TIDMTNI
RNS Number : 6667D
Trinity Mirror PLC
28 October 2015
THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE INFORMATION
CONTAINED HEREIN IS RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR
ANY OTHER JURISDICTION IN WHICH RELEASE, PUBLICATION OR
DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICE AT
THE END OF THIS ANNOUNCEMENT.
28 October 2015
Trinity Mirror plc
Placing to raise approximately GBP35.4 million
Trinity Mirror plc ("Trinity Mirror" or the "Company" and,
together with its subsidiaries, the "Group") today announces a
placing of 22,398,041 new ordinary shares to raise approximately
GBP35.4 million (before expenses) (the "Placing").
The Company has also announced today, in a separate
announcement, that it has entered into a conditional agreement to
acquire all of the shares in Local World Holdings Limited ("Local
World" and, together with the Group, the "Enlarged Group") not
already owned by the company (the "Acquisition"). Local World is of
sufficient size relative to Trinity Mirror to constitute a Class 1
transaction under the Listing Rules of the Financial Conduct
Authority and the Acquisition is therefore both subject to and
conditional upon the approval of Trinity Mirror's shareholders. The
Acquisition is also conditional upon completion of the Placing.
Transaction highlights
The Board believes that the Acquisition will:
-- Transform Trinity Mirror into the UK's largest regional news publisher;
-- Create a stronger and more resilient organisation enabling
the Group to accelerate its strategic transformation;
-- Further enhance Trinity Mirror's digital reach. The Enlarged
Group's digital portfolio would comprise a network of publishing
websites delivering 120 million monthly unique browsers and 790
million monthly page views; and
-- Deliver cost synergies - c. GBP10 million to GBP12 million in
the second full year of ownership.
The Board expects the Acquisition to be earnings-enhancing in
the first full year following the Acquisition.
About Local World
Local World is one of the largest regional news publishers in
the UK and was established at the end of 2012 through the
acquisition of the regional publishing assets of Northcliffe Media
Limited and Iliffe News & Media Limited.
Local World's print portfolio:
-- Comprises 83 print publications: 16 daily print titles, 2
Metro franchises, 36 paid weekly titles and 29 free weekly
titles;
-- Has its main footprint in the South West and Wales, London
and the South East, and the Midlands and the North; and
-- Includes 7 of the top 20 regional paid daily titles (by circulation) in England and Wales
Local World's digital portfolio attracts a growing digital
audience with 24 million monthly unique browsers and approximately
167 million monthly page views at June 2015.
Local World generated revenue and Adjusted Operating Profit* of
GBP221 million and GBP39 million in 2014.
*Adjusted Operating Profit means operating profit excluding
non-recurring items, restructuring charges in respect of cost
reduction measures, pension administrative expenses and the
amortisation of intangible assets.
Use of Proceeds
Under the Acquisition, the consideration for the Local World
Shares to be acquired by Trinity Mirror will be payable as a
combination of cash and Consideration Shares issued to the Sellers.
Trinity Mirror will fund the total consideration for the
Acquisition, including related transaction costs of the Company
by:
-- Utilising GBP67.3 million of existing cash resources;
-- Entering into a new GBP80 million five-year amortising debt facility;
-- Satisfying GBP5.3 million of the consideration through the
issue of 3,371,010 new ordinary shares, representing 1.3 per cent.
of Trinity Mirror's existing issued ordinary share capital; and
-- Undertaking a placing of 22,398,041 new ordinary shares,
representing 8.7 per cent. of Trinity Mirror's existing issued
ordinary share capital to raise net proceeds of GBP34.8
million.
Following the Acquisition, Trinity Mirror will continue to
benefit from strong cash generation providing financial flexibility
for ongoing investment, potential return of capital to shareholders
and continued support for Trinity Mirror's historic defined benefit
pension scheme liabilities.
The Placing is not conditional upon completion of the
Acquisition. Should the Acquisition not complete, the Board will
consider the appropriate application of the net proceeds of the
Placing, but it is anticipated that they may be used to support
Trinity Mirror's strategic objectives, to reduce net debt or for
general corporate purposes.
The Placing
The Placing will comprise an offering of 22,398,041 new ordinary
shares (the "Placing Shares") at a price of 158 pence per ordinary
share (the "Placing Price").
The Placing Price represents a discount of 1.6 per cent. to the
closing price of 160.5 pence per existing ordinary share on 27
October 2015.
The issue of the Placing Shares is to be effected by way of a
cashbox placing. The Company will allot and issue the Placing
Shares on a non pre-emptive basis to the Placees in consideration
for Numis transferring its holdings of ordinary shares and
redeemable preference shares in TM Finance (Jersey) Limited to the
Company. Accordingly, instead of receiving cash as consideration
for the issue of Placing Shares, at the conclusion of the Placing,
the Company will own the entire issued share capital of TM Finance
(Jersey) Limited, whose only asset will be its cash reserves
representing an amount approximately equal to the net proceeds of
the Placing.
The Placing has been fully underwritten by Numis and Barclays,
who are acting as joint bookrunners in connection with the Placing,
subject to the conditions and termination rights set out in the
placing agreement entered into between the Company, Numis and
Barclays (the "Placing Agreement"). Further details of the Placing
Agreement and the terms and conditions of the Placing are set out
in Appendix I to this announcement.
Prospective investors should read Appendix II (which, along with
Appendix I forms part of this announcement, such announcement and
appendices, together being, the "Announcement") for a discussion of
certain factors that should be considered in connection with an
investment in the Placing Shares. Prospective investors should be
aware that an investment in the Company involves a degree of risk
and that, if certain of the risks described in this Announcement
occur, investors may find their investment materially adversely
affected. Accordingly, an investment in the Placing Shares is only
suitable for investors who are particularly knowledgeable in
investment matters and who are able to bear the loss of the whole
or part of their investment.
The Placing Shares, when issued, will be credited as fully paid
and will rank pari passu in all respects with the existing ordinary
shares of ten pence each in the capital of the Company, including
the right to receive all dividends and other distribution declared,
made or paid on or in respect of such ordinary shares after the
date of issue, save that the Placing Shares will not rank for the
2015 interim dividend previously announced by the Company. The
Company's total issued share capital following completion of the
Placing will consist of 280,088,561 ordinary shares of ten pence
each with one voting right per share.
Applications have been made to the Financial Conduct Authority
for the Placing Shares to be admitted to the premium listing
segment of the Official List of the UK Listing Authority (the
"Official List") and to the London Stock Exchange plc for the
Placing Shares to be admitted to trading on its main market for
listed securities (together, "Admission"). It is expected that
Admission will become effective at 8.00 a.m. on 30 October 2015 and
that dealings in the Placing Shares will commence at that time. The
Placing is conditional upon, amongst other things, Admission
becoming effective and upon the Placing Agreement not being
terminated in accordance with its terms.
This Announcement should be read in its entirety. In particular,
your attention is drawn to the "Important Notices" section of this
Announcement, to the detailed terms and conditions of the Placing
set out in Appendix I, and to the risk factors set out in Appendix
II. By choosing to participate in the Placing and by making an oral
and legally binding offer to acquire Placing Shares, investors will
be deemed to have read and understood this Announcement in its
entirety and to be making such offer on the terms and subject to
the conditions in it, and to be providing the representations,
warranties and acknowledgements contained Appendix I.
Aberforth Partnerson behalf of its clients has agreed to
participate as a placee in the Placing in respect of up to
4,400,000 new ordinary shares for a total consideration of GBP7.0
million. Aberforth Partners is a related party of the Company for
the purposes of the Listing Rules by virtue of their clients
holding in excess of 10 per cent. of the Company's issued share
capital. The entry into the Placing of Aberforth Partners on behalf
of its clients in respect of its placing commitment constitutes a
smaller related party transaction for the purposes of 11.1.10R of
the Listing Rules.
(MORE TO FOLLOW) Dow Jones Newswires
October 28, 2015 03:01 ET (07:01 GMT)
The Company has received notifications from several of the
directors of their intention to subscribe for new ordinary shares
up to the amounts set out below:
Director Interest Aggregate Number of Interest Resulting holding
in Ordinary value of Ordinary in Ordinary of Ordinary
Shares Ordinary Shares to Shares following Shares as %
Shares to be acquired the Placing of enlarged
be acquired issued share
(GBP) capital
--------------- ------------- ------------- ------------- ------------------ ------------------
David
Grigson 200,000 31,600 20,000 220,000 0.1%
--------------- ------------- ------------- ------------- ------------------ ------------------
Simon
Fox 62,659 39,500 25,000 87,659 <0.1%
--------------- ------------- ------------- ------------- ------------------ ------------------
Vijay
Vaghela 502,873 39,500 25,000 527,873 0.2%
--------------- ------------- ------------- ------------- ------------------ ------------------
Jane Lighting 34,800 0 0 34,800 <0.1%
--------------- ------------- ------------- ------------- ------------------ ------------------
Lee Ginsberg 0 15,800 10,000 10,000 <0.1%
--------------- ------------- ------------- ------------- ------------------ ------------------
David
Kelly 0 15,800 10,000 10,000 <0.1%
--------------- ------------- ------------- ------------- ------------------ ------------------
Helen
Stevenson 10,000 39,500 25,000 35,000 <0.1%
--------------- ------------- ------------- ------------- ------------------ ------------------
Enquiries:
Trinity Mirror plc
Simon Fox, Chief Executive
Vijay Vaghela, Group Finance Director 020 7293 3553
Numis
Financial Adviser, Sponsor, Joint Bookrunner
and Corporate Broker
Nick Westlake, Lorna Tilbian, Mark Lander, Michael
Wharton 020 7260 1000
Barclays
Joint Bookrunner and Corporate Broker
Nicola Tennent, Stuart Jempson 020 3134 9801
IMPORTANT NOTICES
This Announcement (including the Appendices) has been issued by,
and is the sole responsibility of, the Company.
