RNS Number : 5349J
Wensum Company PLC
04 December 2008
This announcement is not for release, publication or distribution in or into the United States, Canada, Australia, South Africa or Japan
or in any other country outside the United Kingdom where such distribution may lead to a breach of any legal or regulatory requirement.
4 December 2008
PROPOSED ACQUISITION OF CROWN EAST GROUP BY WENSUM
Highlights
* Wensum, the AIM quoted UK corporatewear company, is to acquire Crown East through the issue of new Wensum Shares.
* Crown East is a well-established UK and international corporate and workwear group principally comprising the Faithful, Rainbow
and Monarch businesses. Crown East is privately-owned.
* The combined annual sales of the Enlarged Group are approximately �30 million (based on the most recent audited accounts of the
two companies).
* The proposed acquisition has the following key objectives: greater critical mass; substantial cost savings; and enhanced
management strength to enable to Enlarged Group to become a significant presence in the corporate and workwear markets in the future.
* Following completion of the Acquisition, existing Wensum shareholders will hold approximately 40 per cent. of the Enlarged Share
Capital and the vendors of Crown East will hold approximately 60 per cent. The Acquisition values Crown East at approximately �3.0 million
and the market capitalisation of the Enlarged Group is approximately �5.0 million at Wensum's current share price.
* The transaction is subject to the approval of Wensum Shareholders at a general meeting to be held on 19 December 2008. The Board
intends to recommend unanimously that Shareholders vote in favour of the Proposals; irrevocable undertakings to vote in favour of the
proposals have been given in respect of 41.0 per cent. of Wensum's Existing Shares (including the beneficial holdings of the Board, of
Wensum's former Chief Executive and of Wensum's largest independent shareholder).
* On completion of the Acquisition, the following Crown East directors will be joining the board of Wensum: Rt Hon Stephen Dorrell
MP (as Deputy Chairman); Paul Curtis (as Chief Executive); and Lars Maynard (as Finance Director). One existing Wensum director, Sandra
Badman, will be stepping down from the Board on Admission and John Newman will be joining the Board as a non-executive director.
Commenting on the Acquisition, Stuart Lyons CBE, Chairman of Wensum, said:
"By merging with Crown East, Wensum will create a much larger group with greater critical mass. We expect the enlarged group will be
able to operate from a lower overhead base and achieve valuable economies of scale. Wensum and Crown East's Rainbow business both operate
in the corporatewear market and together we believe they will become a more powerful force in the marketplace. The Faithful and Monarch
businesses will give the Wensum group a broader spread of activities, by taking us into the workwear and protectivewear sectors. We will
also have access to the Dutch and German markets through Crown East's business in the Netherlands, and to sourcing and distribution
opportunities through its Tunisian operations."
Chairman of Crown East, Rt Hon Stephen Dorrell MP, said:
"The proposed combination of the businesses of Crown East and Wensum represents an opportunity to achieve improved trading performance
for both companies and to enhance the position of the businesses of the Enlarged Group in their markets."
This summary should be read in conjunction with the full text of this announcement. The definitions of certain terms used in this
announcement are set out in the Appendix to this announcement. The Admission Document will be sent to Shareholders later today and will be
available on the Company's website www.wensum.co.uk when issued.
Enquiries
Wensum
Stuart Lyons, Chairman +44 (0) 1293 422 700
Crown East
Stephen Dorrell, Chairman +44 (0) 1332 342 616
Brewin Dolphin Limited
(Financial adviser and nomad to Wensum up to Admission)
Neil Baldwin +44 (0) 113 241 0126
Alison Barrow +44 (0) 845 213 4848
Smith & Williamson
(Financial adviser to Crown East and nomad to Wensum from Admission)
Azhic Basirov +44 (0) 20 7131 4000
David Jones +44 (0) 20 7131 4000
This announcement is not for release, publication or distribution in or into the United States, Canada, Australia, South Africa or
Japan or in any other country outside the United Kingdom where such distribution may lead to a breach of any legal or regulatory
requirement.
