TIDMHMLH
RNS Number : 5381U
BDB Nominee Company Limited
30 July 2020
Not for release, publication or distribution, in whole or in
part, DIRECTLY OR INDIRECTLY in, into or from any jurisdiction
(including the united states) where to do so would constitute a
violation of the relevant laws or regulations of such jurisdiction
.
this announcement contains inside information FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) No . 596/2014. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
For immediate release
30 July 2020
RECOMMED CASH OFFER
for
HML HOLDINGS PLC
by
BDB NOMINEE COMPANY LIMITED
(formed at the direction of Harwood Capital LLP)
Summary and Highlights :
-- The boards of directors of BDB Nominee Company Limited ("BDB
Nominee") and HML Holdings Plc ("HML" or the "Company") are pleased
to announce that they have reached agreement on the terms of a
recommended cash offer (the "Offer") to be made by BDB Nominee for
the entire issued and to be issued share capital of HML.
-- BDB Nominee is a private limited liability company, formed at
the direction of Harwood Capital LLP ("Harwood") (on behalf of one
of its discretionary investment management clients ("HPE V"))
specifically for the purpose of making the Offer. Following
completion of the Offer, BDB Nominee and the HML Group will be
ultimately beneficially owned by HPE V. BDB Nominee is to be funded
for the purposes of the Offer via the Subscription Agreement and
Loan Agreement, details of which are provided in section 11
below.
-- Under the terms of the Offer, HML Shareholders will be
entitled to receive 37.5 pence in cash for each HML Share held,
valuing the entire issued and to be issued share capital of HML at
approximately GBP 19.01 million on a fully diluted basis.
-- The Offer Price of 37.5 pence per HML Share represents a premium of approximately:
(i) 27.12 per cent. to the Closing Price of 29.50 pence per HML
Share on 29 July 2020 (being the last Business Day prior to the
date of this Announcement); and
(ii) 44.52 per cent. to the volume weighted average price of
25.95 pence per HML Share over the three month period ended on and
including 29 July 2020 (being the last Business Day prior to the
date of this Announcement).
-- Pursuant to the terms of the Offer, following the Offer
becoming or being declared wholly unconditional the BDB Nominee
Board intends to procure the cancellation of the final dividend of
0.52 pence per HML Share proposed by the HML Board on 1 July 2020
in respect of the Company's financial year ended 31 March 2020 with
an ex-dividend date of 1 October 2020. The declaration of this
dividend will therefore not be included in the business of the
Company's forthcoming annual general meeting. If any further
dividend, other distribution or return of capital is authorised,
declared, made or paid or becomes payable in respect of HML Shares
on or after the date of this Announcement, BDB Nominee reserves the
right to reduce the Offer Price by the aggregate amount of such
dividend, distribution or return of capital.
-- HML (AIM: HMLH) is a leading provider of property management,
insurance and ancillary services to residential property
blocks.
-- Harwood is a private investment management firm engaged in
the provision of discretionary investment management and/or
advisory services to its clients. Following implementation of the
Offer, BDB Nominee will be wholly beneficially owned by HPE V.
-- At the date of this Announcement, Harwood and the Harwood
Funds beneficially own, in aggregate, 6,925,000 HML Shares
representing approximately 15.06 per cent. of HML's existing issued
share capital.
-- The Offer is conditional on valid acceptances of the Offer
being received in respect of HML Shares carrying, in aggregate, 75
per cent. or more of the voting rights then normally exercisable at
general meetings of the Company (or such lower percentage as BDB
Nominee may decide).
-- It is intended that the Offer will be implemented by means of
a takeover offer under Part 28 of the Companies Act 2006 (although
BDB Nominee reserves the right to elect to implement the Offer by
means of a Scheme of Arrangement (subject to Panel consent)).
-- BDB Nominee intends to procure, should it receive acceptances
to its Offer of greater than 75 per cent. of the HML Shares and its
Offer becomes, or is declared, wholly unconditional, that HML makes
an application to the appropriate authorities for the cancellation
of the admission of HML Shares to trading on AIM. Should BDB
Nominee proceed with the intended cancellation, a notice period of
not less than 20 Business Days will be given on or after the date
on which the Offer becomes, or is declared, wholly unconditional.
Should BDB Nominee not receive acceptances to its Offer of greater
than 75 per cent. of the HML Shares, then BDB Nominee intends to
seek the cancellation of the admission of HML Shares to trading on
AIM under the other provisions set out in Rule 41 of the AIM
Rules.
-- The Offer is subject to the Conditions and further terms set
out in Appendix I to this Announcement and to be set out in the
Offer Document, which it is expected will be despatched to HML
Shareholders approximately (and before) 28 days after this
Announcement.
-- One of the Conditions of the Offer, being Condition 1(b)(ii)
set out in Appendix I to this Announcement, is the Financial
Conduct Authority approving the acquisition of control of HML, or
any subsidiary undertaking of HML, by BDB Nominee pursuant to a
notice under section 178 FSMA, and such approval not being subject
to any conditions or restrictions (the "FCA Condition"). The
relevant FCA regulated and authorised subsidiaries of HML are
Alexander Bonhill Limited, which carries out insurance and risk
management services, Faraday Property Management Limited, HML PM
Limited and Leasehold Management Limited. Harwood and BDB Nominee
can confirm that they have made the requisite filings to the
Financial Conduct Authority and are in an active dialogue with the
relevant team at the Financial Conduct Authority. The Board of BDB
Nominee is confident that the relevant approval will be
forthcoming, such that the FCA Condition will be satisfied within
the Panel's prescribed Code timetable. However, in order to
maximise the time that the Financial Conduct Authority has to
undertake the process leading to its decision, it is intended that
BDB Nominee will only despatch the Offer Document to HML
Shareholders on, or before, 27 August 2020, being 28 days after
release of this Announcement.
-- If HML Shareholders wish to accept the Offer, it is important
that they follow the instructions to be set out in the Offer
Document and the accompanying Form of Acceptance.
-- The HML Directors, who have been so advised by finnCap Ltd
("finnCap"), the Company's financial adviser, as to the financial
terms of the Offer, consider the terms of the Offer to be fair and
reasonable. In providing its advice to the HML Directors, finnCap
has taken into account the commercial assessments of the HML
Directors. finnCap is providing independent financial advice to the
HML Directors for the purposes of Rule 3 of the Code.
-- Accordingly, the HML Directors have unanimously agreed to
recommend that HML Shareholders accept the Offer, as the HML
Directors who currently hold or control HML Shares have irrevocably
undertaken so to do (or procure to be done) in respect of their own
beneficial shareholdings (or the shareholdings they control),
amounting, in aggregate, to 4,080,666 HML Shares representing
approximately 8.87 per cent. of HML's existing issued share
capital.
-- In addition, excluding the Harwood Funds, BDB Nominee has
received irrevocable undertakings to accept (or procure the
acceptance of) the Offer from certain institutional and other HML
Shareholders (as set out in Appendix III to this Announcement) in
respect of, in aggregate, 12,396,184 HML Shares, representing
approximately 26.95 per cent. of HML's existing issued share
capital.
-- Accordingly, excluding the Harwood Funds, BDB Nominee has
obtained irrevocable undertakings over, in aggregate, 16,476,850
HML Shares, representing approximately 35.82 per cent . of HML's
existing issued share capital.
-- Further details of the abovementioned irrevocable
undertakings are set out in section 7 of, and Appendix III to, this
Announcement.
-- Harwood therefore advises and/or controls and, via BDB
Nominee, has obtained irrevocable undertakings to accept (or
procure the acceptance of) the Offer in respect of, in aggregate,
23,401,850 HML Shares, representing approximately 50.88 per cent.
of HML's existing issued share capital.
Richard Smith, Non-Executive Chairman of HML, commented:
"We are proud of HML's achievements and confident in the
Company's future prospects and strategy. We are also conscious
that, in the short term at least, Covid-19 has increased the risks
and uncertainties for delivering upon the Company's strategy.
Within a private company environment, the Company's management will
be better able to focus on strategic delivery, take a longer term
view on the investment decisions required to grow the business, and
eliminate a meaningful proportion of the financial cost associated
with being an AIM quoted company. Given these factors, and the
relatively illiquid market for HML Shares, we feel that the Offer
represents an attractive opportunity for HML Shareholders and
unanimously recommend that shareholders accept the Offer."
Tim Sturm, Director of BDB Nominee , commented:
"Our recommended cash offer affords HML Shareholders the
opportunity to exit their investment in full at an attractive
valuation. We recognise the potential for HML to be a consolidator
in a fragmented market with strong management, but believe that, in
light of the Company's size and further capital requirements, it
will fare better as a private company with a more cost-effective
corporate structure ."
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement (including the Appendices).
The Offer will be subject to the Conditions and certain further
terms set out in Appendix I to this Announcement and to the full
terms and conditions which will be set out in the Offer Document.
Appendix II to this Announcement contains the sources of
information and bases of calculation of certain information
contained in this Announcement. Appendix III to this Announcement
contains a summary of the irrevocable undertakings in respect of
the Offer received by BDB Nominee. Appendix IV to this Announcement
contains definitions of certain terms used in this summary and the
following content of this Announcement.
A copy of this Announcement will be made available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, for inspection on HML's website at www.hmlgroup.com,
along with certain other documentation required to be posted online
pursuant to the Code.
Enquiries:
BDB Nominee Company Limited Tel: +44 (0)207
Jeremy Brade, Director 640 3200
Tim Sturm, Director
Strand Hanson Limited Tel: +44 (0)207
(Financial Adviser to BDB Nominee and Harwood 409 3494
Capital)
Stuart Faulkner/Matthew Chandler
Jack Botros/James Dance
HML Holdings plc Tel: +44 (0)20 8439
Alec Guthrie, Chief Executive Officer 8529
James Howgego, Chief Financial Officer
finnCap Ltd Tel: +44 (0)20 7220
(Financial and Rule 3 Adviser, Nominated Adviser 0500
and Broker to HML)
Ed Frisby
Giles Rolls
Henrik Persson
Tavistock Communications Group Tel: +44 (0)20 7920
(Financial PR adviser to HML) 3150
James Verstringhe
Jeremy Carey
BDB Pitmans LLP is providing legal advice to BDB Nominee.
Keystone Law Limited is providing legal advice to HML.
Important Notice
Strand Hanson Limited, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting
exclusively as financial adviser to BDB Nominee and Harwood and
no-one else in connection with the Offer and other matters
described in this Announcement and will not be responsible to
anyone other than BDB Nominee and Harwood for providing the
protections afforded to clients of Strand Hanson Limited nor for
providing advice in relation to the Offer, the contents of this
Announcement or any other matter referred to herein. Neither Strand
Hanson Limited nor any of its subsidiaries, branches or affiliates
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Strand
Hanson Limited in connection with this Announcement, any statement
contained herein or otherwise.
finnCap Ltd, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as financial adviser, nominated adviser and broker to HML and
no-one else in connection with the Offer and other matters
described in this Announcement and will not be responsible to
anyone other than HML for providing the protections afforded to
clients of finnCap Ltd nor for providing advice in relation to the
Offer, the contents of this Announcement or any other matter
referred to herein. Neither finnCap Ltd nor any of its
subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of finnCap Ltd in connection with this
Announcement, any statement contained herein or otherwise.
