TIDMERM TIDMDMGT
RNS Number : 3755R
Euromoney Institutional InvestorPLC
08 December 2016
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATION OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Euromoney Institutional Investor PLC
("Euromoney" or the "Company")
Daily Mail and General Trust plc ("DMGT") placing and Euromoney
buyback to deliver Euromoney greater financial control and
strategic autonomy
-- DMGT intends to reduce its stake in Euromoney from 67% to below 50%
-- To be achieved by a combination of a placing by DMGT of its
shares in Euromoney with institutional investors and a buyback of
DMGT's shares in Euromoney by Euromoney
-- If the Placing and the Buyback are successful, Euromoney is expected to benefit from:
o greater strategic autonomy
o financial flexibility with a balance sheet which is uncoupled
from DMGT
o a more diversified investor base and greater liquidity in its
shares
o material EPS accretion from the buyback
-- Euromoney to review its dividend policy with a view to increasing its payout ratio
-- DMGT will remain Euromoney's largest shareholder
-- The buyback is subject to approval by shareholders (excluding
DMGT) at a general meeting of Euromoney which is expected to be
held before the end of December 2016
-- The placing by DMGT is not conditional on Euromoney buyback
-- A full circular will be posted to Euromoney shareholders shortly
Euromoney today announces that: its parent company DMGT has
agreed to sell c.10 per cent. of the Company's issued share capital
to certain institutional investors by means of an accelerated
bookbuild (the "Placing") and; Euromoney has agreed with DMGT and a
wholly-owned subsidiary of DMGT to buyback c.15 per cent. of the
Company's issued share capital by means of an off-market share
buyback (the "Buyback"). The final number of Placing Shares to be
placed and the placing price and the price of the Buyback will be
agreed at the close of the bookbuild process. The results of the
Placing will be announced as soon as practicable thereafter.
Commenting on the announcement, Euromoney CEO Andrew Rashbass,
said: "DMGT has always been an incredibly supportive shareholder in
Euromoney and I know that will continue. This transaction creates
great opportunity for Euromoney. It gives us autonomy to accelerate
our strategy so that we can continue to create value for all our
shareholders."
The objective of Euromoney and DMGT is to reduce the DMGT
Group's total shareholding in Euromoney to less than 50 per cent.
of Euromoney's issued share capital such that Euromoney would cease
to be a subsidiary of DMGT and Euromoney would no longer be
consolidated within DMGT's accounts.
The Buyback is conditional on and requires the majority approval
of the Company's independent shareholders (other than members of
the DMGT Group) as a "related party transaction" under Chapter 11
of the Listing Rules and as an off-market purchase pursuant to
section 694 of the Companies Act 2006. Shareholder approval will be
sought at a general meeting of the Company, which is expected to be
held before the end of December 2016 (the "General Meeting"). After
the Buyback has completed, the shares will then be cancelled by the
Company.
The Board of Euromoney believes that the Buyback provides an
opportunity to take the next step towards functional and financial
independence and to accelerate the implementation of the strategy
that Euromoney's Chief Executive Officer presented to investors in
March 2016.
The Board will recommend that shareholders vote in favour of the
resolutions to be proposed at the General Meeting.
Background to and Reasons for the Buyback
The Board firmly believes that the Buyback, in combination with
the Placing, will be highly beneficial for Euromoney and is in the
best interests of all shareholders in the Company. In particular,
it delivers:
1. Greater financial control and strategic autonomy
At the Investor Day in March 2016, the Board presented the new
strategy for Euromoney comprising three pillars of strategic
activity: (1) investing around big themes such as the information
and services to support the asset management industry, price
discovery and others; (2) ensuring an effective operating model
which combines Euromoney's entrepreneurial culture with a more
strategic approach; and (3) actively managing the portfolio, buying
where the Board sees value-creating and strategically sensible
opportunities and selling when the Board believes a business is
more valuable to someone else than to Euromoney.
As announced in the preliminary results on 24 November 2016,
progress with implementing Euromoney's new strategy has been good
and Euromoney has continued to achieve strong cash generation.
A key consequence of the Buyback, if approved by Shareholders,
and the Placing, if successful, will be that Euromoney will cease
to be a subsidiary of DMGT and will no longer be consolidated in
DMGT's accounts. This 'uncoupling' of Euromoney's balance sheet
from DMGT's will allow Euromoney to make investment and capital
deployment decisions without reference to the consequences for
DMGT. The Board believes that this greater strategic autonomy will
allow Euromoney to accelerate the implementation of the Board's
announced strategy, which the Board firmly believes to be in the
best interests of all Shareholders.
