TIDMHFG
RNS Number : 8821T
Hilton Food Group PLC
18 October 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN OR ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE MARKET ABUSE REGULATION (EU NO. 596/2014).
18 October 2017
Hilton Food Group plc ("Hilton" or the "Company")
Proposed Acquisition of Icelandic Group UK Limited and
associated Placing
and
Notice of General Meeting
Hilton (LSE: HFG), a leading specialist international meat
packing business, today announces its wholly owned subsidiary,
Hilton Foods Limited, has agreed to acquire Icelandic Group UK
Limited ("Seachill"), a leading chilled UK fish processor (the
"Acquisition"), for cash consideration of GBP80.8 million.
The Company also announces its intention to conduct a
non-pre-emptive underwritten cash placing to raise gross proceeds
of GBP55.9 million (the "Placing") to part-fund the Acquisition
through the issue of new ordinary shares at an indicative price per
share of 760 pence to be confirmed pursuant to an accelerated
bookbuilding process.
Acquisition Highlights
* Proposed acquisition of Seachill with an enterprise
value of GBP84.0 million
* Strategically and financially compelling transaction
for Hilton
* Attractive growth opportunity and entry into the
processing and supply of fish in the UK
* Existing customers see opportunities in adjacent
categories, such as fish, both in the UK and
internationally and the Acquisition therefore
broadens Hilton's offering to both the Group's UK and
overseas customers
* Chilled seafood market within Great Britain has
displayed resilient growth evidenced by a 20 year
track record of increasing market value
* Expected to be earnings enhancing in the first full
year
The Placing
* Fully underwritten placing of GBP53.0 million to
raise gross proceeds of GBP55.9 million at the
indicative share price
* Numis Securities Limited ("Numis") is acting as Sole
Sponsor, Financial Adviser and Joint Bookrunner in
respect of the Placing. Panmure Gordon (UK) Limited
("Panmure Gordon") has been appointed as Joint
Bookrunner with Numis (together the "Bookrunners")
* The Placing is being conducted through an accelerated
bookbuilding process which will be launched
immediately following this announcement
* The Placing will be used to part-fund the Acquisition,
with the balance of the Acquisition consideration
(plus associated transaction costs) to be funded by a
new debt package comprising a new banking facility
totalling GBP34.0 million
* Certain Directors of the Company have indicated their
intention to subscribe for Placing Shares. Further
details of the Placing and any participation by such
Directors will be set out in the announcement to be
made on the closing of the Placing which is expected
to be made later today
Robert Watson OBE, Chief Executive of Hilton, said: "The
processing and supplying of fish and seafood into the UK is an
attractive and growing market and one where we see considerable
opportunities to build Hilton's business. Our initial discussions
with key customers support this view and we look forward to
broadening our offering to both our UK and overseas customers
alongside our existing meat business."
Timetable
Announcement of the Acquisition 18 October 2017
Publication and posting of 18 October 2017
the Circular and the Forms
of Proxy
Latest time and date for receipt 10a.m. on 2 November 2017
of Forms of Proxy (or electronic
/ CREST proxy appointment)
General Meeting 10a.m. on 6 November 2017
Expected date of Completion 7 November 2017
of the Acquisition
Expected date of Admission 7 November 2017
and commencement of dealings
in the Placing Shares
The times and dates set out in the expected timetable of
principal events above and mentioned throughout this announcement
are times in London unless otherwise stated, and may be adjusted by
the Company in consultation with or, if required, with the
agreement of Numis.
A circular is expected to be published by the Company later
today (the "Circular"). The Circular will be submitted to the
National Storage Mechanism and will shortly be available for
inspection at: www.morningstar.co.uk/uk/NSM. The Circular will also
be available on the Company's website at:
http://www.hiltonfoodgroupplc.com/. Capitalised terms used, but not
defined in this announcement shall have the same meaning as set out
in the Circular.
Market soundings, as defined in the Market Abuse Regulation
("MAR"), were taken in respect of the Placing and the Acquisition
with the result that certain persons became aware of inside
information, as permitted by MAR. That inside information is set
out in this announcement in accordance with paragraph 7 of article
17 of MAR. Therefore, those persons that received inside
information in a market sounding are no longer in possession of
inside information relating to the Company and its securities.
For further information please contact:
Hilton Food Group plc Tel: 01480 387214
Robert Watson OBE, Group
Chief Executive
Nigel Majewski, Chief
Financial Officer
Numis Tel: 020 7260 1000
Mark Lander
Luke Bordewich
Andrew Hackney
Panmure Gordon Tel: 020 7886 2500
Erik Anderson
Andrew Godber
Tom Salvesen
Citigate Dew Rogerson Tel: 020 7638 9571
Angharad Couch
Ellen Wilton
Further information in relation to the Acquisition and the
Placing
1. Introduction
The Board announces that its wholly owned subsidiary, Hilton
Foods Limited (the "Buyer") has entered into a conditional
agreement to acquire the entire issued share capital of Seachill
with the Company entering into the agreement as guarantor. The
consideration for the Acquisition is GBP80.8 million which is
payable in cash on Completion.
In accordance with the Listing Rules, the Target Group is of
such a size relative to the Company that the Acquisition
constitutes a Class 1 Transaction and is, therefore, conditional
upon the approval of Shareholders at a General Meeting. The General
Meeting will be convened for 10 a.m. on 6 November 2017 at 2-8 The
Interchange, Latham Road, Huntingdon PE29 6YE and the notice of the
General Meeting containing the Resolutions will be set out at the
end of the Circular.
2. Background to and reasons for the transaction
Hilton
Hilton is a leading specialist international meat packing
business, supplying major international retailers from its
state-of-the-art facilities. Hilton's business was established in
1994 to set up and operate a beef and lamb central meat packing
facility in Huntingdon, England. Hilton has grown rapidly and now
has six factories across Europe plus a joint venture which allows
the Group's products to be sold in supermarkets across 14 European
countries. Hilton also formed a joint venture with Woolworths,
Australia in 2013 which operates two factories and the Group has
recently announced that it will be constructing a new meat
processing facility in Queensland to be operated as Hilton Foods
Australia, a subsidiary 100% owned by Hilton.
Hilton strategy
From the outset, Hilton has had a simple, clear and well defined
strategy focusing on the following four key elements:
1. Building volumes with and extending product ranges for existing customers;
2. Partnering with existing customers in new territories;
3. Gaining new customers in new territories; and
4. Maintaining an uncompromising focus on unit costs, quality and product development.
Throughout Hilton's development it has worked closely and
collaboratively with its customers to deliver the strategy outlined
above. The Group has grown its capacity and capabilities through
disciplined capital investment and continued innovation, to meet
its customers' commercial needs and expanding its range of services
to enhance its customer offering. The Group's successful expansion
into international markets, including recent investments in
Australia and Portugal, are good examples of this successful
strategy in execution. As a result of this strong and growing track
record as a trusted and added value partner to its customers, the
Group is working with an increasing number of its existing
customers on plans to expand Hilton's products, capabilities and
capacity.
To date, the Group has been focused on the processing of meat,
principally beef and lamb as well as pork outside the UK, and this
will remain at the core of the business in the future. However the
Group's customers sell a broader range of protein products than
just meat. It is clear to the Group and its customers have an
interest in the prospect of Hilton processing and supplying other
proteins beyond red meat, based on the Group's expertise in
sourcing, assembling, packing and distribution. The Board sees this
as an attractive and sustainable area to develop and grow Hilton's
business, and its initial discussions with key customers supports
this view.