This Announcement is for information only and does not
constitute an offer or invitation to underwrite, subscribe for or
otherwise acquire or dispose of any securities or investment advice
in any jurisdiction in which such an offer or solicitation is
unlawful. Any failure to comply with these restrictions may
constitute a violation of the securities laws of such
jurisdictions. No prospectus will be made available in connection
with the matters contained in this Announcement and no such
prospectus is required (in accordance with the Prospectus Directive
(as defined below)) to be published. Persons needing advice should
consult an independent financial adviser.
The distribution of this Announcement and the Placing of the
Placing Shares as set out in this Announcement in certain
jurisdictions may be restricted by law. No action has been taken
that would permit an offering of such shares or possession or
distribution of this Announcement or any other offering or
publicity material relating to such shares in any jurisdiction
where action for that purpose is required. Persons into whose
possession this Announcement comes are required to inform
themselves about, and to observe, such restrictions. Any failure to
comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction.
This communication does not constitute an offer of securities to
the public in the United States, the United Kingdom or in any other
jurisdiction. There will be no public offer of securities in the
United States, United Kingdom or in any other jurisdiction. This
communication is directed only at persons: (a) persons in member
states of the European Economic Area ("EEA") who are qualified
investors within the meaning of article 2(1)(e) of EU Directive
2003/71/EC and amendments thereto (the "Prospectus Directive")
("Qualified Investors") and (b) if in the United Kingdom, persons
who (i) have professional experience in matters relating to
investments who fall within the definition of "investment
professionals" in article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005, as amended (the
"Order"), or are high net worth companies, unincorporated
associations or partnerships or trustees of high value trusts as
described in article 49(2) of the Order and (ii) are "qualified
investors" as defined in section 86 of the Financial Services and
Markets Act 2000 ("FSMA") and (c) otherwise, to persons to whom it
may otherwise be lawful to communicate it to (all such persons
together being referred to as "relevant persons"). Any investment
activity in connection with the Placing will only be available to,
and will only be engaged with, relevant persons. Any person who is
not a relevant person should not act or rely on this document or
any of its contents.
This Announcement does not constitute an offer of securities for
sale, or the solicitation or invitation of any offer to buy or
subscribe for or underwrite or otherwise acquire securities in the
United States or any other jurisdiction in which such offer or
solicitation is unlawful. The securities described herein have not
been and will not be registered under the U.S. Securities Act of
1933, as amended (the "Securities Act") or the under the securities
laws of any state or other jurisdiction of the United States, and
may not be offered, sold or otherwise transferred in or into the
United States except in reliance on an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act. The Placing Shares have not been approved or
disapproved by the US Securities and Exchange Commission, any state
securities commission or any US regulatory authority, nor have such
authorities reviewed or passed upon the adequacy or accuracy of
this Announcement. Any representation to the contrary is a criminal
offence in the United States. No public offering of securities by
the Company is being, or will be, made within the United
States.
This Announcement contains (or may contain) statements that are,
or may be deemed to be, "forward-looking statements".
Forward-looking statements are based on current expectations and
projections about future events and other matters that are not
historical fact. These forward-looking statements are sometimes
identified by the use of a date in the future or forward-looking
terminology, including, but not limited to, the words "aim",
"anticipate", "believe", "intend", "plan", "estimate", "expect",
"may", "target", "project", "will", "could" or "should" or, in each
case, their negative or other variations or words of similar
meaning. These forward-looking statements include matters that are
not historical facts and include statements that reflect the
Directors' intentions, beliefs and current expectations. By their
nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may
or may not occur in the future or are beyond Trinity Mirror's
control. They are not guarantees of future performance and are
based on one or more assumptions.
Forward-looking statements appear in a number of places
throughout this Announcement and include statements regarding the
intentions, beliefs or current expectations of Trinity Mirror
concerning, without limitation: current and future years' outlook;
revenue and revenue trends; EBITDA; capital expenditure;
shareholder returns including progressive dividends; net debt;
credit ratings; Trinity Mirror's investment in print and digital
media; enhancing Trinity Mirror's portfolio of print and digital
businesses; the performance and growth of, and opportunities
available in, regional print and digital media and Trinity Mirror's
positioning to take advantage of those opportunities; expectations
regarding competition, market shares, prices and growth; Trinity
Mirror's possible or assumed future results of operations and/or
those of its associates and joint ventures; investment plans;
anticipated financial and other benefits and synergies resulting
from the Acquisition, including revenue, operating cost and capital
expenditure synergies; and Trinity Mirror's plans and objectives
following the Acquisition.
(MORE TO FOLLOW) Dow Jones Newswires
October 28, 2015 03:01 ET (07:01 GMT)
Statements contained in this Announcement regarding past trends
or activities should not be taken as a representation that such
trends or activities will continue in the future. Any
forward-looking statements in this Announcement reflect Trinity
Mirror's view with respect to future events as at the date of this
Announcement and are subject to risks relating to future events and
other risks, uncertainties and assumptions relating to the
conditions to the Acquisition being satisfied, increased leverage
as a result of the Acquisition, Trinity Mirror's ability to
integrate the businesses and retention of key personnel, the
successful realisation of the anticipated synergies and strategic
benefits and an adequate return on its investment from the
Acquisition, consumer behaviour, maintenance of Local World's
performance and momentum in its business throughout integration and
Trinity Mirror's operations, result of operations, financial
condition, growth, strategy, the industry in which Trinity Mirror
operates, and the other risk factors highlighted in this
Announcement. No assurances can be given that the forward-looking
statements in this Announcement will be realised. Trinity Mirror's
actual performance, results of operations, internal rate of return,
financial condition, distributions to shareholders, the development
of its financing strategies and the results or eventual success of
the Acquisition may differ materially from the impression created
by the forward-looking statements contained in this Announcement.
In addition, even if Trinity Mirror's actual performance, results
of operations, financial condition, distributions to Shareholders
and results of the Acquisition are consistent with the
forward-looking statements contained in this Announcement, those
results or developments may not be indicative of results or
developments in subsequent periods.
Forward-looking statements contained in this Announcement apply
only as at the date of this Announcement. Subject to any
obligations under the Listing Rules and the Disclosure Rules and
Transparency Rules or any other applicable law or regulation,
Trinity Mirror undertakes no obligation publicly to update or
review any forward-looking statement, whether as a result of new
information, future developments or otherwise.
Numis Securities Limited ("Numis"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
is acting exclusively as sole sponsor, financial adviser and joint
bookrunner to the Company and no one else in connection with the
Acquisition and the Placing and will not regard any other person
(whether or not a recipient of this Announcement) as a client in
relation to the Acquisition and will not be responsible to anyone
other than the Company for providing the protections afforded to
its clients or for providing advice in relation to the Acquisition,
the Placing and/or any other transaction or arrangement referred to
or contained in this Announcement.
Barclays Bank PLC, acting through its investment bank
("Barclays"), which is authorised by the Prudential Regulation
Authority and regulated in the United Kingdom by the Financial
Conduct Authority and the Prudential Regulation Authority, is
acting exclusively as joint bookrunner for the Company and no one
else in connection with the Placing and will not regard any other
person (whether or not a recipient of this Announcement) as a
client in relation to the Placing and will not be responsible to
anyone other than the Company for providing the protections
afforded to its clients, or for providing advice in relation to the
Placing or any other transaction or arrangement referred to in this
Announcement.
Apart from the responsibilities and liabilities, if any, which
may be imposed on Numis or Barclays by FSMA or the regulatory
regime established thereunder, or any other applicable regulatory
regime, neither Numis nor Barclays nor any of their respective
affiliates accept any responsibility or liability whatsoever for,
and make no representation or warranty, express or implied in
relation to, the contents of this Announcement, including its
accuracy, fairness, completeness or verification, or for any other
statement made or purported to be made by it, or on its behalf, in
connection with the Company, the Placing, the Acquisition, the
Ordinary Shares, the Placing Shares or the Consideration Shares.
Each of Numis, Barclays and their respective affiliates accordingly
disclaims any and all responsibility or liability whatsoever,
whether arising in tort, contract or otherwise (save as referred to
above), in respect of this Announcement or any such statement or
otherwise.
