TIDMWGB
RNS Number : 2827M
Walker Greenbank PLC
12 October 2016
THIS ANNOUNCEMENT (INCLUDING THE APPIX) AND THE INFORMATION
CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION
OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN,
INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF
SOUTH AFRICA, THE REPUBLIC OF IRELAND, NEW ZEALAND OR JAPAN OR ANY
OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR
DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT HAS NOT BEEN
APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTED THAT IT WILL
BE SO APPROVED.
12 October 2016
WALKER GREENBANK PLC
("Walker Greenbank" or the "Company")
Proposed Acquisition of Clarke & Clarke and Placing to raise
GBP17.0 million
Walker Greenbank PLC (AIM: WGB), the luxury interior furnishings
group whose brands include Sanderson, Morris & Co., Harlequin,
Zoffany, Scion and Anthology, is pleased to announce that it has
entered into a conditional agreement with the shareholders of
Globaltex 2015 Limited, the parent company of Globaltex Limited, a
UK-based designer and worldwide distributor of quality interior
fabrics and wallcoverings (trading as "Clarke & Clarke"), to
acquire the entire issued share capital of Globaltex 2015 Limited
(the "Acquisition").
The initial consideration will be GBP25.0 million in cash on a
debt free/cash free basis payable at completion of the Acquisition
("Completion") with further performance related earn-out
consideration payable to the selling shareholders of Clarke &
Clarke by issue of new ordinary shares of GBP0.01 each in the
capital of the Company ("Ordinary Shares") ("Consideration Shares")
of up to 10.0 million Consideration Shares or such number of
Consideration Shares which do not exceed, in aggregate, GBP17.5
million in value.
The initial consideration is to be funded in part as to GBP17.0
million by way of a placing of 8,947,369 new Ordinary Shares at
190.0 pence per share (the "Placing Shares") representing a 6.6 per
cent. discount to the closing middle market price of 203.5 pence
per share on 11 October 2016 (being the last practicable date prior
to the date of this announcement) (the "Placing"). The remaining
GBP8.0 million of the cash element of the consideration is being
met through drawdown under the Company's existing bank facilities
and the Company's existing cash resources. The Placing is being
underwritten by Investec.
Highlights
-- Clarke & Clarke is a UK-based designer and worldwide
distributor of quality interior fabrics and wallcoverings sold
under two distinct brands - Clarke & Clarke and Studio G;
-- Clarke & Clarke's brands are complementary to the Group's
brands in terms of market positioning, design and product
offering;
-- Clarke & Clarke has a track record of strong revenue and
profit growth. For the financial year ended 31 December 2015,
Clarke & Clarke generated revenue of GBP22.4 million and
adjusted EBITDA of GBP3.8 million;
-- Strong strategic rationale for the Acquisition delivering the
following benefits to the Enlarged Group:
o increasing the Group's scale of operations and accelerating
the Group's market penetration through a broader product offering
and customer base;
o enhancing the Group's international reach, including in the
US;
o strengthening the Group's sourcing capabilities and increasing
buying power;
o creating revenue growth opportunities through the Enlarged
Group;
-- Directors believe that the Acquisition will be materially
earnings enhancing in the year ending 31 January 2018. This
earnings accretion is also expected to enhance the Group's future
dividend capacity;
-- Gross proceeds of the Placing of approximately GBP17.0
million to be used to part fund the Acquisition; and
-- Completion conditional, inter alia, on passing of resolutions
to authorise the Directors to allot the Placing Shares and the
Consideration Shares and to disapply pre-emption rights in respect
of the Placing Shares and the Consideration Shares ("Resolutions")
and admission of the Placing Shares to trading on AIM ("Admission")
taking place no later than 31 October 2016.
John Sach, Chief Executive of Walker Greenbank, said: "We are
delighted to acquire Clarke & Clarke and to welcome its two
brands into our brand portfolio. Clarke & Clarke will add
significantly to our product offering, customer base and US
presence and also create collaborative opportunities. Clarke &
Clarke has a strong track record of growth and its acquisition will
be materially enhancing for Walker Greenbank in its first full
financial year."
A circular, extracts of which are set out below, containing a
notice of General Meeting of the Company (the "Circular"), convened
for 11.00 a.m. on 28 October 2016, will be sent to Shareholders
today, outlining the terms of the Acquisition and the Placing and
convening the General Meeting at which the Resolutions will be
tabled. A copy of the Circular will also be made available on the
Company's website, www.walkergreenbank.com.
Analyst meeting
A meeting for analysts will be held at 10.00 a.m. today, 12
October 2016, at the offices of Buchanan, 107 Cheapside, London
EC2V 6DN. For further details, contact Buchanan on 020 7466
5000.
This announcement contains inside information
For further information, please contact:
+44 (0)844 543
Walker Greenbank plc 4668
John Sach, Chief Executive Officer
Mike Gant, Chief Financial Officer
+44 (0)20 7597
Investec (Nomad and Broker) 4000
Garry Levin / David Anderson
/ Alex Wright
Henry Reast - Corporate Broking
+44 (0)20 7583
PwC (Financial Adviser) 5000
Rick Jones / Amit Aggarwal
+44 (0)20 7466
Buchanan 5000
Mark Court / Sophie Cowles /
Catriona Flint
About Walker Greenbank
Walker Greenbank is a luxury interior furnishings company that
designs, manufactures and markets wallpapers and fabrics together
with a wide range of ancillary interior products. The Company's
brand portfolio - comprising Sanderson, Morris & Co, Harlequin,
Zoffany, Scion and Anthology - spans heritage and contemporary
design and its products are sold in more than 85 countries
worldwide. The Company derives significant licensing income from
the use of its designs in lifestyle products such as bed linen,
rugs and tableware.
The Company employs more than 600 people and has showrooms in
London, New York, Paris, Amsterdam and Dubai along with partnership
showrooms in Moscow and in Shenzhen, China. Its UK manufacturing
base, which includes a wallpaper factory in Loughborough and a
fabric printing factory in Lancaster, manufactures product both for
the Company together with its subsidiaries (the "Group") and for
other wallpaper and fabric brands. Continued investment in
manufacturing has allowed the Group to offer a wide range of
printing techniques.
Walker Greenbank trades on the AIM market of the London Stock
Exchange under the ticker symbol WGB.
For further information please visit:
www.walkergreenbank.com/
This announcement should be read in its entirety. In particular,
you should read and understand the information provided in the
"Important Notices" section below.
The Appendix to this announcement (which forms part of this
announcement) sets out the terms and conditions of the Placing.
Persons who have chosen to participate in the Placing, by making an
oral or written offer to acquire Placing Shares, will be deemed to
have read and understood this announcement in its entirety
(including the Appendix) and to be making such offer on the terms
and subject to the conditions herein, and to be providing the
representations, warranties, agreements, acknowledgements and
undertakings contained in the Appendix.
IMPORTANT NOTICES
This announcement is not an offer of securities for sale, or
solicitation of an offer to purchase securities, in the United
States. The Placing Shares have not been and will not be registered
under the United States Securities Act of 1933, as amended (the "US
Securities Act") or with any securities regulatory authority of any
state or jurisdiction of the United States, and may not be offered,
sold or transferred, directly or indirectly, in the United States
unless the Placing Shares are registered under the US Securities
Act or pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the US Securities Act,
in each case in compliance with any applicable securities laws of
any state or other jurisdiction of the United States. There will be
no public offering of the Placing Shares in the United States.
This announcement may contain "forward-looking statements" with
respect to certain of the Company's plans and its current goals and
expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results.
Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "seek", "may", "could", "outlook" or other words
of similar meaning. By their nature, all forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances which are beyond the control of the Company,
including amongst other things, United Kingdom domestic and global
economic business conditions, market-related risks such as
fluctuations in interest rates and exchange rates, the policies and
actions of governmental and regulatory authorities, the effect of
competition, inflation, deflation, the timing effect and other
uncertainties of future acquisitions or combinations within
relevant industries, the effect of tax and other legislation and
other regulations in the jurisdictions in which the Company and its
respective affiliates operate, the effect of volatility in the
equity, capital and credit markets on the
Company's profitability and ability to access capital and
credit, a decline in the Company's credit ratings; the effect of
operational risks; and the loss of key personnel. As a result, the
actual future financial condition, performance and results of the
Company may differ materially from the plans, goals and
expectations set forth in any forward-looking statements. Any
forward-looking statements made in this announcement by or on
behalf of the Company speak only as of the date they are made.
Except as required by applicable law or regulation, the Company
expressly disclaims any obligation or undertaking to publish any
updates or revisions to any forward-looking statements contained in
this announcement to reflect any changes in the Company's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
Investec Bank plc ("Investec") is authorised by the Prudential
Regulatory Authority and regulated in the United Kingdom by the
Prudential Regulation Authority and the Financial Conduct Authority
("FCA") and is acting exclusively for the Company and no one else
in connection with the Placing and will not be responsible to
anyone (including any Placees) other than the Company for providing
the protections afforded to its clients or for providing advice in
relation to the Placing or any other matters referred to in this
announcement.
No representation or warranty, express or implied, is or will be
made as to, or in relation to, and no responsibility or liability
is or will be accepted by Investec or by any of its respective
affiliates or agents as to, or in relation to, the accuracy or
completeness of this announcement or any other written or oral
information made available to or publicly available to any
interested party or its advisers, and any liability therefore is
expressly disclaimed.
PricewaterhouseCoopers LLP ("PwC"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
is acting exclusively for Walker Greenbank in relation to the
Acquisition and for no-one else in connection with the Acquisition
or matters referred to in this announcement and will not be
responsible to any person other than Walker Greenbank for providing
the protections afforded to clients of PwC, nor for providing
advice in relation to the Acquisition nor to matters referred to
herein. Neither PwC nor any of its members owes, accepts or assume
any duty of care, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of PwC in connection
with the matters referred to in this announcement, or
otherwise.