Reasons for the Acquisition
As a result, the Board believes that the acquisition of Seachill,
the number 2 player in the UK fish market, presents an attractive
and relatively low risk entry into the processing and supply of
fish in the UK. This is a new category for the Group and it is
an attractive growth opportunity for the Group, for the following
reasons:
* fish is a growing consumer category where the Group
does not currently have a presence;
* the Group's existing customers have shown interest in
opportunities in adjacent categories, such as fish,
both in the UK and internationally;
* consumer tastes and preferences for healthier
lifestyles and menus underpin the attractive market
dynamics for fish as a category; and
* the opportunity created by the extension of the
Group's proven customer focused strategy to this new
category.
The UK chilled seafood market with Great Britain has displayed
resilient growth evidenced by a 20 year track record of increasing
market value. Customers see it as a key category with 80% of shoppers
buying chilled seafood and on average customers making 19 purchases
and spending a total GBP82 per annum.
Following completion of the proposed Acquisition there are a number
of opportunities for the Enlarged Group to create value moving
forwards. These include:
* investing in the Seachill business to increase
capacity and using Hilton's experience in robotics
and automated processes to develop state-of-the-art
facilities in the assembling, packing and
distributing of fish products, which will deliver
even higher quality and better value to the consumer;
* expanding into overseas territories using the
Seachill management team's expertise in the fish
category, following the successful model of its
recent overseas expansion alongside key customers in
Portugal and Australia;
* developing innovative new products in the fish
category in collaboration with its customers,
broadening the range of products that the Enlarged
Group can offer new and existing customers; and
* expanding the proprietary "The Saucy Fish Co." brand
into other categories both in the UK and overseas.
Financial effects of the Acquisition
It is anticipated that the acquisition will be EPS accretive in
the first full year of the proposed acquisition. The Group believes
that Hilton and Seachill management's combined expertise in a
number of areas will enable the Enlarged Group to operate more
efficiently over the medium term. More importantly, the proposed
acquisition will provide the foundations for Hilton to offer Seachill's
fish packing expertise strengthened by Hilton's supply chain experience
to a number of its leading retailer customers both in the UK and
Internationally.
3. Summary information about Seachill
Founded in 1998, Seachill has grown to be one of the largest
chilled fish processors in the UK, with well-invested facilities
and a well-established supply chain based in Grimsby, Lincolnshire.
Under Simon Smith's leadership, who will lead the Seachill business
as a division within Hilton going forward, the Seachill business
has performed well over a number of years, operating from three
sites in the area and supplying a number of leading food retail
customers in the UK. Seachill focuses on the three largest fish
species in the UK and has successfully innovated and developed new
products including The Saucy Fish Co. brand, which is the largest
chilled wet fish brand in the UK.
Seachill's largest customer, Tesco, accounts for approximately
80% of its net sales and there is consequently significant reliance
on one customer relationship. As Tesco is also one of the Company's
principal customers, it is expected that the Acquisition will
strengthen the Company's existing relationship with Tesco through
the supply of a new product category.
The summarised audited financial history of Seachill is set out
below:
Year ended Year ended Year ended
31 31 31
December December December
2016 2015 2014
GBP'000 GBP'000 GBP'000
Revenue 266.3 248.4 258.8
Gross profit 39.2 38.6 37.9
Operating profit 3.4 4.0 (1.7)
Net cash generated
from operations 15.4 6.2 2.4
Gross assets 101.5 108.2 109.2
4. Principal terms of the Acquisition
The Sale and Purchase Agreement entered into by the Buyer, the
Company, the Seller and the Seller Guarantor on 18 October 2017
sets out the terms of the Acquisition pursuant to which the Buyer
has agreed to acquire Seachill from the Seller for headline
consideration of GBP80.8 million payable in cash on Completion. Any
amount of leakage will be deducted from the purchase price.
The Sale and Purchase Agreement is conditional upon the approval
of the Resolutions by Shareholders at the General Meeting, namely:
* the first Resolution approving the Acquisition as a
result of the Acquisition constituting a Class 1
transaction; and
* the second and third Resolutions which provide the
Directors with the authority to allot the Placing
Shares.
The Sale and Purchase Agreement contains representations, warranties,
covenants, undertakings and conditions that are customary for
a transaction of this size and nature.
Assuming that the Shareholders approve the Resolutions at the
General Meeting, Completion is expected to occur on 7 November
2017.
5. Financing of the Acquisition
Historically the Company has built up net cash balances through
strong cash generation. In addition to the proposed acquisition of
Seachill, the Board believes there are significant growth
opportunities in the medium term. Consequently the Board has put in
place appropriate financing to support that growth including bank
borrowing facilities and raising equity. The Board expects to carry
an amount of gearing on the balance sheet for the medium term. This
structure reflects the Board's prudent and conservative approach to
financing with target gearing of not more than 2.5x net
debt/EBITDA.
In line with the Group's prudent financing strategy the transaction
will be funded as follows:
* an issue of new Ordinary Shares, pursuant to the
Placing, raising GBP53.8 million net of expenses at
the indicative share price; and
* a new banking facility totalling GBP34.0 million.
Additional new banking facilities of GBP84.7 million together
with existing net cash balances, which were GBP38.9 million at
16 July 2017, provide funds for future capital investment and
the Group's working capital requirements.
6. Current trading and prospects
Hilton
On 12 September 2017, Hilton published its interim results for
the 28 weeks to 16 July 2017, in which Hilton stated:
"Hilton delivered strong volume and profit growth during the
period. Our strategic progress continued with entry into Portugal
and expansion recently announced in Central Europe where beef
deboning has commenced and a fresh food factory will be developed.
The initial work on our new factory in Queensland, Australia
continues with the planning approvals process well advanced. We
remain committed to growing our business through innovation and
product development as well as exploring a range of new expansion
opportunities to further our geographic reach.
Hilton's overall underlying trading performance remained strong,
despite competitive retail grocery markets and uncertain
macroeconomic conditions. Volumes increased by 8.7% reflecting
growth in Ireland, Sweden and Australia and also the start of the
Portuguese joint venture. Turnover increased by 9.3% to GBP690.7m
(2016: GBP631.9m) and by 3.2% on a constant currency basis.
Operating profit for the first 28 weeks of 2017 was 9.0% higher
at GBP18.8m (2016: GBP17.3m) and 1.4% higher on a constant currency
basis including new product start-up and support costs in Europe
and initial Queensland costs as well as weaker trading across
Central Europe. The operating profit margin at 2.7% was unchanged
compared to last year."
The Hilton 2017 Unaudited Interim Financial Statements outlined
Hilton's continued operating momentum and, since that date,
Hilton's trading performance continues to be in line with the
Hilton Board's expectations.
The Company announced on 16 October 2017 that it will proceed
with plans to expand its packing capability to New Zealand. Hilton
will construct a new meat processing facility in Auckland and will
supply Progressive Enterprises Ltd (which trades as Countdown
Supermarkets). The development will take place as an extension of
the existing site and will be financed by a newly formed
subsidiary, Hilton Foods New Zealand. The Company is targeting
production at the facility for 2020. Progressive Enterprises LTD is
part of the Woolworths group and this development further
strengthens Hilton's existing relationship with Woolworths Ltd.
Target Group
In the current year, the Target Group has performed well and
delivered revenue growth through new business wins, launching a
number of new products and grown its core business.
