TIDMBOTB
RNS Number : 0560P
Best of the Best PLC
16 June 2022
Best of the Best plc
("Best of the Best", "BOTB", "the Company" or "the Group")
Announcement of Tender Offer and General Meeting
Best of the Best plc runs competitions online to win cars and
other prizes.
The Company announced today that it intends to return surplus
cash to Shareholders by way of a tender offer, pursuant to which
finnCap will purchase, as principal, up to approximately 11 per
cent. of the Company's Ordinary Shares (on the basis of 1 Ordinary
Share for every 9 held) at a price of 600 pence per Ordinary Share.
All of the Ordinary Shares that finnCap purchase under the Tender
Offer will be subsequently repurchased from it by the Company
pursuant to the terms and conditions of the Repurchase
Agreement.
If the maximum number of Ordinary Shares under the Tender Offer
are acquired this will result in an amount of approximately
GBP6.275 million being paid to Qualifying Shareholders.
Shareholders can decide whether they want to tender up to their
Basic Entitlement together with potential for further purchases,
depending on the number of Shares tendered by other Qualifying
Shareholders.
The Tender Offer Price represents a premium of 52.28 per cent.
to the middle market closing price of 394 pence per Ordinary Share
on 15 June 2022, being the latest practicable date before the
release of this announcement.
A circular, containing the formal terms and conditions of the
Tender Offer and instructions to Qualifying Shareholders on how to
tender their Ordinary Shares should they choose to do so, together
with a Tender Form and Form of Proxy, are expected to be posted to
Shareholders later today (the "Circular"). Unless otherwise defined
herein, capitalised terms used in this announcement shall have the
same meanings as defined in the Circular, an extract of which is
included below.
Background to and reasons for the Proposals
The Board of BOTB considers that it is in the interests of
Shareholders to implement the Tender Offer so as to provide those
Qualifying Shareholders who wish to sell shares in the Company the
opportunity to do so.
The Company has been cash generative for a number of years and
as noted in the Trading Update section below benefits from a strong
balance sheet with sufficient distributable cash reserves.
Profitable trading in recent periods has led this surplus cash on
the balance sheet which the Board believes that the Company does
not require to fund its growth plans in the short term. Following
the capital distribution, the Company will retain a robust balance
sheet, maintaining cash balances in excess of GBP2.0 million, which
the Directors consider to be sufficient working capital to fund its
activities over the next 12 month period. As such, the Board deems
it appropriate to return surplus cash to shareholders via the
Tender Offer. Returning surplus cash by way of Tender Offer or
Special Dividend has been part of the Company's strategy for a
number of years.
In determining the level of return of value, the Board has taken
into consideration its aim of improving the Company's earnings per
share, as well as targeting a more efficient capital structure
through returning excess balance sheet cash to Shareholders.
In order to return surplus cash to Shareholders by way of the
Tender Offer, the Company is required to produce and file a new
balance sheet with Companies House, demonstrating that it has
sufficient distributable cash reserves. The Company shortly intends
to file an audited Company balance sheet as at 30 April 2022 with
Companies House.
Benefits of the Proposals
The Board has considered a range of options for returning cash
to Shareholders but decided to do this by way of the Tender Offer
because it believes this process benefits both Qualifying
Shareholders and the Company. In particular, the Directors believe
that the Tender Offer:
-- provides those Qualifying Shareholders who wish to sell
Ordinary Shares with the opportunity to do so;
-- is available to all Qualifying Shareholders regardless of the
size of their shareholdings;
-- ensures equal opportunity to all Qualifying Shareholders to
participate in the return of capital by offering a guaranteed Basic
Entitlement to all Qualifying Shareholders;
-- enables those Qualifying Shareholders who do not wish to
receive capital at this time to maintain their full investment in
the Company;
-- enables Ordinary Shares to be sold by Qualifying Shareholders
free of commissions or charges that would otherwise be payable by
them if they were to sell their shares through their broker;
and
-- will have a positive impact on both the Company's earnings
per share and dividend per share as all Ordinary Shares purchased
by the Company pursuant to the Repurchase Agreement will be
cancelled.
Acceptance of the Tender Offer will constitute a return of
capital of 600 pence per share in respect of each Ordinary Share
tendered.
Details of the Proposals
The Directors propose that the Tender Offer be made, pursuant to
which finnCap will purchase, as principal, up to approximately 11
per cent. of the Company's Ordinary Shares at a price of 600 pence
per Ordinary Share. The Tender Offer is being made subject to the
passing of a special resolution which will be proposed at the
General Meeting. The Tender Offer is also subject to the conditions
set out in the Repurchase Agreement and Part 2 of the Circular
being fulfilled. The Tender Offer is open to Qualifying
Shareholders on the Register at 6.00 p.m. on the Tender Offer
Record Date.
In accordance with the terms and subject to the conditions of
the Repurchase Agreement, finnCap has granted to the Company a call
option pursuant to which, the Company may, at its sole discretion,
purchase from finnCap all of the Ordinary Shares purchased by it
pursuant to the Tender Offer at a price of 600 pence per Ordinary
Share. Under the Repurchase Agreement the Company has also granted
to finnCap a put option whereby to the extent that the call option
is not exercised by the Company within the prescribed call option
exercise period, finnCap may, at its sole discretion, require that
the Company purchase all such Ordinary Shares from it at a price of
600 pence per Ordinary Share. All of the Ordinary Shares purchased
by the Company under the Repurchase Agreement will be
cancelled.
