TIDMDAR
RNS Number : 4188C
Dorcaster PLC
13 April 2017
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF
AMERICA, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, NEW
ZEALAND, JAPAN OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION.
This announcement does not constitute an offer of securities for
sale or subscription in any jurisdiction. Investors should not
subscribe for or purchase any securities referred to in this
announcement except in compliance with applicable securities laws
on the basis of information contained in the Admission Document (as
defined below) in connection with the Placing (as defined below)
and the proposed re-admission of the Company's ordinary shares to
trading on AIM, a market operated by the London Stock Exchange.
Copies of the Admission Document are available from the Company's
website at www.dorcasterplc.com.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Proposed Acquisition of Experiential Ventures Ltd
Proposed change of name to Escape Hunt plc
Proposed placing of 10,370,370 Placing Shares of 1.25 pence
each
at 135 pence per share
Proposed authorities to allot relevant securities and dis-apply
pre-emption rights
Amendment to the Articles
Proposed Share Buy-Back
Admission of the Enlarged Share Capital to AIM and Notice of
General Meeting
1. INTRODUCTION
The Company announces that it has conditionally agreed to
purchase the entire issued share capital of Experiential Ventures
Ltd for a consideration of GBP12 million on a cash free and debt
free basis, with a normalised level of working capital.
Experiential Ventures Ltd is the holding company of the Escape Hunt
Group. The consideration (following adjustments for cash/debt and
working capital) would be funded by a payment of GBP7.2 million in
cash on Completion and by the issue to the Sellers of the
Consideration Shares.
In order to fund the cash consideration payable pursuant to the
Acquisition and associated costs and expenses, as well as working
capital, the Company has also today announced the conditional
placing of 10,370,370 Placing Shares at 135 pence per share to
raise GBP14 million (GBP10.8 million net of expenses (including
VAT)). The Acquisition constitutes a reverse takeover of the
Company for the purposes of the AIM Rules for Companies and
accordingly requires Shareholder approval.
At the same time as the Acquisition and the Placing, the
Directors are making other consequential proposals comprising the
change of the Company's name to Escape Hunt plc, seeking new
authorities to allot relevant securities and to dis-apply
pre-emption rights which are appropriate in light of the Enlarged
Share Capital which would be in issue following completion of the
Proposals, to amend the Articles and to approve the Share
Buy-Back.
The Proposals are conditional, amongst other things, upon the
passing of the Resolutions at a General Meeting to be held at the
offices of Eversheds Sutherland (International) LLP, One Wood
Street, London EC2V 7WS at 9.30 a.m. on 2 May 2017, and Admission
taking place. It is expected that Admission will become effective,
and that dealings in the Enlarged Share Capital will commence on
AIM, on 3 May 2017.
An admission document in respect of the admission of the
Enlarged Share Capital (the "Admission Document") has been posted
to Shareholders on 13 April 2017. In addition, copies of the
Admission Document will be available from the offices of Peel Hunt
LLP ("Peel Hunt") at Moor House, 120 London Wall, London EC2Y 5ET
from the date of the Admission Document until the date falling one
month from Admission, and on the Company's website at
www.dorcasterplc.com.
The Admission Document contains detailed information about the
Escape Hunt Group, the Acquisition and the Placing and explains why
the Directors consider the Proposals (excluding the Share Buy-Back
on which they cannot make a recommendation) to be in the best
interests of the Company and its Shareholders as a whole, and
recommend that you vote in favour of the Resolutions to be proposed
at the General Meeting, notice of which is set out at the end of
the Admission Document.
All capitalised terms in this announcement are defined within
the Admission Document.
Important information:
Peel Hunt, which is a member of the London Stock Exchange and is
authorised and regulated by the Financial Conduct Authority in the
United Kingdom is acting exclusively for the Company as nominated
adviser, joint corporate broker and joint bookrunner in connection
with the Placing and Admission and will not be acting for or
otherwise responsible to anyone other than the Company for
providing the protections afforded to customers of Peel Hunt or for
advising any such person in connection with the Placing or
Admission.
Stockdale Securities Limited ("Stockdale Securities"), which is
a member of the London Stock Exchange and is authorised and
regulated by the Financial Conduct Authority in the United Kingdom
is acting exclusively for the Company as joint corporate broker and
joint bookrunner in connection with the Placing and Admission and
will not be acting for or otherwise responsible to anyone other
than the Company for providing the protections afforded to
customers of Stockdale Securities or for advising any such person
in connection with the Placing or Admission.