This announcement contains certain financial measures that are
not defined or recognised under IFRS, including adjusted EBITDA
(being earnings before interest, tax, depreciation, amortisation).
Information regarding these measures are sometimes used by
investors to evaluate the efficiency of a company's operation and
its ability to employ its earnings toward repayment of debt,
capital expenditures and working capital requirements. There are no
generally accepted principles governing the calculation of these
measures and the criteria upon which these measures are based can
vary from company to company. These measures, by themselves, do not
provide a sufficient basis to compare the Company's performance
with that of other companies and should not be considered in
isolation or as a substitute for operating profit or any other
measure as an indicator of operating performance, or as an
alternative to cash generated from operating activities as a
measure of liquidity.
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 years would necessarily match or exceed the
historical published earnings per share of the Company.
Neither the content of the Company's website (or any other
website) nor the content of any website accessible from hyperlinks
on the Company's website (or any other website) is incorporated
into or forms part of this announcement.
Proposed Acquisition of Clarke & Clarke and Placing to raise
GBP17.0 million
Introduction
The Company today announces that it has entered into a
conditional agreement with the shareholders of Globaltex 2015
Limited, the parent company of Globaltex Limited, a UK-based
designer and worldwide distributor of interior fabrics typically
used for home furnishing (trading as "Clarke & Clarke"), to
acquire the entire issued share capital of Globaltex 2015
Limited.
The initial consideration will be GBP25.0 million in cash on a
debt free/cash free basis payable at Completion ("Initial
Consideration") with further performance related earn-out
consideration payable to Lee Clarke and Emma Clarke, the selling
shareholders of Clarke & Clarke (the "Sellers"), by issue of
new Ordinary Shares ("Consideration Shares") in the Company. The
actual number of Consideration Shares issued by way of earn-out
will be dependent on the financial performance of Clarke &
Clarke over a four year period following Completion. The earn-out
consideration is capped at the lower of 10.0 million new Ordinary
Shares or such number of new Ordinary Shares as do not exceed, in
aggregate, GBP17.5 million in value.
The Board believes that Clarke & Clarke is a good strategic
fit with Walker Greenbank and that, inter alia, the
Acquisition:
-- will enhance the Group's scale of operations and accelerate
the progression of the Group's market penetration through a broader
product offering and customer reach;
-- will enhance the Group's international reach; and
-- together with the Placing, is expected to be materially
earnings enhancing in the financial year ending 31 January
2018.
The Initial Consideration for the Acquisition is to be adjusted
by way of completion accounts so that the Company acquires Clarke
& Clarke on a cash free/debt free basis and with a normalised
level of working capital at Completion. The completion accounts
adjustment is subject to a maximum cap of GBP6.0 million. A further
potential cash payment may also be due to the Sellers subject to
Clarke & Clarke obtaining certain tax reliefs from HMRC, which
is capped at approximately GBP0.3 million.
The Acquisition is to be funded in part by way of the Placing of
8,947,369 new Ordinary Shares to raise approximately GBP17.0
million, before expenses, with the remaining GBP8.0 million of the
cash element of the consideration being met through drawdown under
the Bank Facilities (the Company having exercised its rights in
respect of GBP5.0 million of its existing accordion facility
thereunder for these purposes) and from the Company's existing cash
resources. The Placing is being underwritten by Investec. If the
financial targets for the earn-out are met, this will be wholly
satisfied by the issue of up to 10.0 million Consideration Shares
or such number of Consideration Shares which do not exceed, in
aggregate, GBP17.5 million in value.
The Placing is conditional, inter alia, upon the Company
obtaining approval from Shareholders to grant the Board authority
to allot the Placing Shares and the Consideration Shares and to
disapply statutory pre-emption rights which would otherwise apply
to the allotment of the Placing Shares and the Consideration
Shares. The Placing, which has been underwritten by Investec, is
also conditional, inter alia, upon (i) the conditional sale and
purchase agreement in relation to the Acquisition entered into
between the shareholders of Clarke & Clarke and the Company on
12 October 2016 ("SPA") having been entered into and not having
been terminated; and (ii) Admission. In the event that the Company
does not receive authority to allot the New Ordinary Shares at the
General Meeting, the Placing will not proceed, the Placing Shares
will not be issued and the Acquisition will not complete.
Information on Clarke & Clarke
Overview
Founded in 1999 by Lee and Emma Clarke, Clarke & Clarke is a
UK-based designer and worldwide distributor of quality interior
fabrics and wallcoverings used for home furnishing applications,
including curtains, sofas and chairs and décor sold under two
distinct retail fabric brands: Clarke & Clarke and Studio G.
The Clarke & Clarke brand operates in the mid to value end of
its market, and is used predominantly by consumers and interior
designers, with many key customers based in the UK. It occupies an
attractive position in the market, offering a broad range of
contemporary, high quality designs across an affordable range of
price points, with particular strength in the GBP20-GBP60 per metre
price group. In addition to its retail offering, Clarke &
Clarke supplies a contemporary range of fabrics for the commercial
market. Clarke & Clarke is also one of the few mid-market
designers to offer a comprehensive range of contemporary and
traditional designs. Studio G, which launched in January 2015,
operates at a lower price point to increase Clarke & Clarke's
offering for younger customers and to generate higher sales
volumes. Operating at the below GBP20 per metre price group, Studio
G represents a new target price point for the Company. Both brands
operate a subscription based pattern "book club" in the UK, Ireland
and Italy, and have developed a reputation for value, quality and
customer service.
Headquartered in a purpose built warehouse in Haslingden,
Lancashire, with a separate dedicated design studio in Mobberley,
Cheshire, Clarke & Clarke distributes its fabrics and
wallcoverings globally, typically via third party distributors, to
over 80 countries under its retail and commercial fabric brands and
on a white label basis. Clarke & Clarke has an extensive and
diversified customer base including home furnishing stores,
interior designers and major UK chains. Clarke & Clarke's
fabrics include, among other things, prints, jacquard weaves,
plains, embroideries, velvets and silks. Clarke & Clarke
creates its designs in the UK and sources its fabric from the UK,
Europe, India, Turkey and China. The sales of fabrics represented
approximately 91 per cent. of Clarke & Clarke's overall sales
in the financial year ended 31 December 2015.
Clarke & Clarke recently diversified its offering to include
the supply of readymade products such as cushions.
These readymade products are now being sold into UK retail
stores, gift shops and garden centres.
In addition to its branded retail offering, Clarke & Clarke
sells unbranded fabric rolls to a leading UK home furnishing
retailer and its range of readymade home furnishings to other UK
retail stores.
In 2014, Clarke & Clarke successfully introduced a direct
sales model in Ireland, which it is proposing to roll out across
other European countries, such as France, Germany and Spain.
In the United States, Clarke & Clarke has an exclusive
distribution arrangement with Duralee, one of the largest wholesale
fabric distributors in the US, selling to a significant number of
US customers from 12 corporate showrooms, approximately 70 agent
showrooms and 45 "on-the-road" sales representatives.
Financial Information
Clarke & Clarke has a track record of strong revenue and
profit growth. Since 31 December 2013, Clarke & Clarke has
increased its turnover from approximately GBP18.1 million to
GBP22.4 million* for its financial year ended 31 December 2015,
representing a compound annual growth rate of approximately 11.3
per cent. and for its financial year ended 31 December 2015,
generated adjusted EBITDA** of approximately GBP3.8 million. As at
31 December 2015, the business held approximately GBP6.0 million of
gross stock across 13,500 individual stock keeping units. Gross
profit margins have remained strong and stable since the financial
year ended 31 December 2012 at approximately 38 per cent. with an
adjusted EBITDA** margin of approximately 17 per cent. for the
financial year ended 31 December 2015. Clarke & Clarke has
consistently demonstrated strong cash conversion with an operating
cash conversion rate of approximately 64.3 per cent. for the
financial year ended 31 December 2015. For its financial year ended
31 December 2015, Clarke & Clarke reported profit before
taxation of approximately GBP3.7 million and net assets of GBP10.2
million*.
For the financial year ended 31 December 2015, Clarke &
Clarke's revenue was derived from the following areas:
-- UK - 54 per cent.;
-- United States - 18 per cent.;
-- Europe - 12 per cent.; and
-- Rest of the world - 16 per cent.
* Figures include US business (Clarke & Clarke LLC)
** Adjusted EBITDA: Reported EBITDA including adjustments to
align accounting policies between the legacy UK and US businesses
and show consistent application of accounting policies over the
historical period
Background to and reasons for the Acquisition and the
Placing
Walker Greenbank continues to make good progress with the
implementation of its five pillar strategy (international
expansion, market penetration, lifestyle product extension, British
manufacturing capability and acquisitions) and the Directors
consider that the acquisition of Clarke & Clarke presents a
highly attractive opportunity to accelerate this strategy.
The Directors believe that Clarke & Clarke is a good
strategic fit with Walker Greenbank. Clarke & Clarke is a
growing business with a largely complementary brand, design and
product offering which the Directors believe will strengthen the
Group's market positon. In addition, the Directors believe that
there is a strong strategic rationale for the Acquisition and that
it will deliver the following benefits to the Group and Globaltex
2015 Limited together with its subsidiaries (the "Enlarged
Group"):
-- an increase in the Group's scale of operations and
accelerated progression of the Group's market penetration through a
broader product offering and customer reach;
-- an enhancement of the Group's international reach, including in the US;
-- a strengthening of the Group's sourcing expertise and
capabilities and an increase in buying power;
-- an opportunity to acquire a standalone business unit which
will require limited integration; and
-- revenue growth opportunity through the Enlarged Group.
The Directors believe that the Acquisition presents the
opportunity to add two further brands, both of which are at the
affordable end of the quality fabrics market, to the Group's
portfolio thereby complementing the Group's existing brands. The
mid-market segment is comparatively less saturated in terms of
competitive coverage, with a greater proportion of consumers buying
at that price point.