Any indication in this Announcement of the price at which
Placing Shares have been bought or sold in the past cannot be
relied upon as a guide to future performance. No statement in this
Announcement is intended to be a profit forecast, and no statement
in this Announcement should be interpreted to mean that earnings
per share of the Company for the current or future financial years
would necessarily match or exceed the historical published earnings
per share of the Company. The price of shares and any income
expected from them may go down as well as up, and upon disposal of
the shares investors may not get back the full amount invested.
Past performance is no guide to future performance, and persons
needing advice should consult an independent financial adviser.
The Placing Shares to be issued or sold pursuant to the Placing
will not be admitted to trading on any stock exchange other than
the London Stock Exchange.
Neither the content of the Company's website (or any other
website) nor any website accessible by hyperlinks to the Company's
website is incorporated in, or forms part of, this
Announcement.
APPENDIX I: TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN
THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED
ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA
("EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE
2(1)(E) OF EU DIRECTIVE 2003/71/EC AND AMENDMENTS THERETO (THE
"PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS") AND (B) IF IN THE
UNITED KINGDOM, PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN
MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN THE DEFINITION OF
"INVESTMENT PROFESSIONALS" IN ARTICLE 19(5) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS
AMENDED (THE "ORDER"), OR ARE HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS OR PARTNERSHIPS OR TRUSTEES OF HIGH
VALUE TRUSTS AS DESCRIBED IN ARTICLE 49(2) OF THE ORDER AND (II)
ARE "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86 OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 ("FSMA") AND (C) OTHERWISE, TO
PERSONS TO WHOM IT MAY OTHERWISE BE LAWFUL TO COMMUNICATE IT TO
(EACH A "RELEVANT PERSON"). NO OTHER PERSON SHOULD ACT OR RELY ON
THIS ANNOUNCEMENT AND PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST
SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. BY ACCEPTING THE
TERMS OF THIS ANNOUNCEMENT YOU REPRESENT AND AGREE THAT YOU ARE A
RELEVANT PERSON. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT
HEREIN 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 APPENDIX AND THE TERMS AND
CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT
PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS
APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OR ACQUISITION OF ANY SECURITIES IN THE COMPANY.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER THE APPLICABLE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED,
SOLD, TAKEN UP, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR
INDIRECTLY WITHIN, INTO OR IN THE UNITED STATES, EXCEPT PURSUANT TO
AN APPLICABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
COMPLIANCE WITH THE SECURITIES LAWS OF ANY RELEVANT STATE OR OTHER
JURISDICTION OF THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER OF
THE PLACING SHARES IN THE UNITED STATES.
EACH PLACEE SHOULD CONSULT ITS OWN ADVISERS AS TO LEGAL, TAX,
BUSINESS, FINANCIAL AND RELATED ASPECTS OF ACQUIRING THE PLACING
SHARES.
Persons who are invited to and who choose to participate in the
placing of 22,398,041 new ordinary shares (the "Placing") in the
capital of Trinity Mirror plc (the "Company") of nominal value of
10 pence each (the "Placing Shares"), by making an oral or written
offer to take up Placing Shares, including any individuals, funds
or others on whose behalf a commitment to take up Placing Shares is
given ("Placees"), will be deemed to have read and understood this
Announcement, including this Appendix, in its entirety and to be
making such offer on the terms and conditions, and to be providing
the representations, warranties, acknowledgements and undertakings,
contained in this Appendix. In particular each such Placee
represents, warrants and acknowledges that:
1. it is a Relevant Person (as defined above) and undertakes
that it will take up, hold, manage or dispose of any Placing Shares
that are allocated to it for the purposes of its business; and
(MORE TO FOLLOW) Dow Jones Newswires
October 28, 2015 03:01 ET (07:01 GMT)
2. if it is in a member state of the EEA and/or if it is a
financial intermediary, as that term is used in Article 3(2) of the
Prospectus Directive, that any Placing Shares taken up by it in the
Placing will not be taken up on a non-discretionary basis on behalf
of, nor will they be taken up with a view to their offer or resale
to, persons in any member state of the EEA in circumstances which
may give rise to an offer of securities to the public other than an
offer or resale in a member state of the EEA which has implemented
the Prospectus Directive to Qualified Investors (as defined above),
or in circumstances in which the prior consent of Numis Securities
Limited ("Numis") and Barclays Bank PLC ("Barclays") has been given
to each such proposed offer or resale.
Neither Numis nor Barclays makes any representation to any
Placees regarding an investment in the Placing Shares.
Details of the Placing Agreement and of the Placing Shares
Numis and Barclays (together, the "Joint Bookrunners") and the
Company have today entered into a placing agreement (the "Placing
Agreement") under which, on the terms and subject to the conditions
set out therein, each of the Joint Bookrunners has agreed, as agent
for and on behalf of the Company, to use its reasonable endeavours
to procure Placees for the Placing Shares at the Placing Price (as
defined below), failing which to itself take up the Placing Shares
at the Placing Price.
Pursuant to the Placing Agreement, each Joint Bookrunner has
agreed to underwrite the settlement risk in the event that any
Placees procured by it fail to take up their allocation of the
Placing Shares.
The Placing Shares will, when issued, be credited as fully paid
and will rank pari passu in all respects with the existing ordinary
shares of 10 pence each in the capital of the Company (the
"Ordinary Shares"), including the right to receive all dividends
and other distributions declared, made or paid in respect of the
Ordinary Shares after the date of Admission (as defined below),
save in respect of the interim dividend of 2 pence per Ordinary
Share for the 52 weeks ending 29 December 2015 to be paid on 30
November 2015.
The issue of the Placing Shares is to be effected by way of a
cashbox placing. The Company will allot and issue the Placing
Shares on a non-pre-emptive basis to the Placees in consideration
for Numis transferring to the Company its holdings of redeemable
preference shares and ordinary shares in a Jersey-incorporated
special purpose vehicle. Accordingly, instead of receiving cash as
consideration for the issue of Placing Shares, at the conclusion of
the Placing, the Company will own all of the issued ordinary shares
and redeemable preference shares of the Jersey-incorporated special
purpose vehicle, whose only asset will be its cash reserves, which
will represent an amount approximately equal to the net proceeds of
the Placing.
The Company intends to use the net proceeds of the Placing to
part fund the consideration payable in connection with its proposed
acquisition of the shares in Local World Holdings Limited not
already owned by it (the "Acquisition").
Applications for listing and admission to trading
Applications have been made to the Financial Conduct Authority
("FCA") for admission of the Placing Shares to the premium listing
segment of the Official List of the UK Listing Authority (the
"Official List") and to the London Stock Exchange plc (the "London
Stock Exchange") for admission of the Placing Shares to trading on
its main market for listed securities (together, "Admission"). It
is expected that Admission will become effective on or around 8.00
a.m. on 30 October 2015 and that dealings in the Placing Shares
will commence at that time.
The Placing Price
A single price of 158 pence per Placing Share (the "Placing
Price") will be payable by all Placees, representing a 1.6 per
cent. discount to the closing price of 160.5 pence per Ordinary
Shares on 27 October (the last business day before the announcement
of the Placing). The Placing Price and the number of Placing Shares
to be issued in the Placing have been agreed by the Company and the
Joint Bookrunners, including the level of discount which was
determined as a result of the pre-marketing exercise with
prospective investors. The Placing Shares will represent
approximately 8.0 per cent. of the Company's issued ordinary share
capital following Admission.
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. Each of Numis and Barclays is acting as a bookrunner and
agent of the Company in connection with the Placing.
2. Participation in the Placing will only be available to
persons who may lawfully be, and are, invited to participate by the
Joint Bookrunners. The Joint Bookrunners and their respective
affiliates are entitled to participate in the Placing as
principal.
3. An offer to take up Placing Shares which has been
communicated by a prospective Placee to the Joint Bookrunners which
has not been withdrawn or revoked prior to publication of this
Announcement will not be capable of variation or revocation
following the publication of this Announcement.
4. Each prospective Placee's allocation will be agreed between
the Joint Bookrunners (in consultation with the Company) and will
be confirmed orally or in writing by any of the Joint Bookrunners
(as agent for the Company) following publication of this
Announcement and a trade confirmation will be despatched
thereafter. This oral or written confirmation to such prospective
Placee will constitute an irrevocable legally binding commitment
upon that person (who will at that point become a Placee) in favour
of the Joint Bookrunners and the Company to take up the number of
Placing Shares allocated to it at the Placing Price on the terms
and conditions set out in this Appendix and in accordance with the
Company's articles of association.
5. Each Placee will have an immediate, separate, irrevocable and
binding obligation, owed to the Joint Bookrunners, to pay in
cleared funds immediately on the settlement date, in accordance
with the registration and settlement requirements set out below, an
amount equal to the product of the Placing Price and the number of
Placing Shares such Placee has agreed to take up and the Company
has agreed to allot.