Peel Hunt's responsibilities as the Company's nominated adviser
under the AIM Rules for Nominated Advisers are owed solely to the
London Stock Exchange and are not owed to the Company or to any
Director, any Proposed Director or to any other person in respect
of his decision to acquire Placing Shares in reliance on the
Admission Document or any other information.
Forward-looking statements
Some of the statements in this announcement include forward
looking statements which reflect the Directors' current views with
respect to financial performance, business strategy, plans and
objectives of management for future operations (including
development plans relating to the Group's products and services).
These statements include forward looking statements both with
respect to the Group and with respect to the sectors and industries
in which the Group operates. Statements which include the words
"expects", "intends", "plans", believes", "projects",
"anticipates", "will", "targets", "aims", "may", "would", "could",
"continue" and similar statements are of a forward looking
nature.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future and therefore
are based on current beliefs and expectations about future events.
Forward-looking statements are not guarantees of future performance
and the Group's actual operating results and financial condition,
and the development of the industry in which it operates may differ
materially from those made in or suggested by the forward-looking
statements contained in this announcement. In addition, even if the
Group's operating results, financial condition and liquidity, and
the development of the industry in which the Group operates are
consistent with the forward looking statements contained in this
announcement, those results or developments may not be indicative
of results or developments in subsequent periods. Accordingly,
prospective investors should not rely on these forward-looking
statements.
These forward looking statements speak only as of the date of
this announcement. The Company undertakes no obligation to publicly
update or review any forward looking statement, whether as a result
of new information, future developments or otherwise, unless
required to do so by applicable law or the AIM Rules for Companies.
All subsequent written and oral forward looking statements
attributable to the Group or individuals acting on behalf of the
Group are expressly qualified in their entirety by this paragraph.
Prospective investors should specifically consider the factors
identified in this announcement which could cause actual results to
differ from those indicated or suggested by the forward looking
statements in this announcement before making an investment
decision.
Important information
Neither this announcement nor any copy of it may be made or
transmitted into the United States of America (including its
territories or possessions, any state of the United States of
America and the District of Columbia) (the "United States"), or
distributed, directly or indirectly, in the United States. Neither
this announcement nor any copy of it may be taken or transmitted
directly or indirectly into Australia, Canada, the Republic of
South Africa, New Zealand, Japan or to any persons in any of those
jurisdictions, except in compliance with applicable securities
laws. Any failure to comply with this restriction may constitute a
violation of United States, Australian, Canadian, South African,
New Zealand or Japanese securities laws or the securities laws of
any other jurisdiction (other than the United Kingdom). The
distribution of this announcement in other jurisdictions may be
restricted by law and persons into whose possession this
announcement comes should inform themselves about, and observe any
such restrictions. This announcement does not constitute or form
part of any offer or invitation to sell or issue, or any
solicitation of any offer to purchase or subscribe for securities
in the United States, Australia, Canada, the Republic of South
Africa, New Zealand, Japan or in any jurisdiction to whom or in
which such offer or solicitation is unlawful.
The securities to which this announcement relates have not been,
and will not be, registered under the US Securities Act of 1933, as
amended (the "Securities Act") or with any regulatory authority or
under any applicable securities laws of any state or other
jurisdiction of the United States, and may not be offered or sold
within the United States unless registered under the Securities Act
or pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act and in
compliance with applicable state laws. There will be no public
offer of the securities in the United States.
The securities referred to herein have not been registered under
the applicable securities laws of Australia, Canada, the Republic
of South Africa, New Zealand or Japan and, subject to certain
exceptions, may not be offered or sold within Australia, Canada,
the Republic of South Africa, New Zealand or Japan or to any
national, resident or citizen of Australia, Canada, the Republic of
South Africa, New Zealand or Japan.
No representation or warranty, express or implied, is made by
the Company, Peel Hunt or Stockdale Securities as to any of the
contents of this announcement, including its accuracy, completeness
or for any other statement made or purported to be made by any of
them, the Directors or any other person, in connection with the
Placing and Admission, and nothing in this announcement shall be
relied upon as a promise or representation in this respect, whether
as to the past or the future (without limiting the statutory rights
of any person to whom this announcement is issued). Neither Peel
Hunt nor Stockdale Securities accepts any liability whatsoever for
the accuracy of any information or opinions contained in this
announcement or for the omission of any material information from
this announcement for which the Company and the Directors are
solely responsible.