Further information
THIS ANNOUNCEMENT IS MADE PURSUANT TO RULE 2.7 OF THE CODE AND
IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTED TO, AND DOES NOT,
CONSTITUTE OR FORM ANY PART OF, AN OFFER TO SELL OR AN INVITATION
TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES OR THE SOLICITATION OF
ANY VOTE OR APPROVAL IN ANY JURISDICTION PURSUANT TO THE OFFER OR
OTHERWISE, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE
SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN
CONTRAVENTION OF APPLICABLE LAW.
The Offer will be subject to the Conditions and to the further
terms and conditions to be set out in the Offer Document. The Offer
is being made solely through the Offer Document (or any other
document by which the Offer is made), which will contain the full
terms and conditions of the Offer, including details of how to
accept the Offer. Any acceptance in relation to the Offer should be
made only on the basis of the information contained in the Offer
Document. HML Shareholders are advised to read the Offer Document
carefully, once it has been despatched.
This Announcement does not constitute a prospectus or prospectus
equivalent document.
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or other independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial
adviser.
Overseas jurisdictions
The availability of the Offer and the release, publication and
distribution of this Announcement in jurisdictions other than the
United Kingdom may be restricted by the laws of those jurisdictions
and therefore persons who are not resident in the United Kingdom
into whose possession this Announcement comes should inform
themselves about and observe any such restrictions. Failure to
comply with any such restrictions may constitute a violation of the
securities laws of any such jurisdiction. In particular, the
ability of persons who are not resident in the United Kingdom to
participate in the Offer may be affected by the laws of the
relevant jurisdictions in which they are located.
This Announcement has been prepared for the purposes of
complying with English law, the Code and the AIM Rules and the
information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance
with the laws and regulations of jurisdictions outside the United
Kingdom.
The Offer will be implemented in accordance with applicable
English law and will be subject to the applicable requirements of
the Code, the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority, the Panel and the rules of the London
Stock Exchange (including the AIM Rules).
Unless otherwise determined by BDB Nominee or required by the
Code, and permitted by applicable law and regulation, the Offer
will not be made available directly or indirectly, in, into or from
a Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction and no person may accept the Offer from within a
Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this Announcement, the Offer Document, the
Form of Acceptance and all other documents relating to the Offer
are not being, and must not be, directly or indirectly, mailed or
otherwise forwarded, distributed or sent in, into or from any
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction and persons receiving such documents (including
custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send them in, into or from any Restricted
Jurisdiction where to do so would violate the laws in such
jurisdictions. All persons receiving this Announcement (including,
without limitation, custodians, nominees and trustees) should
observe these restrictions and any applicable legal or regulatory
requirements of their jurisdiction and must not mail or otherwise
forward, send or distribute this Announcement in, into or from any
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction. To the fullest extent permitted by applicable
law, the companies and persons involved in the Offer disclaim any
responsibility or liability for the violation of such restrictions
by any person.
Further details in relation to Overseas Shareholders will be
contained in the Offer Document.
Cautionary note regarding forward-looking statements
This Announcement (including information incorporated by
reference in this Announcement) contains certain statements that
are, or may be deemed to be, forward-looking statements with
respect to BDB Nominee and/or HML. These forward-looking statements
can be identified by the fact that they do not relate to historical
or current facts. Forward-looking statements also often use words
such as "anticipate", "target", "expect", "estimate", "intend",
"plan", "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could" or other words of similar
meaning. Forward-looking statements include statements relating to
the following: (i) future capital expenditures, expenses, revenues,
earnings, synergies, economic performance, indebtedness, financial
condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of
BDB Nominee 's or HML's operations and potential synergies
resulting from the Offer; and (iii) the effects of government
regulation on BDB Nominee 's or HML's business. These statements
are based on assumptions and assessments made by BDB Nominee and/or
HML (as applicable) in light of their experience and perception of
historical trends, current conditions, future developments and
other factors they believe appropriate.
Forward-looking statements are not guarantees of future
performance. Such forward-looking statements involve known and
unknown risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many
factors could cause actual results to differ materially from those
projected or implied in any forward-looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of
the date of this Announcement. Neither BDB Nominee nor HML
undertakes any obligation to update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except to the extent required by applicable law, the
Panel or the Code.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in the global, political,
economic, business and competitive environments, market and
regulatory forces, future exchange and interest rates, changes in
tax rates, and future business combinations or dispositions.
No member of the BDB Nominee Group or the HML Group nor any of
their respective associates, directors, officers, employees or
advisers, provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this Announcement will actually
occur.
Except as expressly provided in this Announcement, no
forward-looking or other statements have been reviewed by the
auditors of the BDB Nominee Group or the HML Group. All subsequent
oral or written forward-looking statements attributable to any
member of the BDB Nominee Group or the HML Group, or any of their
respective associates, directors, officers, employees or advisers,
are expressly qualified in their entirety by the cautionary
statement above.
No profit forecasts, quantified financial benefit statements or
estimates
No statement in this Announcement is intended, or is to be
construed, as a profit forecast, profit estimate or quantified
financial benefit statement for any period. No statement in this
Announcement should be interpreted to mean that earnings per HML
Share for the current or future financial years would necessarily
match or exceed the historical published earnings per HML
Share.
Dealing and Opening Position Disclosure requirements of the
Code
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of HML or
of any securities exchange offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) HML and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies
must be made by no later than 3.30 p.m. (UK time) on the 10th
Business Day following the commencement of the offer period and, if
appropriate, by no later than 3.30 p.m. (UK time) on the 10th
Business Day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of HML or of a securities exchange offeror
prior to the deadline for making an Opening Position Disclosure
must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in one per cent. or more of any class of relevant
securities of HML or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of HML or of any securities exchange offeror. A Dealing Disclosure
must contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) HML and (ii) any securities
exchange offeror(s), save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. (UK time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of HML or a securities exchange
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by HML and by any
offeror and Dealing Disclosures must also be made by HML, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on a website and availability of hard copies
This Announcement and the documents required to be published
pursuant to Rule 26 of the Code will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on HML's website at www.hmlgroup.com by
no later than 12.00 noon (UK time) on the Business Day following
this Announcement.
Neither the content of any website referred to in this
Announcement nor the content of any website accessible from
hyperlinks on such website is incorporated into, or forms part of,
this Announcement.
A hard copy of this Announcement will be sent to HML
Shareholders (other than HML Shareholders who have elected to
receive electronic communications) in the near future. HML
Shareholders may request a hard copy of this Announcement (and any
information incorporated by reference in this Announcement) free of
charge by contacting Share Registrars on 01252 821 390 from within
the UK or +44 (0)1252 821 390 if calling from outside the UK
between 8.30 a.m. to 5.30 p.m., Monday to Friday (except public
holidays in England and Wales) or by submitting a request in
writing to Share Registrars at The Courtyard, 17 West Street,
Farnham, Surrey, GU9 7DR . HML Shareholders may also request that
all future documents, announcements and information to be sent to
them in relation to the Offer should be in hard copy form. If you
have received this Announcement in electronic form, hard copies of
this Announcement and any document or information incorporated by
reference into this Announcement will not be provided unless such a
request is made.
Rule 2.9 information
Pursuant to Rule 2.9 of the Code, HML confirms that, as at the
date of this Announcement, it has 45,995,135 ordinary shares of 1.5
pence each in issue, with no shares held in treasury. Accordingly,
HML has 45,995,135 ordinary shares of 1.5 pence each admitted to
trading on AIM with International Securities Identification Number
GB00B16DFY89.
Information relating to HML Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by HML Shareholders, persons with information
rights and other relevant persons for the receipt of communications
from HML may be provided to BDB Nominee during the Offer Period as
required under Section 4 of Appendix 4 of the Code to comply with
Rule 2.11(c) of the Code.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Time
All times shown in this Announcement are UK times, unless
otherwise stated.
Not for release, publication or distribution, in whole or in
part, DIRECTLY OR INDIRECTLY in, into or from any jurisdiction
(including the united states) where to do so would constitute a
violation of the relevant laws or regulations of such jurisdiction
.
this announcement contains inside information FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) No . 596/2014. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
30 July 2020
RECOMMED CASH OFFER
for
HML HOLDINGS PLC
by
BDB NOMINEE COMPANY LIMITED
(formed at the direction of Harwood Capital LLP)
1. Introduction
The boards of directors of BDB Nominee and HML are pleased to
announce that they have reached agreement on the terms of a
recommended cash offer to be made by BDB Nominee for the entire
issued and to be issued share capital of HML. The Offer of 37.5
pence per HML Share values the entire issued and to be issued share
capital of HML at approximately GBP19.01 million on a fully diluted
basis.
The Offer, when made, will be conditional on valid acceptances
of the Offer being received in respect of HML Shares carrying, in
aggregate, not less than 75 per cent. (or such lesser percentage as
BDB Nominee may decide) of the voting rights then normally
exercisable at general meetings of the Company.
The HML Directors have unanimously agreed to recommend that HML
Shareholders accept the Offer, as the HML Directors who currently
hold or control HML Shares have irrevocably undertaken so to do (or
procure to be done) in respect of their own beneficial
shareholdings (or the shareholdings they control) amounting, in
aggregate, to 4,080,666 HML Shares representing approximately 8.87
per cent. of the existing issued share capital of HML.
BDB Nominee is a private limited liability company incorporated
in England and Wales, formed at the direction of Harwood on behalf
of one of the Harwood Funds (HPE V) specifically for the purpose of
making the Offer. Harwood and the Harwood Funds are deemed to be
acting in concert with BDB Nominee for the purposes of the Code.
Following completion of the Offer, BDB Nominee and the HML Group
will be ultimately beneficially owned by HPE V. Further information
on BDB Nominee , Harwood and HPE V is set out in section 9
below.
2. The Offer
Under the terms of the Offer, which will be subject to the
Conditions and further terms summarised below and in Appendix I to
this Announcement and to the full terms and conditions to be set
out in the Offer Document, HML Shareholders will be entitled to
receive:
for each HML Share 37.5 pence in cash
The Offer values the entire issued and to be issued ordinary
share capital of HML at approximately GBP19.01 million on a fully
diluted basis and the Offer Price represents a premium of
approximately:
(i) 27.12 per cent. to the Closing Price of 29.50 pence per HML
Share on 29 July 2020 (being the last Business Day prior to the
date of this Announcement); and
(ii) 44.52 per cent. to the volume weighted average price of
25.95 pence per HML Share over the three month period ended on and
including 29 July 2020 (being the last Business Day prior to the
date of this Announcement).
Pursuant to the terms of the Offer, following the Offer becoming
or being declared wholly unconditional the BDB Nominee Board
intends to procure the cancellation of the final dividend of 0.52
pence per HML Share proposed by the HML Board on 1 July 2020 in
respect of the Company's financial year ended 31 March 2020 with an
ex-dividend date of 1 October 2020. The declaration of this
dividend will therefore not be included in the business of the
Company's forthcoming annual general meeting. If, on or after the
date of this Announcement and before the Offer becomes or is
declared wholly unconditional, any further dividend, other
distribution and/or return of capital is authorised, declared, made
or paid or becomes payable in respect of the HML Shares, BDB
Nominee reserves the right to reduce the Offer Price by an amount
of up to the amount of such dividend, distribution and/or return of
capital. To the extent that any such dividend, distribution and/or
other return of capital is authorised, declared, made or paid or is
payable and it is: (i) transferred pursuant to the Offer on a basis
which entitles BDB Nominee to receive the dividend, distribution or
return of capital and to retain it; or (ii) cancelled, the
consideration payable under the terms of the Offer will not be
subject to change in accordance with this paragraph. Any exercise
by BDB Nominee of its rights referred to in this paragraph shall be
the subject of an announcement and, for the avoidance of doubt,
shall not be regarded as constituting any revision or variation of
the Offer.