4 December 2008
Proposed acquisition of Crown East Group Limited by The Wensum Company plc
Proposed waiver of Rule 9 of the City Code on Takeovers and Mergers
and
Re-admission to trading on AIM
Introduction
The Company announces that it has entered into a conditional Sale and Purchase Agreement to acquire the whole of the issued share
capital of Crown East Group Limited. Crown East is a company operating in the corporatewear and workwear markets, and its businesses and
brands include Faithful, Rainbow and Monarch, and it has overseas operations in Holland and Tunisia. For the year ended 31 December 2007,
prior to the acquisition of Monarch, it had annual sales of just over �24 million. The consideration under the Acquisition will be satisfied
by the allotment to the Vendors of the Consideration Shares, valuing Crown East at �3.0 million (based on the closing mid-market price per
Ordinary Share of 25.5p on 2 December 2008). The Consideration Shares will represent approximately 60 per cent. of the Enlarged Issued Share
Capital.
Crown East is a larger business than Wensum. Consequently, the transaction is a reverse takeover of the Company under the AIM Rules and
so will require the approval of Existing Shareholders at the General Meeting. Irrevocable undertakings to vote in favour of the Resolutions
at the General Meeting have been given in respect of holdings amounting in aggregate to 3,213,680 Ordinary Shares representing 41.0 per
cent. of the Existing Shares. On Admission, following such approval being given, Existing Shareholders will hold approximately 40 per cent.
of the equity of the Enlarged Group, while Wensum's sales for the year ended 26 January 2008 will account for approximately 20 per cent. of
the historical aggregate sales of the Enlarged Group.
Following completion of the Acquisition, a Concert Party (comprising, inter alia, the current shareholders of Crown East) will have an
aggregate holding of 11,750,000 issued Ordinary Shares, representing 60 per cent. of the Enlarged Share Capital. As the Concert Party will
be interested in more than 30 per cent. of the Enlarged Issued Share Capital, in normal circumstances a general offer to Existing
Shareholders would be required under Rule 9 of the Takeover Code to acquire all the Ordinary Shares not already owned by the Concert Party.
However, the Panel has agreed to waive the requirement for such an offer under Rule 9, subject to the approval of Existing Shareholders.
Accordingly, a resolution will be proposed at the General Meeting to approve the Waiver.
If all of the Resolutions are duly passed at the General Meeting, the Company's existing quotation on AIM will be cancelled and the
Enlarged Issued Share Capital will be admitted to trading on AIM immediately thereafter.
Background to and reasons for the Acquisition
Over the past three years, the Group has been reshaped with the sale of both the tailoring business, releasing a substantial amount of
working capital, and the Norwich manufacturing site which has realised in excess of �1.2 million. This restructuring enabled the Group to
concentrate on its core corporatewear business supported by a strong cash position. The Board continues to regard this strategy as sound and
believes that there are attractive commercial opportunities within the corporatewear sector.
However, the rationalisation of the Group's trading activities has reduced the annual sales of the business from �15.5 million to �6.0
million over a three-year period, and the Existing Directors believe that a perceived lack of critical mass is a significant underlying
reason for its disappointing recent sales performance. The Existing Directors see the following factors as key to the development of
Wensum:
* Develop greater critical mass to improve customer perception;
* Reduce the operating and overhead cost base as a percentage of revenues; and
* Provide proven management succession in a cost effective manner.
Having considered several initiatives during the past eighteen months, the Existing Directors have concluded that the proposed
acquisition of Crown East provides a suitable opportunity to meet all three objectives, with a view to the Enlarged Group becoming a
significant presence in the corporatewear and workwear markets in the future. Furthermore, the Existing Directors believe that Wensum's
strong cash position and brand value have enabled the Company to negotiate acquisition terms that will be attractive to Existing
Shareholders.
The Directors have identified the following which they believe will be advantages for the Enlarged Group:
* Critical mass and expertise to meet the challenges of the present and prospective markets, and defensive strengths through greater
product-market diversification;
* Substantial cost savings from combining the operating and overhead structures of Wensum and Crown East which the Directors believe
can be achieved at a manageable cost and within a short time scale; and
* Management strengths and skills, with appropriate management succession.
Following an initial period of consolidation, the Directors believe the Enlarged Group will deliver better trading results than would be
possible on a stand-alone basis.
Information on Crown East
Crown East is an unquoted company which took its present form as a result of a series of transactions over the last decade which have
brought together complementary businesses, several of which trace their roots back to the nineteenth century.
Crown East is chaired by Stephen Dorrell and is substantially owned by his family interests. It has made operating losses during the
recent past, but a new management team has been introduced during the past 12 months and has restructured the Crown East Group into three
divisions:
* UK Corporatewear - engaged in the direct supply to employers by the Rainbow and Monarch businesses of staff clothing,
protectivewear and accessories;
* UK Workwear - specialising in the supply by the Faithful business of branded workwear and protective clothing to industrial
distributors and garment rental companies; and
* International - including the distribution in Holland, Germany and the Middle East of branded workwear and military clothing, and
the manufacture and sourcing of workwear and protectivewear in Tunisia.