Enquiries
Dorcaster Tel: +44 (0) 161 957 8888
Alistair Rae, Company
Secretary
Peel Hunt Tel: +44 (0) 207 418 8900
Nominated adviser, joint
bookrunner and joint corporate
broker to Dorcaster
Adrian Trimmings
George Sellar
Alex Lomax
Al Rae (ECM)
Stockdale Securities Tel: +44 (0) 207 601 6100
Joint bookrunner and joint
corporate broker to Dorcaster
Daniel Harris
2. BACKGROUND ON THE COMPANY
The Company was admitted to AIM on 8 July 2016. The Company was
formed by Richard Rose, Karen Jones and Hubert van den Bergh to
create value for its investors through the acquisition and
subsequent development of target businesses.
The Company's investment policy is to acquire controlling stakes
in one or more quoted or unquoted businesses or companies (in whole
or in part) in the consumer and leisure sectors.
3. SUMMARY INFORMATION ON THE ESCAPE HUNT GROUP
The Escape Hunt Group is a global provider of live 'escape the
room' experiences. The first Escape Hunt branch was opened in 2013
in Bangkok, Thailand. The business has grown quickly, becoming a
franchised global network (including one owner-operated branch) of
38 branches operating 214 rooms across 20 countries (as at 28
February 2017).
In FY16, the Escape Hunt Group generated revenue of
approximately GBP1.1 million revenue and profit before tax of
approximately GBP0.3 million. As at 31 December 2016, the Escape
Hunt Group had net liabilities of approximately GBP0.4 million.
Detailed information on the Escape Hunt Group is set out in Part
3 of the Admission Document and historical financial information on
the Escape Hunt Group can be found in Part 5 of the Admission
Document.
4. REASONS FOR THE ACQUISITION
In line with its investing policy, the Company's stated strategy
is to acquire controlling stakes in one or more quoted or unquoted
businesses or companies (in whole or in part) in the consumer and
leisure sectors.
The Directors and Proposed Directors consider that the
opportunity represented by the Acquisition is aligned to this
strategy and in the best interests of the Company and Shareholders
because Escape Hunt:
- is a global leader in a fragmented market enjoying explosive growth;
- has a timely opportunity for further expansion;
- has a successful worldwide offering;
- has a clear growth plan with multiple revenue streams;
- has attractive site economics; and
- has an experienced management team.
Furthermore, the existing Escape Hunt Group is highly profitable
with high levels of cash generation, achieving an Adjusted EBITDA
margin of 35 per cent. and operating cash conversion of 131 per
cent. in FY16.
5. MARKET OPPORTUNITY AND GROWTH STRATEGY FOR THE ENLARGED
GROUP
The Directors and Proposed Directors believe that Escape Hunt,
as a leading brand in the escape game market, has a global platform
from which to accelerate growth.
Escape Hunt's strategy is to initially open owner-operated
branches in the UK and another European jurisdiction, where it is
considered there are significant opportunities to launch Escape
Hunt branches. In addition, Escape Hunt intends to continue to open
further franchise branches across the globe. In 2017, the Directors
and Proposed Directors plan to open 8 owner-operated branches and
18 franchise branches. In the medium term, the Directors and
Proposed Directors are targeting over 100 owner-operated branches
and 150 franchise branches.
6. CURRENT TRADING AND PROSPECTS
Dorcaster
Dorcaster is currently an investing company and does not trade.
Since the Company's admission to AIM in July 2016, the Company has
incurred expenditure in line with the Directors' expectations in
exploring potential acquisitions in accordance with its investing
policy.
Following completion of the Proposals, Dorcaster would no longer
be an investing company for the purposes of the AIM Rules for
Companies.
The Escape Hunt Group
Since 31 December 2016, the date to which the latest financial
information included in the Admission Document has been prepared,
the Escape Hunt Group has continued to trade in line with the
Directors' and Proposed Directors' expectations.
7. DIRECTORS AND PROPOSED DIRECTORS
Directors
The Board currently comprises the following Directors:
Richard Rose, Non-executive Chairman
Richard has a wealth of experience chairing high profile boards.
He has been Non-executive Chairman of Watchstone Group plc since
May 2015, Crawshaw Group plc since 2006 and Anpario plc since 2005.