Furthermore, the Directors believe that the Acquisition will be
materially earnings enhancing in the year ending 31 January 2018.
This earnings accretion is also expected to enhance the Group's
future dividend capacity.
Following the Acquisition, Walker Greenbank intends to build on
Clarke & Clarke's strengths, continuing to operate it as an
independent business with its current brands and propositions
targeting growth in its core geographic markets of the UK, Europe
and the US.
The current management team, including Lee Clarke, are expected
to remain with the business and be augmented with additional senior
appointments.
Principal terms of the Acquisition
Walker Greenbank is to conditionally acquire the entire issued
share capital of Clarke & Clarke for (i) initial consideration
of GBP25.0 million payable in cash on Completion on a debt
free/cash free basis and (ii) the earn-out element of the
consideration for the Acquisition which is dependent on the
financial performance of Clarke & Clarke for the four year
period following Completion ("Earn-Out") and which shall be
satisfied by the issue of the lower of up to 10.0 million
Consideration Shares or such number of Consideration Shares which
do not exceed, in aggregate, GBP17.5 million in value. The Earn-Out
consideration has been structured in such a way as to constitute
cash consideration which is being satisfied with the issue of
Consideration Shares. Therefore, the Consideration Shares are
declared to be issued for cash and the pre-emption provisions in
section 561 of the Companies Act 2006 (the "Act") applies to the
issue of the Consideration Shares.
The Initial Consideration for the Acquisition is to be adjusted
by way of completion accounts so that the Company acquires Clarke
& Clarke on a cash free/debt free basis and with a normalised
level of working capital at Completion. The completion accounts
adjustment is subject to a maximum cap of GBP6.0 million. A further
potential cash payment may also be due to the Sellers subject to
Clarke & Clarke obtaining certain tax reliefs from HMRC, which
is capped at approximately GBP0.3 million.
The Earn-Out is to be staged over four financial periods, each
ending on Walker Greenbank's financial year end, 31 January, with
the first period ending on 31 January 2017 (each an "Earn-Out
Period"). The amount of consideration payable pursuant to the
Earn-Out is variable with the Sellers being able to achieve
additional performance related Earn-Out consideration based on a
target EBITDA in each Earn-Out Period ("Variable EBITDA Target")
and the amount of Earn-Out consideration payable is adjustable up
or down depending on the actual EBITDA achieved in that Earn-Out
Period.
All payments due pursuant to the Earn-Out will be satisfied by
the issue of Consideration Shares. There is a cash alternative
available only in circumstances whereby Walker Greenbank ceases to
be listed on a stock exchange but not otherwise. The Earn-Out has
an aggregate cap of the lower of 10.0 million Consideration Shares
or such number of Consideration Shares which does not exceed, in
aggregate, GBP17.5 million in value. Therefore, on a debt free/cash
free basis, the total maximum consideration payable to the Sellers
is GBP42.5 million based on financial performance over a four-year
period.
The SPA contains warranties and indemnities which are customary
for a transaction of this nature as well as a tax covenant.
Lee Clarke and Emma Clarke will at Completion each enter into a
lock in agreement in relation to any Consideration Shares which are
issued to them pursuant to which they agree not to sell any of
their Consideration Shares for a period of 12 months following
issue of the relevant Consideration Shares and following such
period be subject to orderly market provisions, for a further 12
months thereafter.
Lee Clarke will remain with the Clarke & Clarke business and
will enter into a new employment agreement at the same time as the
Acquisition.
Financing of the Acquisition
The Acquisition will be funded:
-- as to GBP17.0 million from the proceeds of the Placing;
-- as to GBP8.0 million from the Company's existing accordion
tranche of its Bank Facilities and the Company's existing cash
resources; and
-- as to the Earn--Out of the lower of up to 10.0 million
Consideration Shares or such number of Consideration Shares which
do not exceed, in aggregate, GBP17.5 million in value.
Therefore, on a debt free/cash free basis, the total maximum
consideration payable to the Sellers is GBP42.5 million based on
financial performance over a four-year period.
The total cost and expenses associated with the Acquisition and
the Placing are expected to be approximately GBP2.5 million.
Interim Results and Current Trading
Today, the Company announced its interim results for the six
months ended 31 July 2016. Highlights included the following:
As expected, trading in the six months to 31 July 2016 was
impacted by the flood in December 2015 at Standfast & Barracks,
the Company's fabric printing business in Lancaster. The financial
effect of the flood has been mitigated by the Company's insurance
policy and, as at 11 October 2016 (being the latest practicable
date prior to the publication of this announcement), the Company
has received, in aggregate, GBP12.05 million in insurance payments;
with ongoing discussions in relation to future insurance receipts
to be applied to loss of profits for the Company's brands
business.
In the six months to 31 July 2016, the Company has recognised
GBP7.9 million of insurance reimbursements. The reimbursement
constitutes a GBP4.6 million payment for exceptional costs, along
with a GBP3.3 million payment as a contribution to loss of profits
and exceptional gains for plant and equipment replacement. Full
production has since been restored at the Standfast & Barracks
factory, which is benefitting from new replacement printing
machines, including faster, higher capacity digital printers.
Total sales have decreased by 8.7 per cent. to GBP41.8 million
compared with sales of GBP45.8 million for the six month period
ended 31 July 2015 ("H1 2015"). Meanwhile, adjusted profit before
tax* has increased by 2.7 per cent. to GBP3.78 million compared
with GBP3.68 million for H1 2015.
Earnings per share increased by 62.1 per cent. to 6.55 pence per
share compared with 4.04 pence per share for H1 2015. Adjusted
earnings per share* have decreased 13.6 per cent. to 4.62 pence per
share compared with 5.35 pence per share for H1 2015. The interim
dividend was increased by 25.0 per cent. to 0.55 pence per Ordinary
Share compared with 0.44 pence per Ordinary Share for H1 2015,
reflecting the Board's confidence in the business.
The Company continued to make progress with its market
penetration strategy during the first six months ended 31 July 2016
through the launch of the fourth collection from the Anthology
brand, which for the first time includes an extensive range of
woven fabrics. The Company also successfully launched new product
collections such as Sanderson's Woodland Walk and Morris & Co's
Pure.
Licensing income in the period increased by 16.3 per cent. in
reportable currency, 6.5 per cent. in constant currency, to GBP1.11
million. The Company is also making progress in licensing with the
recent launch of the first footwear range from a licensing
agreement between Sanderson and the well-known US brand Sperry.
This, together with recently signed bed linen licensing agreements
in the US and in China is a very positive step in the Company's
licensing strategy and continues to take its brands further into
lifestyle products and geographic territories.
The Company also recently strengthened its management team with
the appointment of Paul Mullan to the new role of MD of
Manufacturing in March 2016 and Fiona Holmes joining the Board as
Brands Director on 31 October 2016.
Outlook
The Group's fabric printing factory is back to full production,
and sales of printed fabrics are on an improving trend though the
effects of the flood remain evident in current trading. These
effects will be mitigated by the Company's insurance policy.
Brand sales in the first nine weeks of the second half of the
financial year increased by 0.7 per cent. in reportable currency (a
decrease of 3.7 per cent. in constant currency terms**) compared
with the same period last year. Subject to the key Autumn selling
period and anticipated insurance payments, the Board remains
confident of delivering its pre-flood expectations for the full
year.
* Adjusted for accounting charges relating to share-based
incentives, defined benefit pension charge and exceptional gain on
property, plant and equipment
** Assuming currency exchange rates remained the same from one period to another
The Placing
The Company has conditionally raised approximately GBP17.0
million (before expenses) by way of a proposed placing of 8,947,369
new Ordinary Shares at a placing price of 190.0 pence per Ordinary
Share. The Placing Shares will represent approximately 12.9 per
cent. of the entire issued share capital of the Company immediately
following Admission (assuming no exercise of share options) (the
"Enlarged Share Capital"). The Placing Price represents a discount
of approximately 6.6 per cent. to the closing middle market price
of 203.5 pence per Ordinary Share on 11 October 2016 (being the
latest practicable date prior to the date of this
announcement).
Upon Admission, the Company's Enlarged Share Capital will
comprise 69,551,678 Ordinary Shares with one voting right per
share. The Company does not hold any shares in treasury. Therefore,
this figure of 69,551,678 Ordinary Shares may be used by
Shareholders following Admission as the denominator for the
calculations by which they will determine if they are required to
notify their interest in, or a change in their interest in, the
share capital of Walker Greenbank under the FCA's Disclosure
Guidance and Transparency Rules.
The New Ordinary Shares will rank pari passu in all respects
with each other and with the existing Ordinary Shares, including
the right to receive all dividends and other distributions
declared, made or paid on the Ordinary Shares after Admission,
except for the interim dividend of 0.55 pence per Ordinary Share as
announced by the Company today and to be paid on 18 November 2016
to all Shareholders on the register of members of the Company on 21
October 2016, which is prior to the expected date of Admission of
the Placing Shares.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, Investec has
agreed to act as underwriter and agent for the Company to use its
reasonable endeavours to place the Placing Shares with
institutional investors. The Placing is being underwritten by
Investec.
The Placing Agreement is conditional upon, inter alia, the
Resolutions being duly passed at the General Meeting, completion of
the Acquisition and Admission becoming effective on or before 8.00
a.m. on 31 October 2016 (or such later time and/or date as the
Company and Investec may agree, but in any event by no later than
8.00 a.m. on 12 January 2017). If any of the conditions are not
satisfied, the Placing Shares will not be issued and all monies
received from the placees will be returned to them (at the placees'
risk and without interest) as soon as possible thereafter.
The Placing Agreement contains certain warranties and
indemnities from the Company in favour of Investec in relation to,
inter alia, the accuracy of the information in this announcement,
certain financial information and other matters relating to the
Group and its business. The Placing Agreement is not subject to any
right of termination after Admission.
Settlement and dealings
Application will be made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM. It is expected
that Admission will occur and dealings will commence at 8.00 a.m.
on or around 31 October 2016 on which date it is also expected that
the Placing Shares will be enabled for settlement in CREST.