The Existing Directors believe that Crown East is a well-established business, and that the combination of new management, the financial
resources available from Wensum and the synergies identified will deliver better trading results for the Enlarged Group than would be
possible on a stand-alone basis after a period of change.
Summary financial information on Crown East
Year Year Year 6 months
ended ended ended ended
31 December 31 December 31 December 30 June
2005(1) 2006 2007 2008(2)
�'000 �'000 �'000 �'000
Turnover 25,482 23,554 24,052 14,096
(Loss)/profit before tax (876) (314) (2, 038) 1,498
Net (loss)/profit (979) (413) (2, 218) 1,457
Net current assets 4,251 3,876 1,338 2,921
Net assets 5,907 5,928 4,416 6,563
Net borrowings (4,032) (5,356) (7,078) (6,777)
(1) The information for the year ended 31 December 2005 was prepared using UK GAAP. Financial information presented for the year ended
31 December 2006, the year ended 31 December 2007 and the six months ended 30 June 2008 reflects preparation under IFRS.
(2) Included in profit before tax in the 6 months ended 30 June 2008 is an exceptional profit of �1,565,000 arising on the sale of a
property.
Current trading of Crown East
The corporate clothing market has proved to be very competitive in recent years and the trading environment remains challenging.
However, for the six months to 30 June 2008, the Crown East Group saw improved trading over the levels reported in the same period of 2007.
During the first half of the year, the Crown East Group also disposed of a freehold site which resulted in an exceptional profit of
approximately �1.6 million. Net borrowings in the Crown East Group as at 30 June 2008 were approximately �6.8 million.
During the second half of the year Crown East has experienced a slowdown in trading activity and increased pressure on gross margins
resulting in a return to operating losses. Management has responded by initiating a programme of staff reductions and site rationalisation.
Information on Wensum
The business of Wensum originally formed part of the business of the Horne Brothers Plc group of Companies, a high street retailer of
men's tailored garments. It developed a business supplying products to other premium retail outlets and, during the 1980s, began to design
and manufacture corporatewear for corporate clients, in particular in the airline and retail sectors.
In 1988, Wensum was the subject of a management buyout and was subsequently floated on the Unlisted Securities Market of the London
Stock Exchange in 1989, moving to the Official List in 1995. When it was floated, the business of Wensum consisted of two divisions, the
manufacturing division which traded from a site in Norwich, and supplied men's tailored outerwear to premium retailers (Wensum Clothing),
and the corporatewear division which moved to its own distribution facilities near Gatwick Airport (Wensum Corporate).
The Board appointed Stuart Lyons as an independent director in 2001 and as chairman in 2003. Following a review of the challenges facing
the business, the Board decided to downsize the Wensum Clothing business and focus on the more promising business of Wensum Corporate. Jean
Phillips, Managing Director of Wensum Corporate, was appointed Chief Executive of the Group in March 2004 and resigned in December 2008. In
May 2004, the Company transferred from the Official List to AIM.
The manufacture of tailored garments was progressively transferred overseas and manufacturing in Norwich ultimately ceased in July 2005.
The Wensum Clothing business was sold in May 2006 and the Norwich premises were sold in February 2007, leaving Wensum Corporate as the sole
trading activity of the Group.
The core activity of Wensum is currently the supply of a full corporatewear managed service to customers in the travel and leisure,
financial services and retail sectors with a number of high profile clients in those sectors as well as supplying uniforms to the Royal
Household. Wensum also supplies garments and accessories to customers through a limited catalogue range.
Summary financial information on Wensum
Year Year Year 27 weeks
ended ended ended ended
27 January 27 January 26 January 2 August
2006 2007 2008 2008
�'000 �'000 �'000 �'000
Revenue 10,152 6,368 6,017 3,389
Profit/(loss) before tax 1,558 1,204 (282) (25)
Net profit/(loss) 279 602 (244) (18)
Earnings/(loss) per share (p) 14.24 10.60 (3.11) (0.23)
Net current assets 4,617 5,646 4,827 4,484
Net assets 5,759 5,844 5,083 4,721
Net cash 1,910 3,254 2,275 1,150
Current trading of Wensum
Revenues for the 27-week period ended 2 August 2008 rose to �3.4 million (2007: �3.0 million). However, this gain was achieved at a
significant cost in gross margins, which were under considerable pressure due to market conditions and competitive forces, while operating
costs increased. The Group incurred a loss on continuing operations of �18,000 (2007: profit �202,000). Cash balances fell from �2.3 million
at the year-end to �1.15 million, reflecting the trading performance, dividend payments and the build up of stocks prior to the shipment of
major contracts.