It is expected that the Offer Document will be published
approximately (and before) 28 days after this Announcement (unless
BDB Nominee and HML otherwise agree, and the Panel consents, to a
later date).
3. Background to and reasons for the Offer
BDB Nominee has full confidence in the management of HML, its
existing strategy and the overall prospects for the Company's
operating businesses. However, Harwood believes that in order to
achieve its full potential, HML would be better suited to a private
company environment where, with Harwood's support and assistance,
particularly with regard to accessing and providing additional
growth capital, management would be in a stronger position to
deliver its longer term business plan, with a simplified corporate
structure, free from requirements to, inter alia, meet the UK
public equity market's shorter term expectations.
BDB Nominee believes that should HML remain publicly quoted on
AIM it will, as a relatively small and specialist property
management services group, continue to find it difficult to attract
and retain sufficient interest and research coverage in its
activities to generate stock liquidity and a level of market rating
that would make retaining its existing AIM quotation
worthwhile.
BDB Nominee intends to invest in and support the growth of HML's
established customer base, continued development of its suite of
service offerings and digital transformation of its processes
across its national branch network. BDB Nominee will also be
supportive of the strategic growth of the HML Group both through
targeted acquisitions and organically under the existing and
evolving corporate plan, whilst maintaining a tight control of
costs and seeking integration efficiencies within a simplified
corporate structure with a reduced regulatory burden and the
elimination of the numerous expenses associated with maintaining a
UK public quotation.
4. HML's Directors, management, employees, research and development and locations
The BDB Nominee Directors recognise the significant skills and
operating experience of HML's management and employees and expect
that they will play an important role in the future development of
HML. The BDB Nominee Directors intend to support HML's management
in continuing to execute and refine their existing medium term
business plan and strategy for the development of the HML Group
including the recently announced planned rationalisation and
restructuring of its surveying services offering and further
digitisation of the business infrastructure.
The BDB Nominee Directors believe that the Offer, if
successfully completed, will provide a stable and well capitalised
future for HML. The BDB Nominee Directors have no intention to
change the location or functions of HML's existing headquarters in
Richmond or to redeploy HML's fixed asset base. HML has no
dedicated research and development function and BDB Nominee
generally expects that, following successful completion of the
Offer, HML will operate principally as it does today but as a
subsidiary of BDB Nominee.
BDB Nominee does not have any plans to make any material changes
either to the headcount or terms and conditions of employment or in
the balance of the skills and functions of the management and
employees of the HML Group. The BDB Nominee Board has given
assurances to the HML Board that, following the Offer becoming or
being declared wholly unconditional, the existing contractual and
statutory employment rights and terms and conditions of employment,
including any employer contributions to company pension schemes as
applicable, of the management and employees of the HML Group will
be fully safeguarded. BDB Nominee does not intend to make any
changes with regards to the HML Group's existing pension schemes,
including with regard to any current arrangements for the funding
of any scheme deficit, the accrual of benefits for existing members
and the admission of new members to such schemes. Accordingly, the
BDB Nominee Directors believe that the prospects of the employees
of HML will not be adversely affected by the implementation of the
Offer.
The non-executive HML Directors, being Richard Smith, Geoffrey
Griggs, Elizabeth Holden and Anand Verma, have agreed to resign
with effect from completion of the Acquisition or, if later, on the
date when admission of the HML Shares to trading on AIM is
cancelled. They will each receive remuneration in line with the
termination provisions of their letters of appointment by way of
compensation.
It is intended that the appointments of the remaining HML
Directors will remain unchanged following successful completion of
the Offer, however there are no agreements or arrangements between
BDB Nominee and the directors, management or employees of HML in
relation to their on-going involvement in the business and the
Offer will not be conditional on reaching agreement with such
parties. BDB Nominee has not entered into, nor is it in discussions
on any proposals to enter into, any form of incentivisation
arrangements with members of HML's management who are interested in
HML Shares and has no plans so to do. Following completion of the
Acquisition, BDB Nominee may put in place incentive arrangements
for certain members of the HML management team. No proposals have
been made on the terms of any incentive arrangements for relevant
management.
Following completion of the Acquisition, BDB Nominee may, in the
future, invite one or more of the HML Directors to join the board
of BDB Nominee. No proposals have been made regarding any terms of
any such potential appointment.
As set out in section 14 below, BDB Nominee intends to seek the
cancellation of the admission of the HML Shares to trading on AIM
shortly following the Offer becoming, or being declared, wholly
unconditional and BDB Nominee receiving acceptances to its Offer of
greater than 75 per cent. of the HML Shares. Should BDB Nominee not
receive acceptances to its Offer of greater than 75 per cent. of
the HML Shares then BDB Nominee intends to seek the cancellation of
the admission of HML Shares to trading on AIM under the other
provisions set out in Rule 41 of the AIM Rules. This will thereby
enable HML's management to be entirely focussed on the growth and
development of the business, rather than AIM investor and AIM
quoted company related matters.
In accordance with Rule 2.11 of the Code, HML will make
available to its employees a copy of this Announcement and will
inform its employees of the rights of any employee representatives
under Rule 25.9 of the Code to require that a separate opinion of
any employee representatives on the effects of the Acquisition on
employment be appended to the Offer Document. If and to the extent
that HML is provided with an opinion from the employee
representatives after the date of publication of the Offer
Document, HML will publish that opinion in accordance with Rule
25.9 of the Code.
5. Recommendation of the HML Directors
The HML Directors, who have been so advised by finnCap, the
Company's financial adviser, as to the financial terms of the
Offer, consider the terms of the Offer to be fair and reasonable.
In providing its advice to the HML Directors, finnCap has taken
into account the commercial assessments of the HML Directors.
finnCap is providing independent financial advice to the HML
Directors for the purposes of Rule 3 of the Code. In addition, the
HML Directors consider the terms of the Offer to be in the best
interests of the HML Shareholders as a whole.
Accordingly, the HML Directors have agreed to unanimously
recommend that HML Shareholders accept the Offer, as the HML
Directors who currently hold or control HML Shares have irrevocably
undertaken so to do (or procure to be done) in respect of their own
beneficial shareholdings (or the shareholdings which they control),
amounting, in aggregate, to 4,080,666 HML Shares, representing
approximately 8.87 per cent. of the existing issued share capital
of HML.
The Offer Document, which it is expected will be despatched to
HML Shareholders approximately (and before) 28 days after this
Announcement, will contain, inter alia, details of the Offer and
procedure for acceptance.
6. Background to and reasons for the HML Directors' recommendation of the Offer
The HML Directors are confident that, as set out in the
Company's recent unaudited consolidated preliminary results for the
year ended 31 March 2020, announced on 1 July 2020, management's
strategy (as more fully described in section 8 below) will deliver
both future growth and business improvement. The HML Directors are
accordingly confident in the Company's prospects as a standalone
independent business. The HML Directors also consider that the
Company's prevailing share price has not fairly or adequately
reflected this but are conscious that there are risks and
uncertainties inherent in delivering the Company's strategy and to
the timescale for its delivery, and that these factors are
heightened by the unclear extent and duration of Covid-19 and its
impact on the wider economy, as well as the Company's
stakeholders.
The Offer by BDB Nominee represents an opportunity for all HML
Shareholders to realise their investment in full at a price that
has not been achieved since 14 October 2017 and which represents an
attractive premium of 44.52 per cent. to the volume weighted
average price of 25.95 pence per HML Share over the three month
period ended on and including 29 July 2020 (being the last Business
Day prior to the date of this Announcement). The HML Directors
therefore believe, especially in light of the relatively illiquid
market for HML Shares, that the Offer represents an attractive exit
opportunity for HML Shareholders.
Accordingly, the HML Directors have assessed the merits of the
Offer against this background.
It has been an important consideration for the HML Directors
that HML Shareholders representing approximately 42.01 per cent. of
the issued HML Shares have irrevocably undertaken to accept the
Offer (as more fully set out in Appendix III and excluding those
HML Shares held by the HML Directors which are also subject to
irrevocable undertakings). The HML Directors believe that this
support by HML Shareholders underlines the attractions of the
Offer, but are also mindful that, given the extent and irrevocable
terms of this support and together with the irrevocable
undertakings given by the HML Directors in respect of HML Shares
held by them, that there is consequently a heightened likelihood
that the Offer will become or be declared wholly unconditional and
it is unlikely that any third party competing offer would succeed
for so long as these irrevocable undertakings remain binding.
Harwood has indicated that, upon the Offer becoming or being
declared wholly unconditional and BDB Nominee receiving acceptances
to its Offer of greater than 75 per cent. of the HML Shares, it
will seek the cancellation of the admission to trading of HML
Shares on AIM. Should this become effective it would result in any
HML Shareholder who does not accept the Offer becoming a minority
shareholder in a private limited company controlled by Harwood. HML
Shareholders should also note that should BDB Nominee not receive
acceptances to its Offer of greater than 75 per cent. of the HML
Shares, then BDB Nominee has expressed an intention to seek the
cancellation of the admission of HML Shares to trading on AIM under
the other provisions set out in Rule 41 of the AIM Rules.
The HML Directors acknowledge that, within a private company
environment, the Company's management will be better able to focus
on strategic delivery, take a longer term view on the investment
decisions required to grow the business, and eliminate a meaningful
proportion of the financial cost associated with being a UK
publicly quoted company. The HML Directors are also aware that the
cancellation of the admission of HML Shares to trading on AIM could
lead to a considerably limited ability to buy or sell HML Shares
and that HML Shareholders at such time will be exposed to different
standards and regulations regarding (amongst others) corporate
governance, shareholder communications and similar concerns, which
will likely be lower than those expected to be adopted or followed
by a publicly quoted company. The composition of the HML Board
would also change considerably following the Offer becoming or
being declared unconditional in all respects.
The HML Directors welcome the sentiment expressed by Harwood
with regard to the importance that Harwood attributes to the
significant skills and operating experience of HML's employees and
management team, and the statements made by Harwood in section 4 of
this Announcement that it expects HML to operate principally as it
does today and specifically that Harwood has no intention to
procure changes either to the headcount or terms and conditions of
employment or in the balance of the skills and functions of the
management and employees of the HML Group, nor to its existing
headquarters location or headquarters functions.
Following careful consideration of the above, the HML Directors
believe that the Offer Price of 37.5 pence in cash provides
attractive value and certainty for HML Shareholders.
7. Irrevocable undertakings
BDB Nominee has received irrevocable undertakings to accept (or
procure the acceptance of) the Offer (or, in the event that the
Offer is implemented by way of a Scheme of Arrangement, to vote, or
procure the vote, in favour of such offer) from certain
institutional and other HML Shareholders (who are listed in
Appendix III to this Announcement), in respect of, in aggregate,
12,396,184 HML Shares, representing approximately 26.95 per cent.
of the existing issued ordinary share capital of HML.
The HML Directors who beneficially hold or control HML Shares as
at the date of this Announcement have also irrevocably undertaken
to accept (or procure acceptance of) the Offer (or, in the event
that the Offer is implemented by way of a Scheme of Arrangement, to
vote, or procure the vote, in favour of such an offer) in respect
of their entire beneficial shareholdings (or shares over which they
exercise control), amounting to, in aggregate, 4,080,666 HML
Shares, representing approximately 8.87 per cent. of the existing
issued ordinary share capital of HML.