At the same time the business has made a number of operational
efficiencies. A supply contract with Seachill's second largest
customer, which contributed GBP49.8m of revenue in the 12 months to
31 December 2016, was exited as both parties could not agree on
pricing.
Revenue growth this year up to 27 August 2017 on a like-for-like
basis versus the same period in 2016 was 21.5% when adjusted for
the exit from the supply contract detailed above.
7. Details of the Placing
In order to part fund the Acquisition, the Company proposes to
raise GBP53.8 million net of expenses under the underwritten
Placing.
Pursuant to the terms of the Placing Agreement dated 18 October
2017, Numis and Panmure Gordon, as agents for the Company, have
agreed to use their reasonable endeavours to procure placees to
subscribe for such number of Placing Shares as would raise gross
proceeds of GBP53.0 million. To the extent that Numis and Panmure
Gordon do not so procure subscribers, Numis and Panmure Gordon
themselves have agreed to subscribe for the relevant Placing
Shares.
The Placing will be effected by way of an accelerated
bookbuilding to be managed by Numis and Panmure Gordon. The
bookbuilding process will commence with immediate effect. The
Placing Price and the number of Placing Shares will be agreed
between the Company, Numis and Panmure Gordon at the close of the
bookbuilding period. Details of the Placing Price and the number of
Placing Shares will be announced as soon as practicable after the
close of the bookbuilding process.
Accordingly, the Placing is being fully underwritten by Numis
and Panmure Gordon on the terms and subject to the conditions set
out in the Placing Agreement. The Placing is conditional upon,
amongst other things, the Resolutions being duly passed at the
General Meeting, the Placing Agreement not being terminated and
Admission. The Placing shall become unconditional on Admission
occurring. Further details in relation to the Placing Agreement and
in particular the termination rights of Numis and Panmure Gordon
and the conditions of the Placing Agreement are set out in the
Appendix.
Application will be made for the Placing Shares to be admitted
to trading on the Main Market and it is expected that, subject to
the Placing Agreement becoming unconditional in all respects and
not having been terminated, Admission of the Placing Shares will
become effective and that dealings in the Placing Shares will
commence at 8.00 a.m. on 7 November 2017.
The Placing Shares will be fully paid and will rank pari passu
in all respects with the existing Ordinary Shares, including the
right to receive all dividends and other distributions declared,
made or paid after the date of issue. As such the Placing Shares
will not be eligible for the current year interim dividend of 5.0p
per share which will be paid to shareholders on the register at
close of business on 3 November 2017 which is prior to the
Admission of the Placing shares.
8. Important notices
The Bookrunners, which are both authorised and regulated in the
United Kingdom by the FCA, are acting for the Company and for
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 clients of the
Bookrunners, or for providing advice in relation to the contents of
this announcement or any matters referred to herein.
Apart from the responsibilities and liabilities, if any, which
may be imposed on Numis and/or Panmure Gordon under FSMA or the
regulatory regime established thereunder, neither Numis nor Panmure
Gordon accept any responsibility whatsoever and make no
representation or warranty, express or implied, concerning the
contents of this announcement including its accuracy, completeness
and verification or concerning any other statement made or
purported to be made by it or on behalf of it, in connection with
the Company and the Acquisition. Numis and Panmure Gordon
accordingly disclaim to the fullest extent permitted by law all and
any responsibility and liability whether arising in tort, contract
or otherwise (save as referred to herein) which it might otherwise
have in respect of this document or any such statement.
Certain statements in this announcement may be forward-looking.
Although the Company believes that the expectations reflected in
these forward looking statements are reasonable, it can give no
assurance or guarantee that these expectations will prove to have
been correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those
expressed or implied by these forward looking statements.
Neither the content of the Company's website (or any other
website) nor any website accessible by hyperlinks on the Company's
website (or any other website) is incorporated in, or forms part
of, this announcement.
APPIX: TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES
ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN
THIS APPIX ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF
THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS
WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS
DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMED FROM TIME TO
TIME, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN
ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED
INVESTORS"); 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(1) OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER
2005 (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"). THE TERMS AND CONDITIONS
SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE
NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST
SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR
INVESTMENT ACTIVITY TO WHICH THIS APPIX AND THE TERMS AND
CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT
PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS
APPIX IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF
CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN
THE COMPANY. THIS ANNOUNCEMENT AND THIS APPIX HAS BEEN ISSUED BY
AND IS THE SOLE RESPONSIBILITY OF THE COMPANY.
THIS ANNOUNCEMENT, INCLUDING THIS APPIX, IS NOT AN OFFER FOR
SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF
ANY SUCH JURISDICTION. THE SECURITIES MENTIONED HEREIN HAVE NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF
1933, AS AMED (THE "SECURITIES ACT") OR UNDER ANY SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT
BE OFFERED, SOLD, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES EXCEPT PURSUANT TO AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION OF THE UNITED STATES. THERE WILL BE NO
PUBLIC OFFER OF THE SECURITIES MENTIONED HEREIN IN THE UNITED
STATES.
THE SECURITIES MENTIONED HEREIN WILL NOT HAVE BEEN APPROVED OR
DISAPPROVED BY THE US SECURITIES AND EXCHANGE COMMISSION (THE
"SEC"), ANY STATE SECURITIES COMMISSION OR ANY 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 ACQUISITION OF PLACING
SHARES. THE PRICE OF PLACING SHARES AND THE INCOME FROM THEM (IF
ANY) MAY GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE
FULL AMOUNT INVESTED ON DISPOSAL OF THOSE PLACING SHARES.
Persons who are invited to and who choose to participate in the Placing
by making an oral or written offer to acquire Placing Shares, including
any individuals, funds or others on whose behalf a commitment to acquire
Placing Shares is given (the "Placees"), will be deemed: (i) to have
read and understood this Announcement, including this Appendix, in
its entirety; and (ii) to be participating and making an offer for
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 and acknowledges
that:
(a) it is a Relevant Person and undertakes that it will acquire, hold,
manage or dispose of any Placing Shares that are allocated to it for
the purposes of its business;
(b) it is and, at the time the Placing Shares are acquired, will be
outside the United Statesand acquiring the Placing Shares in an "offshore
transaction" in accordance with Rule 903 or Rule 904 of Regulation
S under the Securities Act ("Regulation S") and is acquiring beneficial
interests in the Placing Shares for its own account; if acquiring
the Placing Shares for the account of one or more other persons, it
has full power and authority to make the representations, warranties,
agreements, undertakings, and acknowledgements herein on behalf of
each such person; and
(c) if it is a financial intermediary, as that term is used in Article
3(2) of the Prospectus Directive, any 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 circumstances which may give rise to an offer
of securities to the public other than an offer or resale to Qualified
Investors in a member state of the EEA which has implemented the Prospectus
Directive, or in circumstances in which the prior consent of the Bookrunners
has been given to each such proposed offer or resale.
The Company and Bookrunners will rely upon the truth and accuracy
of the foregoing representations, acknowledgements and agreements.
This Announcement, including this Appendix, does not constitute
an offer to sell, or a solicitation of an offer to buy, securities
in the United States. Securities may not be offered or sold in the
United States absent (i) registration under the Securities Act or
(ii) an available exemption from, or in a transaction not subject
to, registration under the Securities Act. The securities mentioned
herein have not been, and will not be, registered under the
Securities Act. The Placing Shares are being offered and sold
solely outside the United States in "offshore transactions" in
accordance with Regulation S. There will be no public offering of
the securities in the United States.