During the second half of the year, Wensum has experienced a slowdown in business activity and gross margins have remained under
pressure. Operating losses have increased appreciably, but a final instalment in respect of the sale of the Norwich property, amounting to
�550,000 has now been received yielding a profit of �535,000. Steps have been taken to reduce management costs and to bear down on capital
employed. Further cost reductions have been identified as a result of synergies which the Directors believe will be implemented following
completion of the Acquisition. It was announced earlier this week that Jean Phillips had resigned as Chief Executive and director of the
Company and that Stuart Lyons assumed the additional role of Chief Executive.
Intentions regarding the Enlarged Group
Wensum and Crown East have both reported losses in their most recent reported financial statements. The New Board believes that this is,
primarily, because they are carrying excessive overheads in proportion to their revenues. The New Board believes that this situation can be
remedied, even during the current challenging economic environment, because of the synergies which it believes are available to the Enlarged
Group. The New Board has identified a programme of business, site and process rationalisation which it believes should allow the Enlarged
Group to achieve a reduction in its annual overhead base over the next twelve months and beyond.
The New Board believes that there are also opportunities to improve the profitability of the Enlarged Group through purchasing
efficiencies and the rationalisation of the supply chain, including greater use of the Tunisian manufacturing facility and its sourcing
network, and Far East suppliers. Its plans include modest provision for additional management in the sourcing and logistics functions.
The New Board believes that a strength of the Enlarged Group is that it will have customers across different sectors and distribution
channels within the UK and overseas who will be able to draw on a broad range of products including workwear, corporatewear and
protectivewear. The New Board believes that, subject to market conditions, each business unit represents an opportunity for profitable
growth in its own right for the Enlarged Group.
The New Board intends that the existing employment rights, including pension rights, of all employees of the Group as required by
applicable law and the relevant employment regulations will be fully safeguarded.
While Wensum no longer operates a defined benefit pension scheme, Crown East has a defined benefit pension scheme that closed in 2005
but remained in deficit as at 31 December 2007. Crown East has in place a schedule of contributions agreed with the trustees to cover the
period to April 2011. The New Board intends to maintain close contact with the trustees to manage and reduce the Enlarged Group's exposure.
The Acquisition
As noted above, under the terms of the Sale and Purchase Agreement, Wensum is to acquire all the issued share capital of Crown East in
consideration for the allotment and issue of the Consideration Shares (credited as fully paid). This values Crown East at �3.0 million based
on the closing mid-market price per Ordinary Share of 25.5p on 2 December 2008.
The Acquisition is conditional on, inter alia, the passing of the Resolutions at the General Meeting and Admission becoming effective on
or before 22 December 2008.
Financial effects of the Acquisition
The Directors believe that the Acquisition will create the opportunity for overhead cost savings resulting from the centralisation of
key functions and the consolidation of several operating sites, which in turn should lead to an improvement in stock to sales ratios. The
Directors believe that, taken as a whole, the Enlarged Group can expect substantially higher sales than presently experienced by Wensum
together with improved trading performance and a more effective use of capital employed than if the Acquisition were not to proceed.
Board of Directors following Admission
On Admission, the New Board will comprise:
Stuart Lyons CBE, Chairman, aged 65
Stuart Lyons was managing director of UDS Group plc before joining Pearson plc as chief executive of the Royal Doulton group, which he
led successfully for 12 years. He has been a member of the Monopolies & Mergers Commission, a non-executive director of Hogg Robinson plc
and chairman of Gartmore Absolute Growth and Income Trust plc. He is chairman of Airsprung Furniture Group plc. He is a graduate of
Cambridge University and the Advanced Management Program at Wharton, USA.
Rt Hon Stephen Dorrell MP, Deputy Chairman, aged 56
Stephen Dorrell has been a Conservative Member of Parliament since 1979. He held various government offices from 1983 to 1997 and was a
member of the Cabinet from 1994 to 1997. He has been a director of Crown East and some of its predecessor companies since 1997; following
management changes in 2006 he has been leading the process of reshaping the Crown East Group. He was co-chairman of the Conservative Party
Public Service Policy Review. He is a graduate of Oxford University.
