TIDMHRN
RNS Number : 8579W
Hornby PLC
17 November 2017
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA,
AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR IN OR INTO ANY
OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR
BREACH OF ANY APPLICABLE LAW OR REGULATION.
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT DOES NOT
CONSTITUTE AN OFFERING OF SECURITIES FOR SALE IN THE UNITED STATES
OF AMERICA AND NO SECURITIES HAVE BEEN OR WILL BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT 1933, AS AMED (THE "SECURITIES
ACT") OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION IN THE UNITED STATES OF AMERICA NOR WILL THEY QUALIFY
FOR DISTRIBUTION UNDER ANY OF THE RELEVANT SECURITIES LAWS OF
CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA, NOR HAS
ANY PROSPECTUS IN CONNECTION WITH THE SECURITIES BEEN LODGED WITH
OR REGISTERED BY THE AUSTRALIAN SECURITIES AND INVESTMENTS
COMMISSION. THE SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION
DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES OF AMERICA.
THIS ANNOUNCEMENT, WHICH DOES NOT CONSTITUTE A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT FOR THE PURPOSES OF THE PROSPECTUS
RULES AND HAS NOT BEEN, AND WILL NOT BE, APPROVED BY, OR FILED
WITH, THE FINANCIAL CONDUCT AUTHORITY. IT DOES NOT CONSTITUTE OR
FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, AN OFFER TO SELL OR
ISSUE, OR A SOLICITATION OF ANY OFFER OF OR INVITATION TO BUY OR
SUBSCRIBE FOR, ANY SECURITIES, NOR SHALL IT (OR ANY PART OF IT), OR
THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN
CONNECTION WITH, OR ACT AS AN INDUCEMENT TO ENTER INTO, ANY
CONTRACT OR COMMITMENT WHATSOEVER. ANY FAILURE TO COMPLY WITH THESE
RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE APPLICABLE
SECURITIES LAWS IN SUCH JURISDICTION. THIS ANNOUNCEMENT DOES NOT
CONSTITUTE A RECOMMATION REGARDING ANY SECURITIES. INVESTORS SHOULD
NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS
ANNOUNCEMENT EXCEPT ON THE BASIS ON THE INFORMATION IN THE CIRCULAR
TO BE PUBLSIHED BY THE COMPANY AND ANY SUPPLEMENT THERETO.
Hornby PLC
("Hornby", the "Company")
Placing and Open Offer of 40,677,968 New Ordinary Shares to
raise GBP12.0 million
and
Acquisition of 49 per cent. of LCD Enterprises Limited
and
Notice of General Meeting
Hornby PLC, the international models and collectibles group, is
pleased to announce that it proposes to raise, in aggregate,
approximately GBP12.0 million (before expenses) through the issue
of up to 40,677,968 New Ordinary Shares at an issue price of 29.5
pence per New Ordinary Share, pursuant to a Placing and Open
Offer.
The Placing is being conducted through an accelerated book
building process (the "Accelerated Book Build") which will be
launched immediately following the release of this announcement
(the "Announcement") and which is expected to close no later than
4.00 pm (GMT) today. Liberum Capital Limited ("Liberum Capital") is
acting as sole bookrunner in relation to the Placing and Open
Offer.
The Company also announces that it has entered into an agreement
to acquire a 49 per cent. stake in LCD Enterprises, the holding
company for the Oxford Diecast Group, for a cash consideration of
GBP1.6 million.
Highlights
The Placing and Open Offer
-- Approximately GBP12.0 million to be raised via a proposed
Placing and Open Offer at an issue price of 29.5 pence per New
Ordinary Share
-- Placing comprising:
o Firm Placing element of up to 33,898,306 New Ordinary Shares
to raise approximately GBP10.0 million
o Conditional Placing element of up to a further 6,779,662 New
Ordinary Shares to raise up to approximately GBP2.0 million,
subject to clawback by Shareholders, dependent upon the take-up of
the Open Offer by Qualifying Shareholders
-- Open Offer of up to 6,779,662 New Ordinary Shares to raise up
to approximately GBP2.0 million which is expected to be made on the
basis that:
o Qualifying Shareholders may subscribe for 1 Open Offer Share
for every 12.476020780977 Existing Ordinary Shares held
o Qualifying Shareholders may also make applications in excess
of their pro rata initial entitlement under an Excess Application
Facility
-- The Issue Price of 29.5 pence per New Ordinary Share is equal
to the Closing Price per Existing Ordinary Share on 16 November
2017 (being the latest practicable date prior to publication of
this Announcement)
-- Gross proceeds of the Placing and Open Offer expected to be utilised as follows:
GBP1.6 million to fund the Acquisition consideration;
GBP1.1 million to reinvigorate the Group's
key brands through additional
capital expenditure;
GBP2.4 million to fund expected restructuring
costs (including GBP0.5 million
of expected costs of the Placing
and Open Offer, the Acquisition
and the Amendment and Restatement);
GBP3.2 million to reduce the Group's net
debt under the Existing Bank
Facility; and
GBP3.7 million to provide working capital
to support appropriate product
pricing.
-- Funds raised will be used to implement a new Group strategy,
fund the consideration for the Acquisition, strengthen the
Company's balance sheet and reduce its net debt under the Existing
Bank Facility
-- Following Admission, the Board intends to put in place
appropriate incentive arrangements for the executive team of the
Group, in order to align their interests with those of
Shareholders'
The Acquisition
-- Hornby to acquire a 49 per cent. interest in LCD Enterprises,
the holding company of the Oxford Diecast Group, for a cash
consideration of GBP1.6 million. The Acquisition is conditional on
Shareholder approval
-- Oxford Diecast Group owns a portfolio of brands that the
Board believes will be complimentary to Hornby's existing brand
portfolio and the opportunities exist for the two businesses to
work collaboratively together to add scale to the Oxford Diecast
Group's business
-- Given Lyndon Davies' appointment as Chief Executive Officer
of the Company, the Board is keen to ensure that the interests of
both the Company and LCD Enterprises are aligned and the
Acquisition provides an opportunity to achieve this
Bank Facility
-- The Company has entered into an amendment and restatement to
the Existing Banking Facility with Barclays, conditional on
Admission, in order to align the financial covenants with the
revised strategy for the Group
-- Facility to reduce to GBP6.0 million following Admission with
a further reduction to GBP5.0 million on 1 July 2018
David Adams, Interim Chairman said,
"With new management in place and an exciting new strategy to
execute, the board of Hornby is seeking new funds to support the
next stage of its development. Lyndon Davies and his team has
identified the need for further investment in the Company's brands.
This will come in the form of direct capital expenditure and the
acquisition of the stake in LCD Enterprises. I am confident that
both will have a positive impact on the Company's offer to
customers. The new funds will also strengthen the balance sheet,
allowing Hornby to fully exploit the benefits of its
investment."
The Accelerated Book Build
The Placing is being conducted by way of an Accelerated Book
Build led by Liberum Capital as sole bookrunner.
Completion of the Placing and Open Offer will be conditional
upon, inter alia, the approval by Shareholders at the General
Meeting of the Resolutions and Admission occurring.
Accordingly, the Company expects to publish a circular (the
"Circular") in connection with the Placing and Open Offer shortly
following the successful closure of the Accelerated Book Build, in
order to convene the General Meeting to approve certain matters
necessary to implement the Placing and Open Offer and the
Acquisition (the "Resolutions"). Full details of the
non-underwritten Open Offer, to be undertaken at the Issue Price,
will also be included in the Circular.
The Company has today entered into the Placing and Open Offer
Agreement with Liberum Capital which contains customary terms and
conditions, as fully described in the Circular. Pursuant to the
Placing and Open Offer Agreement, Liberum Capital has conditionally
agreed, as agent for the Company, to use its reasonable endeavours
to procure Placees for the Placing Shares at the Placing Price.
Your attention is drawn to the detailed terms and conditions of
the Placing described in the Appendix to this Announcement (which
forms part of this Announcement).
The books for the Accelerated Book Build will open with
immediate effect. The books are expected to close no later than
4.00 pm (London) today. The timing of the closing of the books and
the making of allocations may be accelerated or delayed at Liberum
Capital's sole discretion. The Appendix to this Announcement
contains the detailed terms and conditions of the Placing and basis
on which investors may participate in the Accelerated Book Build.
The Placing is not being underwritten by Liberum Capital. Details
of the number of Placing Shares conditionally placed with
institutional and other investors pursuant to the Placing and gross
proceeds will be announced as soon as practicable after the close
of the Accelerated Book Build.
Qualifying investors who are invited, and who choose, to
participate in the Accelerated Book Build by making an oral and
legally binding offer to acquire Placing Shares, will be deemed to
have read and understood this Announcement in its entirety,
including the Appendix, and to be making such offer on the terms
and subject to the conditions contained herein and to be making the
representations, warranties, undertakings and acknowledgements
contained in the Appendix to this Announcement.
The Placing Shares will be issued credited as fully paid and
will rank pari passu with the Existing Ordinary Shares, including
the right to receive all dividends and other distributions (if any)
declared, made or paid on or in respect of such shares after the
date of their issue.
Circular and Notice of General Meeting
The Company expects to publish a circular (the "Circular") later
today in connection with the Placing and Open Offer and the
Acquisition, which will contain a notice convening the General
Meeting in order to approve certain matters necessary to implement
the Placing and Open Offer and the Acquisition. The Circular will
be posted to Shareholders later today and a copy will be made
available on the Company's website www.hornby.plc.uk.
The General Meeting is expected to be convened for 9.00 a.m. on
5 December 2017 and will take place at the offices of the Company's
solicitors, Taylor Wessing LLP, 5 New Street Square, London EC4A
3TW. The actions that Shareholders should take to vote on the
Resolutions and/or apply for Open Offer Shares will be set out in
the Circular, along with the recommendations of the Independent
Directors and the Acquisition Independent Directors.
Admission
Application will be made for the New Ordinary Shares to be
admitted to trading on AIM and it is expected that Admission will
become effective and trading will commence in the New Ordinary
Shares at 8.00 a.m. on 7 December 2017. Following Admission the
Company's issued ordinary share capital will comprise 125,261,172
Ordinary Shares. From Admission, the figure of 125,261,172 may be
used by Shareholders in the Company as the denominator for the
calculations by which they will determine if they are required to
notify their interest in, or a change to their interest in, the
share capital of the Company under the FCA's Disclosure and
Transparency Rules.
Further details of the Placing and Open Offer and the
Acquisition can be found below.
Defined terms used in this Announcement will have the meaning
(unless the context otherwise requires) as set out in this
Announcement and in the Circular to be posted to Shareholders
today, which will be available on the Company's website
www.hornby.plc.uk.
The information contained within this Announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
- ends -
For further information contact:
Hornby PLC
Lyndon Davies, CEO
David Mulligan, CFO 01843 233500
Liberum Capital Limited
Neil Elliot
Neil Patel
Ben Roberts 020 3100 2222
Capital Access Group
Scott Fulton 020 3763 3400
IMPORTANT INFORMATION
This Announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
plans and its current goals and expectations relating to its future
financial condition and performance and which involve a number of
risks and uncertainties. The Company cautions readers that no
forward-looking statement is a guarantee of future performance and
that actual results could differ materially from those contained in
the forward-looking statements. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements sometimes
use words such as "aim", "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", or other words of
similar meaning. By their nature, forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances, including, but not limited to, economic and
business conditions, the effects of continued volatility in credit
markets, market-related risks such as changes in the price of
commodities or changes in interest rates and foreign exchange
rates, the policies and actions of governmental and regulatory
authorities, changes in legislation, the further development of
standards and interpretations under International Financial
Reporting Standards (IFRS) applicable to past, current and future
periods, evolving practices with regard to the interpretation and
application of standards under IFRS, the outcome of pending and
future litigation or regulatory investigations, the success of
future explorations, acquisitions and other strategic transactions
and the impact of competition. A number of these factors are beyond
the Company's control. As a result, the Company's actual future
results may differ materially from the plans, goals, and
expectations set forth in the Company's forward-looking statements.