Details of the Placing Agreement, the Placing Shares and the
Bookbuild
The Bookrunners are acting as joint bookrunners in connection
with the Placing and have entered into the Placing Agreement with
the Company under which they have agreed to use their respective
reasonable endeavours to procure, as agents for the Company,
Placees to take up the Placing Shares, on the terms and subject to
the conditions set out therein.
The Bookrunners will today commence the bookbuilding process to
determine demand for participation in the Placing by Placees (the
"Bookbuild"). 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.
In the event that the Bookrunners fail to procure Placees for at
least such number of Placing Shares as would raise gross proceeds
of GBP53.0 million (or such other number as agreed by the Company
and the Bookrunners) then subject to the satisfaction (or waiver)
of the Conditions, Numis severally agrees that it shall itself as
principal acquire 75 per cent, and Panmure Gordon severally agrees
that it shall itself as principal acquire 25 per cent, in each case
of any such shortfall not so taken up upon the terms and conditions
set out in this Appendix.
The Placing Shares will, as from the date when they are issued,
be fully paid up, rank in full for all dividends and other
distributions declared, made or paid on the Ordinary Shares after
Admission and otherwise rank pari passu in all respects with, and
be identical to, the existing Ordinary Shares then in issue.
Application for listing and admission to trading
Application will be made to the:
(a) Financial Conduct Authority ("FCA") for admission of the Placing
Shares to the premium listing segment of the Official List London Stock
Exchange; and
(a) London Stock Exchange for admission of the Placing Shares to trading
on the London Stock Exchange's main market for listed securities.
Subject to, amongst other things, the Placing Agreement becoming unconditional
and not being terminated in accordance with its terms, it is expected
that Admission of the Placing Shares will become effective at or around
8.00 a.m. (London time) on 7 November 2017 and that dealings in the
Placing Shares will commence at that time.
Participation in, and principal terms of, the Placing
1. The Bookrunners are arranging the Placing severally, and not jointly,
nor jointly and severally, as bookrunners and placing agents of the
Company for the purpose of using their respective reasonable endeavours
to procure Placees at the Placing Price (as defined below) for the
Placing Shares. Each Bookrunner is authorised and regulated in the
United Kingdom by the FCA, and 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 each Bookrunner
or for providing advice in relation to the matters described in this
Announcement.
2. Participation in the Placing will only be available to persons who
may lawfully be, and are, invited to participate by the Bookrunners.
Each Bookrunner may itself agree to be a Placee in respect of all or
some of the Placing Shares or may nominate any member of its group
to do so.
3. The Bookbuild, if successful, will establish a single price per
Placing Share payable to the Bookrunners as agent for the Company by
all Placees whose bids are successful (the "Placing Price"). The Placing
Price and the number of Placing Shares will be agreed by the Bookrunners
and the Company following completion of the Bookbuild. Any discount
to the market price of the Ordinary Shares will be determined in accordance
with the Listing Rules as published by the FCA pursuant to Part VI
of the FSMA. The Placing Price and the number of Placing Shares to
be issued will be announced on a Regulatory Information Service following
the completion of the Bookbuild (the "Placing Results Announcement").
4. The Bookbuild is expected to close later today, but in any event
no later than 5.00 p.m. on 18 October 2017, but at the sole discretion
of the Bookrunners the timing of the closing of the books, pricing
and allocations may be accelerated or delayed. The Bookrunners may,
in agreement with the Company, accept bids that are received after
the Bookbuild has closed. The Company reserves the right (upon agreement
with the Bookrunners) to reduce or seek to increase the amount to be
raised pursuant to the Placing in its absolute discretion
5. Any person who wishes to participate in the Bookbuild should communicate
their bid by telephone to their usual sales contact at the relevant
Bookrunner. Each bid should state the number of Placing Shares which
the prospective Placee wishes to acquire at either the Placing Price
which is ultimately established by the Company and the Bookrunners
or at prices up to a price limit specified in its bid.
6. Each of the Bookrunners reserves the right not to accept bids or
to accept bids in part rather than inwhole. The acceptance of the bids
shall be at the Bookrunners' absolute discretion. A bid in the Bookbuild
will be made on the terms and conditions in this Appendix and will
be legally binding on the Placee on behalf of which it is made and,
except with the consent of the Bookrunners, will not be capable of
variation or revocation after the close of the Bookbuild.
7. Allocations of the Placing Shares will be determined by the Bookrunners
after consultation with the Company (the proposed allocations having
been supplied by the Bookrunners to the Company in advance of such
consultation). Allocations will be confirmed orally by one of the Bookrunners
and a trade confirmation or contract note will be despatched as soon
as practicable thereafter. A Bookrunner's oral confirmation to such
Placee constitutes an irrevocable legally binding commitment upon such
person (who will at that point become a Placee), in favour of the Bookrunners
and the Company, to acquire the number of Placing Shares allocated
to it and to pay the Placing Price in respect of such shares on the
terms and conditions set out in this Appendix and in accordance with
the Company's articles of association. Except with the Bookrunners'
consent, such commitment will not be capable of variation or revocation
after the time at which it is submitted.
8. Each Placee's allocation and commitment will be evidenced by a trade
confirmation or contract note issued to such Placee by the Bookrunners.
The terms of this Appendix will be deemed incorporated in that trade
confirmation or contract note.
9. Irrespective of the time at which a Placee's allocation pursuant
to the Placing is confirmed, settlement for all Placing Shares to be
acquired pursuant to the Placing will be required to be made at the
same time, on the basis explained below under "Registration and Settlement".
10. All obligations of the Bookrunners 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 "Right to terminate
under the Placing Agreement".
11. 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 under "Right to terminate under
the Placing Agreement" and will not be capable of rescission or termination
by the Placee.
12. To the fullest extent permissible by law, neither the Bookrunners,
nor the Company, nor any of their respective affiliates, agents, directors,
officers or employees shall have any responsibility or liability to
Placees (or to any other person whether acting on behalf of a Placee
or otherwise). In particular, neither the Bookrunners, nor the Company,
nor any of their respective affiliates, agents, directors, officers
or employees shall have any responsibility or liability (including
to the extent permissible by law, any fiduciary duties) in respect
of the Bookrunners' conduct of the Placing or of such alternative method
of effecting the Placing as the Bookrunners and the Company may determine.
13. Each Placee acknowledges and agrees that that it has obtained all
governmental and other consents (if any) which may be required for
the purpose of, or as a consequence of, its participation, and it will
provide promptly to the Bookrunners such evidence, if any, as to the
identity or location or legal status of any person which the Bookrunners
may request from it in connection with the Placing (for the purpose
of complying with the Regulations or ascertaining the nationality of
any person or the jurisdiction(s) to which any person is subject or
otherwise) in the form and manner requested by the Bookrunners on the
basis that any failure by it to do so may result in the number of Placing
Shares that are to be purchased by it or at its direction pursuant
to the Placing being reduced to such number, or to nil, as the Bookrunners
may decide at their sole discretion;
14. Each Placee acknowledges and agrees that the Company is responsible
for the allotment of the Placing Shares to the Placees and the Bookrunners
shall have no liability to the Placees for the failure of the Company
to fulfil those obligations.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional
and not having been terminated in accordance with its terms. The Bookrunners'
obligations under the Placing Agreement are conditional on, inter alia:
(a) Admission occurring at or before 8:00 a.m. (London time) on 7 November
2017 (or such later time and/or date, not being later than 8:00 a.m.
