TIDMFLTR TIDMTSGI
RNS Number : 7924H
Flutter Entertainment PLC
27 March 2020
27 March 2020
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO ANY JURISDICTION
IN WHICH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF
ARTICLE 7 OF THE MARKET ABUSE REGULATION EU 596/2016 .
THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURTIES IN ANY
JURISDICTION. THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A
PROSPECTUS OR A PROSPECTUS EQUIVALENT DOCUMENT. ANY DECISION TO
PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE
DISPOSE OF ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMNET MUST BE
MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND
INCORPORATED BY REFERENCE INTO THE PROSPECTUS EXPECTED TO BE
PUBLISHED TODAY.
FLUTTER SHAREHOLDERS SHOULD NOT MAKE ANY DECISION IN RELATION TO
THE COMBINATION EXCEPT ON THE BASIS OF THE CIRCULAR PUBLISHED
TODAY.
FOR IMMEDIATE RELEASE
Flutter Entertainment plc and
The Stars Group Inc. combination update
Update on the Transaction
On 2 October 2019, Flutter Entertainment plc ("Flutter") and The
Stars Group Inc. ("TSG") jointly announced that they had reached
agreement on the terms of a recommended all-share combination (the
"Combination"). The proposed Combination is to be implemented
through the acquisition of all of the issued and outstanding common
shares of TSG by Flutter, pursuant to a Court approved plan of
arrangement under the Business Corporations Act (Ontario) involving
TSG, its shareholders ("TSG Shareholders") and Flutter (the "Plan
of Arrangement"). Flutter will later today publish a shareholder
circular relating to the Combination (the "Circular") and a
prospectus relating to the new Flutter shares to be issued to TSG
Shareholders in connection with the Combination (the
"Prospectus").
The Boards of Flutter and TSG have considered the likely impact
of COVID-19 on the combined Flutter and TSG Group (the "Combined
Group") and continue to believe strongly in the strategic rationale
for the Combination. Specifically, the Combination will:
-- Create a more diversified product portfolio, with
best-in-class sports betting, poker, casino, fantasy sports and
free-to-play offerings
-- Provide increased geographic diversification
-- Accelerate delivery of Flutter's four pillar strategy
through; increased profitable growth in core markets; enhanced
international positioning and growth opportunities; and a
leading
proposition for pursuit of the US market; and
-- Deliver substantial value through material cost, revenue and financing synergies.
In response to the global COVID-19 pandemic, both Flutter and
TSG separately published market updates on 16 March 2020. Having
taken into consideration the potential impact that the disruption
could have on both businesses, Flutter now provides a further
update on key areas of financing, capital structure, dividend
policy and Board composition.
Financing Update
On 11 March 2020, Flutter entered into new debt arrangements,
contingent only on completion of the Combination, comprising a term
loan and revolving credit facility totalling GBP1.3bn. These
facilities are available for the refinancing of existing Flutter
and TSG debt as well as providing the Group with on-going financial
flexibility. The facilities include a net leverage ratio financial
covenant of 5.1x when combined with TSG's debt, and will include a
material allowance for synergies when covenants are tested twice
annually. The new facilities are also tightly priced at GBP LIBOR +
a fixed 175bps, reflecting the prevailing debt market conditions at
that date.
TSG's indebtedness will be assumed by the Combined Group under
its existing terms. While no obligation arises upon completion of
the Combination for the Combined Group to refinance the existing
TSG debt, we see the new debt arrangements detailed above as the
first step in an overall refinancing package. In due course we will
look to re-finance the remaining debt and we remain confident that
this will drive material financing synergies for the combined Group
over time.
Capital Structure and Dividend Update
The Flutter Board believes that the Combined Group will have a
robust financial profile given its strong cash generation in
conjunction with expected cost, revenue and financing synergies.
The disruption caused by COVID-19 to the global online betting and
gaming sector however is expected to impact the financial profile
of the Combined Group in the current financial year. While this is
expected to reduce over time, the leverage of the Combined Group at
the end of the first financial reporting period following
Completion is now likely to be above 3.5x (excluding
synergies).