Any forward-looking statements made in this Announcement by or on
behalf of the Company speak only as of the date they are made.
Except as required by the Financial Conduct Authority (the FCA),
the London Stock Exchange or applicable law, the Company expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained in
this Announcement to reflect any changes in the Company's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
This Announcement is for information purposes only and shall not
constitute an offer to buy, sell, issue, or subscribe for, or the
solicitation of an offer to buy, sell, issue, or subscribe for any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
This Announcement has been issued by and is the sole
responsibility of the Company. No representation or warranty,
express or implied, is or will be made as to, or in relation to,
and no responsibility or liability is or will be accepted by
Liberum Capital Limited or by any of its affiliates or agents as
to, or in relation to, the accuracy or completeness of this
Announcement or any other written or oral information made
available to or publicly available to any interested party or its
advisers, and any liability therefore is expressly disclaimed.
Liberum Capital Limited, which is authorised and regulated in
the United Kingdom by the FCA, is acting for the Company and for
no-one else in connection with the Placing, and will not be
responsible to anyone other than the Company for providing the
protections afforded to its customers or for providing advice to
any other person in relation to the Placing or any other matter
referred to herein.
The distribution of this Announcement and the offering of the
Placing Shares in certain jurisdictions may be restricted by law.
No action has been taken by the Company or Liberum Capital Limited
that would permit an offering of such shares or possession or
distribution of this Announcement or any other offering or
publicity material relating to such shares in any jurisdiction
where action for that purpose is required. Persons into whose
possession this Announcement comes are required by the Company and
Liberum Capital Limited to inform themselves about, and to observe
such restrictions.
Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
of the Appendix or this Announcement should seek appropriate advice
before taking any action.
The Placing Shares to which this Announcement relates may be
illiquid and / or subject to restrictions on their resale.
Prospective purchasers of the Placing Shares should conduct their
own due diligence on the Placing Shares. If you do not understand
the contents of this Announcement you should consult an authorised
financial adviser.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
FURTHER DETAILS OF THE PLACING AND OPEN OFFER, ACQUISITION AND
NOTICE OF GENERAL MEETING
1 Introduction
1.1 The Company is pleased to announce that it has entered into
the Acquisition Agreement, pursuant to which terms the Company has
agreed to acquire a 49 per cent. stake in LCD Enterprises, for
GBP1.6 million in cash. LCD Enterprises is a private limited
company wholly owned by the Company's Chief Executive Officer,
Lyndon Davies, and his wife, Catherine Davies. LCD Enterprises
holds majority interests in the Oxford Diecast Group, which
supplies diecast model vehicles and railway products to the
collector, gift and hobby markets in the UK, Hong Kong and North
America. The terms of the Acquisition also entitle the Company, in
certain circumstances, to acquire the outstanding 51 per cent. of
LCD Enterprises or to sell its 49 per cent. stake back to the
Seller. Further information in relation to the Oxford Diecast Group
and the terms of the Acquisition Agreement are set out below at
paragraphs 2.11 and 7 respectively.
1.2 To finance the Acquisition, provide sufficient funds to
reduce the net debt drawn down under the Existing Bank Facility and
provide working capital to the Group, the Board also announces,
that it intends to raise, in aggregate, approximately GBP12.0
million (before expenses) through the issue of 40,677,968 New
Ordinary Shares pursuant to a Placing and Open Offer. The Placing
and the Open Offer have been arranged by Liberum Capital.
1.3 The Placing comprises a Firm Placing and a Conditional
Placing. Under the Firm Placing, up to 33,898,306 Placing Shares
are expected to be placed firm with the Firm Placees (being certain
existing institutional investors) at the Issue Price of 29.5 pence
per Placing Share, thereby raising GBP10.0 million. Up to a further
6,779,662 Placing Shares are also expected to be placed with the
Conditional Placees (also being certain existing institutional
investors) at the Issue Price, thereby raising a further GBP2.0
million (before expenses). Such Placing Shares will be placed with
the Conditional Placees, subject to clawback by Qualifying
Shareholders in order to satisfy valid applications made by them
under the Open Offer.
1.4 The Company considers it important that all Shareholders
have an opportunity to participate in the proposed fundraising. The
Company will therefore also provide Qualifying Shareholders with
the opportunity to subscribe for up to 6,779,662 New Ordinary
Shares at the Issue Price pursuant to the Open Offer. Any Open
Offer Shares not applied for under the Open Offer are expected to
be taken up by Conditional Placees pursuant to the Conditional
Placing.
1.5 The Issue Price of 29.5 pence per New Ordinary Share is
equal to the Closing Price per Existing Ordinary Share on 16
November 2017 (being the latest practicable date prior to
publication of this announcement).
1.6 The Directors currently have existing authorities to allot
shares and disapply pre-emption rights under section 551 and
section 570 of the Act which were obtained at the Company's Annual
General Meeting held on 6 September 2017. However, these are
insufficient to enable the Company to allot and issue the full
amount of New Ordinary Shares pursuant to the Placing and Open
Offer. Accordingly, the Placing and Open Offer are both conditional
upon, amongst other things, the Directors obtaining appropriate
Shareholder authorities at the General Meeting to allot the Placing
Shares and the Open Offer Shares and to disapply statutory
pre-emption rights which would otherwise apply to such
allotment.
1.7 The Placing and Open Offer and the Acquisition are each
conditional, inter alia, on the passing of the Resolutions by the
Shareholders at the General Meeting, which is expected to be
convened for 9.00 a.m. on 5 December 2017, notice of which will be
set out in the circular. If the Resolutions are not approved by
Shareholders at the General Meeting, the Placing and Open Offer and
Acquisition will not proceed. Subject to the Resolutions being
passed at the General Meeting and any other relevant conditions
being satisfied (or, if applicable, waived), it is expected that
the New Ordinary Shares will be admitted to trading on AIM at 8.00
a.m. on 7 December 2017. Further details regarding the Placing and
Open Offer and the Acquisition are set out at paragraph 2
below.
2 Background to and reasons for the PLACING and Open Offer AND ACQUISITION
Results of the strategy review
2.1 Since the announcement of his appointment as Chief Executive
Officer of the Company on 3 October 2017, Lyndon Davies has led the
Board in undertaking a review of the Company's strategy. Mr Davies,
together with Tim Mulhall and Simon Kohler, have drawn upon their
combined industry experience totalling nearly 100 years in
conducting an initial review of the Group's business, operations
and its strategy. As a result of that review, the following
opportunities have been identified by the Board with the potential
both to drive growth and operational efficiency, with a view to
returning the Group to long term sustainable profitability and
positive cash generation.
Reinvigorate and grow key brands and products
2.2 The focus on tight cost control has caused the Group to
reduce its expenditure on product development across its key
brands. The Group intends to utilise approximately GBP1.0 million
of the proceeds from the Placing and Open Offer to invest in
additional capital expenditure over and above the existing level to
improve the product offering for its key brands and support new
product development.
2.3 In addition, the Group's population of enthusiasts for many
of its key brands is ageing. As a result, the Company plans to
develop products which are targeted at younger aged groups to
attract a new generation of consumers.
Grow our European brands
2.4 The Group owns a number of well established brands in the
European model trains market. However, these brands have suffered
from underinvestment as management's time was focused on cost
control to improve cash generation. As a result, the Board believes
that there is a significant opportunity to drive revenue growth
across the Group's European markets by improving the product
offering in line with each brand's core values, and through
improving engagement with consumers in these markets.
Maintain appropriate product pricing
2.5 As part of the previous turnaround plan, the Group focussed
on discounting and promotions in order to drive revenue growth and
cash generation. The Board considers that the Group's use of
discounting and promotions has led to an expectation by retailers
that they do not need to acquire new products upon their release as
they would shortly be discounted, thereby undermining the value of
those product lines and ultimately the brand. This has also had an
impact on the Company's relationship with retailers who have
acquired stock from the Company at full price, only to have to
write down the value of that stock once discounts are made
available.
2.6 As announced on 17 October 2017, in order to maximise the
value of its brands over the longer term, the Group will no longer
offer large quantities of stock at a discount. However, in the
short term, this is likely to lead to a reduction in revenue whilst
the market adjusts to the Group's new pricing strategy. This
reduction in revenue will reduce the Group's cashflows and create a
short term working capital requirement, resulting in the need to
strengthen the balance sheet of the Company.
Streamline the Group's systems and processes
2.7 Utilising the industry experience of the new operational
management team, several opportunities have been identified to
restructure the Group's systems and processes, which should lead to
management and cost efficiencies and ultimately further reduce the
fixed cost base of the Group.
Background to and reasons for the Placing and Open Offer
2.8 The Company intends to undertake the proposed Placing and
Open Offer to provide the funding required to implement the new
Group strategy outlined above, fund the consideration for the
Acquisition and to further strengthen the Company's balance sheet.
In addition to implementing the new strategy the Company also
intends to use the fundraising proceeds to reduce its net debt
under the Existing Bank Facility.
Background to and reasons for the Acquisition
Reasons for the Acquisition
2.9 The Company believes that the Oxford Diecast Group's
portfolio of brands will be complimentary to its existing brand
portfolio and that opportunities exist for the two businesses to
work collaboratively together to add scale to the Oxford Diecast
Group's business.
2.10 Further, given Mr Davies' appointment as Chief Executive
Officer of the Company, the Board is keen to ensure that the
interests of both the Company and LCD Enterprises, the holding
company of the Oxford Diecast Group, are aligned and the
Acquisition provides an opportunity to achieve this.
Information on the Oxford Diecast Group
2.11 LCD Enterprises is the holding company for Oxford Diecast
Group of businesses. The Oxford Diecast Group supplies various
scales of diecast and railway products to the collector, gift,
hobby and promotional markets. The group was founded in 1993 and
led by Lyndon Davies since 2002 and has operations in UK, Hong Kong
and North America. It sells its products worldwide and in 2017
launched over 400 new products.
2.12 In October 2017, Lyndon Davies became Chairman of the
Oxford Diecast Group and Eloise Davies (Mr Davies' daughter) was
appointed as Managing Director of the Oxford Diecast Group, which
has enabled Mr Davies to focus on his role as Chief Executive
Officer of the Company.
Incentive arrangements
2.13 Following completion of the proposals, the Board intends to
put in place appropriate incentive arrangements for the executive
team of the Group, in order to align their interests with those of
Shareholders.
3 USE OF PROCEEDS
It is currently expected that the gross proceeds of the Placing
and Open Offer, expected to be GBP12.0 million, will be utilised as
follows:
GBP1.6 to fund the Acquisition consideration;
million
GBP1.0 to reinvigorate the Group's
million key brands through additional
capital expenditure;
GBP2.4 to fund expected restructuring
million costs (including GBP0.5 million
of expected costs of the Placing
and Open Offer, the Acquisition
and the Amendment and Restatement);
GBP3.2 to reduce the Group's net debt
million under the Existing Bank Facility;
and
GBP3.8 to provide working capital to
million support appropriate product
pricing.
4 Current trading and prospects
4.1 The current financial year represents a period of change for
the Group, but as the management team looks to reshape the business
in line with the new strategy, this will result in full year
revenue reducing significantly year on year. At the half year,
Group revenue was 22 per cent. lower than the previous year and
while this performance reflects the timing of new product releases
being more weighted to the second half of the year, it also
reflects softer market demand over the summer months and increased
competition in the important UK Independent channel.