(London time) on 21 November 2017, as the Company and Numis may otherwise
agree) (the "Closing Date");
(b) the Company having confirmed to the Bookrunners that, prior to
the delivery of such confirmation, none of the representations, warranties
and agreements of the Company contained in the Placing Agreement was
untrue, inaccurate or misleading at the date of the Placing Agreement
or will be untrue, inaccurate or misleading immediately prior to Admission
when repeated at that time, by reference to the facts and circumstances
then subsisting;
(c) the Company having complied with or performed its obligations under
the Placing Agreement to the extent that the same fall to be performed
prior to Admission, save for any non-compliance which in the good faith
opinion of Numis is not material;
(d) the Acquisition Agreement (i) having been duly executed by the
parties thereto by or on the date of this Announcement; (ii) remaining
in full force and effect and not having been materially modified, or
rescinded, lapsed or been terminated (in whole or in part) prior to
Admission (save with the consent of Numis); and (iii) having become
unconditional in all respects save for any condition relating to Admission
occurring and to the Placing Agreement not having been terminated and
having become unconditional in all respects;
(e) in the good faith opinion of Numis, between the date of the Placing
Agreement and Admission there has been no material adverse change in,
or any development involving a prospective material adverse change
in, or affecting, the condition (financial, operational, legal or otherwise)
or the earnings, management, business affairs, solvency, credit rating
or prospects of the Company or of the Group (taken as a whole), whether
or not arising in the ordinary course of business; and
(f) in the good faith opinion of Numis, between the date of the Placing
Agreement and Admission there has been no material adverse effect on
the business, operations, financial condition, assets, liabilities
or gross profits of the Target and its subsidiaries, taken as a whole,
which results in costs or losses or liability for the Target group
of GBP7,500,000 or more (excluding certain circumstances, such as conditions
generally affecting the industries in which the Target and its subsidiaries
operate, and matters disclosed to the Company prior to the date of
the Placing Agreement).
Numis, at its discretion and upon such terms as its thinks fit, waive
compliance by the Company with the whole or any part of any of the
Company's obligations in relation to certain conditions in the Placing
Agreement save that the above conditions relating, inter alia, to Admission
taking place may not be waived. Any such extension or waiver will not
affect Placees' commitments as set out in this Announcement.
If: (i) any of the conditions contained in the Placing Agreement, including
those described above, is not fulfilled or (where permitted) waived
by Numis by the relevant time or date specified (or such later time
or date as the Company and Numis may agree); or (ii) the Placing Agreement
is terminated by Numis in the circumstances specified below, the Placing
will lapse and the Placees' rights and obligations hereunder in relation
to the Placing Shares shall cease and terminate at such time and each
Placee agrees that no claim can be made by it in respect thereof.
Neither the Bookrunners nor any of their respective affiliates, agents,
directors, officers or employees shall have any liability to any Placee
(or to any other person whether acting on behalf of a Placee or otherwise)
in respect of any decision Numis may make as to whether or not to waive,
or to extend the time and/or date for the satisfaction of, any condition
in the Placing Agreement nor in respect of any decision it 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 Numis.
Neither the Bookrunners nor the Company 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 each 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
each 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 the Company
and/or the Bookrunners (as applicable).
Right to terminate under the Placing Agreement
Numis is entitled, at any time before Admission, to terminate the Placing
Agreement in accordance with its terms in certain circumstances, including,
inter alia:
(a) if it comes to the knowledge of either Bookrunner that any of the
warranties given by the Company in the Placing Agreement was untrue
or inaccurate or misleading when made and/or that any of such warranties
would be untrue or inaccurate in a material respect or misleading if
it were to be repeated at any time prior to Admission by reference
to the facts, matters and circumstances then subsisting and, in the
opinion of either Bookrunner (acting in good faith), the effect of
such is that it would materially prejudice the success of the Placing
or the distribution of the Placing Shares;
(b) any material adverse change in, or any development reasonably likely
to lead to a material adverse change in, the condition (financial,
operational or legal), the assets, or the earnings, results of operations
or prospects of the Enlarged Group taken as a whole whether or not
arising in the ordinary course of business and, in the opinion of either
Bookrunner (acting in good faith), the effect of such is that it would
materially prejudice the success of the Placing or the distribution
of the Placing Shares;
(c) the occurrence of one or more specified adverse macro-economic
changes, suspension or material limitation in the trading on the London
Stock Exchange's main market for listed securities of any securities
of the Company or a general moratorium on commercial banking activities
in London or New York which, in the opinion of either Bookrunner (acting
in good faith) would materially prejudice the success of the Placing
or the distribution of Placing Shares; or
(d) any of the conditions to the Placing are not fulfilled or waived
(as applicable).
The rights and obligations of the Placees shall terminate only in the
circumstances described in these terms and conditions and in the Placing
Agreement and will not be subject to termination by the Placee or any
prospective Placee at any time or in any circumstances. By participating
in the Placing, Placees agree that the exercise by Numis of any right
of termination or other discretion under the Placing Agreement shall
be within the absolute discretion of Numis and that it need not make
any reference to, or consult with, Placees and that it shall have no
liability to Placees whatsoever in connection with any such exercise.
Placees will have no rights against either Bookrunner, the Company
or any of their respective directors or employees under the Placing
Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999
(as amended).
Whilst, in the circumstances described above, Panmure Gordon may also
have the right to terminate its obligations under the Placing Agreement,
such right shall not entitle Panmure Gordon to terminate the Placing
Agreement and accordingly (subject to any concurrent right by Numis
to terminate the Placing Agreement) such termination by Panmure Gordon
shall be without prejudice to the surviving rights and obligations
of Numis, the Company and any Placees.
No Prospectus
The Placing Shares are being offered to a limited number of
specifically invited persons only and will not be offered in such a
way as to require a prospectus in the United Kingdom or in any
other jurisdiction. No offering document or prospectus has been or
will be submitted to be approved by the FCA or submitted to the
London Stock Exchange in relation to the Placing.
Placees' commitments will be made solely on the basis of the
information contained in this Announcement (including this
Appendix) released by the Company today and subject to the further
terms set forth in the trade confirmation or contract note to be
provided to individual Placees. Each Placee, by accepting a
participation in the Placing, agrees that the content of this
Announcement (including this Appendix) and all other publicly
available information previously published by the Company by
notification to a Regulatory Information Service is exclusively the
responsibility of the Company and confirms that it has neither
received nor relied on any other information, representation,
warranty or statement made by or on behalf of the Company or either
Bookrunner or any other person and none of the Company or the
Bookrunners nor any other person will be liable for any Placee's
decision to participate in the Placing based on any other
information, representation, warranty or statement which the
Placees may have obtained or received. Each Placee acknowledges and
agrees that it has relied on its own investigation of the business,
financial or other position of the Company in accepting a
participation in the Placing. Nothing in this paragraph shall
exclude the liability of any person for fraudulent
misrepresentation by that person.
Neither the Company, nor either Bookrunner are making any
undertaking or warranty to any Placee regarding the legality of an
investment in the Placing Shares by such Placee under any legal,
investment or similar laws or regulations. 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.
Registration and Settlement
Settlement of transactions in the Placing Shares (ISIN:
GB00B1V9NW54) following Admission will take place within the system
administered by Euroclear UK & Ireland Limited ("CREST").