The Flutter Board has considered the future capital management
policy for the Combined Group. While the Group has flexibility to
maintain leverage at higher ratios, it remains committed to
targeting leverage of 1.0x to 2.0x for the Combined Group over the
medium-term. Accordingly, consistent with prudent planning, the
Flutter Board has revised both its approach to Flutter's final
dividend for the financial year ended 31 December 2019 (the "Final
2019 Dividend"), the pro-rated dividend payable in connection with
the Combination, and Flutter and the Combined Group's proposed
dividend policy (as previously announced on 2 October 2019). The
revised position is set out below.
Flutter
Subject to approval of the Final 2019 Dividend by Flutter
Shareholders at Flutter's 2020 annual general meeting to be held on
14 May 2020, existing Flutter Shareholders will be entitled to
receive a Final 2019 Dividend of 133 pence per Flutter ordinary
share. Given the impact of COVID-19, the Flutter Board will now
propose that the Final 2019 Dividend be paid in the form of
ordinary Flutter shares. The record date and payment date for the
Final 2019 Dividend, including the basis on which the number of new
ordinary shares to be issued in satisfaction of the Final 2019
Dividend will be calculated, will be notified to Flutter
Shareholders in the notice of the 2020 AGM which will be published
in due course. For the avoidance of doubt, the new Flutter shares
to be issued in connection with the Combination will not carry any
entitlement to the Final 2019 Dividend.
At the announcement of the Combination, the Flutter Board had
expected that Flutter Shareholders would be entitled to a pro-rated
dividend immediately prior to Completion. This represented a time
pro-rated amount of the total annual dividend for the financial
year ending 31 December 2020, to which Flutter Shareholders would
otherwise be entitled if the Combination had not proceeded. Given
the anticipated financial profile of Flutter in the current year,
the Flutter Board no longer considers it prudent to propose the
pro-rated dividend.
TSG
TSG has never declared nor paid dividends and is not expected to
do so prior to Completion.
Combined Group dividend policy
Given the impact of the current disruption caused by COVID-19
and the ambition for the Combined Group to de-lever, the Flutter
Board considers it prudent to suspend the dividend for the current
financial year ending 31 December 2020. The Flutter Board's future
capital management policy for the Combined Group remains to target
a leverage ratio of 1.0x to 2.0x over the medium term. As such, the
Flutter Board will continue to monitor the calendar of sporting
events and associated performance of sports betting as well as the
Combined Group's anticipated deleveraging and balance sheet
position. It will then decide the appropriate time to reinstate a
dividend for the Combined Group.
The Flutter Board continues to expect the Combination to be
value accretive and deliver a post-tax return on invested capital
which exceeds Flutter's cost of capital by the end of the third
full financial year following Completion. The Combination is also
expected to be at least 50% accretive to Flutter's Underlying
Earnings Per Share in the first full financial year following
Completion.
Directorate Changes
Under the terms of the Combination, Flutter and TSG have agreed
that, subject to and with effect from completion of the
Combination, the following individuals will be appointed as
Directors of Flutter (the "Proposed Directors"):
-- Divyesh (Dave) Gadhia;
-- Rafael (Rafi) Ashkenazi;
-- Richard Flint;
-- Alfred F. Hurley, Jr.;
-- David Lazzarato; and
-- Mary Turner
Each of the Proposed Directors will be Non-Executive Directors
of Flutter. Divyesh/(Dave) will assume the role of Deputy Chair.
Following extensive discussions about the optimal construct of the
senior executive team, and having regard to a number of personal
considerations, Rafi Ashkenazi has now agreed to act as a
consultant to Flutter and will join the Board in a non-executive
capacity.
Flutter also announces that, subject to completion, Jan Bolz and
Emer Timmons will step down as Non-Executive Directors of Flutter.
In addition, Ian Dyson will, with effect from the close of
Flutter's 2020 AGM, step down from the Audit Committee and will
relinquish his roles as Senior Independent Director and Chair of
the Nomination Committee, with Andrew Higginson assuming these
positions.
