Liberum Capital
in any jurisdiction in which the relevant Placee is incorporated or
in which any of its securities have a quotation on a recognised
stock exchange;
30. it acknowledges that time shall be of the essence as regards
to obligations pursuant to this Appendix to the Announcement;
31. it agrees it will be bound by the terms of the Company's Articles of Association;
32. it agrees that the Company, Liberum Capital, and their
respective affiliates and others will rely upon the truth and
accuracy of the foregoing representations, warranties,
acknowledgements and undertakings which are given to Liberum
Capital on their own behalf and on behalf of the Company and are
irrevocable and are irrevocably authorised to produce this
Announcement or a copy thereof to any interested party in any
administrative or legal proceeding or official inquiry with respect
to the matters covered hereby;
33. it agrees to indemnify on an after-tax basis and hold the
Company, Liberum Capital and their respective affiliates harmless
from any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any
breach of the representations, warranties, acknowledgements,
agreements and undertakings in this Appendix and further agrees
that the provisions of this Appendix shall survive after completion
of the Placing;
34. it acknowledges that no action has been or will be taken by
any of the Company, Liberum Capital or any person acting on behalf
of the Company or Liberum Capital that would, or is intended to,
permit a public offer of the Placing Shares in any country or
jurisdiction where any such action for that purpose is
required;
35. it acknowledges that it is an institution that has knowledge
and experience in financial, business and international investment
matters as is required to evaluate the merits and risks of
subscribing for the Placing Shares. It further acknowledges that it
is experienced in investing in securities of this nature and is
aware that it may be required to bear, and it, and any accounts for
which it may be acting, are able to bear, the economic risk of, and
is able to sustain, a complete loss in connection with the Placing.
It has relied upon its own examination and due diligence of the
Company and its associates taken as a whole, and the terms of the
Placing, including the merits and risks involved; and
36. it acknowledges that its commitment to subscribe for Placing
Shares on the terms set out herein and in the trade confirmation or
contract note will continue notwithstanding any amendment that may
in future be made to the terms of the Placing and that Placees will
have no right to be consulted or require that their consent be
obtained with respect to the Company's conduct of the Placing.
The representations, warranties, acknowledgments and
undertakings contained in this Appendix are given to Liberum
Capital for itself and on behalf of the Company and are
irrevocable.
The agreement to settle a Placee's subscription (and/or the
subscription of a person for whom such Placee is contracting as
agent) free of stamp duty and stamp duty reserve tax depends on the
settlement relating only to a subscription by it and/or such person
direct from the Company for the Placing Shares in question. Such
agreement assumes that the Placing Shares are not being subscribed
for in connection with arrangements to issue depositary receipts or
to transfer the Placing Shares into a clearance service. If there
are any such arrangements, or the settlement relates to any other
subsequent dealing in the Placing Shares, stamp duty or stamp duty
reserve tax may be payable, for which neither the Company nor
Liberum Capital will be responsible, and the Placee to whom (or on
behalf of whom, or in respect of the person for whom it is
participating in the Placing as an agent or nominee) the
allocation, allotment, issue or delivery of Placing Shares has
given rise to such UK stamp duty or stamp duty reserve tax
undertakes to pay such UK stamp duty or stamp duty reserve tax
forthwith and to indemnify on an after-tax basis and to hold
harmless the Company and Liberum Capital in the event that any of
the Company and/or Liberum Capital has incurred any such liability
to UK stamp duty or stamp duty reserve tax. If this is the case,
each Placee should seek its own advice and notify Liberum Capital
accordingly.
In addition, Placees should note that they will be liable for
any stamp duty and all other stamp, issue, securities, transfer,
registration, documentary or other duties or taxes (including any
interest, fines or penalties relating thereto) payable outside the
UK by them or any other person on the subscription by them of any
Placing Shares or the agreement by them to subscribe for any
Placing Shares.
Each Placee, and any person acting on behalf of the Placee,
acknowledges that Liberum Capital does not owe any fiduciary or
other duties to any Placee in respect of any representations,
warranties, undertakings or indemnities in the Placing and Open
Offer Agreement.
Each Placee and any person acting on behalf of the Placee
acknowledges and agrees that Liberum Capital or any of its
affiliates may, at their absolute discretion, agree to become a
Placee in respect of some or all of the Placing Shares.
When a Placee or person acting on behalf of the Placee is
dealing with Liberum Capital, any money held in an account with
Liberum Capital on behalf of the Placee and/or any person acting on
behalf of the Placee will not be treated as client money within the
meaning of the rules and regulations of the FCA made under the
FSMA. The Placee acknowledges that the money will not be subject to
the protections conferred by the client money rules; as a
consequence, this money will not be segregated from Liberum
Capital's money in accordance with the client money rules and will
be used by Liberum Capital in the course of their own business and
the Placee will rank only as a general creditor of Liberum
Capital.
All times and dates in this Announcement may be subject to
amendment. Liberum Capital shall notify the Placees and any person
acting on behalf of the Placees of any changes.
No statement in this Announcement is intended to be a profit
forecast, and no statement in this Announcement should be
interpreted to mean that earnings per share of the Company for the
current or future financial years would necessarily match or exceed
the historical published earnings per share of the Company.
The price of shares and any income expected from them may go
down as well as up and investors may not get back the full amount
invested upon disposal of the shares. Past performance is no guide
to future performance, and persons needing advice should consult an
independent financial adviser.
The Placing Shares to be issued or sold pursuant to the Placing
will not be admitted to trading on any stock exchange other than
the London Stock Exchange.
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.
-end-
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IOELBLLLBLLZBBZ
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