TIDMOMIP
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31 August 2018
One Media IP Group plc ("OMIP" or the "Company")
Proposed Fundraise of a minimum of GBP7.9 million and Notice of Extraordinary
General Meeting
Proposed Placing to raise a minimum of GBP1.9 million and
proposed Issue of up to GBP6 million in Loan Notes
Introduction
One Media IP Group plc (AIM: OMIP), an 'intellectual property' (IP) owner and
controller of music and video rights, is pleased to announce a proposed Placing
and Subscription to raise a minimum of GBP1.9 million of new equity capital at an
issue price of 6 pence per new Ordinary Share, and the proposed issue of up to
GBP6 million of Loan Notes.
The Placing will be conducted by way of an accelerated bookbuild, which will be
launched immediately following this announcement. The total number of New
Ordinary Shares will be determined following the Bookbuild. Panmure Gordon is
acting as sole broker to the Company in connection with the Bookbuild.
Highlights
* Placing - the Placing is being conducted by way of an accelerated bookbuild
exercise, to raise a minimum of GBP1.9 million.
* Placing Price - The placing price of 6 pence per New Ordinary Share
represents a premium of 240 per cent. to the price of 2.5 pence per
Ordinary Share at which Lord Michael Grade and Ivan Dunleavy first invested
in the Company in December 2017.
* Debt - Debt funding of up to GBP6 million (gross) in unsecured fixed rate
loan notes is to be provided by BGF. The Loan Notes will be split into
three tranches of GBP1.9 million, GBP2.325 million and GBP1.775 million
respectively. Tranche 1 will be drawn down immediately on Admission.
Tranches 2 and 3 will be available for draw down for a period of 24 months
from 30 August 2018, subject to certain conditions being satisfied,
including the granting of approval to the draw down by BGF's internal
investment committee.
* Use of Proceeds - The Company intends that the net proceeds from the equity
fundraise and the issue of the Loan Notes will be used to acquire music
publishing rights, artist recordings and songwriters' rights.
* The Bookbuild is expected to close no later than 4.30 p.m. (London time) on
31 August 2018. The timing of the closing of the Bookbuild and the final
number and allocation of the Placing Shares to be issued at the Placing
Price are to be determined at the discretion of the Company and Panmure
Gordon.
* The allotment of the New Ordinary Shares is conditional, inter alia, upon
the Company obtaining approval of the Shareholders at an extraordinary
general meeting of the Company to be convened for 11.00 a.m. on 19
September 2018 to grant the Directors the authority to allot the New
Ordinary Shares and to dis-apply statutory pre-emption rights which would
otherwise apply to such allotment.
* Following the close of the Bookbuild, a further announcement will be made
confirming final details of the Placing and the Subscription.
For further information, please contact:
One Media IP Group plc
Ivan Dunleavy, Chairman +44 (0)175 378 5500
Michael Infante, Chief Executive
Cairn Financial Advisers LLP (Nominated Adviser)
Liam Murray, Jo Turner +44 (0)20 7213 0880
Panmure Gordon (UK) Limited (Broker)
Andrew Potts, James Stearns +44 (0)20 7886 2500
Luther Pendragon Ltd (Financial PR)
Harry Chathli, Claire Norbury +44 (0)20 7618 9100
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.
Introduction
OMIP is an 'intellectual property' (IP) owner and controller of music and video
rights and a B2B and B2C digital content provider, licensing intellectual
property rights for music and video. It exploits its catalogue of over 250,000
music tracks and 10,000 hours of video by re-compiling its content for
download, streaming and sublicensing through over 600 territorial digital music
and video stores worldwide. The Company delivers digital music and video
content through aggregators to over 600 global digital stores including iTunes,
Spotify, Amazon, Google, Deezer, Tidal, Audible and YouTube.
The Company's catalogue of nostalgic music tracks is from a range of genres
spanning soul to classical music and rock to pop and including performances
from over 1,700 diverse artists such as George McCrae, Merle Haggard, Ricky
Valance, Edwin Starr, Evelyn Thomas, Mungo Jerry, Eric Burdon, the Troggs, Marv
Johnson and the Royal Philharmonic Orchestra. The Company looks to exploit its
music tracks and over 10,000 hours of video by recompiling the content for sale
through digital music and video stores. In addition, its library of content is
available for TV shows, movies, adverts and websites requiring synchronised
music. The Company owns all the rights to the Men & Motors TV shows (originally
Granada/ITV) that were aired on British TV between 1996 and 2010. Comprising
over 3,400 shows, Men & Motors is available for viewing on OMIP's YouTube
channel. The Company is looking to rework the format for digital TV broadcast
in the future.
OMIP has a team of full-time creative technicians, all of whom are YouTube
certified, who digitise the content, create the metadata, re-compile and
prepare the digital music and video releases using bespoke in-house developed
software. Additionally, OMIP makes its library of content available for TV
shows, movies, adverts and websites requiring synchronised music. OMIP focuses
on music performed by well-known artists from every genre. Its classical music
library of over 10,000 performances includes the Point Classics catalogue
comprising some of the most renowned masterpieces by the world's greatest
composers.
Recently OMIP has developed a content discovery and analytical software
service, 'Technical Copyright Analysis Tool' ("TCAT"), which allows record
companies, publishers and law firms to search certain digital stores, such as
iTunes, Apple Music and Spotify, and carry out a forensic digital audit on
behalf of owners to ensure that their music has not been used without licensing
agreements being in place. A major record label and the largest independent
music distributor are now using this service.
A substantial proportion of the Company's revenues are generated in US Dollars
and as such the Company has a significant exposure to this currency.
Description of the Company's activities
The Company's principal activity is the acquisition and exploitation of
intellectual property rights over music, video and spoken word via digital
platforms, and its music content is also licensed (on an ad-hoc basis) for use
in TV and film, advertising, video games and on corporate websites.
Initially, the Company focused on music catalogue acquisition, which later
expanded to video and spoken word as the popularity of these formats and access
to technology grew.
In addition, it has been developing TCAT as an in-house originated SaaS
(Software as a Service) product to license to the major music distributors and
record labels.
The music industry has witnessed a major change as a result of the increased
adoption of streaming services. After a period of decline, sales of recorded
music have returned to growth, principally driven by streaming. With music
streaming set to grow, not only is the Company expected to benefit from sales
of its portfolio of digital content, it is also able to provide a vital service
to copyright owners through TCAT, which can track and monitor where their music
is made available for sale.
Lord Michael Grade and Ivan Dunleavy identified that the Company was set to
benefit from the return to growth of the music industry and, in December 2017,
they made an equity investment in the Company totalling GBP375,000. In April 2018
they were both appointed to the Board and Ivan Dunleavy became Non-Executive
Chairman of the Board.
Background to and reasons for the Proposed Placing
The Directors have been reviewing options to scale up the business, given their
belief that the music industry will continue to benefit from the growth
generated by streaming services, through the acquisition of music publishing
rights and songwriters' rights. The impact of streaming is expected to
positively benefit music publishing revenues, which Goldman Sachs believes will
rise from US$5.4 billion in 2015 to US$9.3 billion in 2030.
In order to exploit this opportunity the Directors are seeking to raise a
minimum of GBP1.9 million of new equity capital, and up to GBP6 million through the
issue of Loan Notes, to purchase music rights.
New Consultancy Arrangements
Consultancy Agreement with Ninelives
On Admission the Company intends to enter into an agreement with Ninelives,
pursuant to which Ninelives will provide the services of Andrew Michael to the
Company. Andrew will be responsible for identifying potential opportunities for
the Company to acquire new music IP rights catalogues which are being sold.
Andrew Michael founded Ninelives Capital Limited, which arranges financing
solutions for rights owners, performers and creators of recorded music who are
looking to raise capital from their music IP rights, either by way of sale or
the securing of finance, in 2016. Andrew has over 28 years' experience in the
banking sector, including having been a member of the Barclays Bank media team
and establishing the Music & Entertainment Division at Investec. At Investec,
he was involved in numerous deals including funding world tours and events,
advancing against future royalties and providing lending facilities to music
publishing companies.
Andrew has a successful track record in offering lending facilities to rights
owners and creators of recorded music. He has extensive contacts across the
music industry, spanning artists, songwriters, managers, lawyers and
accountants, which will be invaluable to the Group going forward.
Under the terms of the consultancy agreement, Ninelives will provide the
Company with a right of first refusal on all music IP rights acquisitions that
Andrew Michael sources. The Company will then have 30 days' exclusivity to
decide whether or not an acquisition opportunity will be pursued. If the
Company opts not to pursue an opportunity, Andrew and Ninelives will be
permitted to offer the opportunity to other parties, provided that they are not
competitors of the Group.
The Company has agreed that in the event that Andrew Michael identifies a
potential acquisition which the Company subsequently completes, the Company
shall pay a commission to Ninelives which will be determined depending upon the
nature of the catalogue acquired. It has been agreed that a recoupable advance
on commission of GBP125,000 shall be paid to Ninelives on Admission and this
shall be set off against commissions payable on introduced music IP rights
acquisitions.
The consultancy arrangement will continue for an initial period of six months,
during which time it can only be terminated in certain limited circumstances,
and shall be renewable by mutual agreement. In the event that during this
initial period Ninelives has not earned sufficient commission to cover the
advance paid by the Company, Andrew Michael must continue to present
opportunities to the Company until sufficient commission has been earned. The
agreement contains standard confidentiality and indemnity provisions and is
governed by English law.
In addition, Ninelives has indicated an intention to invest GBP125,000 as part of
the Subscription. If this participation is confirmed, following Admission
Ninelives will be subject to a 12 month orderly market arrangement and will
agree that for a period of 12 months from Admission, Ninelives will not deal or
otherwise dispose of any of the Ordinary Shares that will be issued to it other
than through Panmure Gordon (or such other broker appointed by the Company from
time to time) and provided that the dealing will not impair an orderly market
in the Ordinary Shares.
Consultancy Agreement with Nicola Horlick
On Admission the Company intends to enter into a consultancy agreement with
Nicola Horlick, pursuant to which Nicola will source acquisition opportunities
for the Company and will also provide investment advice.
Nicola has 35 years' experience in fund management and establishing investment
businesses. Together with Michael Grade, she was a bidder for Imagem Music
Company (one of the largest owners of music rights), which was purchased by
Concord Bicycle Music in 2017. As Chief Executive Officer of Bramdean Asset
Management, she launched a music rights fund, Resonant, which funded film
scores (including The King's Speech, Drive and The Woman in Black) that created
royalty revenue streams. This catalogue was sold to Resonant's partner, Cutting
Edge Music Holdings, in 2015.
Other senior roles Nicola has held include Managing Director of Morgan Grenfell
Investment Management from 1992 to 1997 and Chief Executive Officer of SG Asset
Management UK from 1997 to 2003. She founded Money & Co. in 2013, which is a
P2P lending platform.
Under the terms of the consultancy agreement, Nicola will spend a minimum of
one day per week on matters for the Company and will not be paid a fee for the
services provided to the Company. The agreement will continue unless terminated
by mutual agreement of the parties. Should the Company raise further equity
capital prior to 31 December 2019, Nicola will become entitled to a bonus of GBP
100,000 otherwise the agreement will terminate without notice. The agreement is
intended to cover the initial phase of investment of the monies raised from the
Placing and the Loan Notes and as further capital is raised, new terms of
engagement are expected to be discussed. The agreement contains standard
confidentiality and indemnity provisions and is governed by English law.