Previously he has held a number of positions in organisations such
as AC Electrical Wholesale, where he was Chairman from 2003 to 2006
and Whittard of Chelsea plc, where he was Chief Executive Officer
and then Executive Chairman from 2004 to 2006. In accordance with
best practice under the UK Corporate Governance Code, he stepped
down as Non-executive Chairman of Booker Group plc in July 2015
having served three terms of three years each. In July 2016,
Richard retired as Chairman of AO World plc after eight years.
Richard is also Non-executive Chairman of CurrencyFair Limited.
Hubert van den Bergh, Non-executive Director
Hubert formerly worked for six years at Merrill Lynch Investment
Managers as a fund manager investing in UK equities (1998 - 2004).
Since then, he has worked at other investment management firms.
Hubert was educated at Oxford University where he received a BA in
Modern Languages. Given the proposed appointment of an additional
Non-executive Director to the Board, it has been agreed that Hubert
will resign from the Board on Completion.
Karen Jones has resigned from the Board in order to allow for
the appointment of an additional Non-executive Director with
relevant financial experience to become audit committee chair. The
Board would like to thank Karen for all of her assistance to date
in sourcing and reviewing potential acquisition opportunities for
the Company.
Proposed Directors
On Admission, it is proposed that the following will be
appointed as directors of the Company:
Richard Harpham, Proposed Chief Executive Officer
Richard has recently worked with the Escape Hunt management
team, getting to know the business. Richard's prior role was with
Harris + Hoole, having been Chief Financial Officer and then
Managing Director, responsible for its turnaround. Before this
Richard spent over four years at Pret A Manger as Global Head of
Strategy. Richard has also held a number of strategic and financial
positions at companies including Constellation Brands, Shire
Pharmaceuticals and Fujitsu Siemens Computers.
Alistair Rae, Proposed Chief Financial Officer
Alistair started his career at KPMG in 1979. Since then, he has
worked in advisory roles at other financial services firms
including Touche Ross (now part of Deloitte), Cazenove & Co.
(now part of JP Morgan Cazenove) and HSBC. In addition, he has held
financial, strategic and executive roles at Jarvis PLC, Imagelinx
plc, Range Resources, DCCL, Motortrak Ltd, Simigon Ltd and Refresh
Group Ltd. Alistair is a Chartered Accountant.
Adrian Jones, Proposed Non-executive Director
Adrian has served as a non-executive director of Escape Hunt
since its incorporation in 2014 and has advised Paul Bartosik, the
Escape Hunt founder, on the international expansion and day-to-day
operations of the business. Early in his career, Adrian was the
creator of WinMail, a leading email product in the early 1990s.
Subsequently he has founded or managed multiple IT, sports and
media companies. Adrian is the founder and executive director of
the Witness Collection, one of the largest collections of
Vietnamese art in the world.
Karen Bach, Proposed Non-executive Director
Karen is an entrepreneur and non-executive director with strong
technology, international and transactional expertise. Karen was
the Chief Financial Officer. at growing technology businesses
IXEurope Plc, ACS Plc and Kewill Plc prior to founding
KalliKids.com in 2012 where she is Chief Executive Officer. Karen
gained much experience internationally and in finance with blue
chip multi-nationals including EDS France, MCI WorldCom, General
Motors and Ernst & Young. Karen is also a non-executive
director of IXCellerate, a Russian datacentre business, and of
Amino plc, a provider of digital entertainment solutions for
internet television, and has been Trustee of the eLearning
Foundation (supporting technology in education) and a nonexecutive
director of Belvoir Lettings Plc.
Details of the service contracts of the Directors and Proposed
Directors are contained in the Admission Document.
Senior Board Support
The Board will be supported by Paul Bartosik and Andrew Jacobs
who both have significant industry experience:
Paul Bartosik, Founder and Chief Creative Officer
Paul founded Escape Hunt in 2013 and has grown it to the leading
global brand it is today. Paul began his career in various sales
and marketing roles. In 1994, Paul was awarded an MA degree in
Modern Languages & Psychology from Cambridge University.
Subsequently Paul had a career in sales, marketing, corporate
management and strategic consulting, before turning to
entrepreneurial ventures and eventually founding Escape Hunt.
Today, Paul focuses more and more on the creative side of Escape
Hunt's game design and the customer experience. Paul has always had
a passion for puzzles, games and problem-solving.