Directors' participation in the Placing
The following Directors have agreed to subscribe, in aggregate,
for 52,630 Placing Shares pursuant to the Placing as follows:
Name Role Number Number Percentage
of Placing of Ordinary shareholding
Shares Shares of Enlarged
subscribed held following Share Capital
for Admission
Chief Executive
John Sach Officer 17,105 1,939,820 2.79%
Chief Financial
Mike Gant Officer 17,105 17,105 0.02%
Non-executive
Terry Stannard Chairman 10,526 80,526 0.12%
Non-executive
Fiona Goldsmith Director 7,894 52,894 0.08%
Irrevocable Undertakings
The Company has received irrevocable undertakings from each of
the Directors who are Shareholders who have irrevocably undertaken
to vote in favour of the Resolutions in respect of their own
beneficial holdings amounting to, in aggregate, 3,286,150 Ordinary
Shares and representing approximately 5.4 per cent. of the issued
ordinary share capital of the Company.
Recommendation
The Board considers that the Placing, the Acquisition including
the potential allotment of Consideration Shares and the passing of
the Resolutions are in the best interests of the Company and
Shareholders as a whole.
Accordingly, the Board unanimously recommends that the
Shareholders vote in favour of the Resolutions as they have
irrevocably undertaken to do in respect of their beneficial
holdings, amounting, in aggregate, to 3,286,150 Ordinary Shares,
representing approximately 5.4 per cent. of the issued ordinary
share capital of the Company.
Placing Statistics
Number of Ordinary Shares in issue
before the Placing 60,604,309
Number of Placing Shares to be issued
pursuant to the Placing 8,947,369
Placing Price 190.0 pence
Gross proceeds of the Placing GBP17.0 million
Estimated expenses of the Acquisition GBP2.5 million
and the Placing
Number of Ordinary Shares in issue
immediately following the Placing(*) 69,551,678
Placing Shares as a percentage of 12.9 per cent.
the Enlarged Share Capital
Total maximum number of Consideration
Shares which could be issued 10,000,000
Number of Ordinary Shares in issue
if all Consideration Shares are issued(*) 79,551,678
Consideration Shares as a percentage 12.6 per cent.
of the Post Acquisition Share Capital(*)
* Assuming that the Placing has completed and that no further
Ordinary Shares have been issued other than the Placing Shares and
no share options have been exercised.
Expected Timetable of Principal Events
2016
Anticipated date of posting 12 October
the Circular
Last time and date for receipt 11.00 a.m. on
of Proxy Forms and CREST Proxy 26 October
Instructions
General Meeting 11.00 a.m. on 28
October
Admission and dealings in the 8.00 a.m. on 31
Placing Shares expected to October
commence on AIM
Where applicable, expected 31 October
date for CREST accounts to
be credited for Placing Shares
in uncertificated form
Expected date of completion 31 October
of the Acquisition
Where applicable, expected by 14 November
date for despatch of definitive
share certificates in respect
of Placing Shares in certificated
form
Notes:
1. References to times are to London times unless otherwise stated.
2. The dates and times given in this announcement are based on
the Company's current expectations and may be subject to
change.
3. Any changes to the timetable set out above will be announced
via a Regulatory Information Service.
APPIX
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
THIS ANNOUNCEMENT, INCLUDING THIS APPIX AND THE INFORMATION
CONTAINED HEREIN (TOGETHER, THE "ANNOUNCEMENT"), IS RESTRICTED AND
IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES,
CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF
IRELAND, JAPAN, NEW ZEALAND OR ANY JURISDICTION IN WHICH THE SAME
WOULD BE UNLAWFUL. THIS ANNOUNCEMENT HAS NOT BEEN EXAMINED OR
APPROVED BY THE FCA OR THE LONDON STOCK EXCHANGE, NOR IS IT INTED
THAT IT WILL BE SO EXAMINED OR APPROVED.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS
DIRECTED ONLY AT: (A) PERSONS IN RELEVANT MEMBER STATES OF THE EEA
WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMED ("QUALIFIED
INVESTORS"), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE
2(1)(E) OF DIRECTIVE 2003/71/EC AS AMED, INCLUDING BY THE 2010
PROSPECTUS DIRECTIVE AMING DIRECTIVE (DIRECTIVE 2010/73/EC) AND TO
THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE (THE
"PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, QUALIFIED
INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN
MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5)
(INVESTMENT PROFESSIONALS) OF THE FINANCIAL SERVICES AND MARKETS
ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMED (THE "ORDER");
(II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET
WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER;
OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY
COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS
"RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON
OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS
DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS
LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH
THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT
DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY
SECURITIES IN THE COMPANY.
THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION FOR,
ANY SECURITIES IN THE UNITED STATES, CANADA, AUSTRALIA, THE
REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND, JAPAN, NEW
ZEALAND OR IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR
SALE WOULD BE UNLAWFUL. NO PUBLIC OFFERING OF THE PLACING SHARES IS
BEING MADE IN ANY SUCH JURISDICTION.
THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE, OR
SOLICITATION OF AN OFFER TO PURCHASE SECURITIES, IN THE UNITED
STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMED (THE "US
SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY
STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED,
SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES
UNLESS THE PLACING SHARES ARE REGISTERED UNDER THE US SECURITIES
ACT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT,
IN EACH CASE IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE PLACING
SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN
"OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE
WITH, REGULATION S UNDER THE US SECURITIES ACT AND OTHERWISE IN
ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING
SHARES IS BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR
ELSEWHERE. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY
PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN
RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL
NOT BE ACCEPTED. PERSONS RECEIVING THIS ANNOUNCEMENT (INCLUDING
CUSTODIANS, NOMINEES AND TRUSTEES) MUST NOT FORWARD, DISTRIBUTE,
MAIL OR OTHERWISE TRANSMIT IT IN, INTO OR FROM THE UNITED STATES,
DIRECTLY OR INDIRECTLY, IN CONNECTION WITH THE PLACING. THE PLACING
SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE US SECURITIES
AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER
REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON ORORSED THE MERITS OF THE PLACING
OR THE ACCURACY OR ADEQUACY OF THIS ANNOUNCEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED
STATES.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL,
TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING
SHARES. THE DISTRIBUTION OF THIS ANNOUNCEMENT, ANY PART OF IT OR
ANY INFORMATION CONTAINED IN IT MAY BE RESTRICTED BY LAW IN CERTAIN
JURISDICTIONS, AND ANY PERSON INTO WHOSE POSSESSION THIS
ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT
COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH
RESTRICTIONS.
This Announcement has been prepared and issued by the Company
and is and will be the sole responsibility of the Company. No
representation or warranty, express or implied, is or will be made
as to, or in relation to, and no responsibility or liability is or
will be accepted by Investec or any of its Affiliates, branches or
advisers or any other person as to or in relation to, the accuracy
or completeness of the Announcement or any other written or oral
information made available to or publicly available to any Placee,
any person acting on such Placee's behalf or any of their
respective advisers, and any liability therefor is expressly
disclaimed.
This Announcement includes statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "may", "will", or
"should" or, in each case, their negative or other variations or
comparable terminology. These forward-looking statements include
matters that are not historical facts. They appear in a number of
places throughout this Announcement and include statements
regarding the Directors' current intentions, beliefs or
expectations concerning, among other things, the Company's results
of operations, financial condition, liquidity, prospects, growth,
strategies and the Company's markets. Forward-looking statements
may and often do differ materially from actual results. Any
forward-looking statements in this Announcement are based on
certain factors and assumptions, including the Directors' current
view with respect to future events and are subject to risks
relating to future events and other risks, uncertainties and
assumptions relating to the Company's operations, results of
operations, growth strategy and liquidity. While the Directors
consider these assumptions to be reasonable based upon information
currently available, they may prove to be incorrect. Save as
required by law or by the AIM Rules, the Company undertakes no
obligation to publicly release the results of any revisions to any
forward-looking statements in this Announcement that may occur due
to any change in the Directors' expectations or to reflect events
or circumstances after the date of this Announcement.
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.
No action has been taken by the Company, Investec or any of
their respective Affiliates that would permit an offer of the
Placing Shares or possession or distribution of this Announcement
or any other offering or publicity material relating to such
Placing Shares in any jurisdiction where action for that purpose is
required.
All offers of the Placing Shares will be made pursuant to an
exemption under the Prospectus Directive from the requirement to
produce a prospectus. In the UK, this Announcement is being
directed solely at persons in circumstances in which section 21(1)
of FSMA does not apply.
The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or
territory of Canada; no prospectus has been lodged with, or
registered by, the Australian Securities and Investments
Commission, the Central Bank of Ireland or the Japanese Ministry of
Finance; the relevant clearances have not been, and will not be,
obtained from the South African Reserve Bank or any other
applicable body in the Republic of South Africa in relation to the
Placing Shares; and the Placing Shares have not been, nor will they
be, registered under or offered in compliance with the securities
laws of any state, province or territory of Australia, Canada,
Japan, the Republic of South Africa, the Republic of Ireland or New
Zealand. Accordingly, the Placing Shares may not (unless an
exemption under the relevant securities laws is applicable) be
offered, sold, resold or delivered, directly or indirectly, in or
into Australia, Canada, Japan, the Republic of South Africa, the
Republic of Ireland or New Zealand or any other jurisdiction
outside the United Kingdom.
Persons (including, without limitation, custodians, nominees and
trustees) who have a contractual or other legal obligation to
forward a copy of this Announcement should seek appropriate advice
before taking any action.