6. Each Placee's allocation and commitment will be evidenced by
a contract note issued to such Placee by one of the Joint
Bookrunners as soon as practicable following the relevant Joint
Bookrunner's oral or written confirmation of the relevant Placee's
allocation. The terms of this Appendix will be deemed incorporated
therein.
7. Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed following publication of this
Announcement, settlement for all Placing Shares to be taken up
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 Placing will be subject to
fulfilment of the conditions referred to below under "Conditions of
the Placing" and to the Placing not being terminated on the basis
referred to below under "Right to terminate under the Placing
Agreement".
9. By participating in the Placing, each Placee will agree that
its rights and obligations in respect of the Placing will terminate
only in the circumstances described below and will not be capable
of variation, rescission or termination by the Placee.
10. Except as required by law or regulation, no press release or
other announcement will be made by the Joint Bookrunners or the
Company using the name of any Placee (or its agent), in its
capacity as Placee (or agent), other than with such Placee's prior
written consent.
11. To the fullest extent permissible by law, neither of the
Joint Bookrunners nor any of their respective 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 particular, neither of the
Joint Bookrunners nor any of their respective affiliates, agents,
directors, officers or employees shall have any liability
(including to the fullest extent permissible by law, any fiduciary
duties) in respect of the conduct of the Placing or of such
alternative method of effecting the Placing as the Joint
Bookrunners and the Company may agree.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming
unconditional and not having been terminated in accordance with its
terms. The obligations of the Joint Bookrunners under the Placing
Agreement in respect of the Placing Shares are conditional on,
inter alia:
(a) the representations and warranties of the Company contained
in the Placing Agreement being true and accurate and not misleading
on and as of the date of the Placing Agreement and Admission by
reference to the facts and circumstances then subsisting;
(b) the Company complying in all respects which in the good
faith opinion of the Joint Bookrunners are material in the context
of the Placing with its obligations under the Placing Agreement to
the extent the same fall to be performed prior to Admission;
(c) the Company allotting, subject only to Admission, the
Placing Shares to the Placees in accordance with the Placing
Agreement; and
(d) Admission taking place by not later than 8.00 a.m. (London
time) on 30 October 2015 (the "Closing Date").
(MORE TO FOLLOW) Dow Jones Newswires
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If (i) any of the conditions contained in the Placing Agreement,
including those described above, are not fulfilled (or, where
permitted, waived or extended in writing by the Joint Bookrunners)
or become incapable of fulfilment on or before the date or time
specified for the fulfilment thereof (or such later date and/or
time as the Joint Bookrunners may agree); or (ii) the Placing
Agreement is terminated in the circumstances specified below, 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 the Placee in respect thereof. Any such extension or waiver
will not affect Placees' commitments as set out in this
Announcement.
Neither of the Joint Bookrunners 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
the 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 the Joint
Bookrunners.
Lock-up
The Company has undertaken that it will not, and will procure
that none of its subsidiaries will (save as required by law or the
rules or standards of the London Stock Exchange or the Listing
Rules), at any time between the date of the Placing Agreement and
the date which is 180 calendar days from the date of Admission
without the prior written consent of both Numis (in its capacity as
both sponsor and Joint Bookrunner) and Barclays (in its capacity as
Joint Bookrunner) (i) issue, allot, offer, pledge, sell, contract
to sell, grant any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase, lend or otherwise transfer or dispose of, directly or
indirectly, any Ordinary Shares or other shares in the capital of
the Company or any securities convertible into or exchangeable for
Ordinary Shares or other shares in the capital of the Company; or
(ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of
ownership of Ordinary Shares or other shares in the capital of the
Company, whether any such transaction described in (i) or (ii)
above is to be settled by delivery of Ordinary Shares or other
shares in the capital of the Company or such other securities, in
cash or otherwise, provided that the foregoing shall not prevent or
restrict the grant of options or share awards under, or the
allotment and issue of shares pursuant to options or share awards
under, any existing employee share schemes of the Company (in
accordance with its normal practice).
Right to terminate under the Placing Agreement
At any time before Admission, either Joint Bookrunner may, in
its absolute discretion (acting on behalf of itself and the other
Joint Bookrunner), by notice in writing given to the Company
terminate the Placing Agreement on behalf of all parties if, inter
alia, (i) any of the Company's warranties or representations
contained in the Placing Agreement when given or repeated are not
true and accurate or have become misleading by reference to the
facts and circumstances at such times; or (ii) the Company fails to
comply with any of its obligations under the Placing Agreement or
otherwise under the terms of the Placing; or (iii) in the opinion
of either Joint Bookrunner there has been any change or development
(whether or not foreseeable at the date of the Placing Agreement)
that would or would be reasonably likely to cause a change in or
affecting the condition (financial, operational or otherwise)
solvency, liquidity position or in the earnings, business affairs
or business prospects of the Company or the Company together with
its subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, the effect of which, in any case,
would be material and adverse; or (iv) the occurrence of a market
disruption event as specified in the Placing Agreement which, in
the good faith opinion of either Joint Bookrunner, makes it
impracticable or inadvisable to proceed with the Placing in the
manner contemplated in this Announcement or may adversely impact
dealings in the Placing Shares following Admission or is likely to
materially and adversely affect the price at which the Company's
ordinary shares are traded on the London Stock Exchange.
Upon such notice being given, the parties to the Placing
Agreement shall be released and discharged (except for any
liability 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, Placees agree that the exercise
by the Joint Bookrunners of any right of termination or other
discretion under the Placing Agreement shall be within their
absolute discretion and that they do not need to make any reference
to Placees and that the Joint Bookrunners shall not have any
liability to Placees whatsoever in connection with any such
exercise or failure so to exercise.
No Prospectus
No offering document or prospectus has been or will be submitted
to be approved by the FCA or submitted to the London Stock Exchange
in relation to the Placing and no such prospectus is required (in
accordance with the Prospectus Directive) to be published. Placees'
commitments will be made solely on the basis of the information
contained in this Announcement (including this Appendix) released
by the Company today and any information publicly announced to a
Regulatory Information Service ("RIS") by or on behalf of the
Company on or prior to the date of this Announcement and subject to
the further terms set forth in the contract note to be provided to
individual prospective Placees.
Each Placee, by accepting a participation in the Placing, agrees
that the content of this Announcement (including this Appendix) is
exclusively the responsibility of the Company and confirms that it
has neither received nor relied on any other information,
representation, warranty, or statement made by or on behalf of the
Company or either of the Joint Bookrunners or any other person and
none of the Company, either of the Joint Bookrunners or any of
their respective affiliates will be liable for any Placee's
decision to participate in the Placing based on any other
information, representation, warranty or statement which the
Placees may have obtained or received. 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. Nothing in this paragraph shall
exclude or limit the liability of any person for fraudulent
misrepresentation by that person.
Registration and settlement
Settlement of transactions in the Placing Shares following
Admission will take place within the system administered by
Euroclear UK & Ireland Limited ("CREST"), subject to certain
exceptions. The Joint Bookrunners and the Company reserve the right
to require settlement for and delivery of the Placing Shares (or a
portion thereof) to Placees in certificated form 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.
Each Placee allocated Placing Shares in the Placing will be sent
a contract note stating the number of Placing Shares to be
allocated to it at the Placing Price 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 that it has
in place with the Joint Bookrunners.
The Company will deliver the Placing Shares to a CREST account
operated by Numis as the Company's agent and Numis will enter its
delivery (DEL) 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 will be on 30 October 2015 on a
T+2 delivery basis in accordance with the instructions set out in
the contract note.
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 the Joint Bookrunners.
Each Placee is deemed to agree that, if it does not comply with
these obligations, Numis may sell any or all of the Placing Shares
allocated to that Placee on such Placee's behalf and retain from
the proceeds, for the Joint Bookrunners' 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 may be
required to bear any stamp duty or stamp duty reserve tax (together
with any interest, fines or penalties thereon) or other similar
taxes imposed in any jurisdiction which may arise upon the sale of
such Placing Shares on such Placee's behalf.
(MORE TO FOLLOW) Dow Jones Newswires
October 28, 2015 03:01 ET (07:01 GMT)
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the contract note is
copied and delivered immediately to the relevant person within that
organisation. Insofar as Placing Shares are registered in a
Placee's name or that of its nominee or in the name of any person
for whom a Placee is contracting as agent or that of a nominee for
such person, such Placing Shares should, subject as provided below,
be so registered free from any liability to UK stamp duty or stamp
duty reserve tax. Placees shall not be entitled to receive any fee
or commission in connection with the Placing.