Paul Curtis, Chief Executive Officer, aged 54
Paul Curtis was a director of Celestion Textiles, a supplier to Marks & Spencer plc, from 1983 to 1987. From 1987 to 1990 he was a
divisional chief executive within the clothing division of Courtaulds Plc. From 1990 to 1994 he was Managing Director of the clothing
division of a privately held group of companies. In 1994, he led a management buyout of Monarch, which he ran as Managing Director until
March 2008 when Crown East acquired Monarch and he became Group Chief Executive of Crown East. He is a qualified industrial engineer and
non-executive chairman of the East Midlands Clothing & Textiles Association.
Lars Maynard, Finance Director, aged 49
Lars Maynard qualified as a chartered accountant with Grant Thornton, subsequently pursuing an international career with the firm until
1993. From 1993 to 1997 he held a series of board appointments as finance director in turnaround situations, gaining experience in a range
of manufacturing and service based industries. From 1999 until 2007 he was Group Finance Director of Composite Materials Technology Plc, an
international textile business with operations in the UK, the Far East and Australia. He joined Crown East as Group Finance Director on 1
October 2007.
Michael Hall, Non-executive Director, aged 60
Michael Hall, a qualified accountant, gained international experience early in his career with a multinational manufacturing company. On
returning to the UK he worked in manufacturing and retail before joining Wensum Clothing Limited in 1985. He was appointed a director of
Wensum Clothing Limited and Hornes Corporate Clothing Ltd in 1986. He was part of the original management buyout team of Wensum and was
finance director of the Group from June 1988 until September 2005 when he became a Non-executive Director.
John Newman, Non-executive Director, aged 62
John Newman has held main board directorships in both public and private company environments, spanning a variety of industries in the
UK and internationally. He qualified as an accountant in 1969 and, in his early career, worked as a management consultant with Price
Waterhouse. He was formerly chief executive of UKS Group Limited, a business with turnover of �25 million in corporatewear, workwear and
protectivewear, and, currently, he is a non-executive director of Airsprung Furniture Group plc and Great Western Ambulance Service NHS
Trust, a director and trustee of Headway Bristol Brain Injury Association Limited and a business adviser to The Prince's Trust in the south
west of England.
It is intended that, at the Company's 2009 annual general meeting, Stephen Dorrell will become Chairman, taking over this role from
Stuart Lyons, who will become Deputy Chairman.
As referred to in Wensum's last annual report, Sandra Badman and the Company had mutually agreed that Mrs Badman would leave the Company
in 2009. Mrs Badman will now resign as a director of the Company on Admission. The Board would like to thank Mrs Badman for her dedicated
service to the Company and her valuable contribution to its development. The Board extends its best wishes to Mrs Badman for the future.
Admission
Application will be made to the London Stock Exchange for the Enlarged Issued Share Capital to be admitted to trading on AIM. It is
expected that Admission will take place, and that dealings on AIM in the Enlarged Issued Share Capital will commence, on 22 December 2008.
Lock-ins and orderly market arrangements
All of the members of the New Board, Faithful Group Limited and Jonathan Peto who will, on Admission, own issued Ordinary Shares, have
undertaken with the Company and Smith & Williamson that they will not (subject to certain exceptions) dispose of any of their Ordinary
Shares until the expiry of 12 months after the date of Admission and that, for a further period of 12 months thereafter, they will not sell
or dispose of their Ordinary Shares except through the Company's broker for the time being. These undertakings are in respect of a total of
12,816,840 issued Ordinary Shares representing 65.45 per cent. of the Enlarged Issued Share Capital.
Reporting period
The Company's accounting reference date will be changed to 31 December and it will prepare its next accounts for the period ending 31
December 2008.
Under IFRS 3 "Business Combinations", the Acquisition is deemed to constitute a reverse acquisition and, as such, the next published
financial statements, following Admission, of the Enlarged Group will be a continuation of Crown East's financial statements. As such, the
consolidated financial statements will be issued under the name of Wensum but will be described in the notes as a continuation of the
financial statements of Crown East with one adjustment, which is to adjust retroactively Crown East's legal capital to reflect the legal
capital of Wensum.