Andrew Jacobs, Property Director
Andrew has been working with Escape Hunt in the UK since 13
October 2016, primarily consulting on potential sites for Escape
Hunt branches in the UK. In 1998, Andrew co-founded the Giraffe
restaurant chain, growing the business to approximately 50 sites
before selling it to Tesco plc in March 2013.
8. PRINCIPAL TERMS AND CONDITIONS OF THE ACQUISITION
On 13 April 2017, the Company, and its subsidiary Escape Hunt
Group Limited, entered into the Acquisition Agreement with the
Sellers pursuant to which Escape Hunt Group Limited has
conditionally agreed to acquire the entire issued share capital of
Escape Hunt for a consideration of GBP12 million, on a cash free
and debt free basis, with a normalised level of working capital.
The consideration payable to the Sellers (following adjustments for
cash/debt and working capital) will be satisfied by the payment of
GBP7.2 million in cash and by the issue of the Consideration Shares
to the Sellers.
Completion of the Acquisition Agreement is conditional, amongst
other things, upon:
- the Placing Agreement having become unconditional in all respects;
- Shareholder approval of the Resolutions; and
- Admission.
The Company will use its existing cash resources and the
proceeds of the Placing to satisfy the cash consideration for the
Acquisition and associated costs and expenses.
9. THE PLACING
In order to fund the cash consideration for the Acquisition, the
related costs and expenses of the Proposals and for general working
capital purposes, the Company is seeking to raise GBP14 million
(gross) (GBP10.8 million net of expenses (including VAT)) pursuant
to the Placing through the issue of the Placing Shares at the
Placing Price. The Placing Shares will represent approximately 51.2
per cent. of the Enlarged Share Capital immediately following
Admission.
The VCT Placing Shares will be allotted and issued before the
Placing Shares (excluding the VCT Placing Shares) with the
intention that VCT Placees investing as part of the VCT Placing
will be able to benefit from tax advantages pursuant to the rules
of the VCT Scheme. For more detail see paragraph 19 later in this
announcement.
Further details of the Placing Agreement, which (together with
Part 7 of the Admission Document) contains the terms and conditions
upon which the Placing is being undertaken, are described in
paragraph 9 of Part 8 of Admission Document. The Placing is being
conditionally underwritten by Peel Hunt and Stockdale
Securities.
The obligations of the Joint Bookrunners under the Placing
Agreement (and, therefore, completion of the Placing) are
conditional, among other things, on:
(a) the Company allotting and issuing the Placing Shares prior
to and, save in respect of the VCT Placing Shares, conditional only
on Admission, in accordance with the terms of the Placing
Agreement;
(b) the Acquisition Agreement having become unconditional in
accordance with its terms and conditions, save as to any condition
relating to Admission having occurred;
(c) Admission taking place not later than 8.00 a.m. (London
time) on 3 May 2017 (or such later time and/or date as the Company
and the Joint Bookrunners may agree, being not later than 17 May
2017; and
(d) the Placing Agreement otherwise becoming unconditional and
not having been terminated, in accordance with its terms, prior to
Admission.
Following Admission, the Placing Shares will rank pari passu
with the Existing Ordinary Shares. Application will be made for the
admission of the Enlarged Share Capital to trading on AIM, which
Admission is expected to occur on 3 May 2017.
Admission will also enable the Sellers to realise, in part,
their investment in the Escape Hunt Group and provide the Escape
Hunt Group with funding to implement its roll-out strategy.
10. INCENTIVISATION ARRANGEMENTS
In order to align the interests of Shareholders and employees of
the Group following Admission, the Company is proposing to
establish, on or prior to Admission, the Share Incentive Plans,
further details of which are set out in paragraph 5 of Part 8 of
the Admission Document.
The Company intends to issue invitations pursuant to the
Executive Growth Share Plan ("EGSP") on or shortly after Admission
to certain members of the Enlarged Group's senior executive team.
Further to such invitation, each relevant individual concerned may
(at their election) subscribe for the number of G Shares specified
in the invitation. Details of the proposed invitations intended to
be made under the EGSP on or shortly after Admission and the number
of G Shares that may be subscribed for pursuant to such invitations
are set out in paragraph 6(b) of Part 8 of the Admission Document.
Furthermore, the principal rights attaching to the G Shares are
summarised at paragraph 5 of Part 8 of the Admission Document. It
should be noted that other than the invitations detailed in
paragraph 6(b) of Part 8 of the Admission Document, it is intended
that no further invitations are issued under the EGSP.