Nicola has indicated an intention to invest GBP225,000 as part of the
Subscription.
BOARD RESPONSIBILITIES
Michael Infante, Chief Executive Officer
Michael Infante, founder of OMIP, will continue to oversee the existing
activities as Chief Executive and as a main Board Executive Director as well as
bringing the benefit of his years of experience to the scale up of music IP
rights acquisition activities and, importantly, assisting with driving
incremental sales revenues from the Company's IP assets, both acquired and
created.
Ivan Dunleavy
Following Admission, Ivan Dunleavy's responsibilities will be changed from
Non-Executive Chairman to Executive Chairman.
Overview of scale up of existing business activities
Acquisition of music publishing rights and songwriters' rights
The Directors believe that music publishing and songwriters' rights can be
purchased from individual songwriters and small publishing companies at a lower
multiple of NPS than the reported acquisition prices of some of the larger
music publishing catalogues, giving rise to a possible arbitrage opportunity.
The major rights owners tend to buy libraries and portfolios of rights rather
than rights for individual songs or small portfolios. The buyers of large
portfolios and libraries are often backed by financial institutions.
The recovery that is being seen by the music industry, driven by the growth in
streaming, is believed by the Directors to further strengthen the case for a
buy and build strategy. There is also an opportunity to exploit the music
rights purchased more effectively and to ensure that royalties are being
properly collected. OMIP's TCAT product is expected to assist in ensuring that
revenues are increased. In addition, the Company's experience in deriving
revenues from its existing portfolio will be used to identify opportunities to
further grow the revenues from the ownership of these newly-acquired music
rights.
In 2017 the major recording companies (Sony Music, Universal Music Group and
Warner Music Group) had a 58.8 per cent. share of the global music publishing
market. Within the remaining 41.2 per cent. there is a highly fragmented long
tail of ownership of music rights, typically owned by the writer/co-writer,
record producers, record labels and family estates from which the Directors
will seek to acquire such music rights.
The OMIP management team will work with artists' business managers, personal
managers, accountants and lawyers to identify opportunities to buy music
rights. Through this pro-active approach, the management team believes that the
Company will be able to deploy the debt and equity capital raised quickly and
efficiently.
How music publishing works
Song writing and producing is the act of creating music. Publishing exploits
the musical creation through various revenue outlets. The music publisher
(or publishing company) is responsible for ensuring the songwriters and
composers receive payment when their compositions are used commercially. The
copyrights owned and administered by publishing companies are one of the most
important forms of intellectual property in the music industry. Publishing
companies play a central role in managing this vital asset. A songwriter or
composer "assigns" the copyright of their composition to a publishing company.
In return, the publishing company licenses compositions, helps monitor where
compositions are used, collects royalties and distributes them to the
composers. They also secure commissions for music and promote existing
compositions to recording artists, film and television.
The creator of a song, the songwriter, owns the "composition" rights. The
songwriter typically, by way of a publisher, grants a license to an artist to
make a recording or a performance of the song. The artist, typically through a
record label, may then, depending on the contractual arrangements in place, be
entitled to a payment for every copy sold of their recording of that song (the
technical term is a phono-record, which covers vinyl, CDs, tapes or downloads).
The recording artist (or a record label) then owns the rights to the "sound
recording" or "master" and also receives payments for every copy of the
recording made. If the songwriter is also the recording artist, then they will
typically receive both of these royalty streams. If another artist wants to
perform a "cover" of the song, the songwriter or the owner of the composition
rights (if they have been sold) will be entitled to payment for each copy,
download or stream of the song. In order to do this, the new artist, typically
through its record label, must procure a mechanical license. The payments are
called the mechanical royalties.
In the US, the royalty rates paid are set by the Copyright Royalty Board
("CRB"). The CRB was created by the Copyright Royalty and Distribution Reform
Act 2004. When an artist wants to record a song, a statutory license is created
by law, which gives the licensee the right to a compulsory license with the
songwriter being entitled to the statutory rate per copy. However, the licensee
can negotiate a lower rate with the songwriter or the owner of the composition
rights, but in practice the latter is only likely to agree if the artist is
particularly well known and is likely to generate a very high rate of sales.
The CRB confirmed in January 2018 that songwriters and music publishers'
royalties from on-demand subscription services would increase during the
five-year term between 2018 and 2022 to 15.1 per cent. of revenue, an increase
of up to 43.8 per cent. on the revenues prior to 2018.
As well as mechanical rights, there are also performance and synchronisation
rights that accrue to the songwriter/publisher for the use of music in radio,
playing in public areas, streaming (performance royalties) and movies, TV
shows, commercials, music videos and gaming etc. (synchronisation royalties).
Songwriters sign with a performance rights organisation who collects royalties
from radio stations, bars, restaurants and other venues where the music is
used. In the US, most artists sign with the American Society of Composers,
Authors and Publishers (ASCAP) or Broadcast Music, Inc. (BMI). In the UK, the
equivalent organisation is the PRS for Music.
With regard to digital platforms like iTunes, in most markets the platform pays
the collection societies for the publishing element of each sale and also to
the record company for the recording artist's share. In markets such as USA,
Mexico and India, the digital platform pays the record company and the record
company then pays the publisher for their share of the sale. Streaming services
like Spotify are responsible for making payments to the songwriter/publishing
company and the artist.
Given the complexity involved in managing music publishing rights, it is not
practical for artists to collect all the revenue due to them directly. They
will, therefore, usually engage a music publishing company to administer their
rights for them. In many cases, where rights are sold, songwriters have decided
to monetise their rights and will sell them for a one-off payment.
The Directors believe that of the money spent by consumers on music
consumption, around 10 per cent. is received by the publisher (which is then
shared with the songwriter). Approximately 60 per cent. is received by the
record label (which is then shared with the artist) and 30 per cent. is
received by either the music platform, ticket seller, promotor or collection
agent depending upon how the music is consumed.
Market activity
Recent rights deals have demonstrated that there is high demand for music
publishing and songwriters' rights. Recent transactions include:
1. Roundhill acquisition of the Carlin America publishing catalogue (January
2018)
Roundhill reportedly raised approximately US$175 million in equity financing
from institutional investors and around US$75 million in debt from SunTrust to
fund the acquisition of the Carlin America publishing catalogue for US$245
million. Carlin America's artists include Elvis Presley, AC/DC, Artie
Resnick, Bobby Darin, Faron Young, Hank Ballard, Rudy Clark, Fats Domino and
Billie Holiday.
2. Primary Wave acquisition of a share of Bob Marley's music publishing
catalogue (January 2018)
Primary Wave, backed by institutional investors including BlackRock, acquired
an 80 per cent. share of two publishing catalogues: Bob Marley's songs and Blue
Mountain Music, including songs from Marley, Toots and the Maytals, Free,
U2 and the Waterboys, from Island Record's founder Chris Blackwell for US$50
million.
3. Concord Bicycle Music acquisition of Imagem music publishing catalogue
(June 2017)
Concord Bicycle Music acquired the Imagem music publishing catalogue which
included the Rodgers & Hammerstein and Boosey & Hawkes music catalogues and
publishing rights for pop songs performed by artists such as Kaiser Chiefs,
Justin Timberlake, Wynton Marsalis, Phil Collins, Genesis, The Temper Trap,
Vampire Weekend, M.I.A. and Daft Punk. Imagem was acquired from Stichting
Pensioenfonds ABP for a reported US$600 million.
4. Kobalt Capital acquisition of Songs Music Publishing's catalogue
(December 2017)
Kobalt Capital acquired Songs Music Publishing's catalogue which included
Lorde's 'Royals', The Weeknd's 'Can't Feel My Face', 'The Hills' and 'Starboy',
and Mark Ronson's 'Uptown Funk'. Kobalt Capital also now represents Diplo and
Major Lazer. The acquisition was for a reported US$150 million.
5. Universal Music acquisition of Stiff Records' publishing catalogue
(December 2017)
Universal's publishing arm acquired the rights to songs owned by Stiff Records,
as well as the labels ZTT and Perfect Songs, from Trevor Horn, the producer and
former member of 'Video Killed the Radio Star' band The Buggles. Stiff Records
was the UK independent label behind acts including Elvis Costello and Madness.
6. Hipgnosis Song Funds GBP202 million equity fundraising
Hipgnosis Song Funds Limited listed on the London Stock Exchange raising
approximately GBP202 million and offering exposure to songs and associated
musical intellectual property rights, which the Directors believe demonstrates
the growing interest in the acquisition of music rights.
Market opportunity
IFPI released its Global Music Report 2018 in April 2018 and reported that the
global recorded music market grew by 8.1 per cent. in 2017, its third
consecutive year of growth since IFPI began tracking the market in 1997. Total
revenues for 2017 were US$17.3 billion.
According to IFPI, streaming remains the main driver of recovering revenues
and, for the first time, has become the single largest revenue source with 176
million users of paid streaming services contributing to year-on-year streaming
growth of 41.1 per cent. Streaming now accounts for 38.4 per cent. of total
recorded music revenue globally and its growth has more than offset a 5.4 per
cent. decline in physical revenue and a 20.5 per cent. decline in download
revenue. Total digital income last year accounted for more than half of all
revenue (54 per cent.) for the first time.
According to the British Phonographic Industry's All About The Music 2018
report, music consumption in the UK in terms of album equivalent sales
increased by 9.5 per cent. in 2017 to 135.1 million. Growth was solely driven
by a 51.5 per cent. increase in the number of tracks streamed on dedicated
audio services such as Spotify, Apple Music, Amazon Unlimited and Deezer. Track
equivalent albums (singles sold divided by 10), physical albums and digital
albums all fell by 24.2 per cent., 9.5 per cent. and 23.4 per cent.
respectively. Recorded music revenues in the UK rose by 10.6 per cent. in 2017.
The report noted that UK record labels had seen the highest annual growth since
1995. Overall, revenues in the UK were almost GBP840 million, approaching the
level last seen in 2010. Revenues from streaming rose by 41.1 per cent.
Total global recorded music revenues were US$17.3 billion in 2017 up from
US$16.0 billion in 2016. Revenues were split as follows:
Digital 54 per cent.
Physical 30 per cent.
Performance rights 14 per cent.
Synchronisation 2 per cent.
The initial wave of technological change in the 1990s resulted in a sharp fall
in music revenues as people were able to access music for free through the
internet. In 1998, consumers spent 7.6 per cent. of their total entertainment
spend on music, but in 2015, this figure was only 4.2 per cent. According to
Nielsen, 93 per cent. of consumers regularly listen to music in the US, however
YouTube estimates only 20 per cent. of consumers currently pay for it. In 2015,
the average spend on music per person per annum in developed markets was
US$15.00 and US$1.00 in emerging markets. However, there is evidence that the
second wave of technological change involving smartphones, smart speakers and
streaming will result in rapid growth in music revenues over the next few
years. Indeed, Goldman Sachs expects global recorded music revenues to reach
US$41 billion by 2030 with subscription streaming accounting for over 68 per
cent. at US$28 billion (US$34 billion including ad-funded streaming revenues).