Dividend policy
Historically, Wensum has paid dividends to Shareholders. In the future, the New Board intends to adopt an appropriate dividend policy
which will take into account the Enlarged Group's capital requirements, cash flows and earnings.
The New Board may amend the dividend policy of the Company from time to time and the above statement regarding the New Board's dividend
policy should not be construed as any form of profit forecast.
Appointment of nominated adviser and broker
The Company has agreed with effect from Admission to appoint Smith & Williamson to act as nominated adviser and broker to the Company.
In addition, Smith & Williamson has agreed with the Company to undertake the role of nominated adviser in relation to the application for
the admission of the Enlarged Issued Share Capital to AIM.
General Meeting
A General Meeting of the Company is to be convened for 10.00 a.m. on 19 December 2008 at the Company's registered office, South Corner,
Old Brighton Road, Lowfield Heath, Crawley, West Sussex RH11 0PH. The resolutions to be proposed at the General Meeting will be as
follows:
* to approve the Acquisition for the purposes of Rule 14 of the AIM Rules;
* to approve the Waiver;
* to authorise the Existing Directors to allot new Ordinary Shares, including authority to allot the Consideration Shares pursuant
to the Sale and Purchase Agreement; and
* to increase the authorised share capital of the Company from �450,000 to �2,550,000 by the creation of an additional 42,000,000
Ordinary Shares.
Resolutions 1, 2, 3 and 4 will be proposed as ordinary resolutions. As required by the Panel, Resolution 2 will be decided on a poll of
Existing Shareholders. All the Resolutions are conditions of the Acquisition, which will only proceed if all the Resolutions are carried.
Irrevocable undertakings
In addition to the undertakings of the Existing Directors set out below, Jean Phillips (former Chief Executive of Wensum) and New
Fortress Finance Holdings Limited have irrevocably undertaken to vote in favour of the Resolutions in respect of their beneficial holdings
amounting, in aggregate, to 2,146,840 Ordinary Shares representing 27.4 per cent. of the Existing Shares.
Recommendation and voting intentions
The Existing Directors, who have been so advised by Brewin Dolphin Limited, consider that the Proposals are fair and reasonable and in
the best interests of the Company and its Shareholders. In providing advice to the Existing Directors, Brewin Dolphin Limited has taken into
account the Existing Directors' commercial assessments.
Accordingly, the Board intends unanimously to recommend that Shareholders vote in favour of the Resolutions to be proposed at the
General Meeting as the Existing Directors and their connected persons have irrevocably undertaken to do in respect of their own beneficial
holdings amounting in aggregate to 1,066,840 Ordinary Shares representing 13.6 per cent. of the Existing Shares.
General
Further information on Wensum, Crown East and the Proposals will be set out in the Admission Document which will be sent to Shareholders
later today and will be available on the Company's website www.wensum.co.uk when issued.
Enquiries
Wensum
Stuart Lyons, Chairman +44 (0) 1293 422 700
Crown East
Stephen Dorrell, Chairman +44 (0) 1332 342 616
Brewin Dolphin Limited
(Financial adviser and nomad to Wensum up to Admission)
Neil Baldwin +44 (0) 113 241 0126
Alison Barrow +44 (0) 845 213 4848
Smith & Williamson
(Financial adviser to Crown East and nomad to Wensum from Admission)
Azhic Basirov +44 (0) 20 7131 4000
David Jones +44 (0) 20 7131 4000
This announcement does not constitute an offer or invitation to purchase, or the solicitation of an offer to sell, any securities.
This announcement contains forward looking statements, including, without limitation, statements containing the word "believes",
"anticipates", "expects", "target", "estimate", "will", "may", "should", "would", "intend" and similar expressions. Such forward looking
statements involve unknown risks, uncertainties and other factors which may cause the actual results, financial condition, performance or
achievements of the Enlarged Group, or industry results, to be materially different from any future results, performance or achievements
expressed or implied by such forward looking statements. Given these uncertainties, prospective investors are cautioned not to place undue
reliance on such forward-looking statements. Subject to their obligations under the AIM Rules, the Company and the Directors disclaim any
obligation to update any such forward looking statements in this announcement to reflect future events or developments.