Mr Dyson will continue in his role as Non-Executive Director. As
Mr Dyson has served on the Board for more than nine years, he does
not, in that respect only, meet the usual criteria for independence
set out in the UK Corporate Governance Code. The Board has
determined Mr Dyson to be independent in character and judgement
and confirmed his continued independence notwithstanding his length
of service, taking into account his significant industry experience
and his continued offering of constructive challenge within the
Board. Mr Dyson's experience has been particularly valuable to the
Board in the unprecedented circumstances created by the recent
COVID-19 virus.
Commenting on today's announcement, Peter Jackson, Chief
Executive, said:
"We are pleased to publish our prospectus and circular in
relation to our combination with The Stars Group. In these
challenging times I am more convinced than ever of the strategic
fit of these two complementary businesses. The combined business
will enjoy improved geographic and product diversification and
allow us to advance our strategic goals. I am delighted that Rafi
has agreed to join the Flutter Board and to be available to me as a
consultant given his extensive knowledge of Stars' international
business. We continue to work with various competition and
anti-trust authorities globally to secure the few remaining
approvals required. We do so while never losing sight of our
current primary objective to ensure the safety of our staff and
customers during these unprecedented times."
Commenting on the proposed Board changes, Gary McGann, Chair of
Flutter, said:
"I am looking forward to working with the new Flutter Board in
realising the exciting opportunities that will emerge from the
combination of these two great companies. I would like to take this
opportunity to note the commitment and dedication shown by Emer and
Jan during their time on the Flutter Board, to thank them for their
support and to wish them both well for the future."
Approval and publication of Circular and Prospectus
The Circular is expected to be approved, published and posted to
Flutter Shareholders today. The Circular contains a notice of an
extraordinary general meeting of Flutter to be held at 11.00 am on
21 April 2020 at Arthur Cox, Ten Earlsfort Terrace, Dublin, D02
T380, Ireland for the purpose of seeking the approval of Flutter
Shareholders for the Combination and certain related matters. The
Circular and guidance for shareholders regarding the format of the
extraordinary general meeting in light of COVID-19 precautions will
be available on Flutter's corporate website:
(https://www.flutter.com/investors/proposed-combination-with-the-stars-group).
In addition, the Prospectus relating to the admission of all of
the issued and to be issued ordinary shares of EUR0.09 each of
Flutter to the premium listing segment of the Official List of the
Financial Conduct Authority and to a secondary listing on the
Official List of Euronext Dublin and to trading on the London Stock
Exchange's main market for listed securities and to trading on the
Euronext Dublin Market following completion of the Combination, is
also expected to be approved and published later today or on
Monday, 30 March 2020.
The Prospectus is expected to be approved by the Central Bank of
Ireland (the "Central Bank"), as competent authority under
Regulation (EU) 2017/1129 of the European Parliament and of the
Council of 14 June 2017 on the prospectus to be published when
securities are offered to the public or admitted to trading on a
regulated market, and repealing Directive 2003/71/EC (the "EU
Prospectus Regulation"). The approval of the Prospectus by the
Central Bank should not be considered as an endorsement of Flutter
or the quality of the securities that are the subject of the
Prospectus nor should it be considered as an endorsement of TSG or
any securities of TSG. Flutter will request that the Central Bank
provides a certificate of approval and a copy of the Prospectus to
the UK Financial Conduct Authority (the "FCA") as competent
authority in the United Kingdom, in accordance with Article 25 of
the EU Prospectus Regulation.
Once the FCA confirms the passporting of the Prospectus into the
United Kingdom, the Prospectus and the Circular will be made
available to the public in accordance with Article 21 of the EU
Prospectus Regulation, free of charge, in electronic form on
Flutter's corporate website.