The growth of streaming has been impressive over the last couple of years. In
the first half of 2016, US consumers streamed 630 million songs per day, a
year-on-year increase of 97 per cent. There are now approximately 57 streaming
platforms in the US and approximately 400 globally. Recent figures suggest
Amazon has around 16 million subscribers through its Amazon Prime Music and
Music Unlimited services, Spotify has around 75 million, Apple Music has
approximately 40 million, Deezer about 6 million and Pandora around 6 million
subscribers (all figures rounded to the nearest million). It is estimated that
streaming revenues grew from US$0.4 billion in 2010 to US$6.6 billion in 2017.
Streaming is most popular with millennials and 4 out of 10 of the most
downloaded apps amongst this age group in 2016 were music apps. In 2016 Spotify
estimated 72 per cent. of its US listeners were millennials and millennials
spend more money than the average consumer on music streaming which means that
music is core to most new technology hardware offerings as manufacturers seek
to attract this crucial age group. The Directors believe that all of this bodes
well for the music industry, including music publishers.
The Recording Industry Association of America ("RIAA") released its full-year
figures for the US recorded music industry in May 2018. They showed that there
was a 17 per cent. year-on-year rise in recorded-music retail revenues in 2017
from US$7.5 billion in 2016 to US$8.7 billion in 2017. This growth was driven
by paid subscription revenues, which increased by 63 per cent. to US$4.0
billion in 2017 and accounted for 47 per cent. of recorded music revenues in
the US during the year. Revenues from ad-supported on-demand streaming services
increased by 35 per cent. to US$659 million in 2017 with approximately 300
billion songs streamed by users.
Streaming has three sub-categories: subscription services (e.g. paid versions
of Spotify, Tidal, Amazon and Apple Music), digital and customised radio (e.g.
Pandora, Sirius XM and other internet radio providers) and ad-supported
on-demand streaming services (e.g. Spotify, Vevo, YouTube and Sound Cloud). In
2017, US revenues for each of these were as follows:
Subscription services US$4 million
Digital and customised radio US$914 million
Ad-supported on-demand US$659 million
Although ad-supported on-demand streaming is the smallest category in the US,
it is proving to be very popular in territories such as China, allowing the
monetisation of music in areas of the world where previously this was not
typically the case. It is expected that the availability of ad-supported
on-demand streaming will result in dramatic growth for streaming services in
emerging markets. China is expected to be one of the fastest growing streaming
markets over the next decade as ownership of smart phones and smart speakers
continues to rise. In 2015, the ad-supported on-demand streaming market
totalled US$1.5 billion and this is likely to rise to over US$7 billion by
2030. To put these figures in context, the global advertising spend in 2018 is
expected to reach US$572 billion with radio accounting for US$32.6 billion of
this.
The growth of streaming is closely linked to the increase in the number of
smartphone users, but in 2015 only 2 per cent. of smartphone users were
subscribed to a paid streaming service. Goldman Sachs estimates that 9 per
cent. of smartphone users will be using a streaming service by 2030. The advent
of free streaming has resulted in a sharp drop in piracy and it is estimated
that the proportion of internet users accessing unlicensed music services from
desktop-based devices fell globally from 30 per cent. to 20 per cent. between
2012 and 2015. This trend is expected to continue. Growth may also be
stimulated by the adoption and increased penetration of certain technologies
such as internet-connected cars, the availability of 5G mobile services and
voice-activated devices.
The Directors believe that the growth of streaming is extremely good news for
owners of back catalogues and has revitalised the long tail of music through
the creation and distribution of playlists on online music stores and streaming
services. Playlists allow users to discover new artists, both nascent artists
or established artists who are new to the user, and can increase the revenues
available to owners who might otherwise have found that following their initial
release their song stopped generating revenues as time went on. The lower price
point from streaming services compared with purchasing a back catalogue in
physical or digital format is also helping to revitalise this music. The
average Walmart store in the US sells 21,000 tracks, but over 30 million tracks
are available on each of Apple Music and Spotify. Tracks recorded before 2015
accounted for 55.3 per cent. of all music streaming in the UK in 2017 with 300
tracks from this period having been played over 10 million times across the
course of the year, which illustrates the revitalisation of the back catalogue.
In addition, catalogue songs (those released more than 18 months ago) accounted
for 70 per cent. of all streaming volumes in 2015, but only represented 50 per
cent. of physical album sales and downloads. The Directors expect that this
trend will be very favourable to the Company as it builds its music rights
catalogue.
The impact of streaming is expected to positively impact music publishing
revenues, which Goldman Sachs believes will rise from US$5.4 billion in 2015 to
US$9.3 billion in 2030. Again, the Directors anticipate that this trend will be
beneficial to OMIP as it acquires its music rights catalogue.
Competitors
With regard to the acquisition of music rights, the Directors believe there are
a number of parties who are active in the acquisition of music rights, who fall
into three broad categories based on a typical acquisition size:
* "Small-scale" competitors including independent publishers and operators
such as Bucks Music Group, Chelsea Music Publishing, Mojo Music & Media,
Notting Hill Music and Silva Screen Records;
* "Medium-scale" competitors including DownTown Music Publishing, Music Sales
Group and Hipgnosis; and
* "Large-scale" competitors including BMG, Concord Bicycle Music, Kobalt
Capital, Round Hill, Sony Music, Universal Music Group and Warner Music
Group.
Use of proceeds
OMIP intends that the net proceeds from the Placing, the Subscription and the
issue of the Loan Notes will be used to acquire music publishing rights, artist
recordings and songwriters' rights. The Company may look to raise further
equity capital in the future in order to enable it to undertake additional
acquisitions once the proceeds of this fundraise have been deployed.
The acquisition pipeline
The Company is considering a number of potential music IP rights acquisitions,
including those that have been introduced by Ninelives. The Directors will
adopt a strict criteria in considering acquisitions, in particular that
acquisitions will be of music rights with an established historical revenue
stream and typically not music written in the last five years. The Directors
will, where appropriate, look to acquire music rights that have opportunities
to further enhance revenues from exploitation of the rights and/or
opportunities from synchronisation usage.
With effect from Admission, the Company is expected to be in a position to make
offers to acquire music publishing rights and/or songwriters' rights and the
focus of the management team will be on completing a number of acquisitions in
the coming year subject to satisfactory due diligence. It should be noted that
acquisitions are expected to be made in the US as well as the UK and that this
would give rise to additional US Dollar income streams in the future.
Whilst the Company is in discussions regarding a number of potential
acquisitions, there is no guarantee that any of these potential acquisitions
will be successfully concluded by the Company.
Current trading and prospects
The Company announced its interim results for the period ended 30 April 2018 on
26 July 2018 which provides an update on trading for that period.
The Placing and Subscription
The Company proposes to raise a minimum of GBP1.9 million by way of a
non-pre-emptive equity Placing and Subscription, and up to GBP6 million through
the issue of Loan Notes, to purchase music rights. The placing price of 6 pence
per New Ordinary Share represents a premium of 140 per cent. to 2.5 pence per
Ordinary Share, being the price at which Lord Michael Grade and Ivan Dunleavy
first invested in the Company in December 2017, and a discount of approximately
42.2 per cent. to the closing price of 10.375 pence on 30 August 2018, being
the last practicable trading day prior to the release of this announcement.
As part of the Company's market sounding exercise, the Company received an
indication of interest from BGF that they would invest GBP600,000 (gross) as part
of the Subscription. The Company has also conditionally agreed to grant options
to BGF and details of these options are described below. An offer to grant
options with the same conditions for exercise, downround protection and
adjustment criteria as the options to be granted to BGF has been made by the
Company in respect of an indication of interest received from a cornerstone
investor. It is intended that the options will be granted to the cornerstone
investor at Admission if the indication is confirmed.
Lord Michael Grade and Ivan Dunleavy have each indicated an intention to invest
GBP37,500 in the Subscription.
Placing
The Placing Shares will be placed with existing and new investors by Panmure
Gordon, acting as agent for the Company, in accordance with the terms of the
Placing Agreement. The exact number of Placing Shares to be placed will be
determined by the Company and Panmure Gordon at the close of the Bookbuild and
announced by the Company shortly thereafter.
The Placing Agreement contains warranties from the Company in favour of Panmure
Gordon in relation to (amongst other things) the Company and its business. In
addition, the Company has agreed to indemnify Panmure Gordon in relation to
certain liabilities they may incur in undertaking the Placing. Panmure Gordon
has the right to terminate the Placing Agreement in certain circumstances prior
to Admission. In particular, Panmure Gordon may terminate in the event that
there has been a breach of any of the warranties or for force majeure. The
Placing will not be underwritten.
The Placing is conditional upon, amongst other things, the Placing Agreement
having become unconditional in all respects, shareholder approval to issue the
Placing Shares being granted at the EGM and Admission. Pursuant to the terms of
the Placing Agreement, Panmure Gordon has agreed to use reasonable endeavours
to procure Placees for the Placing Shares.
The Placing will be effected by way of the Bookbuild to be managed by Panmure
Gordon and will be conducted in accordance with the terms and conditions set
out in Appendix II of this announcement. The Bookbuild will commence with
immediate effect and the book is expected to close no later than 4.30 p.m. BST
today, 31 August 2018, but Panmure Gordon reserves the right to close the book
earlier or later, without further notice. The Company has received non-binding
indications of interest from potential institutional investors for the Placing
during a pre-marketing process.
Subscription
The Subscription Shares will be issued to the Subscribers, at the Subscription
Price, by the Company pursuant to the Subscription Agreements. The Subscription
is conditional upon shareholder approval to issue the Subscription Shares being
granted at the EGM and Admission. The exact number of Subscription Shares to be
placed will be determined by the Company and Panmure Gordon at the close of the
Bookbuild and announced by the Company shortly thereafter.
New debt facilities
On 30 August 2018, BGF entered into the BGF Subscription Agreement in relation
to the Loan Notes. Under the terms of the BGF Subscription Agreement BGF has
conditionally agreed to subscribe for an initial tranche of GBP1.9 million Loan
Notes ("Tranche 1"), before costs. Tranche 1 is conditional on, amongst other
things, Admission and will be draw down immediately on satisfaction of these
conditions. The same day, the Company executed the Loan Note Instrument
creating up to GBP1,900,000 in unsecured fixed rate loan notes.
Pursuant to the terms of the BGF Subscription Agreement, for a period of 24
months from 30 August 2018 the Company shall have the option to draw down an
additional two tranches of Loan Notes - a second tranche of GBP2.325 million
("Tranche 2") and a final tranche of GBP1.775 million ("Tranche 3"), before costs
- subject to certain conditions being satisfied, including the granting of
approval to the draw down by BGF's internal investment committee and the
repetition of warranties by the Company. Transaction fees will be payable on
the drawdown of each of the Tranches. The funds raised through the issue of the
Loan Notes will be used to part fund the Company's music rights acquisitions.
The Loan Notes will accrue interest at a fixed rate of 7 per cent. per annum
from the date of issue, which in relation to Tranche 1 shall be paid in cash
quarterly commencing on 2 September 2019. The relevant dates for Tranche 2 and
Tranche 3 will be confirmed if and when the relevant Loan Notes are issued. The
Loan Notes issued in Tranche 1 shall be redeemed in four equal tranches that
will be due bi-annually from 31 December 2023. The Loan Notes issued in
Tranches 2 and 3 shall also be redeemed in four equal tranches which will be
due bi-annually commencing on the fifth anniversary of the date of issue. The
Company has the option for early redemption of the Loan Notes, subject to a
minimum redemption payment. The Loan Notes issued in Tranche 1 will become
repayable, along with an early repayment fee, in the event that the Company has
not acquired a music catalogue within 12 months of Admission.