By participating in the Placing, each subscriber of Placing
Shares (the "Placees"), will be deemed to have read and understood
this Announcement in its entirety and to be participating, making
an offer for and acquiring Placing Shares 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, undertakes,
agrees and acknowledges (amongst other things) that:
-- it is a Relevant Person (as defined above) and undertakes
that it will acquire, hold, manage or dispose of any Placing Shares
that are allocated to it for the purposes of its business; and
-- in the case of a Relevant Person in a member state of the EEA
which has implemented the Prospectus Directive (each, a "Relevant
Member State") who acquires any Placing Shares pursuant to the
Placing:
a. it is a Qualified Investor within the meaning of Article
2(1)(e) of the Prospectus Directive; and
b. in the case of any Placing Shares acquired by it as a
financial intermediary, as that term is used in Article 3(2) of the
Prospectus Directive:
i. the Placing Shares acquired by it in the Placing have not
been acquired on behalf of, nor have they been acquired with a view
to their offer or resale to, persons in any Relevant Member State
other than Qualified Investors or in circumstances in which the
prior consent of Investec has been given to the offer or resale;
or
ii. where Placing Shares have been acquired by it on behalf of
persons in any Relevant Member State of the EEA other than
Qualified Investors, the offer of those Placing Shares to it is not
treated under the Prospectus Directive as having been made to such
persons; and
iii. it is acquiring the Placing Shares for its own account or
is acquiring the Placing Shares for an account with respect to
which it exercises sole investment discretion and has the authority
to make and does make the representations, warranties, indemnities,
acknowledgements, undertakings and agreements contained in this
Announcement; and
iv. it understands (or if acting for the account of another
person, such person has confirmed that such person understands) the
resale and transfer restrictions set out in this Appendix; and
v. except as otherwise permitted by the Company and subject to
any available exemptions from applicable securities laws, it (and
any account referred to in paragraph (iii) above) is outside the
United States acquiring the Placing Shares in offshore transactions
as defined in and in accordance with Regulation S under the US
Securities Act.
The Company and Investec will rely upon the truth and accuracy
of the foregoing representations, acknowledgements and
agreements.
Details of the Placing
The Company has entered into an agreement dated today with
Investec (the "Placing Agreement") under which, on the terms and
subject to the conditions set out in the Placing Agreement,
Investec, as agent for and on behalf of the Company, has agreed to
use its reasonable endeavours to procure Placees for the Placing
Shares at the Placing Price. In accordance with the terms of the
Placing Agreement, Investec agrees to make payment (on behalf of
subscribers procured by it) of an amount equal to the product of
the Placing Shares at the Placing Price (less the commissions, VAT
(if any) and expense reimbursements).
The Placing is conditional, inter alia, upon the approval by
Shareholders of the Resolutions to be proposed at the General
Meeting (which will grant authority to the directors of the Company
to allot the Placing Shares and disapply pre-emption rights in
respect of the Placing Shares) and on the Acquisition Agreement
having been entered into, not having lapsed or terminated and
having become unconditional in all respects and having been
completed in accordance with its terms.
The Placing Shares will, when issued, be subject to the articles
of association of the Company, be credited as fully paid and rank
pari passu in all respects with the existing issued Ordinary
Shares, including the right to receive any dividends and other
distributions declared or made in respect of the Ordinary Shares
following Admission, except for the interim dividend of 0.55 pence
per Ordinary Share.
The Placing Agreement contains certain undertakings, warranties
and indemnities given by the Company for the benefit of Investec.
Investec has absolute discretion as to whether or not to bring an
action against the Company for breach of these undertakings,
warranties and indemnities.
Investec has the right to terminate the Placing Agreement in
certain circumstances, details of which are set out below.
This Appendix gives details of the terms and conditions of, and
the mechanics of participation in, the Placing.
No commissions will be paid to Placees or by Placees in respect
of any Placing Shares.
Application for admission to trading
Application will be made to the London Stock Exchange for
Admission.
It is expected that Admission will become effective at 8.00 am
on 31 October 2016 and that dealings in the Placing Shares will
commence at that time.
Participation in, and principal terms of, the Placing
1. Each Placee will be deemed to have read and understood this
Appendix in its entirety, to be participating, making an offer and
subscribing for Placing Shares upon the terms and subject to the
conditions contained in this Appendix and to be providing the
representations, warranties, agreements, acknowledgements and
undertakings, in each case as contained in this Appendix.
2. Investec is acting as nominated adviser and broker to the
Placing and as agent for and on behalf of the Company in relation
to the Placing. Investec is authorised by the Prudential Regulation
Authority and regulated in the United Kingdom by the Prudential
Regulation Authority and the FCA, is acting exclusively for the
Company and no one else in connection with the matters referred to
in this Announcement and will not be responsible to anyone other
than the Company for providing the protections afforded to the
customers of Investec or for providing advice in relation to the
matters described in this Announcement.
3. Participation in the Placing will only be available to
persons who may lawfully be, and are, invited by Investec to
participate. Investec and any of its Affiliates are entitled to
participate in the Placing as principal.
4. The price per Placing Share is fixed at 190.0 pence and is
payable to Investec by all Placees. No fee or commission will be
paid to Placees or by Placees in respect of any Placing Shares.
5. Each Placee's allocation will be determined by Investec in
its absolute discretion following consultation with the Company and
will be confirmed orally to such Placee by Investec, as agent of
the Company ("Oral Confirmation") and an order acknowledgement will
be despatched as soon as possible thereafter. The Oral Confirmation
will constitute an irrevocable, legally binding commitment upon
that person (who at that point will become a Placee) in favour of
the Company and Investec to subscribe for the number of Placing
Shares allocated to it at the Placing Price on the terms and
conditions set out in this Appendix and in accordance with the
articles of association of the Company. Except with Investec's
consent, such commitment will not be capable of variation or
revocation after the time at which it is submitted.
6. Each Placee's allocation and commitment will be evidenced by
an order acknowledgement issued to such Placee by Investec which
will confirm the number of Placing Shares allocated, the Placing
Price and the aggregate amount owed by such Placee to Investec.
7. Each Placee will also have an immediate, separate,
irrevocable and binding obligation, owed to Investec (as agent for
the Company), to pay on Admission to Investec (or as it may direct)
in cleared funds an amount equal to the product of the Placing
Price and the number of Placing Shares such Placee has agreed to
subscribe for and the Company has agreed to allot and issue to that
Placee.
8. Irrespective of the time at which a Placee's allocation(s)
pursuant to the Placing is/are confirmed, settlement for all
Placing Shares to be subscribed for pursuant to the Placing will be
required to be made at the same time, on the basis explained below
under "Registration and settlement".
9. All obligations under the Placing will be subject to
fulfilment or (where applicable) waiver of the conditions referred
to below under "Conditions of the Placing" and to the Placing not
being terminated on the basis referred to below under "Termination
of the Placing Agreement".
10. 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 rescission or termination by the Placee.
11. To the fullest extent permitted by law and applicable FCA
rules, none of Investec or any of its Affiliates shall have any
liability (including, to the extent permissible by law, any
fiduciary duties) to Placees or to any person other than the
Company in respect of the Placing. In particular, none of Investec
or any of its Affiliates shall have any liability (including, to
the extent permissible by law, any fiduciary duties) in respect of
Investec's conduct of the Placing or of such alternative method of
effecting the Placing as Investec and the Company may agree. Each
Placee acknowledges and agrees that the Company is responsible for
the allotment of the Placing Shares to the Placees and Investec
shall have no liability to the Placees for the failure of the
Company to fulfil those obligations.
Conditions of the Placing
The obligations of Investec under the Placing Agreement are, and
the Placing is conditional, inter alia, upon:
1. the Company complying with its obligations and having
satisfied all conditions under the Placing Agreement which fall to
be performed or satisfied prior to or on Admission;
2. none of the warranties in the Placing Agreement being untrue,
inaccurate or misleading at the date of the Placing Agreement and
none of the warranties in the Placing Agreement having ceased to be
true and accurate or having become misleading at any time following
the date of the Placing Agreement up to and including the time of
Admission with reference to the facts and circumstances which shall
then exist;
3. prior to Admission, there having been, in the opinion of
Investec (acting in good faith), no Material Adverse Change;
4. the Circular having been posted to the Company's Shareholders
by 5.00pm on the first Business Day following the date of the
Placing Agreement;
5. the Announcement having been released through the Regulatory
News Service by 7:30am on the date of the Placing Agreement;
6. the Acquisition Agreement having become (i) unconditional in
all respects and having been completed in accordance with its
terms, and (ii) not having lapsed or been terminated;
7. the Resolutions being duly passed (without amendment);
8. the Placing Shares having been allotted, subject only to Admission;
9. Admission occurring no later than 8.00 am on 31 October 2016,
or such later time and/or date, being no later than 8.00 am on 12
January 2017, as the Company and Investec may agree,
(all conditions to the obligations of Investec included in the
Placing Agreement being together, the "conditions").
Certain conditions may be waived in whole or in part by Investec
in its absolute discretion and upon such terms as it thinks fit,
save that the condition relating to the allotment of the Placing
Shares, subject only to Admission, may not be waived. Investec may
also agree in writing with the Company to extend the time for
satisfaction of any condition in accordance with the Placing
Agreement. Any such extension or waiver will not affect Placees'
commitments as set out in this Appendix.
If any of the conditions set out in the Placing Agreement are
not fulfilled or, where permitted, waived in accordance with the
Placing Agreement within the stated time periods (or such later
time and/or date as Investec may agree in writing with the
Company), or the Placing Agreement is terminated in accordance with
its terms, the Placing will lapse and the Placee's rights and
obligations under this Announcement shall cease and terminate at
such time and each Placee agrees that no claim can be made by or on
behalf of the Placee (or any person on whose behalf the Placee is
acting) in respect thereof.
Neither Investec nor any of its Affiliates 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 any of
them may make as to whether or not to waive or to extend the time
and/or date for the satisfaction of any condition to the Placing
nor for any decision any of them 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 Investec.