4.2 Revenue for the six weeks to 12 November 2017 was 10 per
cent. lower than the previous year. The previous year's figures
included the effect of significant discounting and promotional
activity. Overall, the Board remain confident that the changes now
being implemented are the correct course of action to protect the
value of the Group's brands and build a stronger platform for the
future growth of the Company for the benefit of all
stakeholders.
5 Details of the Placing and Open Offer
5.1 The Company is proposing to raise, in aggregate,
approximately GBP12.0 million (before expenses) through the issue
of up to 40,677,968 New Ordinary Shares pursuant to a Placing and
an Open Offer at the Issue Price. Under the Firm Placing,
33,898,306 Placing Shares are expected to be placed firm with the
Firm Placees and with a further 6,779,662 Placing Shares expected
to be placed conditionally pursuant to the Conditional Placing with
the Conditional Placees, subject to take-up of those shares by
Qualifying Shareholders under the Open Offer. Accordingly, up to
6,779,662 New Ordinary Shares are expected to be offered to
Qualifying Shareholders pursuant to the Open Offer at the Issue
Price. The Conditional Placing is intended to ensure that any Open
Offer Shares not applied for under the Open Offer may instead be
taken up by the Conditional Placees pursuant to the Placing.
5.2 If the Open Offer is taken up in full by Qualifying Shareholders:
(a) Firm Placees will receive their placing participation in full; and
(b) Conditional Placees will not receive any New Ordinary Shares.
5.3 The aggregate number of New Ordinary Shares to be issued
pursuant to the Placing and Open Offer is expected, on Admission,
to represent approximately 32.5 per cent. of the Enlarged Share
Capital.
5.4 The Placing and Open Offer is expected, upon completion, to
result in a proportionate dilution of the holdings of existing
Shareholders. On Admission, Shareholders who do not participate in
the Placing or the Open Offer would experience an immediate
dilution of approximately 32.5 per cent.
5.5 The Issue Price of 29.5 pence per New Ordinary Share is
equal to the Closing Price per Ordinary Share on 16 November 2017
(being the latest practicable date prior to the publication of this
announcement).
5.6 Application will be made to the London Stock Exchange for
the New Ordinary Shares to be admitted to trading on AIM. On the
assumption that, amongst other things, the Resolutions are passed
by Shareholders at the General Meeting, it is expected that
Admission of the New Ordinary Shares will become effective at 8.00
a.m. on 7 December 2017.
5.7 The New Ordinary Shares will be issued credited as fully
paid and will rank in full for all dividends and other
distributions declared, made or paid after Admission in respect of
Ordinary Shares and will otherwise rank on Admission pari passu in
all respects with the Existing Ordinary Shares. The New Ordinary
Shares are not being made available to the public and are not being
offered or sold in any jurisdiction where it would be unlawful to
do so.
The Open Offer
5.8 The Company considers it important that Shareholders who
have not taken part in the Placing to have an opportunity to
participate in the proposed fundraising. The Company will therefore
provide all Qualifying Shareholders with the opportunity to
subscribe for up to 6,779,662 Open Offer Shares at the Issue Price
pursuant to an Open Offer to raise, in aggregate, up to GBP2.0
million (before expenses). This will allow Qualifying Shareholders
to participate on a pre-emptive basis whilst providing the Company
with the flexibility to raise additional equity capital to further
improve its financial position.
5.9 Subject to fulfilment of the conditions set out below, and
in Part 3 of the Circular, the Open Offer provides Qualifying
Shareholders with the opportunity to apply to acquire Open Offer
Shares at the Issue Price pro rata to their holdings of Existing
Ordinary Shares as at the Open Offer Record Date on the following
basis:
1 Open Offer Share for every 12.476020780977 Existing Ordinary
Shares
and so in proportion for any other number of Existing Ordinary
Shares then held.
5.10 Entitlements to apply to acquire Open Offer Shares will be
rounded down to the nearest whole number and any fractional
entitlements to Open Offer Shares will be disregarded in
calculating an Open Offer Entitlement and will be aggregated and
made available to Qualifying Shareholders pursuant to the Excess
Application Facility.
5.11 Completion of the Open Offer will be conditional upon,
inter alia, the Acquisition Agreement becoming unconditional in all
respects (save for the condition relating to the Placing and Open
Offer Agreement) and the passing of the Resolutions and Admission.
The proceeds of the Open Offer are anticipated to amount to up to
GBP2.0 million, before expenses. If the conditions of the Open
Offer are not satisfied, the Open Offer will not proceed and any
Open Offer Entitlements admitted to CREST will thereafter be
disabled and application monies under the Open Offer will be
refunded to the applicants, by cheque (at the applicant's risk) in
the case of Qualifying Non-CREST Shareholders and by way of a CREST
payment in the case of Qualifying CREST Shareholders, without
interest, as soon as practicable, but within 14 days,
thereafter.
Excess Applications
5.12 The Open Offer will be structured to allow Qualifying
Shareholders to subscribe for Open Offer Shares at the Issue Price
pro rata to their holdings of Existing Ordinary Shares. Qualifying
Shareholders may also make applications in excess of their pro rata
initial entitlement up to an amount equal to the total number of
Open Offer Shares available under the Open Offer less an amount
equal to such Qualifying Shareholder's Open Offer Entitlement. To
the extent that pro rata entitlements to Open Offer Shares are not
subscribed for by Qualifying Shareholders, such Open Offer Shares
will be available to satisfy such excess applications. Applications
under the Excess Application Facility may be allocated in such
manner as the Directors may determine, in their absolute
discretion, and no assurance can be given that any applications
under the Excess Application Facility by Qualifying Shareholders
will be met in full or in part or at all.
5.13 Qualifying Shareholders should note that the Open Offer is
not a rights issue. Qualifying Non-CREST Shareholders should be
aware that the Application Form is not a negotiable document and
cannot be traded. Qualifying Shareholders should also be aware that
in the Open Offer, unlike in a rights issue, any Open Offer Shares
not applied for will not be sold in the market nor will they be
placed for the benefit of Qualifying Shareholders who do not apply
under the Open Offer.
Overseas Shareholders
5.14 Certain Overseas Shareholders may not be permitted to
subscribe for Open Offer Shares pursuant to the Open Offer and
should refer to Part 3 of the Circular for further details.
Placing and Open Offer Agreement
5.15 A placing and open offer agreement has been entered into
between (1) the Company and (2) Liberum Capital in connection with
the Placing and Open Offer and pursuant to which Liberum Capital
has agreed, in accordance with its terms, to use reasonable
endeavours to place the Placing Shares with Placees. The terms of
the Placing and Open Offer Agreement provide that the Placing is
conditional, amongst other things, on:
(a) the passing of the Resolutions;
(b) the Acquisition Agreement (i) having become unconditional in
all respects save for the condition relating to the Placing and
Open Offer Agreement, and (ii) not having been terminated in
accordance with its terms or varied or amended without the consent
of Liberum Capital;
(c) the conditions in the Placing and Open Offer Agreement being
satisfied or (if applicable) waived and the Placing and Open Offer
Agreement not having been terminated in accordance with its terms
prior to Admission; and
(d) Admission becoming effective by no later than 8.00 a.m. on 7
December 2017 (or such later time and/or date, being no later than
5.00 p.m. on 15 December 2017 as the Company and Liberum Capital
may agree in writing).
The Placing and Open Offer Agreement contains customary
warranties given by the Company to Liberum Capital as to matters
relating to the Group and its business and a customary indemnity
given by the Company to Liberum Capital in respect of liabilities
arising out of or in connection with the Placing and Open Offer.
Liberum Capital is entitled to terminate the Placing and Open Offer
Agreement in certain circumstances prior to Admission including
circumstances where there is a breach of warranty or on the
occurrence of certain force majeure events.
6 TERMS OF THE ACQUISITION
6.1 On 17 November 2017, the Company entered into the
Acquisition Agreement with the Seller (Lyndon Davies) and his wife,
Catherine Davies, to conditionally acquire 49 per cent. of the
issued share capital of LCD Enterprises. The consideration payable
for the Acquisition is GBP1.6 million in cash, to be satisfied in
cash following receipt by the Company of the proceeds of the
Placing and the Open Offer.
6.2 Under the Acquisition Agreement the Seller and Mrs Davies
have undertaken not, for the duration of the Lock-In Period, to
dispose of, or agree to dispose of, directly or indirectly, any of
the remaining 51 per cent. of the share capital of LCD Enterprises
which will be held by the Seller and Mrs Davies following
completion of the Acquisition.
6.3 As the Group's business and the Oxford Diecast Group
business (including LCD Enterprises) will be run independently
following completion of the Acquisition, to protect the Company's
interests in LCD Enterprises, the Seller and Mrs Davies have
undertaken, for the duration of the Lock-In Period, to provide the
Company with all information it may reasonably require in relation
to LCD Enterprises and the Oxford Diecast Group, including
financial information and business plans. In addition, the
Acquisition Agreement contains customary consent rights in favour
of the Company (whilst it continues to holds shares in LCD
Enterprises) in respect of the ongoing operations of LCD
Enterprises and the Oxford Diecast Group.
6.4 The Acquisition Agreement also contains rights in favour of
the parties to buy or sell LCD shares in certain specified
circumstances as follows:
(a) if the Seller ceases to hold the position of Chief Executive
Officer of the Company for any reason other than his death or
incapacity, at the expiry of the Lock-In Period, the Seller will
become entitled to acquire the 49 ordinary shares of GBP1.00 each
in the capital of LCD Enterprises acquired by the Company pursuant
to the Acquisition Agreement, for a purchase price of GBP1,600,000;
and
(b) if, at the expiry of the Lock-In Period, the Seller
continues to hold the position of Chief Executive Officer of the
Company, the Company will become entitled to acquire the
outstanding 51 ordinary shares of GBP1.00 each in the capital of
LCD Enterprises for an aggregate purchase price of GBP1,600,000 or
at a price to be negotiated (capped at GBP7.0 million) in the event
that the underlying after tax earnings of LCD Enterprises and the
Oxford Diecast Group (as derived from the most recently completed
financial year of LCD Enterprises for which audited accounts have
been published), are materially different to those of the Oxford
Diecast Group for the financial year ending on 31 December
2016.
The Acquisition Agreement also provides that in the event of the
death or incapacity of the Seller during the Lock-In Period, the
Company will be obliged to purchase the remaining 51% stake in LCD
Enterprises at a price of four times the underlying after tax
earnings of LCD Enterprises and the Oxford Diecast Group (capped at
GBP7.0 million) as derived from the most recently completed
financial year of LCD Enterprises for which audited accounts have
been published.
6.5 Completion of the Acquisition Agreement is conditional on, inter alia:
(a) the passing of the Resolutions;
(b) the Placing and Open Offer Agreement (i) having become
unconditional save for the conditions relating to the Acquisition
Agreement, and (ii) not having been terminated in accordance with
its terms; and
(c) Admission becoming effective by no later than 8.00 a.m. on 7
December 2017 (or such later time and/or date, being no later than
5.00 p.m. on 15 December 2017 as the Company and Liberum Capital
may agree in writing).
6.6 In addition, the Company is entitled to terminate the Acquisition Agreement in certain circumstances, including inter alia if at any time before completion of the Acquisition Agreement there is any breach of any of the warranties which is material in the context of the purchase by the Company or if anything occurs which has, or might reasonably be expected to have, a material adverse effect on the financial position or prospects of LCD Enterprises or the Oxford Diecast Group.