Under the terms of the BGF Subscription Agreement, BGF shall have the right to
appoint an independent non-executive director to the Board for so long it holds
either Loan Notes or 15 per cent. or more of the issued share capital of the
Company. In addition, BGF has certain consent rights in relation to actions
taken by the Company. Customary representations, undertaking and events of
default are set out in the BGF Subscription Agreement.
Pursuant to the terms of the BGF Subscription Agreement, upon the subscription
by BGF to each of Tranches 1, 2 and 3 the Company has agreed to simultaneously
grant options over Ordinary Shares to BGF. The Company shall enter into the BGF
Option Agreement immediately following Admission, at which time the BGF Options
shall be granted. Further details of the BGF Option Agreement are set out
below. Similar option agreements will be entered upon the drawdown of Tranches
2 and 3.
Option Agreements
BGF Option Agreement
The Company shall enter into the BGF Option Agreement with BGF immediately
following Admission. Pursuant to the BGF Option Agreement, BGF shall have the
right to subscribe for up to GBP1,250,000 of Ordinary Shares exercisable in whole
or in part at a subscription price equal to the Placing Price per Ordinary
Share. The BGF Options can be exercised at any time from Admission until the
seventh anniversary of the creation of the BGF Options.
The BGF Options have downround protection and in the event that the Company
issues Ordinary Shares at a price less than 6 pence within 24 months of
Admission, the exercise price of the BGF Options shall be adjusted in
accordance with the terms of the BGF Option Agreement. In addition, the option
will be adjusted in certain circumstances, including where the company conducts
a share split or share consolidation. Upon the exercise of the BGF Options in
accordance with the BGF Option Agreement, BGF shall be issued with Ordinary
Shares.
The options to be granted to BGF on the subscription for Tranches 2 and 3,
pursuant to the BGF Subscription Agreement, shall be on identical terms to the
BGF Option Agreement, subject to any necessary adjustments due to the later
date of issue of those options.
Cornerstone Investor
An offer to grant options with the same conditions for exercise, downround
protection and adjustment criteria as the options to be granted to BGF has been
made by the Company in respect of an indication of interest received from a
cornerstone investor. It is intended that the options will be granted to the
cornerstone investor at Admission if the indication is confirmed.
Risks and uncertainties
Investors should consider carefully the following potential risks and
uncertainties and other information in this Announcement before they decide to
invest. An investment in the Ordinary Shares involves risk and investors may
lose part or all of their investment. All the information contained in this
Announcement should be considered in the light of the risk factors set out
below. This list is not comprehensive, but will provide investors with the main
risks involved in investing.
The main risk factors considered by the Directors to be relevant when
considering an investment in the Company are shown below.
Risks relating to operating history, past performance and future performance
Past performance and historical information is not an indication of future
performance. The Company's actual performance could differ materially from
projections. The Company is operating in a competitive industry where the
commercial risks are high. The Company is looking to expand significantly
through acquisition. Consequently, evaluation of the Company's prospects must
be considered in the light of the risks, expenses and difficulties frequently
encountered by companies pursuing an acquisition strategy.
Risk relating to income
As a result of the move from download to streaming, the existing business
suffered a fall in revenues and profits in 2016. It experienced a recovery in
2017. The Company remains a small entity within the global music market and its
revenues may be disproportionately affected by any adverse market or wider
economic conditions. Acquisitions will be made based on historical reported
income for the assets that are being purchased. However, there is no guarantee
that this income stream will continue in the future at the same level, or at
all.
Risks relating to the music industry
The music industry experienced a sharp decline in revenues and profitability
over a number of years and has recently seen a recovery. Although the Directors
believe that the recovery will continue, driven by the increasing popularity of
streaming, there is no guarantee that this will continue.
Future funding requirements
Once the proceeds of the Placing and Subscription have been deployed, the
Company will likely look to raise further equity capital to make acquisitions
of additional music rights.
There is no certainty that it will be possible for the Company to raise
addition equity capital at all or on acceptable terms. In addition, the terms
of any such financing may be dilutive to, or otherwise adversely affect,
Shareholders.
Currency risk
Some of the Company's revenues are generated in jurisdictions outside of the UK
in currencies other than Pounds Sterling. The Company reports its financial
information in Pounds Sterling, with any revenues generated in other currencies
being subject to foreign currency exchange risks due to exchange rate
movements, which may affect the Company's transaction costs and the translation
of its results.
Brexit risk
On 23 June 2016, the UK held a referendum on its continued membership of the
European Union, which resulted in a vote for the UK to exit the European Union.
There are significant uncertainties as to the terms of such an exit and the
timeframe for doing so in the case that a transition period is agreed with the
other members of the European Union. There are also significant uncertainties
as to the current and future fiscal, monetary and regulatory landscape in the
UK, including but not limited to the regulation of the financial services
industry and questions over how, when and to what extent the exit will have an
impact more generally on the economy of the UK and the growth of various
industries, levels of investor activity and confidence in market performance.
General risks
An investment in the Company is only suitable for investors capable of
evaluating the risks and merits of such investment and who have sufficient
resources to bear any loss which may result from the investment. A prospective
investor should consider with care whether an investment in the Company is
suitable for them in the light of their personal circumstances and the
financial resources available to the potential investor.
Investment in the Company should not be regarded as short-term in nature. There
can be no guarantee that there will be any appreciation in any investment in
the Company. Investors may not get back the full amount initially invested.
The price of the Ordinary Shares and the income derived from them can go down
as well as up. Past performance is not necessarily a guide to the future.
Changes in economic conditions including, for example, interest rates, rates of
inflation, industry conditions, competition, political and diplomatic events
and trends, tax laws and other factors can substantially and adversely affect
equity investments and the Group's prospects. Before making any investment
decision, prospective investors are strongly advised to consult an independent
adviser authorised under FSMA who specialises in advising upon investments.
Market Abuse Regulation
This Announcement contains inside information for the purposes of Article 7 of
EU Regulation 596 of 2014 ("MAR"). In addition, market soundings (as defined in
MAR) were taken in respect of the Placing with the result that certain persons
became aware of inside information (as defined in MAR), as permitted by MAR.
This inside information is set out in this Announcement. Therefore, those
persons that received inside information in a market sounding are no longer in
possession of such inside information relating to the Company and its
securities.
Circular and Notice of Extraordinary General Meeting
The Company expects to publish a Circular in connection with the Placing and
Subscription, which will contain a notice convening an EGM in order to approve
the matters necessary to implement these actions, in due course. A copy of the
Circular will be made available on the Company's website at http://omip.co.uk/
investor-relations/.
The EGM is expected to be convened for 11.00 a.m. on 19 September 2018 and will
take place at the offices of the Company's solicitors, Reed Smith LLP at The
Broadgate Tower, 20 Primrose Street, London EC2A 2RS. The actions that
Shareholders should take to vote on the Resolutions will be set out in the
Circular, along with the recommendation of the Board of Directors of the
Company.
Expected timetable
Anticipated date of posting the Circular 3 September 2018
Last time and date for receipt of Forms of Proxy and 11.00 a.m. on 17
CREST Proxy Instructions September 2018
EGM 11.00 a.m. on 19
September 2018
Admission and dealings in the New Ordinary Shares 8.00 a.m. on 25
expected to commence on AIM September 2018
Where applicable, expected date for CREST accounts 25 September 2018
to be credited for New Ordinary Shares in
uncertificated form
Where applicable, expected date for despatch of By 2 October 2018
definitive share certificates in respect of New
Ordinary Shares in certificated form
Settlement and dealings
Application has been made to the London Stock Exchange for the New Ordinary
Shares to be admitted to trading on AIM.
Settlement for the New Ordinary Shares and Admission is expected to take place
on or before 8.00 a.m. on 25 September 2018. The Placing and Subscription are
conditional upon, amongst other things, Admission becoming effective and the
Placing Agreement not being terminated in accordance with its terms.
Definitions
The following definitions apply in this Appendix to this Announcement, and as
the context shall admit, in the Announcement:
Admission 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
Announcement this announcement, including this appendix and the terms
and conditions set out herein
B2B business-to-business
B2C business-to-consumer
BGF BGF Investments LP or BGF Investment Management Limited as
the case may be
BGF Option an option agreement to be entered into between the Company
Agreement and BGF immediately following Admission, pursuant to which
BGF will be granted options to subscribe for up to GBP
1,250,000 Ordinary Shares
BGF Options options granted to BGF pursuant to the terms of the BGF
Option Agreement
BGF Subscription the subscription agreement entered into by the Company and
Agreement BGF on 30 August 2018, pursuant to which BGF conditionally
agrees to subscribe for the Loan Notes
Board the board of directors of the Company
Bookbuild the bookbuild process to be conducted by Panmure Gordon to
arrange participation by Placees in the Placing
BST British Summer Time
Cairn Cairn Financial Advisers LLP, a limited liability
partnership registered in England and Wales under number
OC351689 whose registered office is at Cheyne House Crown
Court, 62-63 Cheapside, London, England, EC2V 6AX and who,
at the date of this Announcement is appointed as the
nominated adviser to the Company
Company One Media IP Group plc, a company registered in England and
Wales under number 05799897 whose registered office is at
623 East Props Building, Pinewood Studios Pinewood Road,
Iver Heath, Bucks, SL0 0NH
CRB the US Copyright Royalty Board
CREST the computerised settlement system to facilitate transfer
of the title to an interest in securities in uncertificated
form operated by Euroclear UK & Ireland
Directors the directors of the Company
EEA European Economic Area
EGM the extraordinary general meeting of the Company's
shareholders at 11.00 a.m. on 19 September 2018
Euroclear UK & Euroclear UK & Ireland Limited
Ireland
FCA the Financial Conduct Authority
Form of the form of confirmation or contract note made between
Confirmation Panmure Gordon and the Placees which incorporate by
reference the terms and conditions of the Placing contained
in this Announcement
FSMA the Financial Services and Markets Act 2000
Group the Company and its subsidiary undertakings (and "Group"
shall be construed accordingly)
Loan Note the loan note instrument to be executed by the Company
Instrument creating Tranche 1
Loan Notes the up to GBP6 million unsecured fixed rate loan notes to be
created by the Company
London Stock London Stock Exchange plc
Exchange
MAR the EU Market Abuse Regulation (2014/596/EU)
New Ordinary the Placing Shares and the Subscription Shares
Shares
Ninelives Ninelives Capital Limited, a company incorporated in
England with company number 10146294 and having its
registered office at C/O Ojk Ltd, 180 Great Portland
Street, London, England, W1W 5QZ
NPS Net Publisher's Share of revenue
Ordinary Shares ordinary shares of 0.5 pence each in the capital of the
Company
Panmure Panmure Gordon (UK) Limited, a company registered in
England and Wales under number 04915201 whose registered
office is at One New Change, London, EC4M 9AF and who at
the date of this Announcement is appointed as broker to the
Company
Placees persons who agree, by making an oral and legally binding
offer, to subscribe for Placing Shares at the Placing Price
Placing the conditional placing of the Placing Shares by Panmure
Gordon on behalf of the Company at the Placing Price, in
accordance with the Placing Agreement
Placing Agreement the agreement between the Company and Panmure Gordon
relating to the Placing
Placing Price 6 pence per Placing Share
Placing Shares the new Ordinary Shares which are to be issued pursuant to
the Placing, conditional, inter alia, on the passing of the
Resolutions
Resolutions the resolutions required to be passed by the Shareholders
at the EGM to grant authority to, among other things, issue
the New Ordinary Shares and the Ordinary Shares underlying
the Loan Notes and the Options
Shareholders holders of the Company's shares from time to time
Subscribers persons who agree, by entering into a Subscription
Agreement, to subscribe for Subscription Shares at the
Subscription Price
Subscription the conditional subscription for the Subscription Shares,
to be issued at the Subscription Price, in accordance with
the Subscription Agreements
Subscription the agreements between the Company and each of the
Agreement Subscribers relating to the Subscription
Subscription Price means 6 pence per Subscription Share
Subscription the new Ordinary Shares which are to be issued pursuant to
Shares the Subscription, conditional, inter alia, on the passing
of the Resolutions
TCAT Technical Copyright Analysis Tool
Tranche each of Tranche 1, Tranche 2 and Tranche 3 or any of them,
as the context requires
Tranche 1 the initial tranche of GBP1,900,000 of Loan Notes being
subscribed for by BGF at Admission, subject to certain
conditions, pursuant to the BGF Subscription Agreement
Tranche 2 the second tranche of GBP2,325,000 of Loan Notes
conditionally subscribed for by BGF
Tranche 3 the final tranche of GBP1,775,000 of the Loan Notes
conditionally subscribed for by BGF
UK or United the United Kingdom of Great Britain and Northern Ireland
Kingdom
US or United the United States of America
States
No statement in this Announcement is intended to be a profit forecast or
estimate, and no statement in this Announcement should be interpreted to mean
that earnings per Ordinary Share for the current or future financial years
would necessarily match or exceed the historical published earnings per
Ordinary Share.