Representations and warranties and further terms
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 each of the Joint Bookrunners (in its capacity as a bookrunner
and agent of the Company, in each case as a fundamental term of its
application for Placing Shares), the following:
(a) it has read and understood this Announcement, including this
Appendix, in its entirety and that its take up of Placing Shares is
subject to and based upon all the terms, conditions,
representations, warranties, acknowledgements, agreements and
undertakings and other information contained herein and undertakes
not to redistribute or duplicate this Announcement;
(b) that no offering document or prospectus has been or will be
prepared in connection with the Placing and it has not received and
will not receive a prospectus or other offering document in
connection with the Placing or the Placing Shares;
(c) that the Ordinary Shares are listed on the premium listing
segment of the Official List of the UK Listing Authority and
admitted to trading on the main market of the London Stock
Exchange, and that the Company is therefore required to publish
certain business and financial information in accordance with the
rules and practices of the FCA and that it is able to obtain or
access such information, or comparable information concerning any
other publicly traded company, in each case without undue
difficulty;
(d) that the Placing is not conditional on completion of the
Acquisition and although it is proposed to use the net proceeds of
the Placing to part fund the Acquisition, that the Acquisition is
dependent upon certain conditions being satisfied and that,
accordingly, none of the Company or either of the Joint Bookrunners
warrant or represent that the Acquisition will take place;
(e) that none of the Company, the Joint Bookrunners, any of
their respective affiliates, agents, directors, officers or
employees or any person acting on behalf of any of them has
provided, and none of them will provide, it with any material
regarding the Placing Shares or the Company or any other person
other than this Announcement, nor has it requested any of the Joint
Bookrunners, the Company, any of their respective affiliates or any
person acting on behalf of any of them to provide it with any such
information;
(f) unless otherwise specifically agreed with the Joint
Bookrunners, that it is not, and at the time the Placing Shares are
taken up by it, neither it nor the beneficial owner of the Placing
Shares will be, within or a resident of Australia, Canada, Japan,
South Africa or any other jurisdiction in which it is unlawful to
make or accept an offer to take up the Placing Shares and further
acknowledges that the Placing Shares have not been and will not be
registered under the securities laws of Australia, Canada, Japan or
South Africa and, subject to certain exceptions, may not be
offered, sold, transferred, delivered or distributed, directly or
indirectly, in or into those jurisdictions, and that it will not
offer or sell any Placing Shares into any of those
jurisdictions;
(g) that it either:
(i) (A) is not within the United States and will not be within
the United States at the time that any buy order for Placing Shares
is originated by it; (B) is acquiring the Placing Shares in an
"offshore transaction" as defined in Regulation S under the
Securities Act; and (C) is not acquiring any of the Placing Shares
as a result of any form of "directed selling efforts" (within the
meaning of Regulation S under the Securities Act); or
(ii) (A) is a "qualified institutional buyer" ("QIB") as defined
in Rule 144A under the Securities Act; (B) has signed and returned
to the Joint Bookrunners or their respective affiliates a US
investor letter in the form provided to it; and (C) is not
acquiring any of the Placing Shares as a result of any form of
"general solicitation" or "general advertising" (within the meaning
of Rule 502(c) under the Securities Act);
(h) that the Placing Shares have not been and will not be
registered under the Securities Act and that the Placing Shares are
being offered and sold only (i) to persons reasonably believed to
be QIBs in transactions exempt from the registration requirements
of the Securities Act; or (ii) in an "offshore transaction" within
the meaning of and in reliance on Regulation S under the Securities
Act, and that no representation has been made as to the
availability of any exemption under the Securities Act for the
reoffer, resale, pledge or transfer of the Placing Shares;
(i) that the content of this Announcement is exclusively the
responsibility of the Company and that neither of the Joint
Bookrunners nor any of their respective affiliates, agents,
directors, officers or employees or any person acting on behalf of
any of them has or shall have any liability for any information,
representation or statement contained in this Announcement or any
information previously or subsequently published by or on behalf of
the Company, including, without limitation, any information
required to be published by the Company pursuant to applicable laws
(the "Exchange Information") and will not be liable for any
Placee's decision to participate in the Placing based on any
information, representation or statement contained in this
Announcement or otherwise. Each Placee further represents, warrants
and agrees that the only information on which it is entitled to
rely and on which such Placee has relied in committing itself to
take up the Placing Shares is contained in this Announcement and
any information previously published by the Company by notification
to a RIS, such information being all that it deems necessary to
make an investment decision in respect of the Placing Shares and
that it has neither received nor relied on any other information
given or representations, warranties or statements made by either
of the Joint Bookrunners or the Company and neither of the Joint
Bookrunners nor the Company will be liable for any Placee's
decision to accept an invitation to participate in the Placing
based on any other information, representation, warranty or
statement. Each Placee further acknowledges and agrees that it has
relied on its own investigation of the business, financial or other
position of the Company in deciding to participate in the Placing.
None of the Company, the Joint Bookrunners or any of their
respective affiliates has made any representations to it, express
or implied, with respect to the Company, the Placing and the
Placing Shares or the accuracy, completeness or adequacy of the
Exchange Information, and each of them expressly disclaims any
liability in respect thereof. Nothing in this paragraph or
otherwise in this Announcement excludes the liability of any person
for fraudulent misrepresentation made by that person;
(j) that it has complied with its obligations under the Criminal
Justice Act 1993, section 118 of FSMA and in connection with money
laundering and terrorist financing under the Criminal Justice
(Money Laundering and Terrorist Financing) Acts 2010 and 2013 of
Ireland, the Proceeds of Crime Act 2002 (as amended), the Terrorism
Act 2000, the Terrorism Act 2006, the Money Laundering Regulations
2007 (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;
(k) that it is acting as principal only in respect of the
Placing or, if it is acting for any other person: (i) it is duly
authorised to do so and has full power to make the acknowledgments,
representations and agreements herein on behalf of each such
person; and (ii) it is and will remain liable to the Company and/or
the Joint Bookrunners 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);
(l) if a financial intermediary, as that term is used in Article
3(2) of the Prospectus Directive, that the Placing Shares taken up
by it in the Placing will not be taken up on a non-discretionary
basis on behalf of, nor will they be taken up with a view to their
offer or resale to, persons in a member state of the EEA other than
Qualified Investors, or in circumstances in which the prior consent
of the Joint Bookrunners has been given to the proposed offer or
resale;
(m) that it has not offered or sold and will not offer or sell
any Placing Shares to the public in any member state of the EEA
except in circumstances falling within Article 3(2) of the
Prospectus Directive which do not result in any requirement for the
publication of a prospectus pursuant to Article 3 of that
Directive;
(n) that it has only communicated or caused to be communicated
and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within
the meaning of section 21 of 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;
(MORE TO FOLLOW) Dow Jones Newswires
October 28, 2015 03:01 ET (07:01 GMT)
(o) that it has complied and will comply with all applicable
provisions of FSMA with respect to anything done by it in relation
to the Placing Shares in, from or otherwise involving, the United
Kingdom;
(p) if in a member state of the EEA, unless otherwise
specifically agreed with the Joint Bookrunners in writing, that it
is a Qualified Investor;
(q) if in the United Kingdom, that it is a person (i) having
professional experience in matters relating to investments and who
falls within the definition of "investment professionals" in
Article 19(5) of the Order; or (ii) who is a high net worth entity
falling within Article 49 of the Order; or (iii) to whom this
Announcement may otherwise lawfully be communicated;
(r) that no action has been or will be taken by either the
Company or any of the Joint Bookrunners or any person acting on
behalf of the Company or any of the Joint Bookrunners that would,
or is intended to, permit a public offer of the Placing Shares in
any country or jurisdiction where any such action for that purpose
is required;
(s) that it and any person acting on its behalf is entitled to
take up the Placing Shares under the laws of all relevant
jurisdictions which apply to it and that it has fully observed such
laws and obtained all such governmental and other guarantees,
permits, authorisations, approvals and consents which may be
required thereunder and complied with all necessary formalities and
that it has not taken any action or omitted to take any action
which will or may result in any of the Joint Bookrunners, 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;
(t) that it has all necessary capacity and has obtained all
necessary consents and authorities to enable it to commit to its
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;
(u) that it (and any person acting on its behalf) will make
payment for the Placing Shares allocated to it in accordance with
this Appendix on the due time and date set out herein, failing
which the relevant Placing Shares may be placed with other persons
or sold as the Joint Bookrunners may in their absolute discretion
determine and without liability to such Placee;
(v) that its commitment to take up Placing Shares on the terms
set out herein and in the contract note will continue
notwithstanding any amendment that may in future be made to the
terms of the Placing, and that Placees will have no right to be
consulted or require that their consent be obtained with respect to
the Company's or the Joint Bookrunners' conduct of the Placing;
(w) that its allocation (if any) of Placing Shares will
represent a maximum number of Placing Shares which it will be
entitled, and required, to take up, and that the Joint Bookrunners
or the Company may call upon it to take up a lower number of
Placing Shares (if any), but in no event in aggregate more than the