6.7 The Seller has provided warranties as to title and capacity
with respect to himself and Mrs Davies and their shares in LCD
Enterprises and customary business, trading and tax warranties with
regard to LCD Enterprises and the Oxford Diecast Group.
6.8 The maximum liability of the Seller with respect to any
claim under the Acquisition Agreement, including in relation to a
breach of any of the warranties is limited to GBP1.6 million. The
time limit for notification of warranty claims is two years in
respect of non-tax warranties and seven years in respect of the tax
warranties.
7 Related party transactions
7.1 The participation of Lyndon Davies and his wife in the
Acquisition is, for the purposes of AIM Rule 13, considered as a
"Related Party Transaction". The Acquisition Independent Directors
(in respect of the Acquisition) consider, having consulted with the
Company's nominated adviser, Liberum Capital, that the terms of the
Acquisition are fair and reasonable insofar as Shareholders are
concerned.
8 SUBSTANTIAL PROPERTY TRANSACTION
As Lyndon Davies is a majority shareholder of LCD Enterprises
and the sole director of the Company, and due to the fact that the
consideration payable for the Acquisition is for an amount in
excess of GBP100,000, and the consideration which will become
payable in the event that either (i) the Company purchases the
remaining 51% stake in LCD Enterprises or (ii) the Seller
re-acquires the 49% stake in LCD Enterprises, will be in excess of
GBP100,000, the Acquisition and the possible subsequent share
transfers constitute, collectively and individually, substantial
property transactions under sections 190 and 191 of the Act.
Sections 190 and 191 of the Act require that any substantial
property transaction with a director of a company must be approved
in advance by shareholders at a general meeting of the company.
Consequently, completion of the Acquisition is conditional upon
obtaining the approval of Shareholders. Resolution 1 is an ordinary
resolution that seeks Shareholder approval of the Acquisition.
9 Amendment, CONFIRMATION AND WAIVER of the Existing BAnk Facility
9.1 In conjunction with the Placing and Open Offer, the Company,
together with certain members of its Group, has entered into the
Amendment and Restatement, pursuant to which terms, the Existing
Bank Facility made available to the Borrower will be amended and
restated (the terms of the Existing Bank Facility, as so amended
and restated, being the "Amended and Restated RCF"). The Amended
and Restated RCF will continue to be guaranteed by the Company,
Hornby Industries Limited and H&M (Systems) Limited. Completion
of the Amended and Restated RCF is conditional on, amongst other
things, the occurrence of Admission by not later than a long stop
date of 15 December 2017.
9.2 Interest on drawings under the Amended and Restated RCF will
be payable at a percentage rate per annum equal to a margin of 3.75
per cent. over LIBOR for the relevant currency (other than euro or
Hong Kong dollars) (or over such other cost of funds basis as
determined in accordance with the terms of the Amended and Restated
RCF). The Amended and Restated RCF will also be subject to
commitment and utilisation fees payable quarterly dependent on the
level of drawings under the revolving credit facility. Drawings
under the Amended and Restated RCF may be made in sterling, euro,
Hong Kong dollars and US dollars or such other currency approved by
the Lender. The Lender will only be obliged to make available a
drawing under the revolving credit facility if the conditions
precedent have been satisfied, including that no event of default
is continuing or would result from the proposed loan.
9.3 As is customary, the Amended and Restated RCF contains
financial covenants which the Group must comply with and which are
to be tested quarterly. Through to and including 15 December 2018,
such financial covenants will include a minimum EBITDA test and a
current asset (stock and receivables) to net debt test. Thereafter,
such financial covenants will revert to customary leverage and
interest cover financial covenants (with the current asset (stock
and receivables) to net debt continuing). The Amended and Restated
RCF also contains various representations and warranties given by
the Company and various members of the Group. In the Amended and
Restated RCF, the Company also gives various information
undertakings and (on behalf of itself and each other member of the
Group) various general undertakings. Breach of an undertaking,
financial covenant, representation or warranty given by the Company
or other member of the Group under the Amended and Restated RCF
will, subject to grace periods in certain circumstances, constitute
an event of default and entitle the Lender to cancel the revolving
credit facility and make demand for all amounts outstanding under
the Amended and Restated RCF. Other events of default relating to
the Group are contained in the Amended and Restated RCF whose
occurrence would also entitle the Lender to cancel the revolving
credit facility and make demand for all amounts outstanding under
the Amended and Restated RCF. These include events of default
relating to non-payment, cross-default, insolvency, insolvency
proceedings, creditors' process, unlawfulness, cessation of
business, expropriation, repudiation, litigation and material
adverse change.
9.4 The Amendment and Restatement also contains an additional
term, pursuant to which the net proceeds of any sale of shares held
by the Company in LCD Enterprises and its subsidiaries (including
those acquired from the Company by Lyndon Davies pursuant to the
exercise of the option referred to in paragraph 6.4 above) will be
required to be applied in reducing the Existing Bank Facility up to
a maximum of GBP1 million, together with any interest and break
costs thereon
10 GEneral meeting
10.1 A notice convening the General Meeting of the Company to be
held at the offices of the Company's solicitors, Taylor Wessing LLP
at 5 New Street Square, London EC4A 3TW on 5 December 2017 at 9.00
a.m. will be contained in the Circular to be posted to
Shareholders, at which the Resolutions will be proposed.
10.2 The Resolutions will be inter-conditional such that if any
Resolution is not passed by Shareholders at the General Meeting,
the Placing and Open Offer and Acquisition will not proceed. The
Resolutions can be summarised as follows:
(a) Resolution 1 - this will be proposed as an ordinary
resolution and seeks the approval of Shareholders to the
Acquisition, which is a substantial property transaction for the
purposes of the Act;
(b) Resolution 2 - this will be proposed as an ordinary
resolution and seeks the approval of Shareholders to authorise the
Directors to allot the New Ordinary Shares in connection with the
Placing and Open Offer; and
(c) Resolution 3 - this will be proposed as a special resolution
and seeks the approval of Shareholders to authorise the Directors
to disapply pre-emption rights in connection with the allotment of
the New Ordinary Shares.
10.3 Save in respect of the allotment of the Placing Shares and
Open Offer Shares, the grant of options to employees under employee
share plans or other similar incentive arrangements and pursuant to
any exercise of existing options in respect of Ordinary Shares, the
Directors have no current intention to allot shares, or rights to
subscribe or convert into shares, in the capital of the
Company.
10.4 If the Resolutions are not passed by Shareholders at the
General Meeting, the Placing and Open Offer and Acquisition will
not proceed and the Company will not receive the full amount of the
anticipated proceeds of the fundraising. Without the full
anticipated proceeds of the Placing and Open Offer the Board will
need to consider alternative sources of financing, which may or may
not be forthcoming. In light of this, the Independent Directors
and, where appropriate the Acquisition Independent Directors,
believe that the Placing and Open Offer and Acquisition are in the
best interests of Shareholders and the Independent Directors and,
where appropriate the Acquisition Independent Directors,
unanimously recommend that Shareholders vote in favour of the
Resolutions so that the Placing and Open Offer and Acquisition can
be implemented.
11 Irrevocable undertakings
11.1 David Adams, a Director who holds 22,500 Existing Ordinary
Shares, representing 0.03 per cent. of the issued Existing Ordinary
Shares, has given an irrevocable undertaking to vote or, where
applicable, to procure the casting of votes by his connected
persons (as defined in section 252 of the Act), in favour of the
Resolutions in respect of his own (or, as applicable, his connected
persons') beneficial holding of Existing Ordinary Shares.
11.2 Phoenix (in its capacity as manager of certain
discretionary funds which hold, in aggregate 71.4 per cent. of the
issued ordinary share capital of the Company) has given an
irrevocable undertaking to:
(i) vote or, where applicable, to procure the casting of votes
by its connected persons (as defined in section 252 of the Act), in
favour of the Resolutions; and
(ii) not to take up any of its Open Offer Entitlement under the Open Offer,
in respect of its own (or, as applicable, its connected
persons') beneficial holdings of Existing Ordinary Shares together
totalling 60,406,594 Existing Ordinary Shares, representing in
aggregate 71.4 per cent. of the Existing Ordinary Shares.
12 Recommendations
12.1 Shareholders should note that if the Resolutions are not
passed by Shareholders at the General Meeting, the Placing and Open
Offer and Acquisition will not proceed and the Company will not
receive the full amount of the anticipated proceeds of the
fundraising. Without the full anticipated proceeds of the Placing
and Open Offer, the Company is expected by 31 December 2017 to be
unable to comply with one or more financial covenants under the
terms of its Existing Bank Facility, may find itself unable to
prepare accounts on a going concern basis and the Board may need to
consider further external bank finance and/or other alternative
sources of financing which may or may not be forthcoming.
12.2 The Independent Directors (in the case of the Placing and
the Open Offer) and the Acquisition Independent Directors (in the
case of the Acquisition), having consulted with the Company's
nominated adviser, Liberum Capital, consider the terms of the
Placing and Open Offer and Acquisition to be fair and reasonable
and in the best interests of Shareholders and of the Company as a
whole.
12.3 The Independent Directors consider the Placing and Open
Offer and the Acquisition Independent Directors consider the
Acquisition to be in the best interests of the Company and
Shareholders as a whole. Accordingly:
(a) the Acquisition Independent Directors recommend that
Shareholders vote in favour of the Acquisition Resolution
(Resolution 1) at the General Meeting as David Adams, an
Independent Director, intends to do in respect of his entire
holding which amount to interests in 22,500 Ordinary Shares,
representing approximately 0.03 per cent. of the existing issued
ordinary share capital of the Company; and
(b) the Independent Directors recommend that Shareholders vote
in favour of the share authority resolutions (Resolutions 2 and 3)
at the General Meeting as David Adams intends to do in respect of
his entire holding which amount to interests in 22,500 Ordinary
Shares, representing approximately 0.03 per cent. of the existing
issued ordinary share capital of the Company.