Oryx International Growth Fund Limited ("Oryx"), which is one of
the Harwood Funds and which is deemed to be acting in concert with
BDB Nominee, is the beneficial holder of 6,750,000 HML Shares
representing approximately 14.68 per cent. of the existing issued
ordinary share capital of HML. Oryx has irrevocably undertaken to
accept the Offer (or, in the event that the Offer is implemented by
way of a Scheme of Arrangement, to vote, or procure the vote, in
favour of such offer) in respect of its entire holding of HML
Shares.
In addition, Harwood Capital Nominees Limited, which is
controlled by Harwood, is the beneficial holder of 175,000 HML
Shares, representing approximately 0.38 per cent. of HML's existing
issued share capital. Harwood has irrevocably undertaken to accept
the Offer (or, in the event that the Offer is implemented by way of
a Scheme of Arrangement, to vote, or procure the vote, in favour of
such offer) in respect of its entire holding of HML Shares.
BDB Nominee has therefore received irrevocable undertakings to
accept (or procure the acceptance of) the Offer (or, in the event
that the Offer is implemented by way of a Scheme of Arrangement, to
vote, or procure the vote, in favour of such offer) in respect of,
in aggregate, 23,401,850 HML Shares, representing approximately
50.88 per cent. of the existing issued ordinary share capital of
HML.
All of the irrevocable undertakings shall lapse and cease to
become binding, inter alia, if (i) the Offer Document is not
published within 28 days of this Announcement (or within such
longer period as the Panel may agree); (ii) the Offer lapses or is
withdrawn without becoming or being declared unconditional in all
respects; or (iii) BDB Nominee announces that it will not proceed
with the Offer.
Further details of the irrevocable undertakings received by BDB
Nominee (including the circumstances in which the irrevocable
undertakings will cease to remain binding) are set out in Appendix
III to this Announcement.
Copies of the irrevocable undertakings will be put on display on
HML's website (www.hmlgroup.com) by no later than 12.00 noon (UK
time) on 31 July 2020.
8. Information relating to the HML Group
HML was incorporated in England and Wales on 2 March 2006 and
its ordinary shares were admitted to trading on AIM on 30 June
2006. HML provides property management, insurance and ancillary
services to residential property blocks.
HML has a clear strategy to improve business output and deliver
future growth through:
-- selective acquisitions;
-- accelerating the digital transformation of the HML Group's
processes to reduce the burden of maintaining a geographically
spread branch network and adopt more regional hubs along with
engaging locally with clients through readily accessible digital
tools;
-- the pursuit of new property related initiatives to explore
new revenue streams available to the Group from within its existing
business; and
-- further investment in the management of residential lettings
portfolios and commercial management.
HML and its subsidiaries specifically focus on residential
property management where its aim is to deliver a comprehensive
management services to its client. Its services include:
-- Day to day running and management of a development
-- financial management including
-- Preparing budgets
-- Accounts preparation
-- Placing of insurance in accordance with the terms of the lease (where applicable)
-- Managing contracts
-- Arranging repairs and maintenance
-- Ensuring compliance with relevant legislation
-- Arranging health and safety and other routing inspections
-- Concierge services
-- Company Secretarial
-- Chartered surveying and estate valuations
Over time, HML has created standalone businesses to deliver
these services with a view to selling them outside of its own core
business, for example:
-- Alexander Bonhill
-- Shaw and Company
-- HML Concierge
-- HML LAM
The activities of HML's wholly owned subsidiaries, Alexander
Bonhill Limited, which carries out insurance and risk management
activities, Faraday Property Management Limited, HML PM Limited and
Leasehold Management Limited, are authorised and regulated by the
FCA.
The HML Group has approximately 640 employees, all of which are
situated in the UK.
Current trading and prospects
On 1 July 2020, HML announced its unaudited preliminary results
for the year ended 31 March 2020, where it reported total revenue
of GBP31.2 million (2019: GBP28.1 million), a profit after taxation
of GBP1.1 million (2019: GBP1.4 million) and net assets as at 31
March 2020 of GBP16.4 million (2019: GBP15.4m) . As at 31 March
2020, the HML Group was managing more than 80,000 property units in
over 3,000 estates and blocks of flats from 24 offices.
The HML Group continues to trade in line with the HML Directors'
expectations.
Further financial and other information on HML will be set out
in the Offer Document.
9. Information relating to BDB Nominee, Harwood and the Harwood Funds
9.1 BDB Nominee
BDB Nominee is a private company incorporated in England and
Wales with limited liability on 30 June 2020 under registration
number 12708049. BDB Nominee has been established by Harwood (on
behalf of one of the Harwood Funds) specifically for the purpose of
making the Offer.
The current issued share capital of BDB Nominee comprises 1,000
BDB Nominee Ordinary Shares, all of which are held by North
Atlantic Value GP 5 LLP as general partner for HPE V. BDB Nominee
is to be funded for the purposes of the Offer via the Subscription
Agreement and Loan Agreement details of which are provided in
section 11 below.
BDB Nominee does not have any operations nor has it traded since
its date of incorporation, paid any dividends or entered into any
obligations other than in connection with the Offer and the
financing of the Offer. The directors of BDB Nominee are Mr Jeremy
Brade and Mr Timothy Sturm, appointees of Harwood, and there are no
employees. BDB Nominee does not currently have any subsidiaries or
subsidiary undertakings. Further information concerning BDB Nominee
will be set out in the Offer Document.
9.2 Harwood Capital LLP
Harwood is a UK limited liability partnership authorised to
conduct investment business by the FCA since 23 September 2003. Its
principal activity is the provision of discretionary investment
management and advisory services. The funds it manages and/or
advises typically take an active interest in the running of the
companies that it invests in with the aim of adding significant
value by changing or improving various aspects of an investee
company's business. As at 30 June 2020, the Harwood Capital
Management Group had approximately GBP1.7 billion in funds under
management (including advisory clients).
Harwood controls Harwood Capital Nominees Limited which is the
beneficial owner of 175,000 HML Shares, representing approximately
0.38 per cent. of HML's existing issued share capital. Harwood
Capital Nominees Limited has irrevocably undertaken to accept the
Offer (or, in the event that the Offer is implemented by way of a
Scheme of Arrangement, to vote, or procure the vote, in favour of
such Offer) in respect of its entire holding of HML Shares.
9.3 The Harwood Funds
Oryx, a closed-ended investment fund managed and advised by
Harwood Capital Management (Gibraltar) Limited, a company wholly
owned by Harwood Capital Management, holds 6,750,000 HML Shares,
representing approximately 14.68 per cent. of the existing issued
share capital of HML. Oryx has irrevocably undertaken to accept the
Offer (or, in the event that the Offer is implemented by way of a
Scheme of Arrangement, to vote, or procure the vote, in favour of
such Offer) in respect of its entire holding of HML Shares.
As set out in section 10 below, Harwood Private Equity V L.P.
("HPE V ") will provide all of the funding required for the Offer
by subscribing for BDB Nominee Ordinary Shares and BDB Nominee ZRP
Shares pursuant to the Subscription Agreement and advancing an
unsecured loan pursuant to the Loan Agreement .
Harwood Private Equity V L.P.
HPE V is an English limited partnership incorporated on 2 July
2019 under registration number LP020344. The fund's final closing
date was 21 February 2020 and it has total committed capital of
GBP160 million. Harwood is the investment manager and the fund's
objective is to generate high absolute returns from investing in a
portfolio of unquoted small and medium sized companies across a
range of sectors principally in the United Kingdom. It focuses on
leveraged buyouts and similar transactions including
public-to-private investments.
Further information concerning Harwood and the Harwood Fund that
is investing in and financing BDB Nominee will be set out in the
Offer Document.
10. Financing of the Acquisition
Strand Hanson, financial adviser to BDB Nominee, is satisfied
that sufficient financial resources are available to BDB Nominee to
enable it to implement the Offer in full. Assuming that the cash
consideration is payable to all HML Shareholders and all
in-the-money options were to be exercised and accepted into the
Offer, full implementation of the Offer would require a maximum
cash payment of approximately GBP19.01 million by BDB Nominee which
will be funded entirely out of BDB Nominee's cash resources made
available by way of subscriptions for BDB Nominee Ordinary Shares
and BDB Nominee ZRP Shares by HPE V pursuant to the Subscription
Agreement and the advancement of a GBP5 million unsecured loan by
HPE V to BDB Nominee pursuant to the Loan Agreement, details of
which are provided in section 11 below.
There is no requirement for any funding from third party
providers of finance to BDB Nominee.
11. Subscription Agreement and Loan Agreement
Pursuant to the Subscription Agreement, Harwood Capital LLP has
agreed to procure, inter alia, the subscriptions by HPE V of, in
aggregate, GBP1 million of BDB Nominee Ordinary Shares and
GBP13,011,520 of BDB Nominee ZRP Shares, whilst pursuant to the
Loan Agreement, Harwood Capital LLP has agreed to procure that HPE
V will advance an unsecured loan of GBP5 million, with a maturity
date of 12 months from when the Offer becomes wholly unconditional.
Interest on the loan will be accrued at a rate of five per cent.
per annum and paid on repayment or at redemption. Prior to the
scheduled maturity of the loan, it is currently intended that it
will be refinanced with suitable alternative debt funding in order
to optimise BDB Nominee's capital structure.
Such subscription and loan monies will ensure that BDB Nominee
has the amount required to satisfy the maximum aggregate cash
consideration payable in accordance with the Offer. The obligation
to subscribe for BDB Nominee Ordinary Shares and BDB Nominee ZRP
Shares and advance the loan is conditional upon the Offer becoming,
or being declared, unconditional in all respects. The subscription
and loan monies shall be made available no later than five calendar
days after the date on which the Offer becomes, or is declared,
wholly unconditional.
12. HML Share Option Schemes
Participants in the HML Share Option Schemes will be contacted
regarding the effect of the Offer on their rights under the HML
Share Option Schemes. In accordance with Rule 15 of the Code, BDB
Nominee will make appropriate proposals to such participants in due
course.
13. Structure and implementation of the Acquisition and compulsory acquisition
Process
It is intended that the Offer will be implemented by means of a
takeover offer under Part 28 of the Companies Act 2006, the
provisions of which will be set out in full in the Offer Document
(although BDB Nominee reserves the right to elect to implement the
Offer by means of a Scheme of Arrangement (subject to Panel
consent)).
The HML Shares shall be acquired under the Offer fully paid and
free from all liens, charges, equitable interests, encumbrances,
rights of pre-emption and any other rights and interests of any
nature whatsoever and together with all rights now and hereafter
attaching thereto, including voting rights and the right to receive
and retain in full all dividends and other distributions (if any)
declared, made or paid on or after the date of this
Announcement.
The Offer Document and the accompanying Form of Acceptance will
be published approximately (and before) 28 days after this
Announcement (unless BDB Nominee and HML otherwise agree, and the
Panel consents, to a later date). HML Shareholders are urged to
read the Offer Document and the accompanying Form of Acceptance
carefully once they have been dispatched.