(https://www.flutter.com/investors/proposed-combination-with-the-stars-group)
Copies of the Circular and Prospectus will also be available for
inspection during usual business hours on any weekday (Saturdays,
Sundays and public holidays excepted) at the registered office of
Flutter and at the offices of Arthur Cox, Ten Earlsfort Terrace,
Dublin, D02 T380, Ireland and 12 Gough Square, London EC4A 3DW,
United Kingdom.
Copies of the Circular and the Prospectus will be submitted to
the U.K. National Storage Mechanism and to Euronext Dublin, where
they will be available at:
U.K. National Storage Mechanism Euronext Dublin
http://www.morningstar.co.uk/uk/NSM Companies Announcement Office
Euronext Dublin
28 Anglesea Street
Dublin 2
Tel: +353 (0)1 6174200
Unless otherwise defined, all capitalised terms in this
Announcement have the same meaning as those contained in the
Prospectus. All references in this Announcement to times are to
times in Dublin (unless otherwise stated).
An indicative timetable of principal events is set out
below:
Event Expected time/date
TSG Shareholder 10.00 a.m. (Eastern time) on 21 April 2020, or shortly
Meeting...................................... thereafter
Flutter
EGM......................................................
.... 11.00 a.m. (Irish time) on 21 April 2020
Long Stop Date for completion of the Combination... 31 October 2020
The following dates are indicative only and subject to change :
Court hearing in respect of the Final Order and Final
Order
obtained.................................................
...... 23 April 2020, or shortly thereafter
TSG Articles of Arrangement issued by the OBCA Director
and Flutter deposits the New Shares
with the
Depositary............................................... A date expected to be in the second or third quarter of
........ 2020 ("D")
Expected Admission and commencement of dealings in New
Shares, Completion..................................... 3.00 a.m. (Eastern time)/ 8.00 a.m. (Irish time) on D
New Shares credited to CREST accounts............... As soon as reasonably practicable following delivery of
letters of transmittal by former TSG
Shareholders
Despatch of share certificates (where applicable).... As soon as reasonably practicable following delivery of
letters of transmittal by former TSG
Shareholders
Enquiries:
Investor relations
Jonathan Hill, Chief Financial Officer
David Jennings, Corporate Finance & Investor Relations + 353 87 951 3560
Ciara O'Mullane, Investor Relations + 353 87 947 7862
Liam Kealy, Investor Relations + 353 87 665 2014
Media
Fi Thorne, Corporate Affairs + 44 20 8834 6018
James Murgatroyd, Finsbury + 44 20 7251 3801
Billy Murphy, Drury / Porter Novelli + 353 1 260 5000
Financial advisor and joint corporate broker
Nick Harper, Goldman Sachs International
Anthony Gutman, Goldman Sachs International +44 (0) 20 7774
1000
Charlie Lytle, Goldman Sachs International
Joint corporate broker
John Lydon, J&E Davy +353 1 614 8778
Disclosures pursuant to paragraph 9.6.13 of the Listing Rules of
the Financial Conduct Authority
Divyesh (Dave) Gadhia is currently a director of The Stars Group
Inc. and has not held any other directorships in publicly quoted
companies during the last five years.
Rafael (Rafi) Ashkenazi is currently a director of The Stars
Group Inc. and during the past five years held directorships in the
following publicly quoted company: Playtech plc.
Richard Flint is not currently a director of, and during the
past five years has not held any directorships in any publicly
listed companies.
Alfred F. Hurley, Jr. is currently a director of The Stars Group
Inc. and New Mountain Finance Corporation and during the past five
years has not held any directorships in any other publicly listed
companies.
David Lazzarato is currently a director of The Stars Group Inc.
and has not held any other directorships in publicly quoted
companies during the last five years.
Mary Turner is currently a director of The Stars Group Inc. and
has not held any other directorships in publicly quoted companies
during the last five years.
There are no further disclosures required with respect to the
appointment of any of the Proposed Directors pursuant to paragraph
9.6.13 of the UK Listing Rules.