DEFINITIONS
The following definitions apply throughout this Announcement,
unless the context requires otherwise:
"Accelerated Book an accelerated bookbuilding
Build" process
"Acquisition" the proposed acquisition
by the Company of 49 per
cent. of the issued ordinary
share capital of LCD Enterprises,
pursuant to the Acquisition
Agreement
"Acquisition Agreement" the conditional sale and
purchase agreement entered
into between (1) the Company,
(2) the Seller, and (3)
Catherine Davies, dated
17 November 2017, containing
the terms and conditions
on which the Company shall
make the Acquisition
"Acquisition Independent the Directors other than
Directors" Lyndon Davies
"Act" the Companies Act 2006 (as
amended)
"Admission" the admission of the New
Ordinary Shares to trading
on AIM becoming effective
in accordance with the AIM
Rules
"AIM" AIM, a market operated by
the London Stock Exchange
"AIM Rules" the AIM Rules for Companies
published by the London
Stock Exchange from time
to time
"Amended and Restated the Existing Bank Facility,
RCF" as so amended and restated
by the Amendment and Restatement
"Amendment and Restatement" the amendment and restatement
agreement entered into by
Barclays, the Company and
certain members of the Company's
Group, dated 17 November
2017, in respect of an amendment
and restatement of the Existing
Bank Facility
"Announcement" means this announcement,
together with the Appendix
"Appendix" means the appendix to this
Announcement
"Barclays" or "Lender" Barclays Bank PLC
"Board" or "Directors" the directors of the Company
"Borrower" Hornby Hobbies Limited
"Business Day" a day not being a Saturday,
Sunday or public holiday
in England on which clearing
banks are open for business
in the City of London
"certificated" or a share or other security
"in certificated not held in uncertificated
form" form (i.e. not in CREST)
"Closing Price" the closing middle market
quotation of the Existing
Ordinary Shares, as derived
from the Daily Official
List of the London Stock
Exchange
"Company" or "Hornby" Hornby PLC, a company incorporated
in England & Wales and with
registered number 01547390
"Conditional Placees" those placees who conditionally
agree to subscribe for up
to 6,779,662 Placing Shares,
subject to clawback by Qualifying
Shareholders to satisfy
valid applications made
by them to subscribe for
New Ordinary Shares under
the Open Offer and "Conditional
Placee" shall mean any one
of them
"Conditional Placing" the conditional placing
by Liberum Capital of 6,779,662
Placing Shares at the Issue
Price with the Conditional
Placees pursuant to the
Placing and Open Offer Agreement
"CREST" a relevant system (as defined
in the CREST Regulations)
in respect of which Euroclear
is the Operator (as defined
in the CREST Regulations)
"CREST Regulations" the Uncertificated Securities
Regulations 2001 (SI 2001/3755),
including any enactment
or subordinate legislation
which amends or supersedes
those regulations and any
applicable rules made under
those regulations or any
such enactment or subordinate
legislation for the time
being in force
"DTR" The Disclosure Guidance
and Transparency Rules made
by the FCA in exercise of
its powers under FSMA
"EBITDA" earnings before interest,
taxes, depreciation and
amortization and exceptional
items and loss on disposal
of property, plant and equipment
"Enlarged Share the issued ordinary share
Capital" capital of the Company as
enlarged by the issue of
the New Ordinary Shares
"EUR" or "Euros" the single European currency
unit
"Excess Application the arrangement pursuant
Facility" to which Qualifying Shareholders
may apply for any number
of Open Offer Shares in
excess of their Open Offer
Entitlement provided that
they have agreed to take
up their Open Offer Entitlement
in full
"Excess Open Offer in respect of each Qualifying
Entitlement" Shareholder, the entitlement
(in addition to his/her
Open Offer Entitlement)
to apply for Open Offer
Shares pursuant to the Excess
Application Facility, which
is conditional on him/her
taking up his/her Open Offer
Entitlements in full
"Ex-entitlement the date on which the Existing
Date" Ordinary Shares are marked
"ex" for entitlement under
the Open Offer, being 8.00
a.m. on 20 November 2017
"Existing Bank Facility" the multi-currency revolving
credit facility agreement
originally dated 29 July
2009 and as amended from
time to time (including
pursuant to letters of variation
dated 18 October 2011 and
13 December 2012 and as
amended and restated pursuant
to amendment and restatement
agreements dated 26 June
2014 and 18 June 2015, as
amended by way of an amendment
letter on 7 December 2015
and as further amended by
an amendment and restatement
agreement dated 22 June
2016, and as amended by
a deferral letter dated
31 October 2017)
"Existing Ordinary the 84,583,204 existing
Shares" Ordinary Shares in issue
as at 16 November 2017 (being
the latest practicable date
prior to publication of
this announcement)
"FCA" the Financial Conduct Authority
in its capacity as the competent
authority for the purposes
of Part VI of FSMA
"Firm Placees" those placees whose Placing
Shares are to be placed
firm with them pursuant
to the Firm Placing and
"Firm Placee" shall mean
any one of them
"Firm Placing" the placing by Liberum Capital
of 33,898,306 Placing Shares
at the Issue Price with
the Firm Placees pursuant
to the Placing and Open
Offer Agreement
"Form of Proxy" the form of proxy for use
by Shareholders in connection
with the General Meeting
and accompanying the Circular
"FSMA" the Financial Services and
Markets Act 2000 (as amended)
"General Meeting" the general meeting of the
Company which is expected
to be held at the offices
of the Company's solicitors,
Taylor Wessing LLP, 5 New
Street Square, London EC4A
3TW at 9.00 a.m. on 5 December
2017, or any adjournment
thereof, notice of which
will be set out at the end
of the Circular
"Group" the Company and its subsidiary
undertakings
"Independent Directors" the Directors other than
James Wilson
"Irrevocable Undertakings" the irrevocable undertakings
described at paragraph 11
of this announcement
"Issue Price" the price at which the New
Ordinary Shares are to be
issued and allotted pursuant
to the Placing and Open
Offer, being 29.5 pence
per New Ordinary Share
"LCD Enterprises" LCD Enterprises Limited,
a company incorporated in
England & Wales and with
registered number 03005140
"Liberum Capital" Liberum Capital Limited,
the Company's nominated
advisor and broker in connection
with the Placing and Open
Offer
"Lock-In Period" the period beginning on
the date of completion of
the Acquisition Agreement
and ending on the third
anniversary of completion
of the Acquisition
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" up to 40,677,968 new Ordinary
Shares expected to be issued
pursuant to the Placing
and the Open Offer
"Notice of the General the notice of the General
Meeting" Meeting to be set out at
the end of the Circular
"Official List" the Official List of the
FCA
"Open Offer" the conditional invitation
to be made by the Company
to Qualifying Shareholders
to subscribe for the Open
Offer Shares at the Issue
Price on the terms and subject
to the conditions set out
the Circular
"Open Offer Entitlement" the pro rata basic entitlement
of a Qualifying Shareholder,
pursuant to the Open Offer,
to apply to subscribe for
1 Open Offer Share for every
12.476020780977 Existing
Ordinary Shares registered
in its name as at the Open
Offer Record Date
"Open Offer Record the record date in relation
Date" to the Open Offer, being
5.00 p.m. on 15 November
2017
"Open Offer Shares" up to 6,779,662 New Ordinary
Shares to be issued by the
Company to Qualifying Shareholders
in connection with the Open
Offer
"Ordinary Shares" the ordinary shares of 1
pence each in the share
capital of the Company
"Overseas Shareholders" Shareholders with registered
addresses in, or who are
citizens, residents or nationals
of, jurisdictions outside
of the UK
"Oxford Diecast Oxford Diecast Limited,
Group" a company incorporated in
England and Wales, Oxford
Diecast (HK) Limited, a
company incorporated in
Hong Kong, and Oxford Diecast
USA LLP, a partnership incorporated
in USA
"Phoenix" Phoenix Asset Management
Partners Limited
"Placees" the Firm Placees and the
Conditional Placees
"Placing" the conditional placing
by Liberum Capital on behalf
of the Company of the Placing
Shares with the Placees
pursuant to the Placing
and Open Offer Agreement,
comprising the Firm Placing
and the Conditional Placing
"Placing and Open the conditional agreement
Offer Agreement" dated 17 November 2017 entered
into between the Company
and Liberum Capital in respect
of the Placing and Open
Offer
"Placing Shares" up to 33,898,306 New Ordinary
Shares to be placed for
cash with Firm Placees and
up to 6,779,662 New Ordinary
Shares to be placed for
cash with Conditional Placees
(subject to clawback by
Qualifying Shareholders
to satisfy valid applications
made by them to subscribe
for New Ordinary Shares
under the Open Offer)
"Qualifying CREST Qualifying Shareholders
Shareholders" whose Existing Ordinary
Shares on the register of
members of the Company on
the Open Offer Record Date
are held in uncertificated
form
"Qualifying Non-CREST Qualifying Shareholders
Shareholders" whose Existing Ordinary
Shares on the register of
members of the Company on
the Open Offer Record Date,
are held in certificated
form
"Qualifying Shareholders" Shareholders on the register
of members of the Company
on the Open Offer Record
Date with the exclusion
(subject to exemptions)
of persons with a registered
address or located or resident
in a Restricted Jurisdiction
and "Qualifying Shareholder"
shall mean any one of them
"Resolutions" the resolutions to be proposed
at the General Meeting,
as set out in the Notice
of General Meeting and "Resolution"
shall be a reference to
any one of them
"Restricted Jurisdiction" any jurisdiction where local
laws or regulations may
result in a significant
risk of civil, regulatory
or criminal exposure for
the Company if information
or documentation concerning
the proposals set out in
this announcement is sent
or made available to Shareholders
in that jurisdiction including,
without limitation, the
United States of America,
Canada, Australia, Japan
and the Republic of South
Africa
"Seller" Lyndon Davies
"Shareholders" the holders of Existing
Ordinary Shares and "Shareholder"
shall mean any one of them
"Takeover Code" the City Code on Takeovers
and Mergers
"uncertificated" recorded on the register
or "in uncertificated of members of the Company
form" as being held in uncertificated
form in CREST and title
to which, by virtue of the
CREST Regulations, may be
transferred by means of
CREST
"United Kingdom" the United Kingdom of Great
or "UK" Britain and Northern Ireland
"United States" the United States of America
or "US"
"US Securities Act" the US Securities Act of
1933, as amended from time
to time and the rules and
regulations promulgated
thereunder
"GBP" or "Pounds" UK pounds sterling, being
the lawful currency of the
United Kingdom
APPIX: TERMS AND CONDITIONS OF THE PLACING
THIS ANNOUNCEMENT, INCLUDING THIS APPIX (TOGETHER, THE
"ANNOUNCEMENT") AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT
FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA, JAPAN, OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER
JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES
ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS APPIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE
FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS
WHO ARE IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA AND ARE
"QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2.1(E) OF THE EU
PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES
ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE)
(THE PROSPECTUS DIRECTIVE); AND (B) IN THE UNITED KINGDOM, PERSONS
WHO ARE: (I) "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF
ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000
(FINANCIAL PROMOTION) ORDER 2005 (THE ORDER); (II) PERSONS FALLING
WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS, ETC.") OF THE ORDER; OR (III) PERSONS
TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS
TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS APPIX AND THE
TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED
ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR
INVESTMENT ACTIVITY TO WHICH THIS APPIX AND THE TERMS AND
CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT
PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS
APPIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION
OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT IS NOT AN OFFER
OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE
UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMED (THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR
AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. NO OFFERING OF SECURITIES IS
BEING MADE IN THE UNITED STATES. NO MONEY, SECURITIES OR OTHER
CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING
SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN
THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL,
TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING
SHARES.
Persons who are invited to and who choose to participate in the
Placing, by making (or on whose behalf there is made) an oral or
written offer to subscribe for Placing Shares (the Placees), will
be deemed to have read and understood this Announcement, including
this Appendix, in its entirety and to be making such offer on the
terms and conditions, and to be providing the representations,
warranties, acknowledgements, and undertakings contained in this
Appendix. In particular each such Placee represents, warrants and
acknowledges to the Company and Liberum Capital that:
1. it is a Relevant Person (as defined above) and undertakes
that it will acquire, hold, manage or dispose of any Placing Shares
that are allocated to it for the purposes of its business;
2. in the case of any Placing Shares acquired by it as a
financial intermediary, as that term is used in Article 3(2) of the
Prospectus Directive, (i) the Placing Shares acquired by it in the
Placing have not been acquired on behalf of, nor have they been
acquired with a view to their offer or resale to, persons in any
Member State of the European Economic Area which has implemented
the Prospectus Directive other than Qualified Investors or in
circumstances in which the prior consent of Liberum Capital has
been given to the offer or resale; or (ii) where Placing Shares
have been acquired by it on behalf of persons in any member state
of the EEA other than Qualified Investors, the offer of those
Placing Shares to it is not treated under the Prospectus Directive
as having been made to such persons;
3. it is acquiring the Placing Shares in an "offshore
transaction" as defined in and pursuant to Regulation S under the
Securities Act; and
4. it understands (or if acting for the account of another
person, such person has confirmed that such person understands) the
resale and transfer restrictions set out in this Appendix.
