TIDMSLWD
RNS Number : 1505Z
Silverwood Brands PLC
10 January 2024
10 January 2024
Silverwood Brands Plc
("Silverwood" or the "Company")
Settlement Deed
Silverwood Brands Plc (AQSE: SLWD), a holding company
established to invest primarily in branded consumer businesses, is
pleased to announce that the Company has agreed a conditional
settlement deed (the "Settlement Deed") with Andrew Gerrie and
Alison Hawksley (the "Lush Vendors").
Terms used in this announcement are defined at the end of this
announcement unless otherwise defined herein.
On 12 December 2022, the Company announced a transaction (the
"Lush Transaction") to acquire a 19.8% stake in Lush Cosmetics
Limited and Cosmetic Warriors Limited (together, "Lush") from the
Lush Vendors. Following Lush's refusal to register the transfers of
shares in Lush (the "Lush Shares") to Cosmic Circles Limited, the
Company announced on 9 October 2023 that it had decided to withdraw
the request that Lush register the transfers of the Lush Shares to
Cosmic. The Company further announced that it was seeking to take
steps with a view to unwinding the Lush Transaction.
As part of this process, the Company has now reached a
settlement with the Lush Vendors pursuant to the Settlement
Deed.
The terms of the Settlement Deed include (but are not limited
to) the following:
-- An initial cash payment of GBP300,000 from the Lush Vendors
to the Company, as a contribution to Silverwood for some of the
costs it has incurred and/or will incur in connection with the Lush
Transaction and the subsequent litigation. Such sum is to be paid
by the Lush Vendors to the Company by 16 January 2024 .
-- The Lush Vendors have conditionally agreed to pay, or procure
certain payments are made (whether in cash or in kind), to
Silverwood including:
o following a Successful Outcome, the amount of the stamp duty
paid in relation to the Lush Transaction in the event that the
Company is unable to recover the same from HM Revenue &
Customs;
o a cash amount equivalent to one per cent. of any net cash
amount that the Lush Vendors receive as a result of a Successful
Outcome;
o an investment or loan of a sum equivalent to at least five per
cent. of the net proceeds received by the Lush Vendors in
connection with a Successful Outcome (less certain agreed amounts
that may be advanced by the Lush Vendors during the Cooperation
Period as defined below) provided that Andrew Gerrie is a director
of the Company at the time of such proposed investment or loan.
In addition, the parties have agreed in the Settlement Deed to
enter into a period during which the Lush Vendors will work
together with the Company to cancel the Consideration Shares via a
Proposed Capital Reduction Procedure (the "Cooperation Period").
The Cooperation Period shall commence from the date that the Lush
Vendors hold all of the Consideration Shares including those
Consideration Shares currently held by VSA Capital Limited ("VSA
Capital"). The Lush Vendors have in that regard undertaken to the
Company to recover the Consideration Shares currently held by VSA
Capital. The Cooperation Period shall end once the Consideration
Shares have been cancelled pursuant to the Proposed Capital
Reduction Procedure. Until Completion or the lapse of the
Settlement Deed, the parties have agreed not to take active steps
to make Claims (if any) against each other in relation to the Lush
Transaction.
Furthermore, each of the Lush Vendors has agreed in the
Settlement Deed not to exercise any rights attaching to the
Consideration Shares during the Cooperation Period without the
prior written consent of Silverwood. Accordingly, the Lush Vendors
will not sell, transfer or otherwise dispose of, or create any
encumbrance over, any of their Consideration Shares (or any
interest in them), or enter into any agreement to do so.
In the event that the Cooperation Period has not commenced by 30
April 2024, or such later date as agreed by the parties, the
Settlement Deed shall lapse and will not be binding on the
parties.
Upon Completion, the parties have agreed to fully and finally
settle and release all Claims against each other arising under or
in connection with the Lush Transaction save that in the event that
there is no Completion or a Change of Control Event occurs prior to
Completion:
-- there will be no settlement of Claims under the Settlement Deed;
-- any payments (including the Initial Payment) or loans made by
or on behalf of the Lush Vendors to the Company pursuant to the
Settlement Deed shall be immediately repayable by the Company;
and
-- certain obligations of the Lush Vendors under the Settlement
Deed that became effective prior to Completion shall be terminated
with immediate effect and no further performance by them will be
required.
The Settlement Deed is intended to be and is a compromise
amongst the parties.
As Andrew Gerrie is Chief Executive of the Company, the
Settlement Deed is deemed to be a related party transaction
pursuant to Rule 4.6 of the Access Rulebook. The Company's
directors (excluding Andrew Gerrie) having exercised reasonable
care, skill and diligence, consider that the terms of the
Settlement Deed are fair and reasonable insofar as the shareholders
of the Company are concerned.