Important notices
Goldman Sachs, which is authorised by the United Kingdom
Prudential Regulation Authority (the "PRA") and regulated in the
United Kingdom by the FCA and the PRA is acting as financial
adviser, sponsor and corporate broker to Flutter and no one else in
connection with the Combination and Admission. In connection with
such matters, Goldman Sachs, its affiliates and their respective
directors, officers, employees and agents will not regard any other
person as their client, nor will they be responsible to any person
other than Flutter for providing the protections afforded to their
clients or for providing advice in relation to the Combination, the
Admission, the contents of this Announcement or any transaction,
arrangement or other matter referred to herein.
This Announcement contains inside information. The person
responsible for arranging the release of this Announcement is
Edward Traynor, Company Secretary of Flutter. The date and time of
this Announcement are the same as the date and time it has been
communicated to the media.
The information contained in this Announcement is for background
purposes only and does not purport to be full or complete. No
reliance may be placed for any purpose on the information contained
in this Announcement or its accuracy, fairness or completeness.
The contents of this Announcement are not to be construed as
legal, financial or tax advice. If you are in any doubt about the
contents of this announcement or the action you should take, you
are recommended to seek your own personal financial advice as soon
as possible from your stockbroker, bank, solicitor, accountant or
other appropriate independent professional financial adviser
(being, in the case of Shareholders in Ireland, an organisation or
firm authorised or exempted under the Investment Intermediaries
Act, 1995 of Ireland (as amended) or the European Union (Markets in
Financial Instruments) Regulations 2017 (as amended) or, in the
case of Shareholders in the United Kingdom, an adviser authorised
pursuant to the Financial Services and Markets Act 2000 (the
"FSMA"), or from another appropriately authorised independent
financial adviser if you are in a territory outside Ireland or the
United Kingdom).
Forward-looking statements
This Announcement contains statements about Flutter, TSG and the
Combined Group that are or may be forward-looking statements. All
statements other than statements of historical facts included in
this Announcement may be forward-looking statements. Without
limitation, any statements preceded or followed by or that include
the words "targets", "should", "continue", "plans", "believes",
"expects", "aims", "intends", "will", "may", "anticipates",
"estimates", "projects" or words or terms of similar substance or
the negative thereof, are forward-looking statements.
Forward-looking statements include all matters that are not
historical facts and statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects; (ii) business and
management strategies and the expansion and growth of Flutter's,
TSG's or the Combined Group's operations and potential synergies
resulting from the Combination; (iii) the effects of government
regulation on Flutter's, TSG's or the Combined Group's business;
(iv) the ability of Flutter and TSG to satisfy the conditions to,
and to complete, the Combination; (v) the timing and anticipated
receipt of required regulatory, Court and Shareholder approvals for
the Combination; and (vi) the anticipated timing of the Flutter EGM
and the TSG Shareholder Meeting and completion of the
Combination.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Forward-looking statements are not guarantees of future performance
and the actual results of the Combined Group's operations and the
development of the markets and the industry, in which the Combined
Group operates, may differ materially from those described in, or
suggested by, the forward-looking statements contained in this
Announcement. In addition, even if the Combined Group's results of
operations, financial position and growth, and the development of
the markets and the industry, in which the Combined 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. A
number of factors could cause results and developments of the
Combined Group to differ materially from those expressed or implied
by the forward-looking statements including, without limitation,
general economic and business conditions, industry trends,
competition, changes in law or regulation, changes in taxation
regimes, currency fluctuations, changes in its business strategy,
political and economic uncertainty. The forward-looking statements
therein speak only at the date of this Announcement and investors
are cautioned not to place undue reliance on such forward-looking
statements. Save as required by its legal and regulatory
obligations (including under the EU Prospectus Regulation, Market
Conduct Rules, Irish Market Abuse Law, the Market Abuse Regulation,
the Transparency Regulations and Rules, the Disclosure and
Transparency Rules, the Irish Listing Rules, the UK Listing Rules,
Euronext Dublin and the London Stock Exchange or by applicable
Canadian or US securities laws), the Combined Group undertakes no
obligation to update these forward-looking statements and will not
publicly release any revisions it may make to these forward-looking
statements that may occur due to any change in the Combined Group's
expectations or to reflect events or circumstances after the date
of this Announcement. Investors should note that the contents of
these paragraphs relating to forward-looking statements are not
intended to qualify the statements made as to sufficiency of
working capital in this Announcement.