The price of Ordinary 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 Placing and Subscription Shares. Past performance is no guide
to future performance, and persons needing advice should consult an independent
financial adviser.
The New Ordinary Shares to be issued pursuant to the Placing and Subscription
will not be admitted to trading on any stock exchange other than the AIM market
of 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.
By participating in the Placing, each person who is invited to and who chooses
to participate in the Placing (a "Placee") 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, 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 the Appendix.
Panmure Gordon, which is authorised and regulated in the UK by the FCA, is
acting solely as broker exclusively for the Company and no one else in
connection with the matters set out in this Announcement. In connection with
such matters, Panmure Gordon will not regard any other person (including any
Placee) as its client, nor will it be responsible to any other person for
providing the protections afforded to clients of Panmure Gordon or for
providing advice in relation any matter referred to herein. Panmure Gordon does
not accept any responsibility whatsoever to any person other than the Company
for the contents of this Announcement or for any statement made, or purported
to be made, by it or on its behalf in connection with the Placing. Panmure
Gordon accordingly disclaims all and any liability whether arising in tort,
contract or otherwise which it might otherwise have in respect of this
Announcement or any such statement. 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 Panmure Gordon 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
therefor is expressly disclaimed.
Cairn is authorised and regulated by the FCA in the United Kingdom. Cairn is
acting solely as nominated adviser exclusively for the Company and no one else
in connection with the matters set out in this Announcement and will not regard
any other person (whether or not a recipient of this Announcement) as its
client nor will it be responsible to anyone other than the Company for
providing the protections afforded to its clients or for providing advice in
relation to the contents of this Announcement. Apart from the responsibilities
and liabilities, if any, which may be imposed on Cairn by FSMA or the
regulatory regime established thereunder, Cairn accepts no responsibility
whatsoever, and makes no representation or warranty, express or implied, for
the contents of this Announcement including its accuracy, completeness or
verification or for any other statement made or purported to be made by it, or
on behalf of it, the Company or any other person, in connection with the
Company and the contents of this Announcement, whether as to the past or the
future. Cairn accordingly disclaims all and any liability whatsoever, whether
arising in tort, contract or otherwise (save as referred to above), which it
might otherwise have in respect of the contents of this Announcement or any
such statement.
Appendix
FORWARD LOOKING STATEMENTS
To the extent that this Announcement contains 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, a
number of risks and uncertainties exist. The Company cautions readers that any
forward-looking statement is no guarantee of future performance and that actual
results could differ materially from those contained in the forward-looking
statements.
A forward-looking statement can be identified by the fact that it does 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", "predict" or other words of
similar meaning. Examples of forward-looking statements include, amongst
others, statements regarding or which make assumptions in respect of the
planned use of the proceeds of the Placing, the liquidity position of the
Company, the future performance of the Company, future foreign exchange rates,
interest rates and currency controls, the future political and fiscal regimes
in the overseas markets in which the Company operates, the Company's future
financial position, plans and objectives for future operations and any other
statements that are not historical fact.
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 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 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. These forward-looking
statements reflect the Company's judgement at the date of this Announcement and
are not intended to give any assurance as to future results. Except as required
by the FCA, the London Stock Exchange, the AIM Rules 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.
IMPORTANT NOTICES
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
ANNOUNCEMENT (INCLUDING THIS APPIX) AND THE TERMS AND CONDITIONS SET OUT
HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE
ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING
OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND
WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE:
(1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED
INVESTORS AS DEFINED IN ARTICLE 2.1(e) OF DIRECTIVE 2003/71/EC AS AMED, ("
QUALIFIED INVESTORS"), INCLUDING BY THE 2010 PROSPECTUS DIRECTIVE AMING
DIRECTIVE (DIRECTIVE 2010/73/EC) AND TO THE EXTENT IMPLEMENTED IN THE RELEVANT
MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); (2) IF IN THE UNITED KINGDOM,
QUALIFIED INVESTORS AND: (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMED
(THE "ORDER") (INVESTMENT PROFESSIONALS); OR (B) ARE PERSONS WHO FALL WITHIN
ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS,
ETC.) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT
PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON
BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS
ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED ONLY WITH RELEVANT
PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN ONE MEDIA IP GROUP PLC.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMED (THE "SECURITIES ACT") OR WITH ANY
SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED
STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN
THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND
SOLD ONLY OUTSIDE OF THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE
MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT. NO
PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR
ELSEWHERE.
THIS ANNOUNCEMENT (INCLUDING THE APPIX) AND THE INFORMATION CONTAINED HEREIN
IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR
IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY
OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.
The distribution of this Announcement and/or the Placing and/or issue of the
Placing Shares in certain jurisdictions may be restricted by law. No action
has been taken by the Company, Cairn, Panmure Gordon or any of their respective
affiliates, agents, directors, officers or employees that would permit an offer
of the Placing Shares or possession or distribution of this Announcement or any
other offering or publicity material relating to such Placing Shares in any
jurisdiction where action for that purpose is required. Persons into whose
possession this Announcement comes are required by the Company, Cairn and
Panmure Gordon to inform themselves about and to observe any such restrictions.
Neither this Announcement nor any part of it constitutes or forms part of any
offer to issue or sell, or the solicitation of an offer to acquire, purchase or
subscribe for, any securities in the United States (including its territories
and possessions, any state of the United States and the District of Columbia
(the "United States" or the "US")), Australia, Canada, Japan, New Zealand or
the Republic of South Africa or any other jurisdiction in which the same would
be unlawful. No public offering of the Placing Shares is being made in any
such jurisdiction.
All offers of the Placing Shares will be made pursuant to an exemption under
the Prospectus Directive from the requirement to produce a prospectus. In the
United Kingdom, this Announcement is being directed solely at persons in
circumstances in which section 21(1) of FSMA does not apply.
The Placing Shares have not been approved or disapproved by the US Securities
and Exchange Commission, any state securities commission or other regulatory
authority in the United States, nor have any of the foregoing authorities
passed upon or endorsed the merits of the Placing or the accuracy or adequacy
of this Announcement. Any representation to the contrary is a criminal offence
in the United States. 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; the relevant
clearances have not been, and will not be, obtained for the South Africa
Reserve Bank or any other applicable body in the Republic of South Africa in
relation to the Placing Shares 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, New Zealand 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, New Zealand 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 right or other legal obligation to forward a copy of this
Announcement should seek appropriate advice before taking any action.
By participating in the Bookbuild and the Placing, each Placee 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 particular, each such Placee represents, warrants, undertakes, agrees and
acknowledges (amongst other things) to Panmure Gordon and the Company that:
1. it is a Relevant Person 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 a Relevant Person in a member state of the EEA which
has implemented the Prospectus Directive (each, a "Relevant Member State") who
acquires any Placing Shares pursuant to the Placing:
(a) it is a Qualified Investor within the meaning of Article 2(1)(e) of the
Prospectus Directive; and
(b) 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 Relevant Member State other than Qualified Investors or in
circumstances in which the prior consent of Panmure Gordon has been given to
the offer or resale; or
(ii) where Placing Shares have been acquired by it on behalf of persons in any
Relevant Member State 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 for its own account or is
acquiring the Placing Shares for an account with respect to which it exercises
sole investment discretion and has the authority to make and does make the
representations, warranties, indemnities, acknowledgements, undertakings and
agreements contained in this Announcement;
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;
5. except as otherwise permitted by the Company and subject to any
available exemptions from applicable securities laws, it (and any person on
whose account it is acting, as referred to in paragraph 4 above) is not a US
Person (as defined in Regulation S) and is located outside the United States
and is acquiring the Placing Shares in an "offshore transaction" as defined in,
and in accordance with, Regulation S;
6. it is aware that Rule 904 of Regulation S regarding "Offshore
Resales" is not applicable to "affiliates" (as defined in Rule 405 of the
Securities Act) of the Company; and
7. it has not offered, sold or delivered and will not offer to sell or
deliver any of the Placing Shares to persons within the United States, directly
or indirectly, or to, or for the account or benefit of, US Persons; neither it,
its affiliates, nor any persons acting on its behalf, have engaged or will
engage in any directed selling efforts (as defined in Regulation S) with
respect to the Placing Shares; and it is not taking up the Placing Shares for
resale in or into the United States.
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 any
prospectus or other offering document to be published. No prospectus or other
offering document has been or will be submitted to be approved by the FCA in
relation to the Placing or the Placing Shares and Placees' commitments will be
made solely on the basis of the information contained in this Announcement, the
announcement of the results of the Placing (the "Result of Placing Announcement
"), and any other announcement made through a regulatory information service (
"RIS") relating to the Placing (together, the "Placing Announcements") and any
information publicly announced through a RIS by or on behalf of the Company on
or prior to the date of this Announcement (the "Publicly Available Information
") and subject to any further terms set forth in the Form of Confirmation sent
to Placees by Panmure Gordon to confirm their subscription for Placing Shares.
Each Placee, by participating in the Placing, agrees that the content of the
Placing Announcements is exclusively the responsibility of the Company and
confirms that it has neither received nor relied on any information (other than
the Publicly Available Information), representation, warranty or statement made
by or on behalf of Panmure Gordon, Cairn or the Company or any other person and
none of Panmure Gordon, Cairn, the Company nor any other person acting on such
person's behalf nor any of their respective affiliates has or shall have any
liability for any Placee's decision to participate in the Placing based on any
other information, representation, warranty or statement. 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. No Placee should consider any information in this
Announcement to be legal, tax or business advice. Nothing in this paragraph
shall exclude the liability of any person for fraudulent misrepresentation.