Subject to certain exceptions, the Bookrunners and the Company
reserve the right to require settlement for, and delivery of, the
Placing Shares (or any part thereof) to Placees by such other means
that they deem necessary if 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 the Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent
a trade confirmation or contract note in accordance with the
standing arrangements in place with the relevant Bookrunner stating
the number of Placing Shares allocated to it at the Placing Price,
the aggregate amount owed by such Placee to the Bookrunner and
settlement instructions. Each Placee agrees that it will do all
things necessary to ensure that delivery and payment is completed
in accordance with the standing CREST or certificated settlement
instructions in respect of the Placing Shares that it has in place
with the relevant Bookrunner.
Subject to, amongst other things, the Placing Agreement becoming
unconditional and not being terminated in accordance with its
terms, it is expected that settlement will be on 7 November 2017 in
accordance with the instructions set out in the trade confirmation
or contract note.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two percentage points above LIBOR as
determined by the Bookrunners.
Each Placee is deemed to agree that, if it does not comply with
these obligations, the Bookrunners 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 Bookrunners' account and benefit,
an amount equal to the aggregate amount owed by the Placee plus any
interest due. The relevant Placee will, however, remain liable and
shall indemnify the Bookrunners on demand for any shortfall below
the aggregate amount owed by it and may be required to bear any
stamp duty or stamp duty reserve tax (together with any interest or
penalties) or other similar taxes imposed in any jurisdiction which
may arise upon the sale of such Placing Shares on such Placee's
behalf. By communicating an intention to subscribe for Placing
Shares, each Placee confers on the Bookrunners all such authorities
and powers necessary to carry out any such subscription and agrees
to ratify and confirm all actions which the Bookrunners lawfully
take in pursuance of such subscription.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the trade confirmation
or contract note is copied and delivered immediately to the
relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or
that of its nominee or in the name of any person for whom a Placee
is contracting as agent or that of a nominee for such person, such
Placing Shares should, subject as provided below, be so registered
free from any liability to UK stamp duty or stamp duty reserve tax.
Placees will not be entitled to receive any fee or commission in
connection with the Placing.
Representations, Warranties and Further Terms
By participating in the Placing each Placee (and any person acting
on such Placee's behalf) irrevocably:
1. represents and warrants that it has read and understood the Announcement,
including this Appendix, in its entirety and that its acquisition
of Placing Shares is subject to and based upon all the terms, conditions,
representations, warranties, acknowledgements, agreements and undertakings
and other information contained herein and undertakes not to redistribute
or duplicate this Announcement;
2. acknowledges that no offering document or prospectus has been or
will be prepared in connection with the Placing and represents and
warrants that it has not received and will not receive a prospectus
or other offering document in connection with the Placing or the Placing
Shares;
3. acknowledges that the Placing does not constitute a recommendation
or financial product advice and neither Bookrunner has had regard
to its particular objectives, financial situation or needs;
4. acknowledges that none of the Bookrunners, the Company, any of
their respective affiliates, agents, directors, officers or employees
has provided, nor will provide, it with any material regarding the
Placing Shares or the Company other than this Announcement; nor has
it requested any of the Bookrunners, the Company, any of their respective
affiliates or any person acting on behalf of any of them to provide
it with any such information;
5. acknowledges that the Ordinary Shares are listed on the Official
List and are admitted to trading on the main market of the London
Stock Exchange and that the Company is therefore required to publish
certain business and financial information in accordance with the
rules and practices of the London Stock Exchange and/or the FCA, which
includes a description of the Company's business and the Company's
financial information, including balance sheets and income statements,
and that it is able to obtain or access to such information, or comparable
information concerning other publicly traded companies, in each case
without undue difficulty;
6. acknowledges that the content of this Announcement is exclusively
the responsibility of the Company and that neither of the Bookrunners,
nor their respective affiliates or any person acting on behalf of
any of them, has or shall have any liability for any information,
representation or statement contained in, or omission from, this Announcement
or any information previously published by or on behalf of the Company,
pursuant to applicable laws, and will not be liable for any Placee's
decision to participate in the Placing based on any information, representation
or statement contained in this Announcement or otherwise;
7. represents, warrants and agrees that the only information on which
it is entitled to rely and on which such Placee has relied in committing
itself to acquire Placing Shares is contained in this Announcement
and any information previously published by the Company by notification
to a Regulatory Information Service, such information being all that
such Placee deems necessary or appropriate and sufficient to make
an investment decision in respect of the Placing Shares and that it
has neither received nor relied on any other information given, or
representations, warranties or statements made, by any of the Bookrunners
or the Company nor any of their respective affiliates, agents, directors,
officers or employees and none of the Bookrunners or the Company or
any such affiliate, agent, director, officer or employee will be liable
for any Placee's decision to accept an invitation to participate in
the Placing based on any other information, representation, warranty
or statement, provided that nothing in this paragraph excludes the
liability of any person for fraudulent misrepresentation made by that
person;
8. acknowledges and agrees that it may not rely, and has not relied,
on any investigation that either Bookrunner, any of their affiliates
or any person acting on their behalf, may have conducted with respect
to the Placing Shares or the Company, and none of such persons has
made any representation, express or implied, with respect to the Company,
the Placing Shares or the accuracy, completeness or adequacy of the
information from the London Stock Exchange or any other information;
each Placee further acknowledges that it has conducted its own investigation
of the Company and the Placing Shares and has received all information
it believes necessary or appropriate in connection with its investment
in the Placing Shares;
9. acknowledges that it has made its own assessment and has satisfied
itself concerning the relevant tax, legal, currency and other economic
considerations relevant to its investment in the Placing Shares;
10. acknowledges that none of the Bookrunners, their respective affiliates
or any person acting on behalf of any of them has or shall have any
liability for any information made publicly available by or in relation
to the Company or any representation, warranty or statement relating
to the Company or the Group contained therein or otherwise, and that
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, provided that nothing in this paragraph
excludes the liability of any person for fraudulent misrepresentation
made by that person;
11. represents and warrants that (i) the Placing Shares have not been,
and will not be, registered under the Securities Act; (ii) it is and,
at the time the Placing Shares are acquired, will be outside the United
States and acquiring the Placing Shares in an "offshore transaction"
in accordance with Rule 903 or Rule 904 of Regulation S; (iii) if
acquiring the Shares for the account of one or more other persons,
it has full power and authority to make the representations, warranties,
agreements, undertakings and acknowledgements herein on behalf of
each such person; (iv) it is not acquiring the Placing Shares as a
result of any "directed selling efforts" as defined in Regulation
S; and (v) it will not publish, distribute or transmit this Announcement
or any other document or information related to the Placing, by any
means or media, directly or indirectly, in whole or in part, in or
into the United States;
12. acknowledges that in making any decision to acquire Placing Shares
it (i) has such knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks of subscribing
for or purchasing the Placing Shares, (ii) will not look to either
Bookrunner for all or part of any loss it may suffer as a result of
any such subscription or purchase, (iii) is experienced in investing
in securities of this nature in this sector and is aware that it may
be required to bear, and is able to bear, the economic risk of an
investment in the Placing Shares, (iv) is able to sustain a complete
loss of an investment in the Placing Shares and (v) has no need for
liquidity with respect to its investment in the Placing Shares;
13. undertakes, unless otherwise specifically agreed with the Bookrunners,
that it is not and at the time the Placing Shares are acquired, neither
it nor the beneficial owner of the Placing Shares will be, a resident
of Australia, Canada, Japan or South Africa and further acknowledges
that the Placing Shares have not been and will not be registered under
the securities legislation of Australia, Canada, Japan or South Africa
and, subject to certain exceptions, may not be offered, sold, transferred,
delivered or distributed, directly or indirectly, in or into any of
those jurisdictions;
14. acknowledges that the Placing Shares have not been and will not
be registered, and that a prospectus will not be cleared in respect
of any of the Placing Shares, under the securities laws or legislation
of the United States or any state or jurisdiction thereof, Australia,
Canada, Japan, or South Africa and, subject to certain exceptions,
may not be offered, sold, or delivered or transferred, directly or
indirectly, in or into those jurisdictions;
15. represents and warrants that the issue to it, or the person specified
by it for registration as holder, of Placing Shares will not give
rise to a liability under any of sections 67, 70, 93 or 96 of the
Finance Act 1986 (depositary receipts and clearance services) and
that the Placing Shares are not being acquired in connection with
arrangements to issue depositary receipts or to issue or transfer
Placing Shares into a clearance service;
16. represents and warrants that it has complied with its obligations