Termination of the Placing Agreement
Investec may terminate the Placing Agreement at any time on or
before Admission if, inter alia:
1. there has been a breach of any provision in the Acquisition
Agreement by any party to it which would enable the Company to
terminate the Acquisition Agreement; or
2. in the sole judgement of Investec (acting in good faith),
there has been a Material Adverse Change since the date of the
Placing Agreement; or
3. in the sole judgement of Investec (acting in good faith),
there has been a material breach by the Company of any of its
obligations under the Placing Agreement or with the requirements of
any laws or regulations in relation to the Placing, or there has
been a breach of or there has taken place or arisen any event
rendering untrue or incorrect in any respect any of the warranties
set out in the Placing Agreement; or
4. in the sole judgement of Investec (acting in good faith), if
any of the warranties contained in the Placing Agreement would, if
repeated at Admission (by reference to the facts and circumstances
then existing), be untrue, inaccurate or misleading in any
respect;
5. a matter or circumstance has arisen which would be likely to
give rise to an indemnity claim pursuant to the Placing Agreement;
or
6. subsequent to the execution of the Placing Agreement, a
circumstance or event has arisen which in the sole judgement of
Investec (acting in good faith) would be likely to prejudice the
success of the Placing, or which makes it, in the sole judgement of
Investec, impractical to proceed with the Placing and/or Admission
and/or to market the Ordinary Shares on the terms and in the manner
set out in the Placing Documents; or
7. any statement contained in any of the Placing Documents is or
has become untrue, inaccurate, incomplete in any material respect
or misleading or any matter has arisen which would, if the Placing
was made at that time, constitute an omission from the Placing
Documents.
By participating in the Placing, each Placee agrees with
Investec that the exercise by Investec of any right of termination
or any other right or other discretion under the Placing Agreement
shall be within the absolute discretion of Investec (and not the
Placee or any prospective Placee at any time or in any
circumstances) and that Investec does not need to make any
reference to such Placee and that neither Investec nor any of its
Affiliates shall have any liability to such Placee (or to any other
person whether acting on behalf of a Placee or otherwise)
whatsoever in connection with any such exercise. Placees will have
no rights against Investec, the Company or any of their respective
Affiliates under the Placing Agreement pursuant to the Contracts
(Rights of Third Parties) Act 1999 (as amended).
By participating in the Placing, each Placee agrees with the
Company and Investec that its rights and obligations terminate only
in accordance with the Placing Agreement and will not be capable of
rescission or termination by it after the Oral Confirmation.
No prospectus
No prospectus or other offering document has been or will be
submitted to be approved by the FCA in relation to the Placing or
the Placing Shares and Placees' commitments will be made solely on
the basis of the information contained in this Announcement and any
information publicly announced through a Regulatory Information
Service (as defined in the AIM Rules) by or on behalf of the
Company on or prior to the date of this Announcement (the "Publicly
Available Information").
Each Placee, by accepting a participation in the Placing, agrees
that the content of this Announcement is exclusively the
responsibility of the Company and confirms that it has neither
received nor relied on any other information (other than the
Publicly Available Information), representation, warranty or
statement made by or on behalf of Investec or the Company or any
other person and none of Investec, the Company or any other person
acting on such person's behalf nor any of their Affiliates has or
shall have any liability for any Placee's decision to participate
in the Placing based on any other information, representation,
warranty or statement 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. Each
Placee should not consider any information in this Announcement to
be legal, tax or business advice. Each Placee should consult its
own solicitor, tax adviser and financial adviser for independent
legal, tax and
financial advice regarding an investment in the Placing Shares.
Nothing in this paragraph shall exclude the liability of any person
for fraudulent misrepresentation.
Registration and settlement
Investec will act as settlement agent in respect of the
Placing.
Settlement of transactions in the Placing Shares (ISIN:
GB0003061511) following Admission will take place within the system
administered by Euroclear UK & Ireland Limited ("CREST"),
subject to certain exceptions. Investec reserves the right to
require settlement for, and delivery of, the Placing Shares (or a
portion thereof) to Placees in certificated form if, in Investec's
opinion, delivery or settlement is not possible or practicable
within the CREST system within the timetable set out in this
Announcement or would not be consistent with the regulatory
requirements in any Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent
an order acknowledgement in accordance with the standing
arrangements in place with Investec, stating the number of Placing
Shares allocated to it at the Placing Price, the aggregate amount
owed by such Placee to Investec and settlement instructions. Each
Placee agrees that it will do all things necessary to ensure that
delivery and payment is completed in accordance with either the
standing CREST or certificated settlement instructions that it has
in place with Investec.
The Company will deliver the Placing Shares to a CREST account
operated by Investec as agent for the Company and Investec will
enter its delivery (DEL) instruction into the CREST system.
Investec will hold any Placing Shares delivered to this account as
nominee for the Placees. 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.
Settlement through CREST will be on a T+2 basis unless otherwise
notified by Investec and is expected to occur at 8.00 am on 31
October 2016 in accordance with the instructions set out in the
order acknowledgement.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above, in respect of either CREST or certificated deliveries, at
the rate of two percentage points above LIBOR as determined by
Investec.
Each Placee agrees that, if it does not comply with these
obligations, Investec 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 Company's account and benefit, an amount
equal to the aggregate amount owed by the Placee plus any interest
due. The relevant Placee will, however, remain liable for any
shortfall below the aggregate amount owed by it and may be required
to bear any stamp duty, stamp duty reserve tax or securities tax
(together with any interest or penalties) which may arise upon the
sale of such Placing Shares on such Placee's behalf.
By communicating a bid for Placing Shares, each Placee confers
on Investec all such authorities and powers necessary to carry out
any such sale and agrees to ratify and confirm all actions which
Investec lawfully takes in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the order
acknowledgement 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 United Kingdom stamp duty, stamp duty
reserve tax or securities transfer tax.
Placees will not be entitled to receive any fee or commission in
connection with the Placing.
Representations and warranties
By participating in the Placing, each Placee (and any person
acting on such Placee's behalf) acknowledges, undertakes,
represents, warrants and agrees (as applicable, and amongst other
things) with Investec (for itself and as agent on behalf of the
Company) that (save where Investec expressly agrees in writing to
the contrary):
1. it has read and understood the Announcement and any other
Placing Document in its entirety and its subscription of the
Placing Shares is subject to and based upon all the terms,
conditions, representations, warranties, indemnities,
acknowledgements, agreements, undertakings and other information
contained herein and that it has not relied on, and will not rely
on, any information given or any representations, warranties, or
statements made at any time by any person in connection with
Admission, the Placing, the Company, the Placing Shares or
otherwise, other than the information contained in this
Announcement and Publicly Available Information, such information
being all that it deems necessary to make an investment decision in
respect of the Placing Shares;
2. it may not place the same degree of reliance on this
Announcement as it may otherwise place on a prospectus or admission
document;
3. (i) it has made its own assessment of the Placing Shares and
has relied on its own investigation of the business, financial or
other position of the Company in accepting a participation in the
Placing; (ii) neither Investec, the Company nor any of their
respective Affiliates or any person acting on its or their behalf
has provided, or will provide, it with any material regarding the
Placing Shares or the Company in addition to this Announcement or
Publicly Available Information; and (iii) it has not requested
Investec or the Company nor any of their respective Affiliates or
any person acting on its or their behalf to provide it with any
such information;
4. no prospectus or other offering document has been 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 nor is any prospectus or other offering document
required under the Prospectus Directive;
5. the content of this Announcement and the Publicly Available
Information has been prepared by and is exclusively the
responsibility of the Company and neither Investec nor any person
acting on behalf of it nor any of its respective Affiliates has or
shall have any liability for any information, representation or
statement contained in this Announcement, Publicly Available
Information or any information previously, concurrently published
by or on behalf of the Company, any representation, warranty or
undertaking relating to the Company, or any matter arising out of
Investec's role as placing agent or otherwise in connection with
Placing, nor will they be liable for any Placee's decision to
participate in the Placing based on any information,
representation, warranty or statement contained in this
Announcement or Publicly Available Information or otherwise. Where
any such liability nevertheless arises as a matter of law, Placees
will immediately waive any claim against any of such persons which
they may have in respect thereof;
6. none of Investec or the Company nor any of their respective
Affiliates or any person acting on its or their behalf has made any
representations to it, express or implied, with respect to the
accuracy, completeness or adequacy of any Publicly Available
Information, nor have they provided advice in relation to the
Placing nor in respect of any representations, warranties,
acknowledgements, agreements, undertakings, or indemnities
contained in the Placing Agreement nor the exercise or performance
of any of Investec's rights and obligations thereunder including
any rights to waive or vary any conditions or exercise any
termination right, and each of them expressly disclaims any
liability in respect thereof (save that nothing in this paragraph
shall exclude the liability of any person for fraudulent
misrepresentation);
7. it has neither received nor relied on any confidential price
sensitive information concerning the Company in accepting this
invitation to participate in the Placing;
8. it has the funds available to pay for the Placing Shares for
which it has agreed to subscribe and acknowledges, agrees and
undertakes that it will pay the total subscription amount to
Investec in accordance with the terms and conditions of this
Announcement on the due time and date set out herein or in the
relevant order acknowledgement, failing which the relevant Placing
Shares may be placed with other Placees or sold at such price as
Investec determines in its sole discretion and the Placee will
remain liable and indemnify Investec on demand for any shortfall
below the net proceeds of such sale and the placing proceeds of
such Placing Shares and may be required to bear any stamp duty,
stamp duty reserve tax or security transfer tax (together with any
interest or penalties due pursuant to the terms set out or referred
to in this Announcement) which may arise upon the sale of such
Placee's Placing Shares on its behalf;
9. it and/or each person on whose behalf it is participating:
(i) is entitled to subscribe for the Placing Shares under the
laws and regulations of all relevant jurisdictions;
(ii) has fully observed such laws and regulations;
(iii) has the capacity and authority and is entitled to enter
into and to perform its obligations as a subscriber for Placing
Shares and will honour such obligations; and
(iv) has obtained all necessary consents and authorities
(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 Appendix) under
those laws or otherwise and complied with all necessary formalities
to enable it to enter into the transactions contemplated hereby and
to perform its obligations in relation thereto and, in particular,
if it is a pension fund or investment company it is aware of and
acknowledges it is in full compliance with all applicable laws and
regulations with respect to its subscription for Placing
Shares;
10. the Placing Shares have not been registered or otherwise
qualified, and will not be registered or otherwise qualified, for
offer and sale nor will a prospectus be cleared or approved in
respect of any of the Placing Shares under the securities laws of
the United States, or any state or other jurisdiction of the United
States, Australia, Canada, Republic of South Africa, Republic of
Ireland, New Zealand or Japan and, subject to certain exceptions,
may not be offered, sold, taken up, renounced or delivered or
transferred, directly or indirectly, within those jurisdictions or
other country or jurisdiction where any such action for that
purpose is required;
11. it is not, and any person who it is acting on behalf of is
not, and at the time the Placing Shares are subscribed will not be,
a resident of, or with an address in, or subject to the laws of,
Australia, Canada, Japan, the Republic of South Africa, the
Republic of Ireland or New Zealand, and it acknowledges and agrees
that the Placing Shares have not been and will not be registered or
otherwise qualified under the securities legislation of Australia,
Canada, Japan, the Republic of South Africa, the Republic of
Ireland or New Zealand and may not be offered, sold, or acquired,
directly or indirectly, within those jurisdictions;
12. (i) the Placing Shares have not been, and will not be,
registered under the US Securities Act or with any state or other
jurisdiction of the United States, nor approved or disapproved by
the US Securities and Exchange Commission, any state securities
commission in the United States or any other United States
regulatory authority;
(ii) it (and any account for which it is purchasing) is not
acquiring the Placing Shares with a view to any offer, sale, resale
or delivery, directly or indirectly, of any Placing Shares in or
into the United States other than pursuant to an effective
registration under the US Securities Act or in a transaction exempt
from, or not subject to, the registration requirements thereunder
and in compliance with any applicable securities laws of any state
or other jurisdiction of the United States and no representation is
being made as to the availability of any exemption under the US
Securities Act for the reoffer, resale, pledge or transfer of the
Placing Shares; and
(iii) it and the beneficial owner of the Placing Shares is, and
at the time the Placing Shares are subscribed will be, outside of
the United States, not acting on a non-discretionary basis for the
account or benefit of a person located within the United States at
the time the undertaking to acquire the Placing Shares is given and
is otherwise acquiring the Placing Shares in an "offshore
transaction" as defined in, and in accordance with, Regulation S
under the US Securities Act;
(iv) it acknowledges and agrees that it is not taking up or
acquiring the Placing Shares as a result of any directed selling
efforts (as defined in Regulation S under the US Securities
Act).