The Company and Liberum Capital will rely upon the truth and
accuracy of the foregoing representations, acknowledgements and
agreements.
This Announcement does not constitute an offer, and may not be
used in connection with an offer, to sell or issue or the
solicitation of an offer to buy or subscribe for Placing Shares in
any jurisdiction in which such offer or solicitation is or may be
unlawful. This Announcement and the information contained herein is
not for publication or distribution, directly or indirectly, to
persons in the United States, Australia, Canada, Japan or the
Republic of South Africa or in any other jurisdiction in which such
publication or distribution is unlawful. Persons into whose
possession this Announcement may come are required by the Company
to inform themselves about and to observe any restrictions of
transfer of this Announcement. No public offer of securities of the
Company is being made in the United Kingdom, the United States or
elsewhere.
In particular, the Placing Shares referred to in this
Announcement have not been and will not be registered under the
Securities Act or any laws of or with any securities regulatory
authority of any state or other jurisdiction of the United States,
and may not be offered, sold, pledged or otherwise transferred
within the United States except pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act and the securities laws of any state or other
jurisdiction of the United States. The Placing Shares are being
offered and sold only outside the United States in accordance with
Regulation S.
The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or
territory of Canada; no prospectus has been lodged with or
registered by the Australian Securities and Investments Commission
or the Japanese Ministry of Finance or the South African Reserve
Bank; and the Placing Shares have not been, nor will they be,
registered under or offered in compliance with the securities laws
of any state, province or territory of Australia, Canada, Japan or
the Republic of South Africa. Accordingly, the Placing Shares may
not (unless an exemption under the relevant securities laws is
applicable) be offered, sold, resold or delivered, directly or
indirectly, in or into Australia, Canada, Japan or the Republic of
South Africa or any other jurisdiction outside the United
Kingdom.
Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
of this Appendix or the Announcement of which it forms part should
seek appropriate advice before taking any action.
This Announcement should be read in its entirety. In particular,
you should read and understand the information provided in the
"Important Notices" section of this Announcement.
By participating in the Placing, each person who is invited to
and who chooses to participate in the Placing will be deemed to
have read and understood this Announcement in its entirety, to be
participating, making an offer and acquiring Placing Shares on the
terms and conditions contained herein and to be providing the
representations, warranties, indemnities, acknowledgements and
undertakings contained in this Appendix.
In this Appendix, unless the context otherwise requires,
"Placee" means a Relevant Person (including individuals, funds or
others) on whose behalf a commitment to subscribe for Placing
Shares has been given.
Details of the Placing and Open Offer Agreement and the Placing
Shares
Liberum Capital has entered into the Placing and Open Offer
Agreement with the Company under which Liberum Capital has
conditionally agreed on the terms and subject to the conditions set
out therein, as agent for the Company, to use its reasonable
endeavours to place the Placing Shares at the Placing Price with
certain institutional investors. The Placing is not being
underwritten by Liberum Capital or any other person.
The number of Placing Shares at the Placing Price will be
determined following completion of the Accelerated Book Build as
set out in this Announcement.
The Placing Shares will, when issued, be credited as fully paid
and will rank pari passu in all respects with the Existing Ordinary
Shares, including the right to receive all dividends and other
distributions (if any) declared, made or paid on or in respect of
the Existing Ordinary Shares after the date of issue of the Placing
Shares.
Application for admission to trading
Application will be made for admission of the Placing Shares to
trading on AIM. It is expected that settlement of any such shares
and Admission will become effective on or around 8.00 am on 7
December 2017 and that dealings in the Placing Shares will commence
at that time.
Accelerated Book Build
Liberum Capital will today commence an Accelerated Book Building
process in respect to the Placing to determine demand for
participation in the Placing by any Placees at the Placing Price.
This Appendix gives details of the terms and conditions of, and the
mechanics of participation in, the Accelerated Book Build. No
commissions will be paid to Placees or by Placees in respect of any
Placing Shares.
Liberum Capital and the Company shall be entitled to effect the
Placing (in whole or in part) by such alternative method to the
Accelerated Book Build as they may, in their sole discretion,
determine.
Participation in, and principal terms of, the Placing
1. Liberum Capital is acting as nominated adviser and sole
bookrunner to the Placing, as agent for and on behalf of the
Company. Liberum Capital is regulated by the FCA, is acting
exclusively for the Company and no one else in connection with the
matters referred to in this Announcement and will not be
responsible to anyone other than the Company for providing the
protections afforded to the customers of Liberum Capital or for
providing advice in relation to the matters described in this
Announcement.
2. Liberum Capital is arranging the Accelerated Book Build and
Placing as an agent of the Company.
3. Participation in the Accelerated Book Build will only be
available to persons who may lawfully be, and are, invited to
participate by Liberum Capital. Liberum Capital and its affiliates
are entitled to enter bids in the Accelerated Book Build as
principal.
4. The Accelerated Book Build will establish the number of
Placing Shares to be issued at the Placing Price, which will be
agreed between Liberum Capital and the Company following completion
of the Accelerated Book Build. The number of Placing Shares will be
announced on a Regulatory Information Service following the
completion of the Accelerated Book Build.
5. To bid in the Accelerated Book Build, prospective Placees
should communicate their bid by telephone to their usual sales
contact at Liberum Capital. Each bid should state the number of
Placing Shares which the prospective Placee wishes to subscribe for
at the Placing Price. Bids may be scaled down by Liberum Capital on
the basis referred to paragraph 9 below.
6. The Accelerated Book Build is expected to close no later than
4.00 pm (London) today but may be closed earlier or later at the
discretion of Liberum Capital. Liberum Capital may, in agreement
with the Company, accept bids that are received after the
Accelerated Book Build has closed.
7. Each Placee's allocation will be confirmed to Placees orally,
or by email, by Liberum Capital whom they contact following the
close of the Accelerated Book Build and a trade confirmation or
contract note will be dispatched as soon as possible thereafter. A
bookrunner's oral or emailed confirmation to such Placee will
constitute an irrevocable legally binding commitment upon such
person (who will at that point become a Placee) in favour of
Liberum Capital and the Company, under which it agrees to subscribe
for the number of Placing Shares allocated to it at the Placing
Price on the terms and conditions set out in this Appendix (which
are deemed to be incorporated in such trade confirmation or
contract note) and in accordance with the Company's Articles of
Association.
8. The Company will make a further announcement following the
close of the Accelerated Book Build detailing the number of Placing
Shares to be issued at the Placing Price.
9. Subject to paragraphs 5 and 6 above, Liberum Capital may
choose to accept or reject bids, either in whole or in part, on the
basis of allocations determined at its discretion (in consultation
with the Company) and may scale down any bids for this purpose on
such basis as they may determine. Liberum Capital may also,
notwithstanding paragraphs 5 and 6 above, subject to the prior
consent of the Company: (i) allocate Placing Shares after the time
of any initial allocation to any person submitting a bid after that
time; and (ii) allocate Placing Shares after the Accelerated Book
Build has closed to any person submitting a bid after that
time.
10. A bid in the Accelerated Book Build will be made on the
terms and subject to the conditions in this Announcement and will
be legally binding on the Placee on behalf of which it is made and,
except with the consent of Liberum Capital, will not be capable of
variation or revocation after the time at which it is submitted.
Each Placee will also have an immediate, separate, irrevocable and
binding obligation, owed to Liberum Capital, to pay to Liberum
Capital (or as Liberum Capital may direct) in cleared funds an
amount equal to the product of the Placing Price and the number of
Placing Shares for which such Placee has agreed to subscribe. Each
Placee's obligations will be owed to Liberum Capital.
11. Except as required by law or regulation, no press release or
other announcement will be made by Liberum Capital or the Company
using the name of any Placee (or its agent), in its capacity as
Placee (or agent), other than with such Placee's prior written
consent.
12. Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed, settlement for all Placing
Shares to be acquired pursuant to the Placing will be required to
be made at the same time, on the basis explained below under
"Registration and Settlement".
13. All obligations under the Accelerated Book Build and Placing
will be subject to fulfilment of the conditions referred to below
under "Conditions of the Placing" and to the Placing not being
terminated on the basis referred to below under "Right to terminate
under the Placing and Open Offer Agreement".
14. By participating in the Accelerated Book Build, each Placee
agrees that its rights and obligations in respect of the Placing
will terminate only in the circumstances described below and will
not be capable of rescission or termination by the Placee.
15. To the fullest extent permissible by law and the applicable
rules of the FCA, neither Liberum Capital nor any of its affiliates
shall have any liability to Placees (or to any other person whether
acting on behalf of a Placee or otherwise whether or not a
recipient of these terms and conditions) in respect of the Placing.
Each Placee acknowledges and agrees that the Company is responsible
for the allotment of the Placing Shares to the Placees and Liberum
Capital shall have no liability to the Placees for the failure of
the Company to fulfil those obligations. In particular, neither
Liberum Capital nor any of its affiliates shall have any liability
(including to the extent permissible by law, any fiduciary duties)
in respect of Liberum Capital's conduct of the Accelerated Book
Build or of such alternative method of effecting the Placing (in
whole or in part) as Liberum Capital and the Company may agree.
Conditions of the Placing
Completion of the Placing is conditional on, inter alia:
(a) the issue of the Circular by the Company by 5.00 p.m. on 17 December 2017
(b) the passing of the Resolutions (without material amendment)
by shareholders in a general meeting of the Company;
(c) the Company having complied with its obligations under the
Placing and Open Offer Agreement to the extent that such
obligations fall to be performed prior to Admission;
(d) none of the warranties or undertakings in the Placing and
Open Offer Agreement being untrue, inaccurate or misleading;
(e) the Acquisition Agreement (i) having become unconditional in
all respects save for the condition relating to the Placing and
Open Offer Agreement, and (ii) not having been terminated in
accordance with its terms or varied or amended without the consent
of Liberum Capital; and
(f) Admission becoming effective by no later than 8.00 a.m. on 7
December 2017 (or such later date as the Company and Liberum
Capital may agree (being not later than 8.00 a.m. on 15 December
2017).
If: (i) any of the conditions contained in the Placing and Open
Offer Agreement in relation to the Placing Shares are not fulfilled
or waived by Liberum Capital by the respective time or date where
specified (or such later time or date as the Company and Liberum
Capital may agree, but not being later than 8.00 am on 15 December
2017); (ii) any of such conditions becomes incapable of being
fulfilled; or (iii) the Placing and Open Offer Agreement is
terminated in its entirety in the circumstances specified below,
the Placing will lapse and the Placee's rights and obligations
hereunder in relation to the Placing Shares shall cease and
terminate at such time and each Placee agrees that no claim can be
made by the Placee against Liberum Capital in respect thereof.
Liberum Capital may, at its discretion and upon such terms as it
thinks fit, waive, or extend the period for, compliance by the
Company with the whole or any part of any of the Company's
obligations in relation to the conditions in the Placing and Open
Offer Agreement save that the above condition relating to Admission
taking place may not be waived. Any such extension or waiver will
not affect Placees' commitments as set out in this
Announcement.
Neither Liberum Capital nor the Company shall have any liability
to any Placee (or to any other person whether acting on behalf of a
Placee or otherwise) in respect of any decision they may make as to
whether or not to waive or to extend the time and/or date for the
satisfaction of any condition to the Placing nor for any decision
they may make as to the satisfaction of any condition or in respect
of the Placing generally and by participating in the Placing, each
Placee agrees that any such decision is within the absolute
discretion of Liberum Capital.