aforementioned maximum;
(x) that the person whom it specifies for registration as holder
of the Placing Shares will be (i) itself or (ii) its nominee, as
the case may be. None of the Company or any of the Joint
Bookrunners will be responsible for any liability to stamp duty or
stamp duty reserve tax or other similar taxes resulting from a
failure to observe this requirement. Each Placee and any person
acting on behalf of such Placee agrees to indemnify the Company and
each Joint Bookrunner in respect of the same on an after-tax basis
on the basis that the Placing Shares will be allotted to the CREST
stock account of Numis who will hold them as nominee on behalf of
such Placee until settlement in accordance with its standing
settlement instructions;
(y) that none of the Joint Bookrunners, any of their respective
affiliates or any person acting on behalf of any of them, is making
any recommendations to it or, advising it regarding the suitability
of any transactions it may enter into in connection with the
Placing and that participation in the Placing is on the basis that
it is not and will not be a client of any Joint Bookrunner and that
no Joint Bookrunner has any duties or responsibilities to it for
providing the protections afforded to such Joint Bookrunner's
respective 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;
(z) that in making any decision to take up the Placing Shares,
it has knowledge and experience in financial, business and
international investment matters as is required to evaluate the
merits and risks of taking up the Placing Shares. It further
confirms that it 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 participating in, and is
able to sustain a complete loss in connection with, the Placing. It
further confirms that it relied on its own examination and due
diligence of the Company and its associates taken as a whole, and
the terms of the Placing, including the merits and risks involved,
and not upon any view expressed or information provided by or on
behalf of any of the Joint Bookrunners;
(aa) that in connection with the Placing, a Joint Bookrunner and
any of its affiliates acting as an investor for its own account may
take up Placing Shares in the Company and in that capacity may take
up, retain, purchase or sell for its own account such Ordinary
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. None of
the Joint Bookrunners intends to disclose the extent of any such
investment or transactions otherwise than in accordance with any
legal or regulatory obligation to do so;
(bb) that its commitment to take up Placing Shares on the terms
set out in this Announcement will continue notwithstanding any
amendment that may or in the future be made to the terms and
conditions of the Placing and that Placees will have no right to be
consulted or require that their consent be obtained with respect to
the Company's or the Joint Bookrunners' conduct of the Placing;
(cc) that these terms and conditions and any agreements entered
into by it pursuant to these terms and conditions and any
non-contractual obligations arising out of or in connection with
such agreements shall be governed by and construed in accordance
with the laws of England and Wales and it submits (on behalf of
itself and on behalf of any person on whose behalf it is acting) to
the exclusive jurisdiction of the English courts as regards any
claim, dispute or matter arising out of any such contract, except
that enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest
chargeable thereon) may be taken by the Company or any of the Joint
Bookrunners in any jurisdiction in which the relevant Placee is
incorporated or in which any of its securities have a quotation on
a recognised stock exchange;
(dd) that the Company, each of the Joint Bookrunners and their
respective affiliates and others will rely upon the truth and
accuracy of the representations, warranties and acknowledgements
set forth herein and which are given to each Joint Bookrunner on
its own behalf and on behalf of the Company and are irrevocable and
it irrevocably authorises the Company and each of the Joint
Bookrunners 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;
(ee) that none of the Company or either of the Joint Bookrunners
owes any fiduciary or other duties to any Placee in respect of any
representations, warranties, undertakings or indemnities in the
Placing Agreement;
(ff) that it will indemnify on an after-tax basis and hold the
Company, each of the Joint Bookrunners and their respective
affiliates harmless from any and all costs, claims, liabilities and
expenses (including legal fees and expenses) including any VAT
thereon arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and
undertakings in this Appendix and further agrees that the
provisions of this Appendix shall survive after completion of the
Placing;
(gg) that it has neither received nor relied on any inside
information concerning the Company in accepting the invitation to
participate in the Placing; and
(hh) if it is a pension fund or investment company, its
acquisition of Placing Shares is in full compliance with applicable
laws and regulations.
The foregoing representations, warranties and confirmations are
given for the benefit of the Company and the Joint Bookrunners and
are irrevocable.
(MORE TO FOLLOW) Dow Jones Newswires
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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 relates only to their
allotment and issue to Placees, or such persons as they nominate as
their agents, direct from the Company for the Placing Shares in
question. Such agreement also assumes that the Placing Shares are
not being taken up in connection with arrangements to issue
depositary receipts or to issue or transfer the Placing Shares into
a clearance service. If there are any such arrangements, or the
settlement relates to any other dealing in the Placing Shares,
stamp duty or stamp duty reserve tax or other similar taxes may be
payable, for which none of the Company or any of the Joint
Bookrunners will be responsible and the Placees shall indemnify the
Company and each of the Joint Bookrunners on an after-tax basis for
any stamp duty or stamp duty reserve tax paid by them in respect of
any such arrangements or dealings. If this is the case, each Placee
should seek its own advice and notify the Joint Bookrunners
accordingly.
None of the Company or either of the Joint Bookrunners are
liable to bear any transfer taxes that arise on a sale of Placing
Shares subsequent to their acquisition by Placees or for transfer
taxes arising otherwise than under the laws of the United Kingdom.
Each Placee should, therefore, take its own advice as to whether
any such transfer tax liability arises and notify the Joint
Bookrunners accordingly. Furthermore, each Placee agrees to
indemnify on an after-tax basis and hold each Joint Bookrunner
and/or the Company and their respective affiliates harmless from
any and all interest, fines or penalties in relation to stamp duty,
stamp duty reserve tax and all other similar duties or taxes to the
extent that such interest, fines or penalties arise from the
unreasonable default or delay of that Placee or its agent.
Each Placee and any person acting on behalf of each Placee
acknowledges and agrees that the Joint Bookrunners or any of their
respective affiliates may, at their absolute discretion, agree to
become a Placee in respect of some or all of the Placing
Shares.
When a Placee or person acting on behalf of the Placee is
dealing with the Joint Bookrunners, any money held in an account
with any Joint Bookrunner on behalf of the Placee and/or any person
acting on behalf of the Placee will not be treated as client money
within the meaning of the rules and regulations of the FCA made
under FSMA. The Placee acknowledges that the money will not be
subject to the protections conferred by the client money rules; as
a consequence, this money will not be segregated from such Joint
Bookrunner's money in accordance with the client money rules and
will be used by that Joint Bookrunner in the course of its own
business; and the Placee will rank only as a general creditor of
that Joint Bookrunner.
All times and dates in this Announcement may be subject to
amendment by the Joint Bookrunners (in their absolute discretion).
The Joint Bookrunners shall notify the Placees and any person
acting on behalf of the Placees of any changes.
APPENDIX 2: RISK FACTORS
RISKS RELATING TO THE ACQUISITION
Trinity Mirror may sustain losses in excess of the limitations
on the Sellers' liability under the Share Purchase Agreement and/or
the Sellers may not be in a financial position to satisfy any
claims
Under the terms of the Share Purchase Agreement, the Sellers
have given certain representations, warranties, indemnities and
covenants in favour of Trinity Mirror. In addition, Trinity Mirror
has taken out W&I Insurance to provide (subject to customary
exceptions) financial recourse in respect of certain of the
representations, warranties, indemnities and covenants of the
Sellers in the Share Purchase Agreement in the event that the
financial limitations of the Sellers in the Share Purchase
Agreement are exceeded. The liabilities of the Sellers under the
Share Purchase Agreement and of the insurers under the W&I
Insurance policy are both subject to limitations and in any event
limited in amount and Trinity Mirror may therefore sustain losses
in excess of any such limitations. The Sellers' liability is
subject to a de minimis of GBP100,000 per relevant claim (being,
for the purposes of the de minimis and basket, a breach of the
Share Purchase Agreement other than a tax covenant claim, a tax
claim or a claim under the locked box or expenses indemnities) and
a threshold of GBP1,250,000, above which threshold the Sellers are
liable for the whole amount of the claim and not only the excess.
The Sellers' liability under both relevant claims and tax covenant
claims is capped at the GBP10 million retention sum. Each Seller is
only liable pro rata to its respective proportion of the
consideration. The Sellers' liability is also limited in time;
claims must be brought within two years of Completion with the
exception of tax claims, which must be brought within 4 years from
the end of the accounting period in which Completion occurs.
The Acquisition is conditional and the conditions may not be
satisfied
Completion is conditional upon satisfaction of various
Conditions, including the passing of the Acquisition Resolution and
Admission of the Consideration Shares, prior to the Long Stop Date
(or such later date as the parties may agree).
In the event that the General Meeting resolves not to approve
the Acquisition Resolution or the Conditions are not satisfied by
the Long Stop Date (or such later date as the parties may agree),
the Share Purchase Agreement will automatically terminate.
If the Conditions are not satisfied Trinity Mirror would
nonetheless be required to pay significant fees and other costs
incurred in connection with the Acquisition (including financing,
financial advisory, legal and accounting fees and expenses).
If the Acquisition Resolution is approved at the General Meeting
and each of the other Conditions is satisfied prior to the Long
Stop Date (or such later date as the parties may agree), Trinity
Mirror will be contractually obliged to proceed to Completion
unless the Share Purchase Agreement is otherwise terminated in
accordance with its terms.
There can be no assurance that the Conditions will be fulfilled
or that the Acquisition will be completed.