Details of the Placing Agreement and the Placing Shares
Panmure Gordon is acting as sole bookrunner in connection with the Placing and
has today entered into the Placing Agreement with the Company under which, on
the terms and subject to the conditions set out in the Placing Agreement,
Panmure Gordon, as agent for and on behalf of the Company, has agreed to use
its reasonable endeavours to procure Placees for the Placing Shares.
The final number of Placing Shares at the Placing Price (as defined below) will
be set out in a share placing supplement agreed between Panmure Gordon and the
Company following the Bookbuild (the "Placing Supplement"). The Placing is not
underwritten by Panmure Gordon or any other party.
The Placing Shares will, when issued, be credited as fully paid up and will
rank pari passu in all respects with the existing Ordinary Shares, including
the right to receive all dividends and other distributions declared, made or
paid on or in respect of the Ordinary Shares after the date of issue of the
Placing Shares, and will on issue be free of all claims, liens, charges,
encumbrances and equities.
Application for listing and admission to trading
Application will be made to the London Stock Exchange (the "Application") for
admission to trading of the Placing Shares on AIM.
It is expected that Admission of the Placing Shares will occur at or before
8.00 a.m. BST on 25 September 2018 (or such later time and/or date, being not
later than 8.00 a.m. BST on 1 October 2018, as the Company and Panmure Gordon
may agree) and that dealings in the Placing Shares will commence at that time.
Bookbuild
Panmure Gordon will today commence the accelerated bookbuilding process to
determine demand for participation in the Placing by Placees. This Announcement
gives details of the terms and conditions of, and the mechanics of
participation in, the Placing. No commissions will be paid to Placees or by
Placees in respect of any Placing Shares.
Participation in, and principal terms of, the Placing
1. Panmure Gordon is arranging the Placing as bookrunner and placing agent of
the Company.
2. Participation in the Placing will only be available to persons who may
lawfully be, and are, invited to participate by Panmure Gordon. Panmure
Gordon may itself agree to be a Placee in respect of all or some of the
Placing Shares or may nominate any member of its Company to do so.
3. The number of Placing Shares will be agreed by Panmure Gordon (in
consultation with the Company) following completion of the Bookbuild.
Subject to the execution of the Placing Supplement, the Placing Price and
the number of Placing Shares to be issued will be announced on an RIS
following the completion of the Bookbuild by way of the Result of Placing
Announcement.
4. To bid in the Bookbuild, prospective Placees should communicate their bid
by telephone to their usual sales contact at Panmure Gordon. Each bid
should state the number of Placing Shares which the prospective Placee
wishes to subscribe for and specify the amount that they are prepared to
pay per Placing Share.
5. Allocations of the Placing Shares will be determined by Panmure Gordon
after consultation with the Company (the proposed allocations having been
supplied by Panmure Gordon to the Company in advance of such consultation).
Subject to the execution of the Placing Supplement, allocations will be
confirmed orally by Panmure Gordon and a Form of Confirmation will be
despatched as soon as possible thereafter. Panmure Gordon's oral
confirmation to such Placee constitutes an irrevocable legally binding
commitment upon such person (who will at that point become a Placee), in
favour of Panmure Gordon and the Company, to acquire the number of Placing
Shares allocated to it and to pay the Placing Price in respect of such
shares on the terms and conditions set out in this Appendix and in
accordance with the Company's articles of association. Except with Panmure
Gordon's consent, such commitment will not be capable of variation or
revocation after the time at which it is submitted.
6. Each Placee's allocation and commitment will be evidenced by a Form of
Confirmation issued to such Placee by Panmure Gordon. The terms of this
Appendix will be deemed incorporated in that Form of Confirmation.
7. Irrespective of the time at which a Placee's allocation pursuant to the
Placing is confirmed, settlement for all Placing Shares to be subscribed
for pursuant to the Placing will be required to be made at the same time,
on the basis explained below under "Registration and Settlement".
8. All obligations under the Bookbuild and the Placing will be subject to
fulfilment or (where applicable) waiver of the conditions referred to below
under "Conditions of the Placing" and to the Placing not having being
terminated on the basis referred to below under "Right to terminate under
the Placing Agreement".
9. By participating in the Placing, 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.
10. To the fullest extent permissible by law, neither Panmure Gordon, nor the
Company, nor any of its affiliates, agents, directors, officers or
employees shall have any responsibility or liability to Placees (or to any
other person whether acting on behalf of a Placee or otherwise). In
addition, none of Panmure Gordon, nor the Company, nor any of their
respective affiliates, agents, directors, officers or employees shall have
any responsibility or liability (including to the extent permissible by
law, any fiduciary duties) in respect of Panmure Gordon's conduct of the
Placing.
11. The Placing Shares will be issued subject to the terms and conditions of
this Announcement and each Placee's commitment to subscribe for Placing
Shares on the terms set out herein will continue notwithstanding any
amendment that may in future be made to the terms and conditions of the
Placing and Placees will have no right to be consulted or require that
their consent be obtained with respect to the Company's or Panmure Gordon's
conduct of the Placing.
12. All times and dates in this Announcement may be subject to amendment.
Panmure Gordon shall notify the Placees and any person acting on behalf of
the Placees of any changes.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional
and not having been terminated in accordance with its terms. Panmure Gordon's
obligations under the Placing Agreement are conditional on customary
conditions, including (amongst others) (the "Conditions"):
1. the execution and delivery of the Placing Supplement by no later than 6.00
p.m. BST on the date of this Announcement (or such later time and/or date
as Panmure Gordon may otherwise agree with the Company);
2. publication of the Result of Placing Announcement through an RIS by no
later than 8.00 a.m. BST on the date following this Announcement (or such
later time and/or date as Panmure Gordon may otherwise agree with the
Company); and
3. Admission occurring no later than 8.00 a.m. BST on 25 September 2018 (or
such later time and/or date, not being later than 8.00 a.m. BST on 1
October 2018, as Panmure Gordon may otherwise agree with the Company) (the
"Closing Date").
Panmure Gordon may, at their absolute discretion and upon such terms as they
think fit, waive compliance by the Company with the whole or any part of any of
the Company's obligations in relation to the Conditions or extend the time or
date provided for fulfilment of any such Conditions in respect of all or any
part of the performance thereof. The condition in the Placing Agreement
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.
If: (i) any of the Conditions are not fulfilled or (where permitted) waived by
Panmure Gordon in accordance with the Placing Agreement by the relevant time or
date specified (or such later time or date as the Company and Panmure Gordon
may agree); or (ii) the Placing Agreement is terminated in the circumstances
specified below under "Right to terminate under the Placing Agreement", the
Placing will not proceed and the Placees' 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 it or on its behalf (or any person
on whose behalf the Placee is acting) in respect thereof.
By participating in the Placing, each Placee agrees that its rights and
obligations shall cease and terminate only in the circumstances described above
and under "Right to terminate under the Placing Agreement" below and will not
be capable of rescission or termination by it.
Neither Panmure Gordon nor the Company, nor any of their respective affiliates,
agents, directors, officers or employees 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 Panmure Gordon.
Right to terminate under the Placing Agreement
Panmure Gordon is entitled, at any time before Admission, to terminate the
Placing Agreement in accordance with its terms in certain circumstances,
including (amongst other things):
1. where there has been a breach by the Company of any of the warranties
contained in the Placing Agreement or the Company has not complied with its
obligations under the Placing Agreement and has failed to remedy such a
breach (if it is capable of remedy);
2. if any of the Conditions have: (i) become incapable of satisfaction; or
(ii) not been satisfied before the latest time provided in the Placing
Agreement and have not been waived if capable of being waived by Panmure
Gordon; or
3. the occurrence of a material adverse change or certain force majeure
events.
Upon termination, the parties to the Placing Agreement shall be released and
discharged (except for any liability incurred or arising before or in relation
to such termination) from their respective obligations under or pursuant to the
Placing Agreement, subject to certain exceptions.
By participating in the Placing, each Placee agrees that: (i) the exercise by
Panmure Gordon of any right of termination or of any other discretion under
the Placing Agreement shall be within the absolute discretion of Panmure
Gordon and that it need not make any reference to, or consult with, Placees
and that it shall have no liability to Placees whatsoever in connection with
any such exercise or failure to so exercise; and (ii) such Placee's rights and
obligations terminate only in the circumstances described above under "Right to
terminate under the Placing Agreement" and "Conditions of the Placing", and its
participation will not be capable of rescission or termination by it after oral
confirmation by Panmure Gordon of the allocation and commitments following the
close of the Bookbuild.
Restriction on Further Issue of Shares
The Company has undertaken to Panmure Gordon that it will not, and will procure
that no other member of the Company will, at any time during the Restricted
Period enter into any commitment or agreement, or put itself in a position
where it is obliged to announce that any commitment or agreement may be entered
into, which is or may be material in relation to the issue of the Placing
Shares or of the Placing, or issue any shares or options over shares or
securities convertible or exchangeable into shares or enter into any agreement
or undertaking to do the same without the prior written consent of Panmure
Gordon provided that the foregoing restrictions shall not restrict the ability
of the Company during the Restricted Period to: (a) issue shares where any
person (whether employee, director or neither of the foregoing) exercises
rights over such shares granted to him prior to the date of the Placing
Agreement; or (b) grant options over shares provided that the number of options
outstanding at any given point in time cannot exceed 10 per cent. of the number
of shares then in issue, where such options are granted under an existing
employee share scheme (as such expression is defined in section 1166 Companies
Act). For these purposes the "Restricted Period" shall mean the 180 day period
commencing on the date of the Placing Agreement.
By participating in the Placing, Placees agree that the exercise by Panmure
Gordon of any power to grant consent to the undertaking by the Company of a
transaction which would otherwise be subject to the restrictive provisions on
further issuance under the Placing Agreement shall be within the absolute
discretion of Panmure Gordon and that it need not make any reference to, or
consult with, Placees and that it shall have no liability to Placees whatsoever
in connection with any such exercise of the power to grant consent.
Registration and Settlement
Settlement of transactions in the Placing Shares (ISIN: GB00B1DRDZ07) following
Admission will take place within the CREST system administered by Euroclear UK
& Ireland Limited, subject to certain exceptions. Panmure Gordon reserves the
right to require settlement for, and delivery of, the Placing Shares (or any
part thereof) to Placees by such other means that they may deem necessary if
delivery or settlement is not possible or practicable within the CREST system
or would not be consistent with the regulatory requirements in the Placee's
jurisdiction.
Following the close of the Bookbuild, each Placee to be allocated Placing
Shares in the Placing will be sent a Form of Confirmation in accordance with
the standing arrangements in place with Panmure Gordon stating the number of
Placing Shares allocated to them at the Placing Price, the aggregate amount
owed by such Placee to Panmure Gordon, relevant settlement information and
settlement instructions. Each Placee agrees that it will do all things
necessary to ensure that delivery and payment is completed in accordance with
the standing CREST or certificated settlement instructions in respect of the
Placing Shares that it has in place with Panmure Gordon.
The Company will deliver the Placing Shares to a CREST account operated by
Panmure Gordon, as agent for the Company, and Panmure Gordon will enter its
delivery instruction into the CREST system. The input to CREST by a Placee of
a matching or acceptance instruction will then allow delivery of the relevant
Placing Shares to that Placee against payment.