Right to terminate under the Placing and Open Offer
Agreement
Liberum Capital is entitled, at any time before Admission, to
terminate its obligations under the Placing and Open Offer
Agreement by giving notice to the Company in certain circumstances,
including, inter alia:
(a) a breach of the warranties given by the Company in the
Placing and Open Offer Agreement; or
(b) a material breach by the Company of any of its obligations
under the Placing and Open Offer Agreement; or
(c) in Liberum Capital's opinion, there having been a material
adverse change in the financial position and/or prospects of the
Group; or
(d) the occurrence of a force majeure event which, in the
opinion of Liberum Capital, will or is likely to be prejudicial to
the Group or the Placing.
Following Admission, the Placing and Open Offer Agreement is not
capable of termination to the extent that it relates to the Placing
of the Placing Shares. The rights and obligations of the Placees
shall terminate only in the circumstances described in these terms
and conditions and will not be subject to termination by the Placee
or any prospective Placee at any time or in any circumstances. By
participating in the Placing, Placees agree that the exercise by
Liberum Capital of any right of termination or other discretion
under the Placing and Open Offer Agreement shall be within the
absolute discretion of Liberum Capital, and that it need not make
any reference to Placees and that it shall have no liability to
Placees whatsoever in connection with any such exercise.
No Prospectus
The Placing Shares are being offered to a limited number of
specifically invited persons only and will not be offered in such a
way as to require a prospectus in the United Kingdom or in any
other jurisdiction. No offering document, admission document or
prospectus has been or will be submitted to be approved by the FCA
in relation to the Placing, and any Placees' commitments will be
made solely on the basis of the information contained in the
Announcement (including this Appendix) and the Exchange Information
(as defined further below).
Each Placee, by accepting a participation in the Placing, agrees
that the content of this Announcement is exclusively the
responsibility of the Company and confirms that it has neither
received nor relied on any other information (other than the
Exchange Information), representation, warranty, or statement made
by or on behalf of the Company or Liberum Capital or any other
person and neither Liberum Capital nor the Company nor any other
person will be liable for any Placee's decision to participate in
the Placing based on any other information, representation,
warranty or statement which the Placees may have obtained or
received and, if given or made, such information, representation,
warranty or statement must not be relied upon as having been
authorised by any of Liberum Capital, the Company, or their
respective officers, directors, employees or agents.
Each Placee acknowledges and agrees that it has relied on its
own investigation of the business, financial or other position of
the Company in accepting a participation in the Placing. Neither
the Company nor Liberum Capital is making any undertaking or
warranty to any Placee regarding the legality of an investment in
the Placing Shares by such Placee under any legal, investment or
similar laws or regulations. No Placee should consider any
information in this Announcement to be legal, tax or business
advice. Each Placee should consult its own solicitor, tax adviser
and financial adviser for independent legal, tax and financial
advice regarding an investment in the Placing Shares. Nothing in
this paragraph shall exclude the liability of any person for
fraudulent misrepresentation.
Registration and Settlement
Settlement of transactions in the Placing Shares (ISIN:
GB00B01CZ652) following Admission will take place within the system
administered by Euroclear UK & Ireland Limited (CREST) provided
that, subject to certain exceptions, Liberum Capital reserves the
right to require settlement for, and delivery of, the Placing
Shares (or a portion thereof) to Placees by such other means that
they deem necessary if delivery or settlement is not possible or
practicable within CREST within the timetable set out in this
Announcement or would not be consistent with the regulatory
requirements in any Placee's jurisdiction.
Following the close of the Accelerated Book Build, each Placee
allocated Placing Shares in the Placing will be sent a trade
confirmation or contract note in accordance with the standing
arrangements in place with Liberum Capital, stating the number of
Placing Shares allocated to it at the Placing Price, the aggregate
amount owed by such Placee to Liberum Capital (in GBP) and
settlement instructions. Each Placee agrees that it will do all
things necessary to ensure that delivery and payment is completed
in accordance with either the standing CREST or certificated
settlement instructions that it has in place with Liberum
Capital.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two (2) percentage points above LIBOR as
determined by Liberum Capital.
Each Placee is deemed to agree that, if it does not comply with
these obligations, Liberum Capital may sell any or all of the
Placing Shares allocated to that Placee on such Placee's behalf and
retain from the proceeds, for Liberum Capital's account and benefit
(as agent for the Company), an amount equal to the aggregate amount
owed by the Placee plus any interest due. The relevant Placee will,
however, remain liable for any shortfall below the aggregate amount
owed by it and may be required to bear any stamp duty or stamp duty
reserve tax or securities transfer tax (together with any interest
or penalties) which may arise upon the sale of such Placing Shares
on such Placee's behalf. By communicating a bid for Placing Shares,
each Placee confers on Liberum Capital all such authorities and
powers necessary to carry out any such sale and agrees to ratify
and confirm all actions which Liberum Capital lawfully takes in
pursuance of such sale.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the trade confirmation
or contract note is copied and delivered immediately to the
relevant person within that organisation.
The relevant settlement details are as follows:
Insofar as Placing Shares are registered in a Placee's name or
that of its nominee or in the name of any person for whom a Placee
is contracting as agent or that of a nominee for such person, such
Placing Shares should, subject as provided below, be so registered
free from any liability to UK stamp duty or stamp duty reserve tax
or securities transfer tax. Placees will not be entitled to receive
any fee or commission in connection with the Placing.
Representations, Warranties and Further Terms
By participating in the Placing each Placee (and any person
acting on such Placee's behalf) makes the following
representations, warranties, acknowledgements, agreements and
undertakings (as the case may be) to the Company and Liberum
Capital:
1. it represents and warrants that it has read and understood
this Announcement, including the Appendix, in its entirety and that
its subscription for Placing Shares is subject to and based upon
all the terms, conditions, representations, warranties,
acknowledgements, agreements and undertakings and other information
contained herein and undertakes not to redistribute or duplicate
this Announcement;
2. it acknowledges that no offering document, admission document
or prospectus has been prepared in connection with the Placing and
represents and warrants that it has not received and will not
receive a prospectus, admission document or other offering document
in connection therewith;
3. it acknowledges that the Existing Ordinary Shares are
admitted to trading on AIM, and the Company is therefore required
to publish certain business and financial information in accordance
with the AIM Rules and EU Regulation 596/2014 (collectively
"Exchange Information");
4. it acknowledges that none of Liberum Capital, the Company,
any of their respective affiliates or any person acting on behalf
of any of them has provided, and will not provide it, with any
material regarding the Placing Shares or the Company other than
this Announcement; nor has it requested any of Liberum Capital, the
Company, any of their respective affiliates or any person acting on
behalf of any of them to provide it with any such information;
5. it acknowledges that the content of this Announcement is
exclusively the responsibility of the Company, and that none of
Liberum Capital, their respective affiliates or any person acting
on behalf of any of them has or shall have any liability for any
information, representation or statement contained in this
Announcement or any information previously or concurrently
published by or on behalf of the Company, and will not be liable
for any Placee's decision to participate in the Placing based on
any information, representation or statement contained in this
Announcement or otherwise. Each Placee further represents, warrants
and agrees that the only information on which it is entitled to
rely and on which such Placee has relied in committing itself to
acquire the Placing Shares is contained in this Announcement and
any Exchange Information, such information being all that it deems
necessary to make an investment decision in respect of the Placing
Shares and that it has neither received nor relied on any other
information given or representations, warranties or statements made
by any of Liberum Capital or the Company, or, if received, it has
not relied upon any such information, representations, warranties
or statements (including any management presentation that may have
been received by any prospective Placee) and neither Liberum
Capital nor the Company will be liable for any Placee's decision to
accept an invitation to participate in the Placing based on any
other information, representation, warranty or statement. Each
Placee further acknowledges and agrees that it has relied solely on
its own investigation of the business, financial or other position
of the Company in deciding to participate in the Placing and it
will not rely on any investigation that Liberum Capital, its
affiliates or any person acting on behalf of any of them has or may
have conducted;
6. it represents and warrants that it has neither received nor
relied on any unpublished price sensitive information concerning
the Company in accepting this invitation to participate in the
Placing;
7. it acknowledges that none of Liberum Capital, its affiliates
or any person acting on behalf of any of them has or shall have any
liability for the Exchange Information, any publicly available or
filed information or any representation relating to the Company,
provided that nothing in this paragraph excludes the liability of
any person for fraudulent misrepresentation made by that
person;
8. it represents and warrants that it is acquiring the Placing
Shares in an "offshore transaction" as defined in and pursuant
Regulation S under the Securities Act;
9. it acknowledges that it is acquiring the Placing Shares for
its own account or for one or more accounts for which, in each
case, it exercises sole investment discretion, for investment
purposes and not with a view to any distribution or for resale in
connection with, the distribution thereof in whole or in part, in
the United States and that it has full power to make the
acknowledgements, representations and agreements herein on behalf
of each such account;
10. it acknowledges that the Placing Shares have not been and
will not be registered under the Securities Act or with any state
or other jurisdiction of the United States, nor approved or
disapproved by the US Securities and Exchange Commission, any state
securities commission in the United States or any other United
States regulatory authority, and agrees not to reoffer, resell,
pledge or otherwise transfer the Placing Shares except pursuant to
an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act;
11. unless otherwise specifically agreed in writing with Liberum
Capital, it represents and warrants that neither it nor the
beneficial owner of such Placing Shares will be a resident of the
United States, Australia, Canada, Japan or the Republic of South
Africa;
12. it acknowledges that the Placing Shares have not been and
will not be registered under the securities legislation of the
United States, Australia, Canada, Japan or the Republic of South
Africa and, subject to certain exceptions, may not be offered,
sold, taken up, renounced or delivered or transferred, directly or
indirectly, within those jurisdictions;
13. it represents and warrants that the issue to it, or the
person specified by it for registration as holder, of Placing
Shares will not give rise to a liability under any of sections 67,
70, 93 or 96 of the Finance Act 1986 (depositary receipts and
clearance services) and that the Placing Shares are not being
acquired in connection with arrangements to issue depositary
receipts or to transfer Placing Shares into a clearance system;
14. it represents and warrants that: (i) it has complied with
its obligations in connection with money laundering and terrorist
financing under the Proceeds of Crime Act 2002, the Terrorism Act
2000 (as amended), the Terrorism Act 2006 and the Money Laundering,
Terrorist Financing and Transfer of Funds (Information on the
Payer) Regulations 2017 and (ii) it is not a person: (a) with whom
transactions are prohibited under the Foreign Corrupt Practices Act
of 1977 or any economic sanction programmes administered by, or
regulations promulgated by, the Office of Foreign Assets Control of
the U.S. Department of the Treasury; (b) named on the Consolidated
List of Financial Sanctions Targets maintained by HM Treasury of
the United Kingdom; or (c) subject to financial sanctions imposed
pursuant to a regulation of the European Union or a regulation
adopted by the United Nations (together, the Regulations); and, if
making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the
identity of the third party as required by the Regulations and, if
making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the
identity of the third party as required by the Regulations and has
obtained all governmental and other consents (if any) which may be
required for the purpose of, or as a consequence of, such purchase,
and it will provide promptly to Liberum Capital such evidence, if
any, as to the identity or location or legal status of any person
which Liberum Capital may request from it in connection with the
Placing (for the purpose of complying with such Regulations or
ascertaining the nationality of any person or the jurisdiction(s)
to which any person is subject or otherwise) in the form and manner
requested by Liberum Capital on the basis that any failure by it to
do so may result in the number of Placing Shares that are to be
purchased by it or at its direction pursuant to the Placing being
reduced to such number, or to nil, as Liberum Capital may decide at
its sole discretion;