Compulsory acquisition
If BDB Nominee receives acceptances under the Offer in respect
of, and/or otherwise acquires, 90 per cent. or more of the HML
Shares by nominal value, and voting rights attaching to such
shares, to which the Offer relates and assuming that all of the
Conditions of the Offer have been satisfied or waived (if capable
of being waived), BDB Nominee intends to exercise its right
pursuant to the provisions of Chapter 3 of Part 28 of the Companies
Act 2006 to acquire compulsorily the remaining HML Shares in
respect of which the Offer has not been accepted on the same terms
as the Offer.
Anticipated timetable
It is expected that the Offer Document, together with the Form
of Acceptance, will be dispatched to HML Shareholders and, for
information only, to the holders of options granted under the HML
Share Option Schemes, approximately (and before) 28 days after this
Announcement (unless BDB Nominee and HML otherwise agree, and the
Panel consents, to a later date).
A full expected timetable of principal events will be set out in
the Offer Document.
14. Cancellation of admission to trading on AIM and re--registration
On completion of the Offer, HML will become a subsidiary of BDB
Nominee. Following the Offer becoming, or being declared, wholly
unconditional and if BDB Nominee has by virtue of acceptances of
the Offer acquired, or agreed to acquire, HML Shares representing
greater than 75 per cent. of the voting rights attaching to the HML
Shares, BDB Nominee intends to procure that HML makes an
application to the appropriate authorities for the cancellation of
the admission of the HML Shares to trading on AIM. Should BDB
Nominee proceed with the intended cancellation a notice period of
not less than 20 Business Days will be given on or after the date
on which the Offer becomes, or is declared, wholly unconditional.
Should BDB Nominee not receive acceptances to the Offer of greater
than 75 per cent. of the voting rights of HML, then BDB Nominee
intends following completion of the Offer to seek the cancellation
of the admission of HML Shares to trading on AIM under the other
provisions set out in Rule 41 of the AIM Rules.
The cancellation of the admission of the HML Shares to trading
on AIM would significantly reduce the liquidity and marketability
of any HML Shares in respect of which the Offer has not been
accepted at that time and the value of any such HML Shares may be
adversely affected as a consequence.
It is also intended that following the Offer becoming or being
declared unconditional in all respects and the admission to trading
on AIM of HML Shares having been cancelled, HML will be
re--registered as a private limited company under the relevant
provisions of the Companies Act 2006.
15. Offer-related arrangements
Confidentiality Agreement
Harwood and HML entered into a confidentiality agreement on 14
May 2020 (the "Confidentiality Agreement") pursuant to which
Harwood has undertaken to HML to keep confidential information
relating to HML and not disclose it to third parties (other than to
permitted persons) unless required by law or regulation. Such
confidentiality obligation will remain in force until completion of
the Offer or otherwise for a period of 24 months from the date of
the Confidentiality Agreement.
16. Disclosure of interests in the HML Group's relevant securities
BDB Nominee confirms that within 10 Business Days of the date of
this Announcement, it will make an Opening Position Disclosure,
setting out the details required to be disclosed by it under Rule
8.1(a) of the Code.
Save for the 6,750,000 HML Shares held by Oryx and 175,000 HML
Shares held by Harwood Capital Nominees Limited, which represent,
in aggregate, approximately 15.06 per cent. of HML's existing
issued share capital (as set out in section 9 above), and the
irrevocable undertakings referred to in section 7 above, as at the
close of business on 29 July 2020 (being the last Business Day
prior to the date of this Announcement), neither BDB Nominee, or
Harwood nor any of the directors or members (as applicable) of BDB
Nominee or Harwood, nor so far as the directors or members (as
applicable) of BDB Nominee and Harwood are aware, any other person
acting, or deemed to be acting, in concert (within the meaning of
the Code) with BDB Nominee for the purposes of the Offer had:
(a) any interest in, or right to subscribe for, any relevant securities of HML;
(b) any short positions in respect of any relevant securities of
HML (whether conditional or absolute and whether in-the-money or
otherwise), including any short position under a derivative, any
agreement to sell or any delivery obligation or right to require
another person to purchase or take delivery of, relevant securities
of HML;
(c) borrowed or lent any relevant securities of HML (save for
any borrowed shares which have been either on-lent or sold);
(d) procured an irrevocable commitment or letter of intent to
accept the Offer or to vote in favour of a Scheme of Arrangement in
respect of any relevant securities of HML; nor
(e) any arrangement in relation to any relevant securities of HML.
For these purposes, an "arrangement" includes any indemnity or
option arrangement, any agreement or any understanding, formal or
informal, of whatever nature, relating to the relevant securities
of HML which is, or may be, an inducement to deal or refrain from
dealing in such securities.
17. General
BDB Nominee reserves the right to elect, with the consent of the
Panel, to implement the Acquisition by way of a Scheme of
Arrangement as an alternative to the Offer. In such event, the
Scheme of Arrangement would be made on substantially the same terms
as those which would apply to the Offer (subject to appropriate
amendments, including the requirement of HML Shareholders to vote,
or procure the vote, in favour of a Scheme of Arrangement at duly
convened court and general meetings).
The Offer will be subject to the Conditions and certain further
terms set out in Appendix I to this Announcement and to the full
terms and conditions to be set out in the Offer Document and Form
of Acceptance.
One of the Conditions of the Offer, being Condition 1(b)(ii) set
out in Appendix I to this Announcement, is the Financial Conduct
Authority approving the acquisition of control of HML, or any
subsidiary undertaking of HML, by BDB Nominee pursuant to a notice
under section 178 FSMA, and such approval not being subject to any
conditions or restrictions.
Harwood and BDB Nominee can confirm that they have made the
requisite filings to the Financial Conduct Authority and are in an
active dialogue with the relevant team at the Financial Conduct
Authority.
The Board of BDB Nominee is confident that the relevant approval
will be forthcoming, such that the FCA Condition will be satisfied
within the Panel's prescribed Code timetable.
However, in order to maximise the time that the Financial
Conduct Authority has to undertake the process leading to its
decision, it is intended that BDB Nominee will only despatch the
Offer Document to HML Shareholders on, or before, 27 August 2020,
being 28 days after release of this Announcement.
The sources of information and bases of calculation contained in
this Announcement are set out in Appendix II to this Announcement.
A summary of the irrevocable undertakings is set out in Appendix
III to this Announcement. Certain terms used in this Announcement
are defined in Appendix IV to this Announcement.
The Offer Document will include full details of the Offer,
together with the expected timetable of principal events, and will
be accompanied by the Form of Acceptance. The Offer will be subject
to the applicable requirements of the Code, the Panel, the London
Stock Exchange, the AIM Rules and the FCA.
This Announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014
("MAR"). Market soundings, as defined in MAR, were taken in respect
of the Offer, with the result that certain persons became aware of
inside information, as permitted by MAR. That inside information is
set out in this Announcement. Therefore, those persons that
received inside information in a market sounding are no longer in
possession of inside information relating to HML and its
securities.
18. Consents
Strand Hanson has given and not withdrawn its consent to the
publication of this Announcement with the inclusion in it of the
references to its name and (where applicable) advice in the form
and context in which they appear.
finnCap has given and not withdrawn its consent to the
publication of this Announcement with the inclusion in it of the
references to its name and (where applicable) advice in the form
and context in which they appear.
19. Documents available on a website
Copies of the following documents will be made available,
subject to certain restrictions relating to persons resident in any
Restricted Jurisdiction, on HML's website at www.hmlgroup.com by no
later than 12.00 noon (UK time) on 31 July 2020 until the end of
the Offer Period:
-- this Announcement;
-- the irrevocable undertakings referred to in section 7 above
and summarised in Appendix III to this Announcement;
-- the Confidentiality Agreement;
-- the Subscription Agreement and Loan Agreement referred to in section 11 above; and
-- the written consents provided by Strand Hanson and finnCap referred to in section 18 of this Announcement.
Enquiries:
BDB Nominee Company Limited Tel: +44 (0)207 640 3200
Jeremy Brade, Director
Tim Sturm, Director
Strand Hanson Limited Tel: +44 (0)207 409 3494
(Financial Adviser to BDB Nominee Company Limited
and Harwood Capital)
Stuart Faulkner/Matthew Chandler
Jack Botros/James Dance
HML Holdings plc Tel: +44 (0)20 8439 8529
Alex Guthrie, Chief Executive Officer
James Howgego, Chief Financial Officer
finnCap Limited Tel: +44 (0)207 220 0500
(Financial and Rule 3 Adviser, Nominated Adviser
and Broker to HML)
Ed Frisby
Giles Rolls
Henrik Persson
Tavistock Communications Group Tel: +44 (0)20 7920 3150
(Financial PR adviser to HML)
James Verstringhe
Jeremy Carey
BDB Pitmans LLP is providing legal advice to BDB Nominee.
Keystone Law Limited is providing legal advice to HML.
Important Notice
Strand Hanson Limited, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting
exclusively as financial adviser to BDB Nominee and Harwood and
no-one else in connection with the Offer and other matters
described in this Announcement and will not be responsible to
anyone other than BDB Nominee and Harwood for providing the
protections afforded to clients of Strand Hanson Limited nor for
providing advice in relation to the Offer, the contents of this
Announcement or any other matter referred to herein. Neither Strand
Hanson Limited nor any of its subsidiaries, branches or affiliates
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Strand
Hanson Limited in connection with this Announcement, any statement
contained herein or otherwise.
finnCap Ltd, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as financial adviser, nominated adviser and broker to HML and
no-one else in connection with the Offer and other matters
described in this Announcement and will not be responsible to
anyone other than HML for providing the protections afforded to
clients of finnCap Ltd nor for providing advice in relation to the
Offer, the contents of this Announcement or any other matter
referred to herein. Neither finnCap Ltd nor any of its
subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of finnCap Ltd in connection with this
Announcement, any statement contained herein or otherwise.
Further information
THIS ANNOUNCEMENT IS MADE PURSUANT TO RULE 2.7 OF THE CODE AND
IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTED TO, AND DOES NOT,
CONSTITUTE OR FORM ANY PART OF, AN OFFER TO SELL OR AN INVITATION
TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES OR THE SOLICITATION OF
ANY VOTE OR APPROVAL IN ANY JURISDICTION PURSUANT TO THE OFFER OR
OTHERWISE, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE
SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN
CONTRAVENTION OF APPLICABLE LAW.
The Offer will be subject to the Conditions and to the further
terms and conditions to be set out in the Offer Document. The Offer
is being made solely through the Offer Document (or any other
document by which the Offer is made), which will contain the full
terms and conditions of the Offer, including details of how to
accept the Offer. Any acceptance in relation to the Offer should be
made only on the basis of the information contained in the Offer
Document. HML Shareholders are advised to read the Offer Document
carefully, once it has been despatched.
This Announcement does not constitute a prospectus or prospectus
equivalent document.
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or other independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial
adviser.
Overseas jurisdictions
The availability of the Offer and the release, publication and
distribution of this Announcement in jurisdictions other than the
United Kingdom may be restricted by the laws of those jurisdictions
and therefore persons who are not resident in the United Kingdom
into whose possession this Announcement comes should inform
themselves about and observe any such restrictions. Failure to
comply with any such restrictions may constitute a violation of the
securities laws of any such jurisdiction. In particular, the
ability of persons who are not resident in the United Kingdom to
participate in the Offer may be affected by the laws of the
relevant jurisdictions in which they are located.
This Announcement has been prepared for the purposes of
complying with English law, the Code and the AIM Rules and the
information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance
with the laws and regulations of jurisdictions outside the United
Kingdom.