13. it will not distribute, forward, transfer or otherwise
transmit this Announcement or any part of it, or any other
presentational or other materials concerning the Placing, in or
into or from the United States (including electronic copies
thereof) to any person, and it has not distributed, forwarded,
transferred or otherwise transmitted any such materials to any
person;
14. the Ordinary Shares are admitted to trading on AIM, and the
Company is therefore required to publish certain business and
financial information in accordance with the rules and practices of
AIM, which includes a description of the nature of the Company's
business, the Company's most recent balance sheet and profit and
loss account and the Company's announcements and circulars
published in the past 12 months and the Placee is able to obtain or
access such information or comparable information concerning any
other publicly traded company without undue difficulty;
15. it is a person of a kind described in (i) Article 19(5)
(Investment Professionals) and/or 49(2) (High net worth companies
etc.) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended, and/or an authorised person as
defined in section 31 of FSMA; and (ii) section 86(7) of FSMA
("Qualified Investor"), being a person falling within Article
2.1(e) the Prospectus Directive. For such purposes, it undertakes
that it will acquire, hold, manage and (if applicable) dispose of
any Placing Shares that are allocated to it for the purposes of its
business only;
16. it has only communicated or caused to be communicated, and
will only communicate or cause to be communicated, any invitation
or inducement to engage in investment activity (within the meaning
of section 21 of FSMA) relating to the Placing Shares in
circumstances in which section 21(1) of FSMA does not require
approval of the communication by an authorised person and it
acknowledges and agrees that Investec has not approved this
Announcement in its capacity as an authorised person under section
21 of FSMA and it may not therefore be subject to the controls
which would apply if it was made or approved as financial promotion
by an authorised person;
17. it has complied and it will comply with all applicable laws
with respect to anything done by it or on its behalf in relation to
the Placing Shares (including all relevant provisions of FSMA in
respect of anything done in, from otherwise involving the United
Kingdom);
18. it will not make any offer to the public of the Placing
Shares and it has not offered or sold and will not offer or sell
any Placing Shares to persons in the United Kingdom or elsewhere in
the EEA prior to Admission, except to persons whose ordinary
activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes
of their business or otherwise in circumstances which have not
resulted in and which will not result in an offer to the public in
the United Kingdom for the purposes of section 85(1) of FSMA or an
offer to the public in any other member state of the EEA within the
meaning of the Prospectus Directive (which includes any relevant
implementing measure in any Relevant Member State of the EEA);
19. where it is acquiring Placing Shares for one or more managed
accounts, it is authorised in writing by each managed account: (a)
to acquire the Placing Shares for each managed account; (b) to make
on its behalf the representations, warranties, acknowledgements,
undertakings and agreements in this Appendix and the Announcement
of which it forms part; and (c) to receive on its behalf any
investment letter relating to the Placing in the form provided to
it by Investec;
20. if it is a financial intermediary, as that term is used in
Article 3(2) of the Prospectus Directive (including any relevant
implementing measure in any Relevant Member State), the Placing
Shares acquired by it in the Placing will not be acquired on a
non-discretionary basis on behalf of, nor will they be acquired
with a view to their offer or resale to, persons in a Relevant
Member State of the EEA which has implemented the Prospectus
Directive other than Qualified Investors, or in circumstances in
which the express prior written consent of Investec has been given
to the offer or resale;
21. it has not been engaged to subscribe for the Placing Shares
on behalf of any other person who is not a Qualified Investor
unless the terms on which it is engaged enable it to make decisions
concerning the acceptance of offers of transferable securities on
the client's behalf without reference to the client, as described
in section 86(2) of FSMA;
22. 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
Investec 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);
23. no action has been or will be taken by any of the Company,
Investec or any of their respective Affiliates or any person acting
on their behalf that would, or is intended to, permit a public
offer of the Placing Shares in the United States or in any country
or jurisdiction where any such action for that purpose is
required;
24. it has complied with its obligations in connection with
money laundering and terrorist financing under the Proceeds of
Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and
the Money Laundering Regulations 2007 (together, the "Regulations")
and, if making payment on behalf of a third party, that
satisfactory evidence has been obtained and recorded by it to
verify the identity of the third party as required by the
Regulations;
25. it is aware of the obligations regarding insider dealing in
the Criminal Justice Act 1993, the Market Abuse Regulation
(596/2014) and the Proceeds of Crime Act 2002 and confirms that it
has and will continue to comply with those obligations;
26. in order to ensure compliance with the Money Laundering
Regulations 2007, Investec, (as agent on behalf of the Company) or
the Company's registrars may, in its absolute discretion, require
verification of its identity. Pending the provision to Investec, or
the Company's registrars, as applicable, of evidence of identity,
definitive certificates in respect of the Placing Shares may be
retained at Investec's absolute discretion or, where appropriate,
delivery of the Placing Shares to it in uncertificated form may be
delayed at Investec's or the Company's registrars', as the case may
be, absolute discretion. If within a reasonable time after a
request for verification of identity Investec (for itself and as
agent on behalf of the Company) or the Company's registrars have
not received evidence satisfactory to them, Investec and/or the
Company may, at its absolute discretion, terminate its commitment
in respect of the Placing, in which event the monies payable on
acceptance of allotment will, if already paid, be returned without
interest to the account of the drawee's bank from which they were
originally debited;
27. the allocation, allotment, issue and delivery to it, or the
person specified by it for registration as a holder of Placing
Shares, will not give rise to a stamp duty or stamp duty reserve
tax liability under (or at a rate determined under) any of sections
67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and
clearance services) and that no instrument under which it
subscribes for Placing Shares (whether as principal, agent or
nominee) would be subject to stamp duty or the increased rates
referred to in those sections and that it, or the person specified
by it for registration as a holder of Placing Shares, is not
participating in the Placing as nominee or agent for any person or
persons to whom the allocation, allotment, issue or delivery of
Placing Shares would give rise to such a liability;
28. it, or the person specified by it for registration as a
holder of the Placing Shares, will be liable for any stamp duty and
all other stamp, issue, securities, transfer, registration,
documentary or other duties or taxes (including any interest, fines
or penalties relating thereto), if any, payable on acquisition of
any of the Placing Shares or the agreement to subscribe for the
Placing Shares and acknowledges and agrees that none of Investec
nor the Company nor any of their respective Affiliates or any
person acting on behalf of them will be responsible for any
liability to stamp duty or stamp duty reserve tax resulting from a
failure to observe this requirement. Each Placee and any person
acting on behalf of such Placee agrees to participate in the
Placing, and agrees to indemnify the Company and Investec on an
after-tax basis in respect of the same, on the basis that the
Placing Shares will be allotted to the CREST stock account of
Investec who will hold them as nominee on behalf of such Placee
until settlement in accordance with its standing settlement
instructions;
29. its participation in the Placing is on the basis that it is
not and will not be a client of Investec and Investec does not have
any duties or responsibilities to it for providing the protections
afforded to its clients or customers under the rules of the FCA,
for providing advice in relation to the Placing, in respect of any
representations, warranties, undertakings or indemnities contained
in the Placing Agreement or 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. In
addition, any payment by it will not be treated as client money
governed by the rules of the FCA;
30. Investec and its Affiliates, acting as an investor for its
or their own account(s), may bid or subscribe for and/or purchase
Placing Shares and, in that capacity, may retain, purchase, offer
to sell or otherwise deal for its or its own account in the Placing
Shares, any other securities of the Company or other related
investments in connection with the Placing or otherwise.