15. it represents and warrants that, to the extent it has
received any inside information (for the purposes of the Market
Abuse Regulation (EU Regulation No. 596/2014 ("MAR")) and section
56 of the Criminal Justice Act 1993) in relation to the Company and
its securities, it has not: (a) dealt (or attempted to deal) in the
securities of the Company; (b) encouraged, recommended or induced
another person to deal in the securities of the Company; or (c)
unlawfully disclosed inside information to any person, prior to the
information being made publicly available;
16. it acknowledges that it has consented to receive information
in respect of securities of the Company and other price-affected
securities (as defined in FSMA) which makes it an "insider" for the
purposes of Part V of FSMA and MAR, and it agrees not to deal in
any securities of the Company until such time as the inside
information (as defined in FSMA) of which it has been made aware
has been made public for purposes of FSMA or it has been notified
by Liberum Capital or the Company that the proposed Placing will
not proceed and any unpublished price sensitive information of
which it is aware has been publicly announced, and, other than in
respect of its knowledge of the proposed Placing, it has neither
received nor relied on any confidential price sensitive information
concerning the Company or the Placing Shares;
17. if a financial intermediary, as that term is used in Article
3(2) of the Prospectus Directive, it represents and warrants that
the Placing Shares purchased by it in the Placing will not be
acquired on a non-discretionary basis on behalf of, nor will they
be acquired with a view to their offer or resale to, persons in a
Member State of the European Economic Area which has implemented
the Prospectus Directive other than Qualified Investors, or in
circumstances in which the prior consent of Liberum Capital has
been given to the offer or resale;
18. it represents and warrants that it has not offered or sold
and, prior to the expiry of a period of six (6) months from
Admission, will not offer or sell any Placing Shares to persons in
the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
business or otherwise in circumstances which have not resulted and
which will not result in an offer to the public in the United
Kingdom within the meaning of section 85(1) of the Financial
Services and Markets Act 2000 (FSMA);
19. it represents and warrants that it has not offered or sold
and will not offer or sell any Placing Shares to persons in the
European Economic Area prior to Admission except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes
of their business or otherwise in circumstances which have not
resulted in and which will not result in an offer to the public in
any member state of the European Economic Area within the meaning
of the Prospectus Directive;
20. it represents and warrants that it has only communicated or
caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the FSMA) relating to
the Placing Shares in circumstances which do not require the
approval of the communication by an authorised person under section
21(1) of the FSMA;
21. it represents and warrants that it has complied and will
comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Placing Shares in, from or
otherwise involving, the United Kingdom;
22. if in a Member State of the European Economic Area, unless
otherwise specifically agreed with Liberum Capital in writing, it
represents and warrants that it is a Qualified Investor within the
meaning of the Prospectus Directive;
23. if in the United Kingdom, it represents and warrants that it
is a person: (i) who is an investment professionals within the
meaning of Article 19(5) of the Order; (ii) who falls within
Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated
Associations, etc.") of the Order; or (iii) to whom this
Announcement may otherwise be lawfully communicated;
24. it represents and warrants that it and any person acting on
its behalf is entitled to acquire the Placing Shares under the laws
of all relevant jurisdictions and that it has all necessary
capacity and has obtained all necessary consents and authorities
and taken any other necessary actions to enable it to commit to
this participation in the Placing and to perform its obligations in
relation thereto (including, without limitation, in the case of any
person on whose behalf it is acting, all necessary consents and
authorities to agree to the terms set out or referred to in this
Announcement) and will honour such obligations;
25. where it is acquiring Placing Shares for one or more managed
accounts, it represents and warrants that it is authorised in
writing by each managed account: (a) to acquire the Placing Shares
for each managed account; (b) to make on its behalf the
representations, warranties, acknowledgements, undertakings and
agreements in this Appendix and the Announcement of which it forms
part; and (c) to receive on its behalf any investment letter
relating to the Placing in the form provided to you by Liberum
Capital;
26. it undertakes that it (and any person acting on its behalf)
will make payment for the Placing Shares allocated to it in
accordance with this Announcement on the due time and date set out
herein, failing which the relevant Placing Shares may be placed
with other subscribers or sold as Liberum Capital may in its sole
discretion determine and without liability to such Placee and it
will remain liable for any shortfall below the net proceeds of such
sale and the placing proceeds of such Placing Shares and may be
required to bear the liability for any stamp duty or stamp duty
reserve tax or security transfer tax (together with any interest or
penalties due pursuant to or referred to in these terms and
conditions) which may arise upon the placing or sale of such
Placee's Placing Shares on its behalf;
27. it acknowledges that none of Liberum Capital, its
affiliates, or any person acting on behalf of any of them, is
making any recommendations to it, advising it regarding the
suitability of any transactions it may enter into in connection
with the Placing and that participation in the Placing is on the
basis that it is not and will not be treated for these purposes as
a client of Liberum Capital and that Liberum Capital has no duties
or responsibilities to it for providing the protections afforded to
its clients or customers or for providing advice in relation to the
Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing and Open Offer
Agreement nor for the exercise or performance of any of its rights
and obligations thereunder including any rights to waive or vary
any conditions or exercise any termination right;
28. it undertakes that the person whom it specifies for
registration as the holder of the Placing Shares will be (i) itself
or (ii) its nominee, as the case may be. Neither Liberum Capital
nor the Company will be responsible for any liability to stamp duty
or stamp duty reserve tax resulting from a failure to observe this
requirement. Each Placee and any person acting on behalf of such
Placee agrees to participate in the Placing and it agrees to
indemnify the Company, Liberum Capital in respect of the same on
the basis that the Placing Shares will be allotted to the CREST
stock account of Liberum Capital who will hold them as nominee on
behalf of such Placee until settlement in accordance with its
standing settlement instructions;
29. it acknowledges that these terms and conditions and any
agreements entered into by it pursuant to these terms and
conditions shall be governed by and construed in accordance with
the laws of England and Wales and it submits (on behalf of itself
and on behalf of any person on whose behalf it is acting) to the
exclusive jurisdiction of the English courts as regards any claim,
dispute or matter arising out of any such contract, except that
enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest
chargeable thereon) may be taken by the Company or Liberum Capital
in any jurisdiction in which the relevant Placee is incorporated or
in which any of its securities have a quotation on a recognised
stock exchange;
30. it acknowledges that time shall be of the essence as regards
to obligations pursuant to this Appendix to the Announcement;
31. it agrees it will be bound by the terms of the Company's Articles of Association;
32. it agrees that the Company, Liberum Capital, and their
respective affiliates and others will rely upon the truth and
accuracy of the foregoing representations, warranties,
acknowledgements and undertakings which are given to Liberum
Capital on their own behalf and on behalf of the Company and are
irrevocable and are irrevocably authorised to produce this
Announcement or a copy thereof to any interested party in any
administrative or legal proceeding or official inquiry with respect
to the matters covered hereby;
33. it agrees to indemnify on an after-tax basis and hold the
Company, Liberum Capital and their respective affiliates harmless
from any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any
breach of the representations, warranties, acknowledgements,
agreements and undertakings in this Appendix and further agrees
that the provisions of this Appendix shall survive after completion
of the Placing;
34. it acknowledges that no action has been or will be taken by
any of the Company, Liberum Capital or any person acting on behalf
of the Company or Liberum Capital that would, or is intended to,
permit a public offer of the Placing Shares in any country or
jurisdiction where any such action for that purpose is
required;
35. it acknowledges that it is an institution that has knowledge
and experience in financial, business and international investment
matters as is required to evaluate the merits and risks of
subscribing for the Placing Shares. It further acknowledges that it
is experienced in investing in securities of this nature and is
aware that it may be required to bear, and it, and any accounts for
which it may be acting, are able to bear, the economic risk of, and
is able to sustain, a complete loss in connection with the Placing.
It has relied upon its own examination and due diligence of the
Company and its associates taken as a whole, and the terms of the
Placing, including the merits and risks involved; and
36. it acknowledges that its commitment to subscribe for Placing
Shares on the terms set out herein and in the trade confirmation or
contract note will continue notwithstanding any amendment that may
in future be made to the terms of the Placing and that Placees will
have no right to be consulted or require that their consent be
obtained with respect to the Company's conduct of the Placing.
The representations, warranties, acknowledgments and
undertakings contained in this Appendix are given to Liberum
Capital for itself and on behalf of the Company and are
irrevocable.
The agreement to settle a Placee's subscription (and/or the
subscription of a person for whom such Placee is contracting as
agent) free of stamp duty and stamp duty reserve tax depends on the
settlement relating only to a subscription by it and/or such person
direct from the Company for the Placing Shares in question. Such
agreement assumes that the Placing Shares are not being subscribed
for in connection with arrangements to issue depositary receipts or
to transfer the Placing Shares into a clearance service. If there
are any such arrangements, or the settlement relates to any other
subsequent dealing in the Placing Shares, stamp duty or stamp duty
reserve tax may be payable, for which neither the Company nor
Liberum Capital will be responsible, and the Placee to whom (or on
behalf of whom, or in respect of the person for whom it is
participating in the Placing as an agent or nominee) the
allocation, allotment, issue or delivery of Placing Shares has
given rise to such UK stamp duty or stamp duty reserve tax
undertakes to pay such UK stamp duty or stamp duty reserve tax
forthwith and to indemnify on an after-tax basis and to hold
harmless the Company and Liberum Capital in the event that any of
the Company and/or Liberum Capital has incurred any such liability
to UK stamp duty or stamp duty reserve tax. If this is the case,
each Placee should seek its own advice and notify Liberum Capital
accordingly.
In addition, Placees should note that they will be liable for
any stamp duty and all other stamp, issue, securities, transfer,
registration, documentary or other duties or taxes (including any
interest, fines or penalties relating thereto) payable outside the
UK by them or any other person on the subscription by them of any
Placing Shares or the agreement by them to subscribe for any
Placing Shares.
Each Placee, and any person acting on behalf of the Placee,
acknowledges that Liberum Capital does not owe any fiduciary or
other duties to any Placee in respect of any representations,
warranties, undertakings or indemnities in the Placing and Open
Offer Agreement.
Each Placee and any person acting on behalf of the Placee
acknowledges and agrees that Liberum Capital or any of its
affiliates may, at their absolute discretion, agree to become a
Placee in respect of some or all of the Placing Shares.
When a Placee or person acting on behalf of the Placee is
dealing with Liberum Capital, any money held in an account with
Liberum Capital on behalf of the Placee and/or any person acting on
behalf of the Placee will not be treated as client money within the
meaning of the rules and regulations of the FCA made under the
FSMA. The Placee acknowledges that the money will not be subject to
the protections conferred by the client money rules; as a
consequence, this money will not be segregated from Liberum
Capital's money in accordance with the client money rules and will
be used by Liberum Capital in the course of their own business and
the Placee will rank only as a general creditor of Liberum
Capital.
All times and dates in this Announcement may be subject to
amendment. Liberum Capital shall notify the Placees and any person
acting on behalf of the Placees of any changes.
No statement in this Announcement is intended to be a profit
forecast, and no statement in this Announcement should be
interpreted to mean that earnings per share of the Company for the
current or future financial years would necessarily match or exceed
the historical published earnings per share of the Company.
The price of shares and any income expected from them may go
down as well as up and investors may not get back the full amount
invested upon disposal of the shares. Past performance is no guide
to future performance, and persons needing advice should consult an
independent financial adviser.
The Placing Shares to be issued or sold pursuant to the Placing
will not be admitted to trading on any stock exchange other than
the London Stock Exchange.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
-end-
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCOKODNBBDDBDD
(END) Dow Jones Newswires
November 17, 2017 07:37 ET (12:37 GMT)
Hornby (LSE:HRN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Hornby (LSE:HRN)
Historical Stock Chart
From Apr 2023 to Apr 2024