The Company Share Option Plan ("CSOP") shall afford the Company
the ability to grant options over Ordinary Shares to eligible
employees of the Group and for those options to be exercised in a
tax efficient manner subject to the requisite statutory conditions
being satisfied. The CSOP therefore gives the Company the ability
to reward and incentivise its employees in a manner which is tax
efficient for both the employees concerned and the Company. There
is no present intention to grant options under the CSOP to any
identified employees of the Group at Admission. Instead it is
intended that the CSOP shall be used to grant options to eligible
employees of the Group, as and when such eligible employees have
been identified following Admission. Further details of the CSOP,
including the limit on the number of Ordinary Shares that may be
made subject to options granted under the CSOP, are set out in
paragraph 5 of Part 8 of the Admission Document.
11. SHARE BUY-BACK AGREEMENTS
It has been agreed that following the Placing, the 4,000,000
Ordinary Shares in aggregate held by Karen Jones, Hubert van den
Bergh, Dominic Rose, Jessica Rose and Jaime Sarah Rose Scudamore
prior to the Company's admission to AIM on 8 July 2016 ("Pre-IPO
Shares") will have a value, at the Placing Price, of GBP450,000. It
is therefore proposed that Shareholders approve a Company share
buy-back at the General Meeting which will have the effect of
reducing their combined holding so that the aggregate value, at the
Placing Price, of the Pre-IPO Shares (following the Share Buy-Back)
equates to GBP450,000. It is proposed that an aggregate of
3,666,667 Ordinary Shares (which equates to 18.1 per cent. of the
Enlarged Share Capital) will be acquired by the Company from Karen
Jones, Hubert van den Bergh, Dominic Rose, Jessica Rose and Jaime
Sarah Rose Scudamore at par value (GBP0.0125 per Ordinary Share) in
cash.
The Company and each of Karen Jones, Hubert van den Bergh,
Dominic Rose, Jessica Rose and Jaime Sarah Rose Scudamore have
entered into a share buy-back agreement which is conditional upon
Admission and, as this is an "off-market" share purchase, approval
by Shareholders is required by the 2006 Act. Further details on the
Share Buy-Back agreements are in contained in paragraph 10(a)(v) of
Part 8 of the Admission Document.
12. RELATED PARTY TRANSACTIONS
The Share Buy-Back constitutes a related party transaction for
the purposes of Rule 13 of the AIM Rules for Companies in respect
of both of the Directors and neither of the Directors are
considered independent for the purpose of making a recommendation
to Shareholders in respect of it.
Accordingly Peel Hunt, in its capacity as the Company's
nominated adviser, confirms that it considers that the terms of the
Share Buy-Back are fair and reasonable insofar as independent
Shareholders are concerned. At the General Meeting convened for
9.30 a.m. on 2 May 2017, Resolution 3 will be proposed to approve
the Share Buy-Back.
13. LOCK-INS AND ORDERLY MARKET PROVISIONS
Lock-in and orderly market deeds were entered into on 13 April
2017 between (1) Peel Hunt, (2) Stockdale Securities, (3) the
Company and (4) each of the Locked-in Shareholders. Pursuant to the
deeds, each of the Locked-in Shareholders has undertaken to the
Company and Peel Hunt that, subject to certain limited exceptions
permitted by Rule 7 of the AIM Rules for Companies, they will not
dispose of Ordinary Shares held by them for a period following
Admission. In the case of Paul Bartosik, Adrian Jones, Hubert van
den Bergh, Richard Rose, Alistair Rae, Richard Harpham and Karen
Bach, this period is 12 months following Admission and in the case
of Dominic Rose, Jessica Rose and Jaime Sarah Rose Scudamore, this
period is 6 months following Admission (the relevant Locked-in
Shareholder's "Hard Lock-in Period"). Each of Paul Bartosik, Adrian
Jones, Hubert van den Bergh, Richard Rose, Alistair Rae, Richard
Harpham and Karen Bach has also undertaken that for the period of 6
months following the expiry of their Hard Lock-in Period, they will
only dispose of Ordinary Shares held by them on an orderly market
basis through Peel Hunt or Stockdale Securities, if they shall at
the relevant time remain the Company's corporate broker. Adrian
Jones also has a derogation from these orderly market provisions to
dispose of up to half of his holding of Consideration Shares to the
extent necessary in order to satisfy any liabilities owing by
Adrian Jones under the terms of the Acquisition Agreement and/or
Placing Agreement.