It is expected that settlement in respect of the Placing Shares will take place
on 25 September 2018, on a delivery versus payment basis.
A Placee's entitlement to receive any Placing Shares under the Placing will be
conditional on Panmure Gordon's receipt of payment in full for such Placing
Shares by the relevant time to be stated in the Form of Confirmation, or by
such later time and date as Panmure Gordon and the Company may in their
absolute discretion determine, and otherwise in accordance with the Form of
Confirmation's terms.
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
percentage points above LIBOR as determined by Panmure Gordon.
Each Placee is deemed to agree that, if it does not comply with these
obligations, Panmure Gordon may sell any or all of the Placing Shares allocated
to that Placee on such Placee's behalf and retain from the proceeds, for
Panmure Gordon's account and benefit, 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 will
be required to bear any stamp duty or stamp duty reserve tax or other taxes or
duties (together with any interest or penalties) imposed in any jurisdiction
which may arise upon the sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees should ensure that the Form of Confirmation is copied and delivered
immediately to the relevant person within that organisation. Insofar as Placing
Shares are issued 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.
If there are any circumstances in which any stamp duty or stamp duty reserve
tax or other similar taxes or duties (including any interest and penalties
relating thereto) is payable in respect of the allocation, allotment, issue,
sale, transfer or delivery of the Placing Shares (or, for the avoidance of
doubt, if any stamp duty or stamp duty reserve tax is payable in connection
with any subsequent transfer of or agreement to transfer Placing Shares), none
of Panmure Gordon nor the Company shall be responsible for payment thereof.
Representations, warranties, undertakings and acknowledgements
By participating in the Placing each Placee (and any person acting on such
Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents,
warrants and agrees (as the case may be) with Panmure Gordon (in their capacity
as bookrunner and placing agent of the Company in respect of the Placing) and
the Company, in each case as a fundamental term of their application for
Placing Shares, the following:
1. it has read and understood this Announcement in its entirety and 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 that it has not
relied on, and will not rely on, any information given or any
representations, warranties or statements made at any time by any person in
connection with Admission, the Placing, the Company, the Placing Shares or
otherwise, other than the information contained in this Announcement and
the Publicly Available Information;
2. its rights and obligations in respect of the Placing will terminate only in
the circumstances referred to in this Announcement and will not be subject
to rescission or termination by the Placee in any circumstances;
3. the Ordinary Shares are admitted to trading on AIM and that the Company is
therefore required to publish certain business and financial information in
accordance with the rules and practices of AIM, which includes a
description of the Company's business and the Company's financial
information, including balance sheets and income statements, and that it is
able to obtain or has access to such information without undue difficulty,
and is able to obtain access to such information or comparable information
concerning any other publicly traded companies, without undue difficulty;
4. none of its rights or obligations in respect of the Placing is conditional
on any other person agreeing to subscribe for any Placing Shares under the
Placing and no failure by any other Placee to meet any of its obligations
in respect of the Placing will affect any of your obligations in respect of
the Placing;
5. neither Panmure Gordon nor any of its affiliates, agents, directors,
officers and/or employees has or shall have any responsibility for any acts
or omissions of the Company or any of the directors of the Company or any
other person (other than Panmure Gordon) in connection with the Placing;
6. time is of the essence as regards its obligations under this Announcement;
7. any document that is to be sent to it in connection with the Placing will
be sent at its risk and may be sent to it at any address provided by it to
Panmure Gordon;
8. no prospectus or other offering document is required under the Prospectus
Directive, nor will one be prepared in connection with the Bookbuild, the
Placing or the Placing Shares and it has not received and will not receive
a prospectus or other offering document in connection with the Bookbuild,
the Placing or the Placing Shares;
9. in connection with the Placing, Panmure Gordon and any of its affiliates
acting as an investor for its own account may subscribe for Placing Shares
in the Company and in that capacity may retain, purchase or sell for its
own account such Placing Shares in the Company and any securities of the
Company or related investments and may offer or sell such securities or
other investments otherwise than in connection with the Placing.
Accordingly, references in this Announcement to the Placing Shares being
issued, offered or placed should be read as including any issue, offering
or placement of such shares in the Company to Panmure Gordon or any of its
affiliates acting in such capacity;
10. Panmure Gordon and its affiliates may enter into financing arrangements and
swaps with investors in connection with which Panmure Gordon and any of its
affiliates may from time to time acquire, hold or dispose of such
securities of the Company, including the Placing Shares;
11. Panmure Gordon does not intend to disclose the extent of any investment or
transactions referred to in paragraphs 9 and 10 above otherwise than in
accordance with any legal or regulatory obligation to do so;
12. its participation in the Placing is on the basis that:
1. it is not, and will not be, a client of Panmure Gordonin connection
with its participation in the Placing and that Panmure Gordon 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 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; and
2. Panmure Gordon does not owe any fiduciary or other duties to it in
respect of any representations, warranties, undertakings or indemnities
in the Placing Agreement; and
3. none of Panmure Gordon, nor any of its affiliates, nor any person
acting on behalf of them, is making any recommendations to it nor
advising it regarding the suitability of any transactions it may enter
into in connection with the Placing.
13. the content of the Placing Announcements and the Publicly Available
Information has been prepared by and is exclusively the responsibility of
the Company and neither Panmure Gordon nor its affiliates, agents,
directors, officers or employees nor any person acting on behalf of any of
them is responsible for or has or shall have any liability for any
information, representation or statement contained in, or omission from,
this Announcement, the Publicly Available Information, the Placing
Announcements or otherwise nor will they be liable for any Placee's
decision to participate in the Placing based on any information,
representation, warranty or statement contained in this Announcement the
Publicly Available Information, the Placing Announcements or otherwise,
provided that nothing in this paragraph excludes the liability of any
person for fraudulent misrepresentation made by such person;
14. the only information on which it is entitled to rely and on which such
Placee has relied in committing itself to subscribe for Placing Shares is
contained in the Placing Documents or any Publicly Available Information
(save that in the case of Publicly Available Information, a Placee's right
to rely on that information is limited to the right that such Placee would
have as a matter of law in the absence of this paragraph 15(a)), such
information being all that such Placee deems necessary or appropriate and
sufficient to make an investment decision in respect of the Placing Shares;
15.
1. it has neither received nor relied on any other information given, or
representations, warranties or statements, express or implied, made, by
Panmure Gordon or the Company nor any of their respective affiliates,
agents, directors, officers or employees acting on behalf of any of
them (including in any management presentation delivered in respect of
the Bookbuild) with respect to the Company, the Placing or the Placing
Shares or the accuracy, completeness or adequacy of any information
contained in the Placing Announcements, or the Publicly Available
Information or otherwise;
2. none of Panmure Gordon, nor the Company, nor any of their respective
affiliates, agents, directors, officers or employees or any person
acting on behalf of any of them has provided, nor will provide, it with
any material or information regarding the Placing Shares or the Company
or any other person other than the information in the Placing
Announcements or the Publicly Available Information; nor has it
requested Panmure Gordon, the Company, any of their respective
affiliates or any person acting on behalf of any of them to provide it
with any such material or information;
3. none of Panmure Gordon or the Company will be liable for any Placee's
decision to participate in the Placing based on any other information,
representation, warranty or statement,
provided that nothing in this paragraph 15 excludes the liability of any person
for fraudulent misrepresentation made by that person;
1. it may not rely, and has not relied, on any investigation that Panmure
Gordon, any of its affiliates or any person acting on their behalf, may
have conducted with respect to the Placing Shares, the terms of the Placing
or the Company, and none of such persons has made any representation,
express or implied, with respect to the Company, the Placing, the Placing
Shares or the accuracy, completeness or adequacy of the information in the
Placing Announcements, the Publicly Available Information or any other
information;
2. in making any decision to subscribe for Placing Shares it:
3. has such knowledge and experience in financial and business matters to be
capable of evaluating the merits and risks of subscribing for the Placing
Shares;
4. will not look to Panmure Gordon for all or part of any such loss it may
suffer;
5. is experienced in investing in securities of this nature in this sector and
is aware that it may be required to bear, and is able to bear, the economic
risk of an investment in the Placing Shares;
6. is able to sustain a complete loss of an investment in the Placing Shares;
7. has no need for liquidity with respect to its investment in the Placing
Shares;
8. has made its own assessment and has satisfied itself concerning the
relevant tax, legal, currency and other economic considerations relevant to
its investment in the Placing Shares; and
9. has conducted its own due diligence, examination, investigation and
assessment of the Company, the Placing Shares and the terms of the Placing
and has satisfied itself that the information resulting from such
investigation is still current and relied on that investigation for the
purposes of its decision to participate in the Placing;
10. it is acting as principal only in respect of the Placing or, if it is
acting for any other person, it is:
11. duly authorised to do so and has full power to make the acknowledgments,
representations and agreements herein on behalf of each such person; and
12. will remain liable to the Company and/or Panmure Gordon for the performance
of all its obligations as a Placee in respect of the Placing (regardless of
the fact that it is acting for another person);
13. it and any person acting on its behalf is entitled to subscribe for the
Placing Shares under the laws and regulations of all relevant jurisdictions
that apply to it and that it has fully observed such laws and regulations,
has capacity and authority and is entitled to enter into and perform its
obligations as a subscriber of Placing Shares and will honour such
obligations, and has obtained all such governmental and other guarantees,
permits, authorisations, approvals and consents which may be required
thereunder and complied with all necessary formalities 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 and that it has not taken any action or omitted to
take any action which will or may result in Panmure Gordon, the Company or
any of their respective directors, officers, agents, employees or advisers
acting in breach of the legal or regulatory requirements of any
jurisdiction in connection with the Placing;
14. it irrevocably appoints any duly authorised officer of Panmure Gordon as
its agent for the purpose of executing and delivering to the Company and/or
its registrars any documents on its behalf necessary to enable it to be
registered as the holder of any of the Placing Shares for which it agrees
to subscribe for upon the terms of this Announcement;
15. the Placing Shares:
1. have not been and will not be registered or otherwise qualified and
that a prospectus will not be cleared in respect of any of the Placing
Shares under the securities laws or legislation of the United States,
Australia, Canada, Japan, New Zealand or the Republic of South Africa,
or any state, province, territory or jurisdiction thereof;
2. may not be offered, sold, or delivered or transferred, directly or
indirectly, in or into the above jurisdictions or any jurisdiction
(subject to certain exceptions) in which it would be unlawful to do so
and no action has been or will be taken by any of the Company, Panmure
Gordonor any person acting on behalf of the Company or Panmure Gordon
that would, or is intended to, permit a public offer of the Placing
Shares in the United States, Australia, Canada, Japan, New Zealand or
the Republic of South Africa or any country or jurisdiction, or any
state, province, territory or jurisdiction thereof, where any such
action for that purpose is required;
16. unless otherwise specifically agreed with Panmure Gordon, it is not and at
the time the Placing Shares are subscribed for, neither it nor the
beneficial owner of the Placing Shares will be, a resident of, nor have an
address in, Australia, Japan, New Zealand, the Republic of South Africa or
any province or territory of Canada;
17. it may be asked to disclose in writing or orally to Panmure Gordon:
18. if he or she is an individual, his or her nationality; or
19. if he or she is a discretionary fund manager, the jurisdiction in which the
funds are managed or owned;