The Offer will be implemented in accordance with applicable
English law and will be subject to the applicable requirements of
the Code, the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority, the Panel and the rules of the London
Stock Exchange (including the AIM Rules).
Unless otherwise determined by BDB Nominee or required by the
Code, and permitted by applicable law and regulation, the Offer
will not be made available directly or indirectly, in, into or from
a Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction and no person may accept the Offer from within a
Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this Announcement, the Offer Document, the
Form of Acceptance and all other documents relating to the Offer
are not being, and must not be, directly or indirectly, mailed or
otherwise forwarded, distributed or sent in, into or from any
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction and persons receiving such documents (including
custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send them in, into or from any Restricted
Jurisdiction where to do so would violate the laws in such
jurisdictions. All persons receiving this Announcement (including,
without limitation, custodians, nominees and trustees) should
observe these restrictions and any applicable legal or regulatory
requirements of their jurisdiction and must not mail or otherwise
forward, send or distribute this Announcement in, into or from any
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction. To the fullest extent permitted by applicable
law, the companies and persons involved in the Offer disclaim any
responsibility or liability for the violation of such restrictions
by any person.
Further details in relation to Overseas Shareholders will be
contained in the Offer Document.
Cautionary note regarding forward-looking statements
This Announcement (including information incorporated by
reference in this Announcement) contains certain statements that
are, or may be deemed to be, forward-looking statements with
respect to BDB Nominee and/or HML. These forward-looking statements
can be identified by the fact that they do not relate to historical
or current facts. Forward-looking statements also often use words
such as "anticipate", "target", "expect", "estimate", "intend",
"plan", "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could" or other words of similar
meaning. Forward-looking statements include statements relating to
the following: (i) future capital expenditures, expenses, revenues,
earnings, synergies, economic performance, indebtedness, financial
condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of
BDB Nominee's or HML's operations and potential synergies resulting
from the Offer; and (iii) the effects of government regulation on
BDB Nominee's or HML's business. These statements are based on
assumptions and assessments made by BDB Nominee and/or HML (as
applicable) in light of their experience and perception of
historical trends, current conditions, future developments and
other factors they believe appropriate.
Forward-looking statements are not guarantees of future
performance. Such forward-looking statements involve known and
unknown risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many
factors could cause actual results to differ materially from those
projected or implied in any forward-looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of
the date of this Announcement. Neither BDB Nominee nor HML
undertakes any obligation to update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except to the extent required by applicable law, the
Panel or the Code.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in the global, political,
economic, business and competitive environments, market and
regulatory forces, future exchange and interest rates, changes in
tax rates, and future business combinations or dispositions.
No member of the BDB Nominee Group or the HML Group nor any of
their respective associates, directors, officers, employees or
advisers, provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this Announcement will actually
occur.
Except as expressly provided in this Announcement, no
forward-looking or other statements have been reviewed by the
auditors of the BDB Nominee Group or the HML Group. All subsequent
oral or written forward-looking statements attributable to any
member of the BDB Nominee Group or the HML Group, or any of their
respective associates, directors, officers, employees or advisers,
are expressly qualified in their entirety by the cautionary
statement above.
No profit forecasts, quantified financial benefit statements or
estimates
No statement in this Announcement is intended, or is to be
construed, as a profit forecast, profit estimate or quantified
financial benefit statement for any period. No statement in this
Announcement should be interpreted to mean that earnings per HML
Share for the current or future financial years would necessarily
match or exceed the historical published earnings per HML
Share.
Dealing and Opening Position Disclosure requirements of the
Code
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of HML or
of any securities exchange offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) HML and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies
must be made by no later than 3.30 p.m. (UK time) on the 10th
Business Day following the commencement of the offer period and, if
appropriate, by no later than 3.30 p.m. (UK time) on the 10th
Business Day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of HML or of a securities exchange offeror
prior to the deadline for making an Opening Position Disclosure
must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in one per cent. or more of any class of relevant
securities of HML or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of HML or of any securities exchange offeror. A Dealing Disclosure
must contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) HML and (ii) any securities
exchange offeror(s), save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. (UK time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of HML or a securities exchange
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by HML and by any
offeror and Dealing Disclosures must also be made by HML, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on a website and availability of hard copies
This Announcement and the documents required to be published
pursuant to Rule 26 of the Code will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on HML's website at www.hmlgroup.com by
no later than 12.00 noon (UK time) on the Business Day following
this Announcement.
Neither the content of any website referred to in this
Announcement nor the content of any website accessible from
hyperlinks on such website is incorporated into, or forms part of,
this Announcement.
A hard copy of this Announcement will be sent to HML
Shareholders (other than HML Shareholders who have elected to
receive electronic communications) in the near future. HML
Shareholders may request a hard copy of this Announcement (and any
information incorporated by reference in this Announcement) free of
charge by contacting Share Registrars on 01252 821 390 from within
the UK or +44 (0)1252 821 390 if calling from outside the UK
between 8.30 a.m. to 5.30 p.m., Monday to Friday (except public
holidays in England and Wales) or by submitting a request in
writing to Share Registrars at The Courtyard, 17 West Street,
Farnham, Surrey, GU9 7DR. HML Shareholders may also request that
all future documents, announcements and information to be sent to
them in relation to the Offer should be in hard copy form. If you
have received this Announcement in electronic form, hard copies of
this Announcement and any document or information incorporated by
reference into this Announcement will not be provided unless such a
request is made.
Rule 2.9 information
Pursuant to Rule 2.9 of the Code, HML confirms that, as at the
date of this Announcement, it has 45,995,135 ordinary shares of 1.5
pence each in issue, with no shares held in treasury. Accordingly,
HML has 45,995,135 ordinary shares of 1.5 pence each admitted to
trading on AIM with International Securities Identification Number
GB00B16DFY89.
Information relating to HML Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by HML Shareholders, persons with information
rights and other relevant persons for the receipt of communications
from HML may be provided to BDB Nominee during the Offer Period as
required under Section 4 of Appendix 4 of the Code to comply with
Rule 2.11(c) of the Code.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Time
All times shown in this Announcement are UK times, unless
otherwise stated.
Appendix I
Conditions and certain further terms of the Offer
Part A: The Conditions
1. The Offer shall be subject to the following Conditions:
(a) valid acceptances of the Offer being received (and not,
where permitted, withdrawn) by no later than 1.00 p.m. (London
time) on the First Closing Date of the Offer (or such later time(s)
and/or dates(s) as BDB Nominee may, with the consent of the Panel
or in accordance with the Code, decide) in respect of HML Shares
which, taken together with all other HML Shares which BDB Nominee
(and/or its nominees) acquires or agrees to acquire (whether
pursuant to the Offer or otherwise), carry in aggregate not less
than 75 per cent. (or such lesser percentage as BDB Nominee may
decide) of the voting rights then normally exercisable at a general
meeting of HML, provided that this Acceptance Condition will not be
satisfied unless BDB Nominee and/or any member of the BDB Nominee
Group shall have acquired or agreed to acquire (whether pursuant to
the Offer or otherwise), directly or indirectly, HML Shares
carrying in aggregate more than 50 per cent. of the voting rights
then normally exercisable at a general meeting of HML;
for the purposes of this Acceptance Condition:
(i) HML Shares which have been unconditionally allotted but not
issued before the Offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise, shall be deemed to
carry the voting rights they shall carry upon issue; and
(ii) valid acceptances shall be deemed to have been received in
respect of HML Shares which are treated for the purposes of Part 28
of the Companies Act 2006 as having been acquired or contracted to
be acquired by BDB Nominee by virtue of acceptances of the Offer or
otherwise;
(b) subject to Part B below and to the requirements of the
Panel, the Offer will also be conditional upon the following
matters, unless such Conditions (as amended as appropriate) have
been satisfied (where capable of satisfaction) and continue to be
satisfied or, where relevant, waived:
(i) all notifications and filings which are necessary in
connection with the Offer having been made by the relevant party,
all necessary waiting periods (including any extension to them)
under any applicable legislation or regulations of any jurisdiction
having expired, lapsed or been terminated, all necessary statutory
or regulatory obligations in any relevant jurisdiction having been
complied with and all Authorisations which in each case are
necessary for or in respect of the Offer, its implementation or any
acquisition of any shares in, or control or management of, HML or
any other member of the Wider HML Group by any member of the Wider
BDB Nominee Group, in each case where the absence of such
notification, filing or application would have a material adverse
effect on the Wider BDB Nominee Group or the Wider HML Group in
each case taken as a whole, and all Authorisations necessary in
respect thereof having been obtained on terms and in a form
reasonably satisfactory to BDB Nominee from all Relevant
Authorities or persons with whom any member of the Wider HML Group
has entered into contractual arrangements (other than contractual
arrangements which have been Fairly Disclosed) in each case where
the direct consequence of a failure to make such notification or
filing or to wait for the expiry, lapse or termination of any such
waiting period or to comply with such obligation or obtain such
Authorisation from such a person would have a material adverse
effect on the Wider HML Group taken as a whole, and all such
Authorisations, together with all Authorisations necessary to carry
on the business of any member of the Wider HML Group, remaining in
full force and effect at the time when the Offer becomes wholly
unconditional and there being no intimation of any intention to
revoke or not to renew, withdraw, suspend, withhold, modify or
amend the same in consequence of the Offer becoming wholly
unconditional;
(ii) in addition to Condition 1(b)(i) above, the Financial
Conduct Authority approving the acquisition of control of HML, or
any subsidiary undertaking of HML, by BDB Nominee pursuant to a
notice under section 178 FSMA, such approval not being subject to
any conditions or restrictions. In the event that such notice under
section 178 FSMA is a joint notice between HML and BDB Nominee,
neither HML nor BDB Nominee will unreasonably withhold cooperation
and will provide any information and/or documentation required in a
timely manner;
(iii) no Relevant Authority having instituted, implemented or
threatened any action, suit, proceedings, investigation, reference
or enquiry, or enacted, made or proposed any statute, regulation,
order or decision, or having taken any other steps or measures that
would or might reasonably be expected to, in any case which would
be material in the context of the Wider HML Group or the Wider BDB
Nominee Group, as the case may be, when taken as a whole:
(A) make the Offer, its implementation or the acquisition or
proposed acquisition of any shares or other securities in, or
control over, HML or any member of the Wider HML Group by BDB
Nominee or any member of the Wider BDB Nominee Group, illegal, void
or unenforceable under the laws of any relevant jurisdiction or
otherwise directly or indirectly materially restrict, restrain,
prohibit, delay, frustrate or interfere in the implementation of or
impose additional material conditions or obligations with respect
to or otherwise materially challenge the Offer or such proposed
acquisition in any case in a manner which is material in the
context of the Wider HML Group when taken as a whole (including
without limitation, taking any steps which would entitle the
Relevant Authority to require any member of the Wider BDB Nominee
Group to dispose of all or some of its HML Shares or restrict the
ability of any member of the Wider BDB Nominee Group to exercise
voting rights in respect of some or all of such HML Shares);
(B) require, prevent or materially delay a divestiture by any
member of the Wider BDB Nominee Group of any shares or other
securities in HML;
(C) impose any material limitation on, or result in a material
delay in, the ability of BDB Nominee or HML or any member of the
Wider BDB Nominee Group to acquire or hold or exercise effectively,
directly or indirectly, any rights of ownership of shares or other
securities in any member of the Wider HML Group or voting rights or
management control over any member of the Wider HML Group;
(D) require, prevent or materially delay a divestiture by any
member of the Wider BDB Nominee Group or the Wider HML Group of all
or any material portion of their respective businesses, assets or
properties or impose any material limitation on the ability of any
of them to conduct their respective businesses or own their
respective assets or properties;
(E) result in any member of the Wider HML Group or the Wider BDB
Nominee Group ceasing to be able to carry on their business under