The lock-in and orderly market agreement dated 5 July 2016 made
between (1) Peel Hunt, (2) the Company and (3) Karen Jones referred
to in the Company's AIM admission document of the same date shall
remain in force. Pursuant to this agreement Karen Jones undertook
to the Company and Peel Hunt that, subject to certain limited
exceptions permitted by Rule 7 of the AIM Rules for Companies, she
would not dispose of Ordinary Shares held by her for a period of 12
months from the date of original admission of the Company's
Ordinary Shares to AIM, 8 July 2016 ("Initial Period") and that for
a period of 6 months following the expiry of the Initial Period,
she would only dispose of Ordinary Shares held by her on an orderly
market basis through Peel Hunt, if Peel Hunt shall at the relevant
time remain the Company's nominated adviser and corporate
broker.
14. DIVID POLICY
Given the nature of the business and its growth strategy, it is
unlikely that the Board will recommend a dividend in the early
years following Admission. The Directors and Proposed Directors
believe the Company should seek to re-invest profits to fund its
growth strategy over the medium term.
The ability of the Company to pay dividends is dependent on a
number of factors and there is no assurance that the Company will
pay dividends or, if a dividend is paid, what the amount of such
dividend would be. See Part 4 of the Admission Document headed
"Risk Factors" for further details. Consequently, Shareholders may
not receive any return on their investment unless they sell their
Ordinary Shares for a price greater than that which they paid for
them.
15. CHANGE OF NAME
The Resolutions include a resolution to change the name of the
Company to Escape Hunt plc. Upon the change of name being
registered at Companies House, the Company's AIM ticker symbol will
be changed to ESC. The Company's website address will be changed to
www.escapehunt.com.
16. AMMENT TO THE ARTICLES OF ASSOCIATION
Given that the Company has, to date, been an investing company,
the Articles do not currently contain either a cap on Non-executive
Director fees or a cap on the Company's borrowing powers. The Board
considers that the inclusion of such provisions in the Articles is
appropriate and therefore the Resolutions include proposed
amendments to the Articles to include a cap on Non-executive
Director fees of GBP250,000 per annum and a cap on borrowing powers
of two times "Adjusted Capital and Reserves" (as such term is
defined in the proposed new Article 102.3 as set out in Resolution
7 in the notice of General Meeting attached to the Admission
Document).
17. GENERAL MEETING
Set out at the end of the Admission Document is a notice
convening the General Meeting to be held at the offices of
Eversheds Sutherland (International) LLP, One Wood Street, London
EC2V 7WS at 9.30 a.m. on 2 May 2017. The full terms of the
Resolutions are set out in that notice and are summarised
below:
- The Acquisition constitutes a 'reverse takeover' under the AIM
Rules for Companies by virtue of the size of the Escape Hunt Group
relative to the size of the Company, and is therefore subject to
the approval of Shareholders. Such approval is being sought by way
of Resolution 1 to be proposed at the General Meeting.
- Resolution 2 seeks approval for the Directors to allot the
Placing Shares and to provide general authority for the Directors
to allot Ordinary Shares, up to an aggregate nominal value equal to
one-third of the nominal value of the Enlarged Share Capital.
- Resolution 3 approves the agreements to effect the Share Buy-Back.
- Resolution 4 seeks approval for the Directors to disapply
pre-emption rights in relation to the allotment of the Placing
Shares and generally in connection with rights issues and the issue
of other Ordinary Shares, up to an aggregate nominal value equal to
5 per cent. of the nominal value of the Enlarged Share Capital.
- Resolution 5 authorises the Company to purchase certain of the
Ordinary Shares in issue from time to time, up to an aggregate
nominal value equal to 10 per cent. of the nominal value of the
Enlarged Share Capital.
- Resolution 6 seeks approval for the proposed change of name of the Company.
- Resolution 7 seeks approval to amend the Articles to include a
cap on borrowing powers and fees payable to Non-executive
Directors.
Resolutions 1-3 will be proposed as ordinary resolutions and
Resolutions 4-7 will be proposed as special resolutions. Certain of
the Resolutions are conditional upon Admission. If Resolution 6 is
passed, the share certificates held by the existing Shareholders
will continue to be valid, notwithstanding the change of name which
will occur on Admission.