Overseas jurisdictions
The distribution of this Announcement in certain jurisdictions
may be restricted by law. Other than in Ireland and the United
Kingdom, no action has been or will be taken by Flutter to permit
an issue of the Ordinary Shares or to permit the possession or
distribution of this Announcement (or any other issuing or
publicity materials relating to the Ordinary Shares) in any
jurisdiction where action for that purpose may be required. Neither
this Announcement nor any other material relating to it may be
distributed or published in any jurisdiction except under
circumstances that will result in compliance with any applicable
laws and regulations. Persons into whose possession this
Announcement comes should inform themselves about and observe any
such restrictions. Any failure to comply with these restrictions
may constitute a violation of the securities laws of any such
jurisdiction. To the fullest extent permitted by applicable law,
the companies and persons involved in the Combination disclaim any
responsibility or liability for the violations of any such
restrictions by any person.
Canadian Investors
No securities regulatory authority in any province or territory
of Canada has expressed an opinion about the securities mentioned
in this Announcement and it is an offence to claim otherwise. This
Announcement is not, and under no circumstances is to be construed
as, an advertisement or public offering of securities in Canada.
The New Shares to be issued to TSG Shareholders" in connection with
the Combination will be issued pursuant to an exemption from the
prospectus requirements of applicable Canadian securities laws
under section 2.11 of National Instrument 45-106 Prospectus
Exemptions of the Canadian Securities Administrators and will
generally not be subject to any resale restrictions under
applicable Canadian securities laws provided that the following
conditions are satisfied: (i) the Combined Group is and has been a
reporting issuer in a jurisdiction of Canada for the four months
immediately preceding the trade (pursuant to section 2.9 of
National Instrument 45-102 Resale Restrictions of the Canadian
Securities Administrators, following the completion of the
Combination, the Combined Group will be deemed to have been a
reporting issuer from the time that TSG became a reporting issuer
in a jurisdiction of Canada, satisfying this requirement) so long
as the Combined Group remains a reporting issuer; (ii) the trade is
not a control distribution; (iii) no unusual effort is made to
prepare the market or to create a demand for the security that is
the subject of the trade; (iv) no extraordinary commission or
consideration is paid to a person or company in respect of the
trade; (v) if the selling securityholder is an insider or officer
of the Combined Group, the selling securityholder has no reasonable
grounds to believe that the Combined Group is in default of
applicable Canadian securities legislation (each as set out in
subsection 2.6(3) of National Instrument 45-102 Resale Restrictions
of the Canadian Securities Administrators); and (vi) such holder is
not a person or company engaged in or holding itself out as
engaging in the business of trading securities or such trade is
made in accordance with applicable dealer registration requirements
or in reliance upon an exemption from such requirements. The
receipt of New Shares pursuant to the Combination by a Canadian
resident TSG Shareholder may be a taxable transaction for Canadian
income tax purposes. TSG Shareholders should consult with their own
financial, tax and legal advisers with respect to any restrictions
on the resale of New Shares received following Completion and
regarding the tax consequences of the Combination.
US Investors
In connection with the Combination, Flutter will issue New
Shares to existing TSG Shareholders in consideration for the
acquisition by Flutter of the issued and outstanding common shares
of TSG held by them. TSG is a Canadian company incorporated under
the laws of the Province of Ontario and is a "foreign private
issuer" as defined under the US Securities Exchange Act of 1934
(the "US Exchange Act"). The Plan of Arrangement will be submitted
for approval at a meeting of TSG Shareholders to consider the
Combination, which will be subject to the proxy solicitation
requirements of Canadian securities law and Ontario corporate law,
but will not be subject to the proxy solicitation rules under the
US Exchange Act which do not apply to TSG as a foreign private
issuer. As a result, the information included in the proxy circular
delivered to TSG Shareholders in the United States may not be
comparable to the information contained in proxy circulars for US
domestic public companies.