2. More diversified shareholder base and greater trading
liquidity
The Placing is expected to result in a more diversified
shareholder base, and increased liquidity in the Company's
shares.
The Board believes that the Buyback, taken together with the
effects of the Placing, is a significant step towards a
shareholding structure closer to that of most other FTSE 250
companies.
DMGT will remain Euromoney's largest shareholder following the
Buyback and will continue to support the management team in
implementing its strategy through its representatives on the
Board.
3. EPS accretion
In addition, the Buyback, if approved by Shareholders, is
expected to deliver EPS accretion to Euromoney Shareholders.
Consideration
The consideration for the Buyback will be satisfied in cash,
funded from:
-- approximately GBP 75 million from the Euromoney Group's
existing cash reserves, after set off of any agreed intercompany
account balances between the DMGT Group and the Euromoney Group;
and
-- new facilities made available under the New Facilities
Agreement, comprising term facilities of GBP112 million and USD201
million.
The New Facilities Agreement, which was entered into on 8
December 2016, is conditional on, among other things, the Company
obtaining shareholder approval of the Buyback. Once this condition,
and the other conditions precedent, has been satisfied and the
funds drawn down, the New Facilities Agreement will replace the
Euromoney Group's existing financing arrangements with DMGT.
The Buyback is expected to increase Euromoney's leverage (Net
Debt/EBITDA) to c.1.0x. However, in the light of the Company's
historically strong cash flows and ongoing cash generation
capability the Board believes that this leverage is readily
supported.
Amendment of the Relationship Deed
As noted above, the Buyback (if approved by shareholders) would
reduce DMGT Group's shareholding to less than 50 per cent. of the
Company's issued share capital such that it would no longer have
voting control and the legal ability to appoint directors to the
Board. The DMGT Group will nevertheless continue to be the
Company's most significant shareholder. The existing Relationship
Deed between DMGT plc and the Company [has been] amended so that
DMGT's right to appoint two non-executive directors to the Board
continues for so long as the DMGT Group holds at least 25 per cent.
of the Company's issued share capital; and, in the event that the
DMGT Group holds less than 25 per cent. but at least 10 per cent.
of the Company's issued share capital, the DMGT Group shall have
the right to appoint one non-executive director to the Board. The
Company has agreed to procure that at least one of the
representatives nominated by the DMGT Group shall be appointed to
each of the Company's Audit Committee and Remuneration Committee
for so long as DMGT holds 10 per cent. or more of the Company's
issued share capital. DMGT has agreed that the Board should have
the right to appoint a senior independent director of the Company
going forwards. The amended Relationship Deed will continue to
comply with the Listing Rules.
Dividend
Following the Buyback, the Company will review its dividend
policy with a view to increasing its dividend payout ratio to be
more in line with peers, subject to approval by the Board.
Enquiries:
Euromoney Institutional Investor PLC
Andrew Rashbass
CEO
t: +44 20 7779 8888
Colin Jones
Finance Director
t: +44 20 7779 8888
Ondra
Michael Tory
Partner
t: +44 (0)20 7082 8750
HSBC
Oliver Smith
Managing Director
t: +44 (0) 20 7991 8888
HSBC Bank plc ("HSBC"), which is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the UK is
acting as joint financial adviser and as sponsor (in relation to
the advice required under LR 13.6.1(5)) to Euromoney and no one
else in connection with the Buyback or any other matter referred to
in this announcement. In connection with such matters, HSBC, its
affiliates, and its or their respective directors, officers,
employees and agents will not regard any other person as their
client, nor will they be responsible to anyone other than Euromoney
for providing advice in relation to the Buyback or any other matter
referred to in this announcement.
Ondra LLP ("Ondra"), which is authorised and regulated by the
Financial Conduct Authority in the UK is acting as lead financial
adviser to Euromoney and no one else in connection with the Buyback
or any other matter referred to in this announcement. In connection
with such matters, Ondra, its affiliates, and its or their
respective partners, directors, officers, employees and agents will
not regard any other person as their client, nor will they be
responsible to anyone other than Euromoney for providing advice in
relation to the Buyback or any other matter referred to in this
announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCFSIFMAFMSEIE
(END) Dow Jones Newswires
December 08, 2016 11:57 ET (16:57 GMT)
Daily Mail & General (LSE:DMGT)
Historical Stock Chart
From Apr 2024 to May 2024
Daily Mail & General (LSE:DMGT)
Historical Stock Chart
From May 2023 to May 2024