under the Criminal Justice Act 1993, the EU Market Abuse Regulation
(2015/596/EU) ("MAR") and in connection with money laundering and
terrorist financing under the Proceeds of Crime Act 2002 (as amended),
the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering
Regulations 2007 and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any government agency
having jurisdiction in respect thereof (the "Regulations") and the
Money Laundering Sourcebook of the FCA and, if making payment on behalf
of a third party, that satisfactory evidence has been obtained and
recorded by it to verify the identity of the third party as required
by the Regulations;
17. represents and warrants that it is acting as principal only in
respect of the Placing or, if it is acting for any other person: (i)
it is duly authorised to do so and has full power to make the acknowledgments,
warranties, representations, undertakings, and agreements herein on
behalf of each such person; and (ii) it is and will remain liable
to the Company and/or the Bookrunners for the performance of all its
obligations as a Placee in respect of the Placing (regardless of the
fact that it is acting for another person);
18. if a financial intermediary, as that term is used in Article 3(2)
of the EU Prospectus Directive, represents, warrants and undertakes
that the Placing Shares purchased 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
Member State of the EEA which has implemented the Prospectus Directive
other than Qualified Investors, or in circumstances in which the prior
consent of the Bookrunners has been given to the offer or resale;
19. represents, warrants and undertakes that it has not offered or
sold and will not offer or sell any Placing Shares to persons in the
United Kingdom, except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or otherwise
in circumstances which have not resulted and which will not result
in an offer to the public in the United Kingdom within the meaning
of section 85(1) of the FSMA;
20. represents, warrants and undertakes that it has not offered or
sold and will not, prior to Admission, offer or sell any Placing Shares
to persons in the EEA 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 (within the meaning of the Prospectus Directive)
in any member state of the EEA;
21. represents, warrants and undertakes that it has only communicated
or caused to be communicated and will only communicate or cause to
be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the FSMA) relating to
the Placing Shares in circumstances in which section 21(1) of the
FSMA does not require approval of the communication by an authorised
person;
22. represents, warrants and undertakes that it has complied and will
comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Placing Shares in, from or
otherwise involving the United Kingdom;
23. represents and warrants, if in a Member State of the European
Economic Area, unless otherwise specifically agreed with the Bookrunners
in writing, that it is a "Qualified Investor";
24. represents and warrants, if in the United Kingdom, that it is
a person (i) having professional experience in matters relating to
investments who falls within the definition of "investment professionals"
in Article 19(5) of the Order or (ii) who falls within Article 49(2)(a)
to (d) ("High Net Worth Companies, Unincorporated Associations, etc")
of the Order, or (iii) to whom this Announcement may otherwise lawfully
be communicated;
25. acknowledges and agrees that no action has been or will be taken
by either the Company or the Bookrunners or any person acting on behalf
of the Company or the Bookrunners that would, or is intended to, permit
a public offer of the Placing Shares in any country or jurisdiction
where any such action for that purpose is required;
26. represents and warrants that it and any person acting on its behalf
is entitled to acquire the Placing Shares under the laws of all relevant
jurisdictions and that it has all necessary capacity, fully observed
such laws and obtained all such governmental and other guarantees,
permits, authorisations, approvals and consents which may be required
thereunder and complied with all necessary formalities to enable it
to commit to this participation in the Placing and to perform its
obligations in relation thereto (including, without limitation, in
the case of any person on whose behalf it is acting, all necessary
consents and authorities to agree to the terms set out or referred
to in this Appendix) and will honour such obligations and that it
has not taken any action or omitted to take any action which will
or may result in the Bookrunners, the Company or any of their respective
directors, officers, agents, employees or advisers acting in breach
of the legal or regulatory requirements of any jurisdiction in connection
with the Placing;
27. undertakes that it (and any person acting on its behalf) will
make payment in respect of the Placing Shares allocated to it in accordance
with this Appendix on the due time and date set out herein, failing
which the relevant Placing Shares may be placed with other acquirers
or sold as the Bookrunners may in their sole discretion determine
and without liability to such Placee, who will remain liable and will
indemnify the Bookrunners on demand for any amount by which the net
proceeds of such sale fall short of the product of the relevant Placing
Price and the number of Placing Shares allocated to it and may be
required to bear any stamp duty, stamp duty reserve tax or other similar
taxes (together with any interest or penalties) which may arise upon
such placing or sale of such Placee's Placing Shares;
28. acknowledges that neither of the Bookrunners, nor any of their
respective affiliates, agents, directors, officers or employees is
making any recommendations to it or advising it regarding the suitability
of any transactions it may enter into in connection with the Placing
and that its participation in the Placing is on the basis that it
is not and will not be a client of either Bookrunner in connection
with its participation in the Placing and that neither Bookrunner
has any duty nor responsibility to it for providing the protections
afforded to its clients or customers or for providing advice in relation
to the Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing Agreement nor
for the exercise or performance of any of its rights and obligations
thereunder including any rights to waive or vary any conditions or
exercise any termination right;
29. acknowledges that each of the Bookrunners does not have any duties
or responsibilities to it, or its clients, similar or comparable to
the duties of "best execution" and "suitability" imposed by the Conduct
of Business Sourcebook in the FCA's Handbook of Rules and Guidance
and that neither of the Bookrunners is acting for it or its clients
and that it will not be responsible for providing protections to it
or its clients;
30. undertakes that the person whom it specifies for registration
as holder of the Placing Shares will be (i) itself or (ii) its nominee,
as the case may be. Neither of the Bookrunners nor the Company will
be responsible for any liability to stamp duty or stamp duty reserve
tax or other similar taxes resulting from a failure to observe this
requirement ("Indemnified Taxes"). Each Placee and any person acting
on behalf of such Placee agrees to indemnify the Company and the Bookrunners
on an after-tax basis in respect of any Indemnified Taxes;
31. acknowledges that these terms and conditions and any agreements
entered into by it pursuant to the terms and conditions set out in
this Appendix, and all non-contractual or other obligations arising
out of or in connection with them, shall be governed by and construed
in accordance with the laws of England and Wales and it submits (on
behalf of itself and on behalf of any person on whose behalf it is
acting) to the exclusive jurisdiction of the English courts as regards
any claim, dispute or matter arising out of any such contract (including
any dispute regarding the existence, validity or termination of such
contract or relating to any non-contractual or other obligation arising
out of or in connection with such contract), except that enforcement
proceedings in respect of the obligation to make payment for the Placing
Shares (together with any interest chargeable thereon) may be taken
by either the Company or either Bookrunner 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. agrees to indemnify on an after tax basis and hold the Company,
the Bookrunners 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 its
representations, warranties, acknowledgements, agreements and undertakings
in this Appendix and further agrees that the provisions of this Appendix
shall survive after completion of the Placing;
33. except as set out in clause 34 below, represents and warrants
that it has neither received nor relied on any 'inside information'
(for the purposes of MAR and section 56 of the Criminal Justice Act
1993) concerning the Company prior to or in connection with accepting
the invitation to participate in the Placing and is not purchasing
Placing Shares on the basis of material non-public information;
34. if it has received any 'inside information' (for the purposes
of MAR and section 56 of the Criminal Justice Act 1993) in relation
to the Company and its securities, it confirms that it has received
such information within the market soundings regime provided for in
article 11 of MAR and associated delegated regulations and it has
not: (i) dealt (or attempted to deal) in the securities of the Company;
(ii) encouraged, recommended or induced another person to deal in
the securities of the Company; or (iii) unlawfully disclosed inside
information to any person, prior to the information being made publicly
available;
35. if it is a pension fund or investment company, its purchase of
Placing Shares is in full compliance with applicable laws and regulations;
36. agrees that the Company, the Bookrunners and their respective
affiliates and others will rely upon the truth and accuracy of the
foregoing representations, warranties, acknowledgements, agreements,
and undertakings which are given to the Bookrunners on their own behalf
and on behalf of the Company and are irrevocable and it irrevocably
authorises the Company and the Bookrunners to produce this Announcement,
pursuant to, in connection with, or as may be required by any applicable
law or regulation, administrative or legal proceeding or official
inquiry with respect to the matters set forth herein;
37. none of the Company or the Bookrunners owes any fiduciary or other
duties to any Placee in respect of any acknowledgments, confirmations,
undertakings, representations, warranties or indemnities in the Placing
Agreement; and
38. its commitment to take up Placing Shares on the terms set out
in this Announcement (including this Appendix) will continue notwithstanding
any amendment that may or in the future be made to the terms and conditions
of the Placing and that Placees will have no right to be consulted
or require that their consent be obtained with respect to the Company
or the Bookrunners' conduct of the Placing.