18. TAXATION
Your attention is drawn to the information regarding taxation
which is set out in paragraph 11 of Part 8 of the Admission
Document. That information is intended only as a general guide to
the current tax position under UK taxation law. If you are in any
doubt as to your tax position, you should contact your independent
professional adviser.
19. VCT INVESTORS
Advance assurance has been obtained from HM Revenue and Customs
that a subscription for Ordinary Shares in the Company is a
"qualifying holding" for the purpose of investment by VCTs. The
continuing status of the Ordinary Shares as a qualifying holding
for VCT purposes will be conditional, inter alia, on the Ordinary
Shares being held as a "qualifying holding" for VCT purposes
throughout the period of ownership.
Neither the Company nor the Directors nor the Proposed Directors
nor the Company's advisers (including the Joint Bookrunners) give
any warranty, representation or undertaking that any VCT investment
in the Company will remain a qualifying holding. The Company cannot
guarantee or undertake to conduct its business following Admission,
in a way to ensure that the Company will continue to meet the
requirements of a VCT Scheme. VCTs considering making a qualifying
VCT investment are recommended to seek their own professional
advice in order that they may fully understand how the relief
legislation may apply in their individual circumstances.
20. ADMISSION AND CREST SETTLEMENT
As the Acquisition constitutes a reverse takeover of the Company
under the AIM Rules for Companies, Shareholder consent to the
Acquisition is required at the General Meeting. If the Resolutions
are duly passed at the General Meeting and assuming that the
Placing Agreement becomes unconditional in accordance with its
terms, the Enlarged Share Capital will be admitted to trading on
AIM.
Application will be been made to London Stock Exchange for the
Enlarged Share Capital to be admitted to trading on AIM. Admission
is expected to take place at 8.00 a.m. on 3 May 2017.
The Placing Shares are eligible for CREST settlement. CREST is a
paperless settlement procedure enabling securities to be evidenced
otherwise than by a certificate and transferred otherwise than by a
written instrument in accordance with the requirements of CREST.
The Articles permit the holding and transfer of Ordinary Shares to
be evidenced in uncertificated form in accordance with the
requirements of CREST.
Accordingly, following Admission, settlement of transactions in
Ordinary Shares may take place within the CREST system if the
relevant Shareholder so wishes. CREST is a voluntary system and
Shareholders who wish to receive and retain share certificates will
be able to do so.
Settlement of the Placing will, at the option of Placees, be
within CREST and Ordinary Shares will be allotted and issued in
certificated form to the VCT Placees at 7.30 a.m. on 3 May 2017 and
delivered into the CREST account for all other Placees of the
Placing Shares (excluding the VCT Placing Shares) at 8.00 a.m. on 3
May 2017. As soon as possible after 8.00 a.m. on 3 May 2017 the VCT
Placing Shares will be dematerialised into CREST. No other
temporary documents of title will be issued. Definitive share
certificates for Placees not settling through CREST will be
despatched by the Registrars on or before 10 May 2017. Prior to the
despatch of such certificates, transfers will be certified against
the register of members of the Company held by the Company's
registrar.
22. FURTHER INFORMATION
Your attention is also drawn to the Admission Document, which
contains further information on the Company, the Escape Hunt Group
and the Proposals.
22. ACTION TO BE TAKEN
An Admission Document has been posted to Shareholders on 13
April 2017. You will find accompanying the Admission Document a
Form of Proxy for use in connection with the General Meeting.
Whether or not you intend to be present at the General Meeting, you
are asked to complete the Form of Proxy in accordance with the
instructions printed on it so as to be received by the Company's
registrars, Equiniti Limited, as soon as possible but in any event
not later than 9.30 a.m. on 30 April 2017. Completion of the Form
of Proxy will not preclude you from attending and voting at the
General Meeting should you so wish.
23. RECOMMENDATION
The Directors consider, for the reasons set out above, that the
Proposals are in the best interests of the Company and Shareholders
as a whole. Accordingly, the Directors recommend that you vote in
favour of the Resolutions at the General Meeting. For the reasons
set out above, no recommendation is made in relation to Resolution
3 as this Resolution relates to the Share Buy-Back, which concerns
the Directors amongst others.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGGUCACUPMUAW
(END) Dow Jones Newswires
April 13, 2017 02:00 ET (06:00 GMT)
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