Accordingly, references in this Announcement to the Placing Shares
being offered, subscribed, acquired or otherwise dealt with should
be read as including any offer to, or subscription, acquisition or
dealing by, Investec and/or any of its respective Affiliates acting
as an investor for its or their own account. None of Investec or
the Company intend to disclose the extent of any such investment or
transaction otherwise than in accordance with any legal or
regulatory obligation to do so;
31. this Appendix and all documents into which this Appendix are
incorporated by reference or otherwise validly form a part and/or
any agreements entered into pursuant to these terms and conditions
and all agreements to subscribe for shares pursuant to the Placing
will be governed by and construed in accordance with English law
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 Investec 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;
32. the Company and Investec (including each of their respective
Affiliates) will rely upon the truth and accuracy of the foregoing
agreements, acknowledgements, representations, warranties and
undertakings which are given to Investec, on its own behalf and on
behalf of the Company, and are irrevocable;
33. it irrevocably appoints any duly authorised officer of
Investec as its agent for the purpose of executing and delivering
to the Company and/or its registrars any documents on its behalf
necessary to enable it to be registered as the holder of any of the
Placing Shares for which it agrees to subscribe or purchase upon
the terms of this Appendix;
34. (i) it has knowledge and experience in financial, business
and international investment matters and is required to evaluate
the merits and risks of subscribing for the Placing Shares; (ii) it
is experienced in investing in securities of this nature and is
aware that it may be required to bear, and is able to bear, the
economic risk of, and is able to sustain a complete loss in
connection with, the Placing; and (iii) it has relied upon its own
examination and due diligence of the Company and its associates,
taken as a whole, and the terms of the Placing, including the
merits and risks involved;
35. if it is acquiring the Placing Shares as a fiduciary or
agent for one or more investor accounts, it has full power and
authority to make, and does make, the foregoing representations,
warranties, acknowledgements, agreements and undertakings on behalf
of each such accounts;
36. time is of the essence as regards its obligations under this
Appendix;
37. any document that is to be sent to it in connection with the
Placing will be sent at its risk and may be sent to it at any
address provided by it to Investec;
38. it will be bound by the terms of the articles of association
of the Company;
39. the Placing Shares will be issued subject to the terms and
conditions of the Placing Agreement and this Appendix;
40. its commitment to subscribe for Placing Shares on the terms
set out in this Appendix and in the order acknowledgement will
continue notwithstanding any amendment that may in future be made
to the terms of the Placing and that it will have no right to be
consulted or require that their consent be obtained with respect to
the Company's or Investec's conduct of the Placing;
41. by participating in the Placing, each Placee (and any person
acting on such Placee's behalf) agrees to indemnify on an after-tax
basis and hold the Company, Investec and their respective
Affiliates harmless from any and all costs, claims, liabilities and
expenses (including legal fees and expenses) arising out of or in
connection with any breach of the representations, warranties,
acknowledgements, agreements and undertakings given by the Placee
(and any person acting on such Placee's behalf) in this Appendix or
incurred by the Company, and Investec and each of their respective
Affiliates arising from the performance of the Placee's obligations
as set out in this Appendix and further agrees that the provisions
of this Appendix shall survive after completion of the Placing;
42. acknowledges 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 agreement 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 (including non-contractual
matters) 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 Investec 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; and
43. to the fullest extent permitted by law, it acknowledges and
agrees to the disclaimers contained in the Announcement.
The agreement to allot and issue Placing Shares to Placees (or
the persons for whom Placees are contracting as agent) free of
stamp duty and stamp duty reserve tax in the United Kingdom relates
only to their allotment and issue to Placees, or such persons as
they nominate as their agents, direct by the Company. Such
agreement assumes that the Placing Shares are not being acquired in
connection with arrangements to issue depositary receipts or to
transfer the Placing Shares into a clearance service. If there are
any such arrangements, or the settlement related to any other
dealings in the Placing Shares, stamp duty or stamp duty reserve
tax may be payable. In that event, the Placee agrees that it shall
be responsible for such stamp duty or stamp duty reserve tax and
neither the Company nor Investec shall be responsible for such
stamp duty or stamp duty reserve tax. If this is the case, each
Placee should seek its own advice and they should notify Investec
accordingly. In addition, Placees should note that they will be
liable for any capital duty, stamp duty and all other stamp, issue,
securities, transfer, registration, documentary or other duties or
taxes (including any interest, fines or penalties relating thereto)
payable outside the United Kingdom by them or any other person on
the acquisition by them of any Placing Shares or the agreement by
them to acquire any Placing Shares and each Placee, or the Placee's
nominee, in respect of whom (or in respect of the person for whom
it is participating in the Placing as an agent or nominee) the
allocation, allotment, issue or delivery of Placing Shares has
given rise to such non-United Kingdom stamp, registration,
documentary, transfer or similar taxes or duties undertakes to pay
such taxes and duties, including any interest and penalties (if
applicable), forthwith and to indemnify on an after-tax basis and
to hold harmless the Company and Investec in the event that either
the Company and Investec have incurred any such liability to such
taxes or duties.
The representations, warranties, acknowledgements and
undertakings contained in this Appendix are given to Investec for
itself and on behalf of the Company and are irrevocable, will
survive completion of the Placing and shall not be capable of
termination in any circumstances. Each Placee, and any person
acting on behalf of the Placee, acknowledges and agrees that
Investec does not owe any fiduciary or other duties to any Placee
in respect of any representations, warranties, undertakings,
acknowledgements, agreements or indemnities in the Placing
Agreement.
When a Placee or person acting on behalf of the Placee is
dealing with Investec, any money held in an account with Investec
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. Each Placee
acknowledges and agrees 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 Investec's money in
accordance with the client money rules and will be used by Investec
in the course of its own business; and the Placee will rank only as
a general creditor of Investec.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
All times and dates in this Announcement are to London time and
may be subject to amendment.
The price of shares and any income expected from them may go
down as well as up and investors may not get back the full amount
invested upon disposal of the shares. Past performance is no guide
to future performance, and persons needing advice should consult an
independent financial adviser.
The Placing Shares to be issued or sold pursuant to the Placing
will not be admitted to trading on any stock exchange other than
the London Stock Exchange.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser.
DEFINITIONS
In addition to the terms previously defined, the following
definitions apply throughout this Appendix unless the context
otherwise requires:
"Acquisition" the conditional acquisition by the Company of the
entire issued share capital of Globaltex 2015 Limited on the terms
of the Acquisition Agreement;
"Acquisition Agreement" the share purchase agreement entered
into on 12 October 2016 between the Company and the Sellers in
relation to the Acquisition;
"Admission" the admission of the Placing Shares to trading on
AIM becoming effective in accordance with the AIM Rules;
"Affiliates" any of either the Company or Investec's affiliates,
agents, directors, officers, employees or consultants, but in
respect of Investec only, also includes any person connected with
Investec as defined in FSMA;
"AIM" AIM, a market operated by the London Stock Exchange;
"AIM Rules" the AIM Rules for Companies, incorporating guidance
notes, published by the London Stock Exchange as at the date of
this Announcement;
"Appendix" this appendix to the Announcement;
"Business Day" a day (excluding Saturdays, Sundays and public
holidays in the United Kingdom) on which banks are generally open
for normal banking business in the City of London;
"Circular" the circular to be sent to the Shareholders on the
date of this Announcement, containing details of, inter alia, the
Acquisition and the Placing, and containing the notice of the
General Meeting;
"Company" Walker Greenbank PLC, a company incorporated and
registered in England and Wales under the Companies Act 2006 (as
amended) with registered number 61880;
"EEA" European Economic Area;
"FSMA" the Financial Services and Markets Act of 2000 (as
amended);
"General Meeting" the general meeting of the Company to be held
on 28 October 2016 (or any adjustment thereof) at which the
Resolutions will be proposed;
"Group" the Company and its respective subsidiary undertaking
and associates (as defined in s345 of the Companies Act 2006) from
time to time;
"Investec" Investec Bank plc, a company incorporated in England
and Wales with registered number 489604;
"London Stock Exchange" London Stock Exchange plc;
"Material Adverse Change" any adverse change in, or any
development or event reasonably likely to result in an adverse
change in, or affecting, the condition (financial, operational,
legal or otherwise), earnings, business, management, financial
position, properties, assets, rights, results of operations, net
asset value, funding position, liquidity, solvency, prospects or
general affairs of the Group which is material in the context of
the Group as a whole, whether or not arising in the ordinary course
of business;
"Ordinary Shares" ordinary shares of GBP0.01 each in the capital
of the Company;
"Placing" the conditional placing of the Placing Shares with
certain institutional investors at the Placing Price pursuant to
the terms of the Placing Agreement;
"Placing Agreement" the conditional agreement dated 12 October
2016 between the Company and Investec relating to the Placing;
"Placing Documents" together the Presentation, this
Announcement, the Circular and these terms and conditions;
"Placing Price" 190.0 pence per Placing Share;
"Placing Shares" 8,947,369 new Ordinary Shares to be issued
pursuant to the Placing;
"Presentation" the presentation by the Company in the marketing
of the Placing to institutional investors;
"Regulatory News Service" the electronic information
dissemination service operated by London Stock Exchange's Company
Announcements Office, or any alternative (primary information
provider service) which the Company has selected for the purpose of
making regulatory announcements in accordance with the AIM
Rules;
"Resolutions" the resolutions to be proposed at the General
Meeting and to be set out in the notice of the General Meeting;
"Shareholder" holder of Ordinary Share(s);
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland;
"United States" United States of America, its territories and
possessions, any state of the United States of America and the
District of Columbia and all other areas subject to its
jurisdiction; and
"US Securities Act" the US Securities Act of 1933, as
amended.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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