Non- Delivery Notice
On or about 24 October 2023, the Company delivered the
Non-Delivery Notice to the Lush Vendors to notify them that title
of the Lush Shares had not been delivered. Pursuant to the terms of
the SPA, the Lush Vendors appointed a director of the Company,
namely Paul Hodgins, as attorney over the Consideration Shares,
with full power to exercise all rights, powers and privileges in
relation to the Consideration Shares in order to protect the
Company's interests.
Separately, in consideration of Silverwood consenting to the
transfer by the Lush Vendors of some of the Consideration Shares to
VSA Capital in January 2023, VSA Capital undertook to the Company
to comply with, observe, perform and be bound by the provisions in
the SPA concerning the appointment of the attorney over those
Consideration Shares in the same way as the Lush Vendors.
Silverwood notes from the announcement made by VSA Capital on 29
November 2023 that they are in dispute with the Lush Vendors in
relation to the Consideration Shares.
The Company will announce further information regarding the
process to unwind the Lush Transaction as soon as practicable.
Pending the publication of that further information, trading in the
Company's ordinary shares on the Access segment of the Aquis Growth
Market will remain suspended.
Sonotas
In January 2023, the Company completed the acquisition of 90% of
the issued share capital of Sonotas Holdings Corporation and 100%
of the share capital of Sonotas Corporation from, amongst others,
Andrew Tone, a Director of the Company, for an initial
consideration of approximately GBP16.0 million, satisfied in cash
and ordinary shares in Silverwood. The Company also agreed to pay
Andrew Tone deferred consideration, on or before 15 December 2023,
with such consideration being satisfied in cash or ordinary shares
in Silverwood.
The Company and Andrew Tone have agreed to postpone the
settlement of this deferred consideration until the process and
timing of the Proposed Capital Reduction Procedure have been
confirmed.
As Andrew Tone is an Executive Director of the Company, the
agreement regarding the deferred consideration is deemed to be a
related party transaction pursuant to Rule 4.6 of the Access
Rulebook. The Company's directors (excluding Andrew Tone) having
exercised reasonable care, skill and diligence, consider that the
terms of the agreement regarding the deferred consideration are
fair and reasonable insofar as the shareholders of the Company are
concerned.
Silverwood Brands Plc info@silverwoodbrands.com
Paul Hodgins
Peterhouse Capital Limited (Aquis
Corporate Adviser)
Mark Anwyl
Narisha Ragoonanthun
Brefo Gyasi +44 (0)20 7469 0930
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation EU 596/2014 as it forms
part of retained EU law (as defined in the European Union
(Withdrawal) Act 2018).
Definitions
the Access Rulebook the rules of the Access segment of the
Aquis Growth Market published time to
time.
Aquis Exchange Aquis Stock Exchange Ltd a recognised
investment exchange under section 290
of the Financial Services and Markets
Act 2000 (as amended).
AQSE Growth Market the primary market for unlisted securities
operated by the Aquis Exchange.
Change of Control (a) Andrew Gerrie ceases to be a director
Event of Silverwood other than with his written
consent; and/or
(b) there is a change of Control in Silverwood
other than certain agreed events.
Claim an actual or potential claim or complaint,
demand, counterclaim, right of set-off,
right to receive payment, indemnity,
cause of action, right or interest of
any kind or nature whatsoever, whether
known or unknown, contingent or actual,
present or future, however and whenever
arising and in whatever capacity and
jurisdiction.
Completion the completion of the Proposed Reduction
of Share Capital Procedure or the completion
of an alternative mechanism agreed by
the parties (whichever completes first).
Consideration Shares the 228,212,632 ordinary shares in Silverwood
issued to the Lush Vendors pursuant to
the Lush Transaction.
Control has the meaning as defined in the City
Code on Takeovers and Mergers published
by the Takeover Panel.
Cosmic Cosmic Circles Limited, a wholly owned
subsidiary of the Company.
Initial Payment an initial cash payment of GBP300,000
to be paid by the Lush Vendors to Silverwood
by 16 January 2024.
Non-Delivery Notice a notice delivered by the Company to
the Lush Vendors under the terms of the
SPA.
parties parties to the Settlement Deed.
Proposed Reduction the proposed cancellation of the Consideration
of Share Capital Procedure Shares pursuant to chapter 10 of Part
17 of the Companies Act 2006.
Settlement Deed the conditional settlement deed entered
into by the Lush Vendors, the Company
and Cosmic.
SPA the sale and purchase agreement dated
11 December 2022 in between the Lush
Vendors and Silverwood
Successful Outcome means the Lush Vendors' net receipt of
the unencumbered proceeds of their sale
of or dealings in some or all of the
Lush Shares, whether or not arising out
of legal proceedings.
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END
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