Local World may not perform in line with expectations
If the financial results and cash flows generated by Local World
and its future prospects are not in line with Trinity Mirror's
expectations, a write-down may be required against the carrying
value of Trinity Mirror's investment in Local World and/or
accounting goodwill and other intangible assets generated upon
acquisition. Such a write-down may affect Trinity Mirror's (and,
following completion of the Acquisition, the Enlarged Group's)
business and may also reduce Trinity Mirror's ability to generate
distributable reserves by the extent of the write-down and
consequently affect its ability to pay dividends.
The Enlarged Group may experience difficulties in integrating
Local World with the existing businesses carried on by Trinity
Mirror and the Enlarged Group may not realise, or it might take the
Enlarged Group longer than expected to realise, certain or all of
the anticipated benefits of the Acquisition
Trinity Mirror and Local World currently operate and, until
Completion, will continue to operate as two separate and
independent businesses. The Acquisition will require the
integration of Local World with the existing businesses carried on
by Trinity Mirror and the success of the Enlarged Group will
depend, in part, on the effectiveness of the integration process
and the ability of the Enlarged Group to realise the anticipated
benefits and synergies from combining the respective
businesses.
The integration of Local World may involve particular
challenges, some of which may not be known until after Completion.
The process of integrating Local World with the existing businesses
carried on by Trinity Mirror could potentially lead to operational
interruption or a loss of key personnel, either or both of which
could have an adverse effect on the business, financial condition
and results of operations of the Enlarged Group. Any delays or
difficulties encountered in connection with the integration of
Trinity Mirror's and Local World's businesses could also lead to
reputational damage to the Enlarged Group. Trinity Mirror's and
Local World's management teams will be required to devote
significant attention and resources to integrating their respective
business practices and operations. There is a risk that the
challenges associated with managing the integration of Trinity
Mirror's and Local World's respective businesses will result in
management distraction and that, consequently, the underlying
businesses will not perform in line with expectations.
Trinity Mirror and Local World expect to incur a number of costs
in relation to the Acquisition, including integration and
post-Completion costs, which could exceed amounts estimated. There
may also be further additional and unforeseen expenses incurred in
connection with the Acquisition. These costs could have an adverse
effect on the operating results, business, financial condition and
prospects of the Enlarged Group.
Trinity Mirror can offer no assurance that the Enlarged Group
will realise the potential benefits of the Acquisition, including
synergies, to the extent and within the timeframe contemplated or
at all. If Trinity Mirror is unable to successfully integrate the
Acquired Business, this could have a negative impact on the
business, results of operations, financial condition and/or
prospects of the Enlarged Group.
The Enlarged Group may not realise the desired synergy benefits
from the Acquisition
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Trinity Mirror is targeting synergies from the Acquisition, and
the financial planning for the Enlarged Group is based in part on
realising these synergies, which include expected cost savings of,
in aggregate, GBP12 million per annum before tax (assuming the
Proposed On-Sale does not complete, or GBP10 million per annum if
it does), to be realised from the second full year following
Completion.
Realisation of these synergies will depend partly on the rapid
and efficient management and co-ordination of the activities of the
Enlarged Group's businesses. There is a risk that synergy benefits
from the Acquisition may fail to materialise, or they may be
materially lower than has been estimated. In addition, the cost of
achieving these synergies may exceed the GBP11 million expectation.
Such eventualities could have an adverse effect on the operating
results, business, financial condition and prospects of the
Enlarged Group.
Prior to Completion, Local World, and following Completion, the
Enlarged Group, may fail to retain key personnel and other
employees
The calibre and performance of management personnel and other
employees, taken together, is important to the success of both
Local World, prior to Completion, and to the Enlarged Group,
following Completion, and, while plans are, or will be, put in
place for the retention of management personnel and other key
employees following Completion, there can be no assurance that,
prior to Completion, Local World will not lose key personnel (or a
significant number of personnel) or that the Acquisition will not
result in the departure of management personnel and/or employees
from the Enlarged Group. The departure of key or of a significant
number of management personnel or employees could adversely affect
Trinity Mirror's abilities to realise the benefits and synergies of
the Acquisition. Such departures could also adversely affect both
the Enlarged Group's ability to conduct its businesses (through an
inability to execute business operations and strategies
effectively) and the value of those businesses, which could have an
adverse effect on the operating results, business, financial
condition and prospects of the Enlarged Group.
Prior to Completion, Local World, and following Completion, the
Enlarged Group, may not be able to protect intellectual property
rights upon which their businesses rely and, if they lose
intellectual property protection, their assets may lose value and
their business may be adversely affected
A significant proportion of the value of Local World relates to
its intellectual property rights, in particular its valuable brands
and proprietary trademarks, content, services and
internally-developed technology. The business of Local World
depends (and, following Completion, the Enlarged Group will depend)
on this intellectual property. The Directors believe that,
following Completion, the ability of the Enlarged Group to protect
its intellectual property rights would be important to the
continued success and competitive position of the Enlarged
Group.
The Enlarged Group may not be able to protect intellectual
property rights upon which its business relies and, if it loses
intellectual property protection, its assets may lose value and its
business may be adversely affected. Unauthorised parties may
attempt to copy or otherwise obtain the content, services,
technology and other intellectual property of Local World (or,
following Completion, the Enlarged Group), and it cannot be certain
that the steps that have been taken to protect such proprietary
rights will prevent any misappropriation or confusion among
consumers and merchants, or unauthorised use of such rights.
Advancements in technology have exacerbated the risk by making it
easier to duplicate and disseminate content.
If Local World (or, following Completion, the Enlarged Group)
has to litigate (in the United Kingdom or elsewhere) to enforce its
intellectual property rights or determine the validity and scope of
the proprietary rights of others, such litigation may be costly and
divert the attention of the management of Local World (or,
following Completion, the Enlarged Group).
If Local World (or, following Completion, the Enlarged Group) is
unable to procure, protect and enforce its intellectual property
rights, it may not realise the full value of these assets, and its
business may be adversely affected. These occurrences could have a
material adverse effect on the business, financial condition,
operational results and/or prospects of Local World (or, following
Completion, the Enlarged Group).
Third parties may terminate or alter existing contracts with
Local World as a result of the Acquisition
Certain of the contracts which Local World has entered into
contain "change of control" or similar clauses that allow the
counterparty to terminate or change the terms of their contract
upon Completion, or may otherwise allow the counterparty to exert
leverage to renegotiate the terms of the existing contract upon
Completion. Trinity Mirror and Local World will seek to obtain
consents from certain of these counterparties to the continuance of
the contract after the change of control, and may renegotiate terms
with others. There can be no assurance that the Enlarged Group will
be able to contract on the same terms as Local World does prior to
Completion. If third party consents cannot be obtained, or terms
that are renegotiated are unfavourable when compared with the
current contracts, there may be an adverse effect on the operating
results, business, financial condition and prospects of the
Enlarged Group.
Following Completion Trinity Mirror may not be able to achieve
optimal value in respect of the Proposed On-Sale
In connection with the Acquisition, Trinity Mirror has signed
heads of terms with Edward Richard Iliffe ("ERI") in relation to
the Proposed On-Sale. As with any disposal, there is a risk that
Trinity Mirror may not be able to achieve optimal value for the
Proposed On-Sale for reasons including, for example, the
unsuccessful separation of the assets and businesses to be sold and
the management of any related costs and/or the failure to realise
the anticipated benefits of any such disposal.
The Enlarged Group may face increased costs when it seeks to
refinance its debt as a result of its increased level of debt
following the Acquisition
The Acquisition will be funded in part by the New Debt Facility.
The costs and terms on which the Enlarged Group is able to
refinance the New Debt Facility and other longer-term indebtedness
will depend in part on market conditions. Unfavourable market
conditions may arise which could impact the cost at, and terms on
which, the Enlarged Group is able to access capital markets to
refinance its indebtedness which may among other things increase
its cost of capital.
RISKS RELATING TO TRINITY MIRROR, LOCAL WORLD AND THE ENLARGED
GROUP FOLLOWING THE ACQUISITION
The increasing popularity of digital media may result in
decreased print advertising and newspaper sales revenues which may
affect the larger regional business of the Enlarged Group
The Acquisition will significantly increase the scale of Trinity
Mirror Group's regional newspapers business. Revenue in the
regional newspaper industry is (and therefore Trinity Mirror's and
Local World's regional business operations are and, following
Completion, the Enlarged Group's regional business operations will
be) dependent upon advertising and, to a lesser extent, newspaper
sales revenue. Competition for advertising and newspaper sales
revenue comes from national, local and regional free and paid-for
newspapers, radio, broadcast and cable television, direct mail,
classified directories, internet and other communications and
advertising media that operate in the same markets as Trinity
Mirror and Local World (and, following Completion, the Enlarged
Group). Websites and applications for mobile devices distributing
news and other content continue to gain popularity, with relatively
low barriers to entry for certain web-based businesses bringing new
entrants to the markets of Trinity Mirror and Local World (and,
following Completion, the Enlarged Group). As a result, audience
attention and advertising spending is now spread across a more
fragmented media landscape. The fragmentation of media has
intensified competition for advertising and has contributed, and
may continue to contribute, to a decline in print advertising and
newspaper sales revenue for Trinity Mirror and Local World (and,
following Completion, the Enlarged Group). Should significant
numbers of customers choose to receive content using these
alternative delivery sources (rather than the newspapers of Trinity
Mirror or Local World (or, following Completion, the Enlarged
Group)), and if Trinity Mirror or Local World (or, following
Completion, the Enlarged Group) is not successfully able to migrate
customers onto its digital distribution channels (and/or is not
able to generate equivalent revenue through such channels), the
Enlarged Group may suffer decreases in advertising revenue or face
a long-term decline in circulation, which is likely to have a
material adverse effect on its business, operational results,
financial condition and/or prospects. The increased scale of the
Trinity Mirror Group's regional businesses may lead to increased
exposure to declines in print advertising revenue and newspaper
sales revenue.