any name under which it presently does so;
(F) impose any material limitation on the ability of any member
of the Wider BDB Nominee Group or of the Wider HML Group to
integrate or co-ordinate its business, or any part of it, with the
businesses or any part of the businesses of any other member of the
Wider BDB Nominee Group or of the Wider HML Group in a manner that
is materially adverse to the relevant group taken as a whole;
(G) otherwise affect any or all of the businesses, assets,
prospects or profits of any member of the Wider BDB Nominee Group
or any member of the Wider HML Group in a manner which is material
and adverse to the relevant group taken as a whole; or
(H) other than in the implementation of the Offer pursuant to
Chapter 3 of Part 28 of the Companies Act 2006, require the
divestiture by any member of the Wider BDB Nominee Group of any
shares, securities or other interests in any member of the Wider
HML Group;
and all applicable waiting and other time periods during which
any such Relevant Authority could institute, or implement or
threaten any proceedings, suit, investigation or enquiry or enact,
make or propose any such statute, regulation or order or take any
other such step having expired, lapsed or been terminated;
(iv) except as Fairly Disclosed there being no provision of any
Authorisation or other instrument to which any member of the Wider
HML Group is a party, or by or to which any such member, or any of
its assets, is bound or subject, which could or might reasonably be
expected, as a consequence of the Offer or of the proposed
acquisition by BDB Nominee of any shares or other securities (or
the equivalent) in HML or because of a change in, or control or
management of, any member of the Wider HML Group, result, in any
case to an extent which is material in the context of the Wider HML
Group taken as a whole, in:
(A) any assets or interests of any member of the Wider HML Group
being or falling to be disposed of or charged, or any right arising
under which any such assets or interests could be required to be
disposed of or charged or could cease to be available to any member
of the Wider HML Group, other than in the ordinary course of
business;
(B) any monies borrowed by or other indebtedness or material
liabilities (actual or contingent) of, or any grant available to,
any member of the Wider HML Group becoming repayable or being
capable of being declared repayable immediately or earlier than its
stated repayment date or the ability of such member of the Wider
HML Group to incur any indebtedness becoming or being capable of
being or becoming withdrawn or prohibited;
(C) any such Authorisation or other instrument being terminated
or materially adversely modified, affected, amended or varied or
any materially adverse action being taken or any onerous obligation
or liability arising thereunder;
(D) the business or interests of any member of the Wider HML
Group with any firm, body or person (or any arrangements relating
to such business or interests) being terminated, modified,
affected, amended or varied in any materially adverse manner;
(E) the value of or the financial or trading position or
prospects of any member of the Wider HML Group being prejudiced or
adversely affected;
(F) the creation of any liability (actual or contingent) by any
member of the Wider HML Group other than in the ordinary course of
business;
(G) any liability of any member of the Wider HML Group to make
any severance, termination, bonus or other payment to any of its
directors or other officers;
(H) the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business,
property or assets of any member of the Wider HML Group or any such
mortgage, charge or security (whenever arising or having arisen)
becoming enforceable; or
(I) any member of the Wider HML Group ceasing to be able to
carry on business under any name under which it currently does
so,
and no event having occurred which, under any provision of any
Authorisation or other instrument to which any member of the Wider
HML Group is a party, or by or to which any such member, or any of
its assets, is bound, or subject, would reasonably be expected to
result, in any case to an extent which is material and adverse in
the context of the Wider HML Group taken as a whole, in any of the
events or circumstances as are referred to in items (i) to (viii)
inclusive of this section;
(v) since 31 March 2020 and except as Fairly Disclosed:
(A) no enquiry or investigation by or complaint or reference to
any Relevant Authority against or in respect of any member of the
Wider HML Group or no criminal proceedings, litigation, arbitration
proceedings, mediation proceedings, prosecution or other legal
proceedings to which any member of the Wider HML Group is or may
become a party (whether as claimant, defendant or otherwise) having
been instituted or threatened or remaining outstanding against or
in respect of any member of the Wider HML Group which in any case
is material in the context of the Wider HML Group taken as a
whole;
(B) no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits of any
member of the Wider HML Group which in any case is material in the
context of the Wider HML Group taken as a whole;
(C) no contingent or other liability having arisen, become
apparent or increased which in any case is material in the context
of the Wider HML Group taken as a whole; and
(D) no steps having been taken and no omissions having been made
which would reasonably be expected to result in the withdrawal,
cancellation, termination or modification of any licence held by
any member of the Wider HML Group, which is material to, and
necessary for the proper carrying on of, its business;
(vi) since 31 March 2020 and except as Fairly Disclosed, neither
HML nor any other member of the Wider HML Group having:
(A) issued or agreed to issue or authorised or announced its
intention to authorise or propose the issue or grant of additional
shares of any class, or securities convertible into or exchangeable
for, or rights, warrants or options to subscribe for or acquire any
such shares or convertible securities or transferred or sold any
HML Shares out of treasury (save as between HML and any member of
the Wider HML Group or between any members of the Wider HML Group
and save for the issue of HML Shares pursuant to the entitlements
of participants under the HML Share Option Schemes);
(B) purchased, redeemed or repaid any of its own shares or other
securities or reduced or made any other changes to its share
capital, except in respect of the matters mentioned in Condition
1(b)(vi)(A) above;
(C) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any dividend, bonus or other
distribution whether payable in cash or otherwise, other than to
HML or a wholly-owned subsidiary of HML;
(D) save for any transaction between HML and any member of the
Wider HML Group or between any members of the Wider HML Group,
merged with, demerged or acquired any body corporate, partnership
or business or acquired or disposed of or transferred, mortgaged,
charged or created any security interest over any assets or any
right, title or interest in any assets (including shares in
subsidiaries and trade investments) which in any case would be
material in the context of the Wider HML Group taken as a
whole;
(E) save for any transaction between HML and any member of the
Wider HML Group or between any members of the Wider HML Group,
issued or authorised the issue of any debentures or incurred or
increased any indebtedness or liability or become subject to a
contingent liability which in any case is material in the context
of the Wider HML Group taken as a whole;
(F) entered into, varied or authorised any arrangement,
transaction, contract or commitment other than in the ordinary
course of business (whether in respect of capital expenditure or
otherwise) which is of a long-term, onerous or unusual nature or
which involves an obligation of a nature and magnitude which is
material in the context of the Wider HML Group taken as a whole or
is likely to materially restrict the scope of the existing business
of any member of the Wider HML Group other than to a nature and
extent which is normal in the context of the business
concerned;
(G) save for any transaction between HML and any member of the
Wider HML Group or between any members of the Wider HML Group,
entered into, implemented, effected or authorised any merger,
demerger, reconstruction, amalgamation, scheme, commitment or other
transaction or arrangement (other than the Offer) in relation to
itself or another member of the Wider HML Group otherwise than in
the ordinary course of business which in any case is material in
the context of the Wider HML Group taken as a whole;
(H) otherwise than in the ordinary course of business, waived or
compromised any claim which is material in the context of the Wider
HML Group taken as a whole;
(I) taken any corporate action or had any legal proceedings
started or threatened against it for its winding up (whether
voluntary or otherwise), dissolution or reorganisation or analogous
proceedings in any jurisdiction or for the appointment of a
receiver, trustee, administrator, administrative receiver or
similar officer in any jurisdiction of all or any of its assets and
revenues or had any such person appointed which in any case is
material in the context of the Wider HML Group taken as a
whole;
(J) taken or proposed any steps, corporate action or had any
legal proceedings instituted or threatened against it in relation
to the suspension of payments or a moratorium of any indebtedness
that is material in the context of the Wider HML Group;
(K) been unable or admitted in writing that it is unable to pay
its debts or having stopped or suspended (or threatened to do so)
payments of its debts generally or ceased or threatened to cease
carrying on all or a substantial part of its business in any case
which is material in the context of the Wider HML Group taken as a
whole;
(L) save for any transaction between HML and any member of the
Wider HML Group or between any members of the Wider HML Group made
or authorised any change in its loan capital which is material in
the context of the Wider HML Group taken as a whole;
(M) entered into or varied in any material respect the terms of
any letter of appointment or service agreement (as the case may be)
with or relating to any of the executive directors, non--executive
directors or senior executives of HML or any of the directors or
senior executives of any other member of the Wider HML Group;
(N) proposed, agreed to provide or modified in any material
respect the terms of any share option scheme, incentive scheme or,
other than in the ordinary course of business, any other benefit
relating to the employment or termination of employment of any
person employed by the Wider HML Group which in any case is
material in the context of the Wider HML Group taken as a
whole;
(O) save as envisaged in the Offer, made any alteration to its
Articles of Association or other incorporation or constitutional
documents which is material in the context of the Offer; or
(P) otherwise than in the ordinary course of business entered
into any agreement or commitment or passed any resolution or made
any offer which remains open for acceptance or proposed or
announced any intention with respect to any of the transactions,
matters or events referred to in this paragraph (vi);
(vii) BDB Nominee not having discovered that, except as Fairly Disclosed:
(A) any financial, business or other information concerning the
Wider HML Group disclosed publicly or disclosed to any member of
the Wider BDB Nominee Group by any member of the Wider HML Group at
any time is to a material extent misleading, contains a material
misrepresentation of fact or omits to state a fact necessary to
make the information therein not misleading to a material extent
and which was not corrected before the date of the announcement of
the Offer either by public disclosure through a Regulatory
Information Service or by a written disclosure to the Wider BDB
Nominee Group and which is material in the context of the Wider HML
Group taken as a whole; or
(B) any information which affects the import of any information
disclosed to any member of the Wider BDB Nominee Group at any time
by or on behalf of any member of the Wider HML Group which is
material in the context of the Wider HML Group taken as a whole;
or
(C) any member of the Wider HML Group has not complied with any
applicable legislation or regulations of any relevant jurisdiction
with regard to the use, storage, transport, treatment, handling,
disposal, release, discharge, spillage, leak or emission of any
waste or hazardous substance or any substance likely to impair the
environment or harm human health, or otherwise relating to
environmental matters or the health and safety of any person where
non-compliance would be likely to give rise to any liability or
cost (whether actual or contingent) on the part of any member of
the Wider HML Group which in any case is material in the context of
the Wider HML Group taken as a whole; or
(D) there has been an emission, discharge, disposal, spillage or
leak of waste or hazardous substance or any substance likely to
impair the environment or harm human health which would be likely
to give rise to any liability or cost (whether actual or
contingent) on the part of any member of the Wider HML Group which
in any case is material in the context of the Wider HML Group taken
as a whole; or
(E) there is or is likely to be any liability (whether actual or
contingent) to improve or install new plant or equipment or make
good, repair, reinstate or clean up any property now or previously
owned, occupied or made use of by any past or present member of the
Wider HML Group under any environmental legislation, regulation,
notice, circular or order of any Relevant Authority or any other
person or body in any jurisdiction which in any case is material in
the context of the Wider HML Group taken as a whole; or
(F) circumstances exist whereby a person or class of person
would be likely to have any claim or claims in respect of any
product or process of manufacture or materials used therein now or
previously manufactured, sold or carried out by any past or present
member of the Wider HML Group which in any case is material in the
context of the Wider HML Group taken as a whole; and
(viii) except as Fairly Disclosed, no member of the Wider HML
Group nor the trustees of any relevant pension scheme having, since
31 March 2020 (and in each case to an extent which is material in
the context of the Wider HML Group taken as a whole):
(A) made or agreed or consented to any significant change (i) to
the terms of any trust deeds constituting the pension schemes
established for the directors or employees (or their dependants) of
any member of the Wider HML Group, (ii) to the benefits which
accrue, (iii) to the pensions which are payable thereunder for all
members or any category of members, (iv) to the basis on which
qualification for, or accrual or entitlement to, such benefits or
pensions are calculated or determined for all members or any
category of members (including with regard to commutation factors
where employer agreement is required to change such factors), or
(v) to the basis on which the liabilities (including pensions) of
such pension schemes are funded (including putting in place,
agreeing or consenting to technical provisions, actuarial
valuations, statements of funding principles, schedules of
contributions and recovery plans pursuant to Part 3 of the Pensions
Act 2004); or
(B) established any new pensions arrangements.