20. it, and any prospective beneficial owner for whose account or benefit it is
purchasing the Placing Shares: (i) is not a US Person (as defined in
Regulation S) and is, and at the time the Placing Shares are subscribed for
will be, located outside the United States and is acquiring the Placing
Shares in an "offshore transaction" as defined in, and in accordance with,
Regulation S; (ii) is aware of the restrictions on the offer and sale of
the Placing Shares pursuant to Regulation S, including that Rule 904 of
Regulation S regarding "Offshore Resales" is not applicable to "affiliates"
(as defined in Rule 405 under the Securities Act) of the Company; and (iii)
has not been offered to purchase or subscribe for Placing Shares by means
of any "directed selling efforts" as defined in Regulation S;
21. it understands that the Placing Shares have not been, and will not be,
registered under the US Securities Act and may not be offered, sold or
resold in or into or from the United States or to, or for the account or
benefit of, US Persons (as defined in Regulation S) except pursuant to an
effective registration under the US Securities Act, or pursuant to an
exemption from the registration requirements of the US Securities Act and
in accordance with applicable state securities laws;
22. it will not distribute, forward, transfer or otherwise transmit this
Announcement or any part of it, or any other presentational or other
materials concerning the Placing in or into or from the United States,
Australia, Canada, Japan, New Zealand or the Republic of South Africa
(including electronic copies thereof) to any person, and it has not
distributed, forwarded, transferred or otherwise transmitted any such
materials to any such person;
23. if it is in:
1. a member state of the EEA, unless otherwise specifically agreed with
Panmure Gordon in writing, it is a Qualified Investor (as defined in
Article 2.1(e) of the ; or;
2. the United Kingdom, it is a Qualified Investor and is a person who
falls within (i) Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005, as amended (the "Order")
(having professional experience in matters relating to investments who
falls within the definition of "investment professionals") or (ii)
Article 49(2)(a) to (d) of the Order ("high net worth companies,
unincorporated associations, etc.");
24. it has not offered or sold, and will not offer or sell, any Placing Shares
to persons;
1. in the EEA except to Qualified Investors 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 EEA within the meaning of the
Prospectus Directive;
2. 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, as amended ("FSMA");
25. if a financial intermediary, as that term is used in Article 3(2) of the
Prospectus Directive,:
1. the Placing Shares subscribed for by it in the Placing will not be
acquired on behalf of, nor have they been acquired with a view to their
offer or resale to, persons in any Relevant Member State other than
Qualified Investors or in circumstances in which the prior consent of
Panmure Gordon has been given to the offer or resale;
2. where Placing Shares will be acquired by it on behalf of persons in any
Relevant Member State other than Qualified Investors, the offer of
those Placing Shares to it will not be treated under the Prospectus
Directive as having been made to such persons;
26. 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 FSMA)
relating to the Placing Shares in circumstances in which section 21(1) of
FSMA does not require approval of the communication by an authorised person
and it acknowledges and agrees that the Placing Announcements have not and
will not have been approved by Panmure Gordonin its capacity as an
authorised person under section 21 of the FSMA and it may not therefore be
subject to the controls which would apply if it was made or approved as a
financial promotion by an authorised person;
27. it has complied and will comply with all applicable laws with respect to
anything done y it or on its behalf in relation to the Placing Shares
(including all applicable provisions in FSMA and Regulation (EU) No. 596/
2014 of the European Parliament and of the Council of 16 April 2014 on
market abuse ("MAR")) in respect of anything done in, from or otherwise
involving, the United Kingdom). In particular, if it has received any
'inside information' (for the purposes of MAR or the Criminal Justice Act
1993) in relation to the Company and its securities in advance of the
Placing, it confirms that it has received such information within the
market soundings regime provided for in article 11 of MAR and associated
delegated regulations and it has not:
28. dealt with securities of the Company;
29. encouraged or required another person to deal in the securities of the
Company; or
30. disclosed such information to any person, prior to the information being
made publicly available;
31. it has complied with its obligations in connection with money laundering
and terrorist financing under the Proceeds of Crime Act 2002 (as amended),
the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering,
Terrorist Financing and Transfer of Funds (Information on the Payer)
Regulations 2017 and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any government agency
having jurisdiction in respect thereof (the "Regulations") and the Money
Laundering Sourcebook of the FCA 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;
32. in order to ensure compliance with the Regulations, Panmure Gordon (for
itself and as agent on behalf of the Company) or the Company's registrars
may, in their absolute discretion, require verification of its identity.
Pending the provision to Panmure Gordon or the Company's registrars, as
applicable, of evidence of identity, definitive certificates in respect of
the Placing Shares may be retained at Panmure Gordon absolute discretion
or, where appropriate, delivery of the Placing Shares to it in
uncertificated form may be delayed at Panmure Gordon's or the Company's
registrars', as the case may be, absolute discretion. If within a
reasonable time after a request for verification of identify Panmure Gordon
(for itself and as agent on behalf of the Company) or the Company's
registrars have not received evidence satisfactory to them, either Panmure
Gordon and/or the Company may, at their absolute discretion, terminate a
Placee's commitment in respect of the Placing, in which event the monies
payable on acceptance of allotment will, if already paid, be returned
without interest to the account of the drawee's bank from which they were
originally debited;
33. (i) the allocation, allotment, issue and delivery to it, or the person
specified by it for registration as holder, of Placing Shares will not give
rise to a stamp duty or stamp duty reserve tax liability under (or at a
rate determined 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 issue or transfer Placing Shares into a clearance
service; (ii) the person whom it specifies for registration as holder of
the Placing Shares will be: (a) itself; or (b) its nominee, as the case may
be; and (iii) it agrees that none of Panmure Gordon nor the Company will be
responsible for any liability to stamp duty or stamp duty reserve tax or
other similar taxes or duties imposed in any jurisdiction (including
interest and penalties relating thereto) for its failure to comply with
this provision ("Indemnified Taxes") and each Placee and any person acting
on behalf of such Placee agrees to indemnify the Company and Panmure Gordon
on an after-tax basis in respect of any Indemnified Taxes;
34. it (and any person acting on its behalf) has the funds available to pay for
the Placing Shares for which it has agreed to subscribe and acknowledges
and agrees that it will make payment in respect of 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 Panmure Gordonmay in its sole
discretion determine and without liability to such Placee, who will remain
liable for any amount by which the net proceeds of such sale falls short of
the product of the relevant Placing Price and the number of Placing Shares
allocated to it and will be required to bear any stamp duty, stamp duty
reserve tax or other taxes or duties (together with any interest, fines or
penalties) imposed in any jurisdiction which may arise upon the sale of
such Placee's Placing Shares;
35. any money held in an account with Panmure Gordon on behalf of the Placee
and/or any person acting 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 relevant rules and regulations of the FCA made under the
FSMA. Each 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 Panmure Gordon's money in accordance with
the client money rules and will be held by it under a banking relationship
and not as trustee;
36. the rights and remedies of the Company and Panmure Gordon under the terms
and conditions in this Announcement are in addition to any rights and
remedies which would otherwise be available to each of them and the
exercise or partial exercise of one will not prevent the exercise of
others;
37. these terms and conditions of the Placing and any agreements entered into
by it pursuant to the terms and conditions of the Placing, and all
non-contractual or other obligations arising out of or in connection with
them, shall be governed by and construed in accordance with the laws of
England 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 (including any dispute regarding the existence, validity or
termination of such contract or relating to any non-contractual or other
obligation arising out of or in connection with 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 either the Company or Panmure Gordonin any jurisdiction in which
the relevant Placee is incorporated or in which any of its securities have
a quotation on a recognised stock exchange; and
38. it agrees to indemnify on an after tax basis and hold the Company, Panmure
Gordon and their respective affiliates, agents, directors, officers and
employees 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 given by the Placee (and any person acting on such
Placee's behalf) in this Announcement or incurred by Panmure Gordon, the
Company or each of their respective affiliates, agents, directors, officers
or employees arising from the performance of the Placees' obligations as
set out in this Announcement, and further agrees that the provisions of
this Announcement shall survive after completion of the Placing.
The foregoing representations, warranties, confirmations, acknowledgements,
agreements and undertakings are given for the benefit of the Company as well as
Panmure Gordon and are irrevocable. Panmure Gordon, the Company and their
respective affiliates and others will rely upon the truth and accuracy of the
foregoing representations, warranties, confirmations, acknowledgements,
agreements and undertakings. Each prospective Placee, and any person acting on
behalf of such Placee, irrevocably authorises the Company and Panmure Gordon to
produce this Announcement, pursuant to, in connection with, or as may be
required by any applicable law or regulation, administrative or legal
proceeding or official inquiry with respect to the matters set forth herein.
Taxation
The agreement to allot and issue Placing Shares to Placees (or the persons for
whom Placees are contracting as agent) free of stamp duty and stamp duty
reserve tax in the UK relates only to their allotment and issue to Placees, or
such persons as they nominate as their agents, directly by the Company. 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 were any such arrangements,
or the settlement related to other dealings in the Placing Shares, stamp duty
or stamp duty reserve tax may be payable, for which neither the Company nor
Panmure Gordon would be responsible. If this is the case, it would be sensible
for Placees to take their own advice and they should notify Panmure Gordon
accordingly. Places should note that the Company and Panmure Gordon are not
liable to bear any taxes that arise on a sale of Placing Shares subsequent to
their acquisition by Placees. In addition, Placees should also note that they
will be liable for any capital duty, 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 acquisition by them of any Placing
Shares or the agreement by them to subscribe for any Placing Shares and each
Placee, or the Placee's nominee, in respect 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 non-UK stamp, registration, documentary, transfer or similar taxes or
duties undertakes to pay such taxes and duties, including any interest and
penalties (if applicable), forthwith and to indemnify on an after-tax basis and
to hold harmless the Company and Panmure Gordon in the event that either the
Company and/or Panmure Gordon have incurred any such liability to such taxes or
duties.
Information to Distributors
Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II; and (c) local implementing measures
(together, the "MiFID II Product Governance Requirements"), and disclaiming all
and any liability, whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the Placing Shares have
been subject to a product approval process, which has determined that the
Placing Shares are: (i) compatible with an end target market of retail
investors and investors who meet the criteria of professional clients and
eligible counterparties, each as defined in MiFID II; and (ii) eligible for
distribution through all distribution channels as are permitted by MiFID II
(the "Target Market Assessment").
Notwithstanding the Target Market Assessment, Distributors should note that:
the price of the Placing Shares may decline and investors could lose all or
part of their investment; Placing Shares offer no guaranteed income and no
capital protection; and an investment in Placing Shares is compatible only with
investors who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or other adviser)
are capable of evaluating the merits and risks of such an investment and who
have sufficient resources to be able to bear any losses that may result
therefrom. The Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling restrictions in
relation to the Placing. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, Panmure Gordon will only procure investors who meet
the criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute:
(a) an assessment of suitability or appropriateness for the purposes of MiFID
II; or (b) a recommendation to any investor or Company of investors to invest
in, or purchase, or take any other action whatsoever with respect to Placing
Shares.
Each distributor is responsible for undertaking its own target market
assessment in respect of the Placing Shares and determining appropriate
distribution channels.
END
(END) Dow Jones Newswires
August 31, 2018 02:00 ET (06:00 GMT)
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