Pension deficits may grow at such a rate so that annual cash
funding consumes a disproportionate level of operating cash
flow
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Trinity Mirror operates a number of occupational pension
schemes. Trinity Mirror pays contributions to its defined benefit
pension schemes to make good the past service deficits on terms
agreed with the trustees of those schemes. The accounting pension
deficit fell during the first half of 2015 by GBP10.4 million from
GBP301.2 million (GBP241.0 million net of deferred tax) to GBP290.8
million (GBP232.6 million net of deferred tax) reflecting the
impact of an increase in assets of GBP6.0 million and a fall in
liabilities of GBP4.4 million. The change in the accounting deficit
does not impact Trinity Mirror's current funding commitments.
During 2013 the funding valuations of all schemes were aligned
to 31 December 2013 and valuations were completed in December 2014.
The revised recovery plan agreed with the pension scheme trustees
in these valuations was annual payments of GBP36.2 million per
annum for 2015, 2016 and 2017. In addition, Trinity Mirror has
agreed that in respect of dividend payments additional
contributions would be paid at 50 per cent. of the excess if
dividends in 2015 were above five pence per share. For 2016 and
2017 the threshold increases in line with increases in dividends
capped at 10 per cent. per annum. Trinity Mirror pre-paid GBP16.5
million of the 2015 contributions and GBP0.5 million of the 2016
contributions in December 2014. Therefore, deficit funding payments
in 2015 will be GBP19.7 million, payments in 2016 will be GBP35.7
million and payments in 2017 will be GBP36.2 million.
The funding position of defined benefit pension schemes on both
the IAS19 and other bases can fluctuate depending on market
conditions and actuarial assumptions (including long-term discount
rates and mortality assumptions). These fluctuations can impact on
the contributions payable by Trinity Mirror (and, following
Completion, the Enlarged Group) to the schemes and pension deficits
may grow at such a rate so that annual cash funding consumes a
disproportionate level of operating cash flow of Trinity Mirror
(and, following Completion, the Enlarged Group).
Trinity Mirror continues (and, following Completion, the
Enlarged Group will continue) to monitor its pension exposures
through regular reviews with trustees. However, certain material
factors are outside the control of Trinity Mirror (and will,
following Completion, be outside the control of the Enlarged
Group): interest rates, inflation rates, mortality and regulatory
change. Any adverse impact from these factors, together with the
slowdown in the global economy and its impact on Trinity Mirror's
(or, following Completion, the Enlarged Group's) business and
investment returns, could have material implications for future
pension scheme funding and could adversely impact Trinity Mirror
(or, following Completion, the Enlarged Group) and its ability to
fund past service provision. This may result in an adverse impact
on the business, operational results, financial condition and/or
prospects of Trinity Mirror (or, following Completion, the Enlarged
Group).
Trinity Mirror is subject to legal claims for misuse of private
information and, following Completion, the Enlarged Group may be
subject to further legal claims that if determined adversely could
negatively affect its reputation, business, operational results,
financial condition and/or prospects
Trinity Mirror and Local World (and, following Completion, the
Enlarged Group) may be subject to legal claims, including actual or
alleged libel, misuse of private information, infringement of
copyright and breach of the Data Protection Act, that arise in the
course of the business of Trinity Mirror or Local World (or,
following Completion, the Enlarged Group) in connection with the
content of their publications, websites and advertisements. The
damages that may be claimed in future legal proceedings could be
substantial, including in certain cases claims for aggravated
and/or exemplary damages as well as injunctions. In addition,
Trinity Mirror and Local World (and, following Completion, the
Enlarged Group) may incur significant costs in defending future
legal actions brought against them which may not be fully
recoverable, irrespective of whether it is successful in defending
any claims, and it may be subject to adverse publicity or
reputational harm as a result of such claims or actions.
Furthermore, conditional fee arrangements, and the fact that
claimants are not themselves responsible for paying costs in
relation to such arrangements, may encourage the pursuit of legal
action and may lead to an increase in the number of claims made
against Trinity Mirror or Local World (or, following Completion,
the Enlarged Group).
In addition, Trinity Mirror and Local World are (and, following
Completion, the Enlarged Group will be) liable for the content of
their publications, websites and advertisements. If legal
proceedings against Trinity Mirror or Local World (or, following
Completion, the Enlarged Group) are successful, it could increase
their expenses and harm their reputations and relationships with
customers. Trinity Mirror and Local World (and, following
Completion, the Enlarged Group) may also be liable to third parties
if the content of their publications, websites or advertisements
violates intellectual property rights of third parties. If the
outcome of any legal proceedings brought against Trinity Mirror or
Local World (or, following Completion, the Enlarged Group) are not
favourable, it could have a material adverse effect on their
reputations, business, operational results, financial condition
and/or prospects.
By way of example, Trinity Mirror continues to cooperate with
the Metropolitan Police Service ("MPS") in respect of Operation
Elveden (the investigation relating to alleged inappropriate
payments to public officials) and Operation Golding (the
investigation into alleged phone hacking). In September 2013
Trinity Mirror announced that its subsidiary, MGN Limited ("MGN"),
had been notified by the MPS that the MPS were at a very early
stage in investigating whether MGN was criminally liable in
relation to phone hacking. MGN currently faces a significant number
of civil claims for misuse of private information. In July 2014,
after Trinity Mirror's ongoing investigations revealed that phone
hacking had taken place at MGN, a provision of GBP4.0 million was
made to cover the cost of dealing with and resolving civil claims
from individuals. In the second half of the 2014 financial year, a
number of claims were settled and MGN admitted liability to a
number of individuals who had sued for interception of their
voicemails many years ago. As Trinity Mirror progressed with
dealing with the civil claims, it became evident that the cost of
resolving these claims would be higher than previously envisaged.
Therefore, the provision of GBP4.0 million at the 2014 half year
for resolving phone hacking claims was increased by a further
GBP8.0 million. In May 2015, following the release of the judgment
and conclusion of the civil trial for assessment of damages for
eight representative claimants arising from phone hacking, Trinity
Mirror made a further provision of GBP16.0 million to cover the
costs of dealing with and resolving the historical legal issues in
relation to phone hacking. This judgment was the subject of an
appeal to the Court of Appeal by MGN which was heard on 20 and 21
October 2015 and in respect of which the judgment is awaited. There
can be no assurance that MGN will be successful in its appeal.
Civil claims continue to be advanced against MGN and it remains
uncertain as to how these matters will progress, whether further
allegations or claims will be made and their financial impact. MGN
continues to resolve civil claims but there is potential for
further and/or increased liabilities to arise from the outcome or
resolution of the ongoing historical legal issues, including as a
result of the judgment of the Court of Appeal, which may require
Trinity Mirror to reassess the sufficiency of, and potentially
increase, its current provision. Due to the present uncertainty in
respect of the nature, timing or measurement of any such
liabilities it is too soon to be able to reliably estimate how
these matters will proceed and their financial impact.
Trinity Mirror and Local World depend (and, following
Completion, the Enlarged Group will depend) on key personnel and
their ability to attract, retain and motivate other qualified
employees
Trinity Mirror and Local World depend (and, following
Completion, the Enlarged Group will depend) on their key personnel
and their ability to attract, retain and hire other qualified and
experienced employees. In particular, competition in the media
industry for experienced senior management personnel is intense and
Trinity Mirror and Local World (and, following Completion, the
Enlarged Group) may not be able to retain their personnel. The loss
of any key personnel would require the remaining key personnel to
divert immediate and substantial attention to seeking a
replacement. An inability to find suitable replacements for
departing key personnel could adversely affect the ability of
Trinity Mirror or Local World (or, following Completion, the
Enlarged Group) to grow their businesses. Production and
distribution of the publications of Trinity Mirror and Local World
(and, following Completion, the Enlarged Group) and the generation
of advertising revenue also require skilled and experienced
employees. A shortage of such employees, or the inability of
Trinity Mirror or Local World (or, following Completion, the
Enlarged Group) to retain such employees, could have an adverse
impact on the productivity and costs of Trinity Mirror or Local
World (or, following Completion, the Enlarged Group), its ability
to expand, develop and distribute new products, generate
advertising sales and its entry into new markets. The cost of
retaining or hiring such employees could exceed the resources of
Trinity Mirror or Local World (or, following Completion, the
Enlarged Group).
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