Brewin Dolphin Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is the Company's
current nominated adviser and broker for the purposes of the AIM Rules. Its responsibilities as the Company's nominated adviser under the
AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company or to any director or to any other person in respect
of his reliance on any part of this announcement. Brewin Dolphin Limited is acting for the Company and no one else and will not be
responsible to any other person for providing the protections afforded to customers of Brewin Dolphin Limited nor for providing advice in
relation to the contents of this announcement or any matter referred to herein. No liability whatsoever is accepted by Brewin Dolphin
Limited for the accuracy of any information or opinions contained in this announcement or for the omission of any material information, for
which it is not responsible.
Smith & Williamson Corporate Finance Limited, which is authorised and regulated in the United Kingdom by the Financial Services
Authority, will be the Company's nominated adviser and broker following Admission for the purposes of the AIM Rules. Its responsibilities as
the Company's nominated adviser under the AIM Rules will be owed solely to the London Stock Exchange and will not be owed to the Company or
to any director or to any other person in respect of his reliance on any part of this announcement. Smith & Williamson Corporate Finance
Limited will be acting for the Company and no one else and will not be responsible to any other person for providing the protections
afforded to customers of Smith & Williamson Corporate Finance Limited nor for providing advice in relation to the contents of this
announcement or any matter referred to herein. No liability whatsoever is accepted by Smith & Williamson Corporate Finance Limited for the
accuracy of any information or opinions contained in this announcement or for the omission of any material information, for which it is not responsible.
APPENDIX
Definitions
In this announcement, unless the context requires otherwise, the following expressions shall have the following meanings:
"Acquisition" the proposed acquisition of Crown East by the Company
"Admission" admission of the Enlarged Issued Share Capital to trading on AIM
and such admission becoming effective in accordance with the AIM
Rules
"Admission Document" the document to be sent to Shareholders containing information on
the Proposals
"AIM" "AIM" the market of that name operated by the London Stock
Exchange
"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange
governing admission to and operation of AIM
"Board" the directors of the Company prior to Admission
"Company" or "Wensum" The Wensum Company plc
"Concert Party" the Vendors and certain other individuals deemed by the Panel to
be acting in concert in relation to the Acquisition
"Consideration Shares" the 11,750,000 new Ordinary Shares to be issued by the
Company on completion of the Acquisition
"Crown East" Crown East Group Limited
"Directors" the Existing Directors and the Proposed Directors
"Enlarged Group" the Group as enlarged by the Acquisition
"Enlarged Issued Share Capital the issued ordinary share capital of the Company immediately
following Admission comprising the Existing Shares and the
Consideration Shares
"Existing Directors" the existing directors of the Company being Stuart Lyons, Sandra
Badman and Michael Hall
"Existing Shares" the 7,833,916 Ordinary Shares in issue immediately prior to
Admission
"Existing Shareholders" the Shareholders prior to Admission
"Financial Services Authority" the UK Financial Services Authority
or "FSA"
"FSMA" the UK Financial Services and Markets Act 2000 (as amended)
"General Meeting" the general meeting of the Company to be convened for 10.00 a.m.
on 19 December 2008, or any adjournment thereof
"Group" the Company and its subsidiaries
"London Stock Exchange" "London Stock Exchange plc
"New Board" the board of directors of the Company as constituted following the
Acquisition
"Notice of General Meeting" the notice of the General Meeting
"Official List" the Official List of the UK Listing Authority
"Ordinary Shares" or "Shares" ordinary shares of �0.05 each in the capital of the Company
"Panel" the Panel on Takeovers and Mergers
"Proposals" the Acquisition, Waiver and Admission
"Proposed Directors" the proposed new directors of the Company to be appointed as from
Admission, being Stephen Dorrell, Paul Curtis, Lars Maynard and
John Newman
"Resolutions" the resolutions set out in the Notice of General Meeting
"Sale and Purchase Agreement" the agreement dated 4 December 2008 between the Vendors, Stephen
Dorrell and the Company pursuant to which the Company has
conditionally agreed to acquire the entire issued share capital of
Crown East
"Shareholders" holders of Ordinary Shares
"Takeover Code" the City Code on Takeovers and Mergers issued by the Panel
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland
"UK GAAP" Generally Accepted Accounting Principles in the United Kingdom
"UK Listing Authority" the Financial Services Authority acting in its capacity as the
competent authority for the purposes of Part VI of FSMA
"Vendors" the holders of the issued share capital of Crown East being
Faithful Group Limited, Paul Curtis and Jonathan Peto
"Waiver" the conditional waiver by the Panel of the obligation of the
Concert Party to make a general offer under Rule 9 of the Takeover
Code
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQEAPALEDKPFEE
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