The New Shares have not been and will not be registered under
the US Securities Act of 1933 (the "US Securities Act") or under
the securities laws of any state or other jurisdiction of the
United States. Accordingly, the New Shares may not be offered,
sold, resold, delivered, distributed or otherwise transferred,
directly or indirectly, in or into or from the United States absent
registration under the US Securities Act or an exemption therefrom,
and in compliance with applicable state securities laws. The New
Shares are expected to be issued in reliance upon the exemption
from the registration requirements of the US Securities Act
provided by section 3(a)(10) thereof and corresponding exemptions
under state securities laws. Section 3(a)(10) of the US Securities
Act exempts the issuance of any securities issued in exchange for
one or more bona fide outstanding securities from the general
requirement of registration where the terms and conditions of the
issuance and exchange of such securities have been approved by a
court of competent jurisdiction, after a hearing upon the fairness
of the terms and conditions of such issuance and exchange at which
all persons to whom it is proposed to issue the securities have the
right to appear and receive timely notice thereof. Flutter shall
not be required to deliver New Shares to any existing TSG
Shareholders located in any state where no corresponding securities
registration or qualification exemption is available. Instead,
Flutter shall be entitled to deliver the New Shares to which TSG
Shareholders in such states would otherwise have been entitled to a
selling agent appointed by Flutter. The selling agent shall be
directed to sell all the New Shares delivered to it, and to deliver
to each TSG Shareholder in any such state its proportionate
entitlement to the net cash proceeds of the sales of such New
Shares. TSG Shareholders (whether or not they are located in the
United States or US persons (as defined within Regulation S)) who
are or will be affiliates (as defined within the US Securities Act)
of Flutter prior to or after the Effective Date will be subject to
certain US transfer restrictions relating to the New Shares
received pursuant to the Combination that are applicable to
affiliates of an issuer. For the purposes of qualifying for the
exemption from the registration requirements of the US Securities
Act afforded by section 3(a)(10), TSG will advise the Court before
the hearing that its approval of the Plan of Arrangement and
determination of its procedural and substantive fairness to TSG
Shareholders will be the basis on which Flutter will rely on the
section 3(a)(10) exemption.
The financial information included in this Announcement has not
been prepared in accordance with accounting standards applicable to
financial information of US companies or companies whose financial
statements are prepared in accordance with generally accepted
accounting principles in the United States and therefore may not be
comparable with financial information prepared in accordance with
such standards. Further, the audited financial statements included
in this Announcement have not been audited in accordance with
public company auditing standards and practices applicable in the
United States and may not be comparable to financial statements
audited in accordance with such standards and practices.
The receipt of New Shares pursuant to the Combination by a US
TSG Shareholder may be a taxable transaction for US federal income
tax purposes and under applicable state and local, as well as
foreign and other, tax laws. Each TSG Shareholder is urged to
consult his independent professional adviser immediately regarding
the tax consequences of the Combination.
It may be difficult for US TSG Shareholders to enforce their
rights and claims arising out of the US federal securities laws,
since Flutter and TSG are located in countries other than the
United States, and some or all of their officers and directors may
be residents of countries other than the United States. US TSG
Shareholders may not be able to sue a non-US company or its
officers or directors in a non-US court for violations of the US
securities laws. Further, it may be difficult to compel a non-US
company and its affiliates to subject themselves to a US court's
judgement. US TSG Shareholders should note that the New Shares will
not be listed on a US securities exchange. Although Flutter will
become subject to the periodic reporting requirements of the US
Exchange Act as a result of the Combination as a successor
registrant to TSG, Flutter intends to take steps to terminate its
US Exchange Act reporting obligations following the completion of
the Combination, following which it will not be required to file
any reports with the US Securities and Exchange Commission (the
"SEC") thereunder.
None of the securities referred to in this Announcement have
been approved or disapproved by the SEC, any state securities
commission in the United States or any other US regulatory
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END
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