The purchase of shares from finnCap pursuant to the Repurchase
Agreement will be funded from available cash of the Company and
paid out of its distributable reserves. Accordingly, following the
completion of the Repurchase, the Company's distributable reserves
will be reduced by the size of the Tender Offer. If the call option
or put option is exercised pursuant to the Repurchase Agreement,
the Company's issued share capital will be reduced to 8,367,024
Ordinary Shares, assuming the Tender Offer is taken up in full.
General Meeting
The authorisation of the Repurchase Agreement and, accordingly,
the implementation of the Tender Offer, requires, inter alia, the
passing of a special resolution.
There is set out at the end of the Circular a notice convening a
General Meeting of the Company to be held at the offices of the
Company at 2 Plato Place, 72-74 St Dionis Road, London SW6 4TU on 4
July 2022 at 11.00 a.m.
Irrevocable undertakings by Director Shareholders
Directors William Hindmarch, Rupert Garton, David Firth, Daniel
Burns and Ben Hughes and persons closely associated with them and
former director, Michael Hindmarch, who together are the registered
holders of, in aggregate, 4,571,377 Ordinary Shares, representing
approximately 48.57 per cent. of the Company's current issued share
capital, have undertaken to accept the Tender Offer in respect of
their Basic Entitlement and to vote in favour of the
Resolution.
Director Shareholdings
As described in the paragraph above, the following Directors
intend to accept the Tender Offer in respect of the following
shares:
Name Current Current Undertaken Resultant Resultant
Shareholding Shareholding Tender Offer Shareholding* Shareholding
% share take-up %*
William
Hindmarch** 3,017,588 32.06% 335,288 2,682,300 32.06%
-------------- -------------- --------------- --------------- --------------
Rupert Garton 887,250 9.43% 98,584 788,666 9.43%
-------------- -------------- --------------- --------------- --------------
David Firth 4,623 0.05% 514 4,109 0.05%
-------------- -------------- --------------- --------------- --------------
Daniel Burns 20,833 0.22% 2,315 18,518 0.22%
-------------- -------------- --------------- --------------- --------------
Ben Hughes 44,791 0.48% 4,977 39,814 0.48%
-------------- -------------- --------------- --------------- --------------
* Assuming full take-up of the 1,045,877 Tender Offer shares
** Including Ordinary Shares held by his wife
Trading update
As disclosed in the announcement of the Company's preliminary
results for the year ended 30 April 2022, released earlier today,
revenue for the year ended 30 April 2022 was GBP34.68 million
(2021: GBP45.68 million, 2020: GBP17.79 million) and profit before
tax was GBP5.14 million (2021: GBP14.06 million, 2020: GBP4.21
million). Earnings per share were 45.66p (2021: 122.52p, 2020:
37.51p).
A total of GBP5.90 million of cash flow was generated from
operations during the period. Net assets at 30 April 2022 stood at
GBP8.09 million (2021: GBP8.96 million, 2020: GBP3.30 million),
underpinned by cash balances of GBP10.82 million (2021: GBP11.8
million, 2020: GBP5.2 million) and our 965-year leasehold office
properties valued at GBP0.95 million. The Group is debt free.
As stated in the aforementioned announcement, the Company has
delivered consistently strong results over recent years and
management have been adjusting the various business levers at their
disposal, to ensure that where revenues and customer acquisition
are settling and normalising post pandemic, the business continues
to produce strong profits and cash generation. Whilst this has not
been without its challenges, with so many unknowns in this
financial year, the Company is pleased to have produced financial
results a little better than market expectations.
The Board remains confident that the Company is underpinned by
very solid financials, a large and loyal database, and a proven
business model. There will understandably be continued focus in the
short term on both profit and cash generation to support and
strengthen our platform as we then to look to further business
development opportunities and growth.
Expected Timetable of Events
2022
Announcement of these proposals 07:01 a.m. 16 June
Publication of the Circular 16 June
Latest time and date for receipt of Forms 11:00 a.m. on 30 June
of Proxy
Latest time and date for receipt of Forms 1.00 p.m. on 1 July
of Acceptance and TTE Instructions from
CREST Shareholders
Record Date for the Tender Offer 6:00 p.m. on 1 July
General Meeting 11:00 a.m. on 4 July
Announcement of Result of GM and Tender 4 July
Offer
Completion of purchase of Ordinary Shares 6 July
under the Tender Offer
Cheques dispatched for certificated Ordinary On or by 15 July
Shares purchased pursuant to the Tender
Offer and payment through CREST for uncertificated
Ordinary Shares purchased pursuant to the
Tender Offer
Enquiries:
Best of the Best plc William Hindmarch, Chief T: 020 7371
Executive 8866
Rupert Garton, Commercial
Director
Buchanan Chris Lane T: 020 7466
Toto Berger 5000
Oakvale Capital Daniel Burns T: 0207 580
(Financial Adviser) Kieran Davey 3838
finnCap Corporate Finance T: 020 7220
(Nominated Adviser Carl Holmes 0500
and Broker) Kate Bannatyne
Teddy Whiley
ECM
Alice Lane
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation 596/2014
Please visit www.botb.com for further information
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END
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