The foregoing representations, warranties, agreements,
undertakings, acknowledgements and confirmations are given for the
benefit of the Company as well as each of the Bookrunners and are
irrevocable. Each Placee, and any person acting on behalf of the
Placee, acknowledges that neither the Company nor either of the
Bookrunners owes any fiduciary or other duties to any Placee in
respect of any representations, warranties, undertakings or
indemnities in the Placing Agreement.
The agreement to allot and issue Placing Shares to Placees
(and/or to persons for whom such Placee is contracting as agent)
free of stamp duty and stamp duty reserve tax relates only to their
allotment and issue to Placees, or such persons as they nominate as
their agents, direct from the Company for the Placing Shares in
question. Such agreement also assumes that the Placing Shares are
not being acquired in connection with arrangements to issue
depositary receipts or to issue or transfer the Placing Shares into
a clearance service. If there are any such arrangements, or the
settlement relates to any other dealing in the Placing Shares,
stamp duty or stamp duty reserve tax or other similar taxes may be
payable, for which neither the Company nor the Bookrunners will be
responsible and the Placees shall indemnify the Company and the
Bookrunners on an after-tax basis for any stamp duty or stamp duty
reserve tax paid by them in respect of any such arrangements or
dealings. If this is the case, each Placee should seek its own
advice and notify the Bookrunners accordingly.
The Company and the Bookrunners are not liable to bear any
transfer taxes that arise on a sale of Placing Shares subsequent to
their acquisition by Placees or for transfer taxes arising
otherwise than under the laws of the United Kingdom. Each Placee
should, therefore, take its own advice as to whether any such
transfer tax liability arises and notify the Bookrunners
accordingly. Furthermore, each Placee agrees to indemnify on an
after-tax basis and hold each of the Bookrunners and the Company
and their respective affiliates harmless from any and all interest,
fines or penalties in relation to stamp duty, stamp duty reserve
tax and all other similar duties or taxes to the extent that such
interest, fines or penalties arise from the default or delay of
that Placee or its agent.
In addition, Placees should note that they 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) payable outside the
UK by them or any other person on the acquisition by them of any
Placing Shares or the agreement by them to acquire any Placing
Shares.
Each Placee and any person acting on behalf of the Placee
acknowledges and agrees that any Bookrunner or any of its
affiliates may, at its absolute discretion, agree to become a
Placee in respect of some or all of the Placing Shares and that, in
the event that the Bookrunners fail to procure Placees for any of
the Placing Shares then the Bookrunners will, as principal,
subscribe for such Placing Shares.
When a Placee or person acting on behalf of the Placee is
dealing with a Bookrunner, any money held in an account with such
Bookrunner on behalf of the Placee and/or any person acting on
behalf of the Placee will not be treated as client money within the
meaning of the rules and regulations of the FCA made under the
FSMA. The Placee acknowledges that the money will not be subject to
the protections conferred by the client money rules; as a
consequence, this money will not be segregated from such
Bookrunner's money in accordance with the client money rules and
will be used by such Bookrunner in the course of its own business
and the Placee will rank only as a general creditor of such
Bookrunner.
All times and dates in this Announcement may be subject to
amendment. The Bookrunners shall notify the Placees and any person
acting on behalf of the Placees of any changes.
DEFINITIONS
Acquisition the purchase by the Company of the Target pursuant
to the Acquisition Agreement.
Admission admission of the Placing Shares to the Official
List of the FCA and to trading on the London
Stock Exchange's main market.
Bookrunners Numis and Panmure Gordon.
Buyer Hilton Foods Limited, a wholly owned subsidiary
of the Company.
Circular the circular to shareholders to be published
today setting out details of the Acquisition.
Class 1 Transaction a major transaction, the size of which results
in a 25 per cent. threshold being reached under
any of the class tests set out in the Listing
Rules.
Company or Hilton Food Group plc.
Hilton
Completion completion of the Acquisition pursuant to the
Sale and Purchase Agreement
Enlarged Group the Group as enlarged following the acquisition
of the Target.
FSMA the Financial Services and Markets Act 2000.
General Meeting The general meeting of the Company (or any adjournment
of it) convened for 10 a.m. on 6 November 2017
for shareholders to approve the Resolutions,
notice of which are set out in the Circular.
Group the Company and its subsidiary undertakings.
Listing Rules The listing rules made by the UKLA under Part
VI of FSMA
London Stock London Stock Exchange plc.
Exchange
Numis Numis Securities Limited.
Ordinary Shares ordinary shares of GBP0.10 each in the capital
of the Company.
Panmure Gordon Panmure Gordon (UK) Limited.
Placing the underwritten placing of the Placing Shares
on the terms and subject to the conditions contained
in the Placing Agreement and to the terms and
conditions set out in this Announcement.
Placing Agreement the conditional agreement between the Company
and the Bookrunners entered into on the date
of this Announcement in connection with the Placing.
Placing Shares the new Ordinary Shares to be allotted and issued
by the Company pursuant to the Placing.
Resolutions the resolutions in the notice of General Meeting
to be set out in the Circular.
Sale and Purchase the conditional agreement between (1) the Buyer
Agreement (2) the Company as the Buyer's guarantor (3)
the Seller and (4) the Seller Guarantor dated
18 October 2017 in respect of the Acquisition
Seller Gadus B.V.
Seller Guarantor Framtakssjóður Íslands slhf.
Target Icelandic Group UK Limited.
UKLA the Financial Conduct Authority exercising its
functions under Part VI of FSMA.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQFFDEFWFWSELS
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October 18, 2017 02:00 ET (06:00 GMT)
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