Part B : Waiver of Conditions and further terms of the Offer
1. BDB Nominee reserves the right (subject to the requirements
of the Code and the Panel) to waive in whole or in part all or any
of the above Conditions, other than the Acceptance Condition and
the FCA Condition.
2. If BDB Nominee is required by the Panel to make an offer for
HML Shares under the provisions of Rule 9 of the Code, BDB Nominee
may make such alterations to the terms and conditions of the Offer
as are necessary to comply with the provisions of that Rule, and
such offer shall be subject to the terms and conditions as so
amended.
3. The Offer will lapse unless all the Conditions to the Offer
have been fulfilled or (if capable of waiver) waived or, where
appropriate, determined by BDB Nominee to have been or remain
satisfied by midnight (London time) on the date which is 21 days
after the later of the First Closing Date and the date on which the
Offer becomes, or is declared, unconditional as to acceptances (or
such later date (if any) as BDB Nominee may, with the consent of
the Panel or in accordance with the Code, decide).
4. BDB Nominee shall be under no obligation to waive (if capable
of waiver), to determine to be or remain satisfied or to treat as
fulfilled any of the Conditions except for the Acceptance Condition
or the FCA Condition by a date earlier than the latest date for the
fulfilment of that condition notwithstanding that the other
Conditions of the Offer may at such earlier date have been waived
or fulfilled and that there are at such earlier date no
circumstances indicating that any of such Conditions may not be
capable of fulfilment.
5. The Offer will lapse if, before 1.00 p.m. (London time) on
the First Closing Date or the date on which the Offer becomes, or
is declared, unconditional as to acceptances (whichever is
later):
a. in so far as the Offer or any matter arising from or relating
to the Offer constitutes a concentration with a Community dimension
within the scope of Council Regulation (EC) 139/2004 (the
"Regulation"), the European Commission initiates proceedings under
Article 6(1)(c) of the Regulation or makes a referral under Article
9(1) of the Regulation to the CMA and the CMA makes a CMA Phase 2
Reference; or
b. in so far as the Offer or any matter arising from or relating
to the Offer becomes subject to a CMA Phase 2 Reference.
6. If the Offer lapses, not only will the Offer cease to be
capable of further acceptance but also HML Shareholders and BDB
Nominee will thereafter cease to be bound by prior acceptances.
7. BDB Nominee reserves the right to elect (with the consent of
the Panel (if required)) to implement the Offer by way of a
court-sanctioned Scheme of Arrangement. In such event, the Offer
will be implemented on substantially the same terms as those which
would apply to the Offer, subject to appropriate amendments to
reflect the change in method (including statutory voting
requirements).
8. The availability of the Offer to persons not resident in the
United Kingdom may be affected by the laws of the Restricted
Jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements.
9. Unless otherwise determined by BDB Nominee or required by the
Code and permitted by applicable law and regulation, the Offer is
not being, and will not be, made, directly or indirectly, in or
into or by the use of the mails of, or by any other means or
instrumentality (including, without limitation, facsimile
transmission, telex, telephone, internet or other forms of
electronic transmission) of interstate or foreign commerce of, or
by any facility of a national, state or other securities exchange
of, any Restricted Jurisdiction and will not be capable of
acceptance by any such use, means, instrumentality or facility or
from within any Restricted Jurisdiction.
10. Under Rule 13.5 of the Code, BDB Nominee may only invoke a
Condition so as to cause the Offer not to proceed, to lapse or to
be withdrawn where the circumstances which give rise to the right
to invoke the Condition are of material significance to BDB Nominee
in the context of the Offer. The Acceptance Condition is not
subject to Rule 13.5 of the Code.
11. HML Shares will be acquired pursuant to the Offer fully paid
with full title guarantee and free from all liens, charges,
equitable interests, encumbrances, rights of pre-emption and any
third party interests and other rights of any nature whatsoever and
together with all rights now or hereafter attaching thereto,
including voting rights and the right to receive and retain in full
all dividends and other distributions (if any), and any other
return of capital (whether by way of reduction of share capital or
share premium account or otherwise), declared, made or paid on or
after the date of this Announcement.
12. If, on or after the date of this Announcement and before the
Offer becomes or is declared wholly unconditional, any dividend,
other distribution and/or other return of capital is authorised,
declared, made or paid or becomes payable in respect of the HML
Shares, BDB Nominee reserves the right to reduce the consideration
payable under the terms of the Offer for the HML Shares by an
amount of up to the amount of such dividend, distribution and/or
return of capital, in which case any reference in this Announcement
or in the Offer Document to the consideration payable under the
terms of the Offer will be deemed to be a reference to the
consideration as so reduced. To the extent that any such dividend,
distribution and/or other return of capital is authorised,
declared, made or paid or is payable and it is: (i) transferred
pursuant to the Offer on a basis which entitles BDB Nominee to
receive the dividend, distribution or return of capital and to
retain it; or (ii) cancelled, the consideration payable under the
terms of the Offer will not be subject to change in accordance with
this paragraph. Any exercise by BDB Nominee of its rights referred
to in this paragraph shall be the subject of an announcement and,
for the avoidance of doubt, shall not be regarded as constituting
any revision or variation of the Offer.
13. The Offer will be governed by the laws of England and Wales
and be subject to the jurisdiction of the courts of England and
Wales. The Offer will also be subject to the applicable
requirements of the Code, the Panel, the London Stock Exchange, the
FCA and the AIM Rules. In addition, it will be subject to the terms
and conditions set out in the Offer Document.
14. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
Appendix II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement, unless otherwise stated, or the context
otherwise requires, the following bases and sources have been
used:
1. The value attributed to the fully diluted share capital of
HML is based upon: (i) the 45,995,135 HML Shares in issue; and (ii)
the 4,702,250 in-the-money options outstanding under the HML Share
Option Schemes; in each case as at 29 July 2020 (being the last
Business Day prior to the date of this Announcement).
2. The maximum cash consideration payable pursuant to the Offer
is based on the Offer Price and the fully diluted share capital as
set out in 1. above.
3. Unless otherwise stated, all prices for HML Shares are
closing middle market quotations derived from the AIM Appendix to
the London Stock Exchange's Daily Official List for the particular
date(s) concerned.
4. The volume weighted average price of 25.95 pence per HML
Share over the three month period up to and including 29 July 2020,
is derived from Bloomberg's daily volume weighted average price
data.
5. Unless otherwise stated, the financial information relating
to the HML Group has been extracted or derived (without material
adjustment) from HML's preliminary unaudited consolidated financial
statements for the financial year ended 31 March 2020 prepared in
accordance with IFRS.
6. All information relating to BDB Nominee has been provided by
persons duly authorised by the BDB Nominee Board.
7. All information relating to Harwood and the Harwood Funds has
been extracted from published sources and/or provided by persons
duly authorised by Harwood and the Harwood Funds.
8. All information relating to HML has been extracted from published sources (including the abovementioned financial information) which has been extracted without material adjustment from such sources and/or provided by persons duly authorised by HML.
9. Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Appendix III
DETAILS OF IRREVOCABLE UNDERTAKINGS
HML Directors
The HML Directors have given irrevocable undertakings to accept
the Offer (or if BDB Nominee exercises its right to structure the
Offer as a Scheme of Arrangement, to vote in favour of such Offer)
as follows:
Name of HML Director Number of HML Shares Percentage of HML's
to which undertaking existing issued ordinary
relates* share capital
Richard Smith 1,953,399 4.25%
James Howgego 1,594,100 3.47%
Geoffrey Griggs 533,167 1.16%
TOTAL : 4,080,666 8.87%
* - the undertakings and the numbers referred to above refer
only to those HML Shares to which the relevant director is
beneficially entitled or any share such director is otherwise able
to control the exercise of in terms of the rights attaching to such
share, including the ability to procure the transfer of such share.
The numbers referred to in this table exclude any award that may be
outstanding under the HML Share Option Schemes, however any such
shares awarded would be included in the scope of the
undertakings.
The HML Directors' irrevocable undertakings shall lapse and
cease to become binding, inter alia, if (i) the Offer Document is
not published within 28 days of this Announcement (or within such
longer period as the Panel may agree); (ii) the Offer lapses or is
withdrawn without becoming or being declared unconditional in all
respects; or (iii) BDB Nominee announces that it will not proceed
with the Offer.
Institutional and other HML Shareholders
The following HML Shareholders have given irrevocable
undertakings to accept the Offer (or if BDB Nominee exercises its
right to structure the Offer as a Scheme of Arrangement, to vote in
favour of such Offer) as follows:
Name of HML Shareholder Number of HML Shares Percentage of HML's
to which undertaking existing issued ordinary
relates share capital
LTC Holdings plc 9,432,117 20.51%
Robert Plumb 2,964,067 6.44%
TOTAL: 12,396,184 26.95%
The irrevocable undertakings for LTC Holdings plc and Mr Robert
Plumb shall lapse and cease to become binding, inter alia, if (i)
the Offer Document is not published within 28 days of this
Announcement (or within such longer period as the Panel may agree);
(ii) the Offer lapses or is withdrawn without becoming or being
declared unconditional in all respects; or (iii) BDB Nominee
announces that it will not proceed with the Offer.
Oryx's and Harwood Capital Nominees Limited's Irrevocable
Undertakings
Oryx has irrevocably undertaken to accept or procure the
acceptance of the Offer in relation to HML Shares representing
approximately 14.68 per cent. of the share capital of HML in issue
on 29 July 2020 (being the last Business Day prior to the date of
this Announcement).
Harwood Capital Nominees Limited has irrevocably undertaken to
accept or procure the acceptance of the Offer in relation to HML
Shares representing approximately 0.38 per cent. of the share
capital of HML in issue on 29 July 2020 (being the last Business
Day prior to the date of this Announcement).
These irrevocable undertakings shall lapse and cease to be
binding inter alia, if (i) the Offer Document is not published
within 28 days of this Announcement (or within such longer period
as the Panel may agree); (ii) the Offer lapses or is withdrawn
without becoming or being declared unconditional in all respects;
or (iii) BDB Nominee announces that it will not proceed with the
Offer.
APPIX IV
DEFINITIONS
The following definitions apply throughout this Announcement
unless the context requires otherwise:
"Acceptance Condition" the acceptance condition in paragraph 1(a)
of Part A of Appendix I to this Announcement;
"Acquisition" the acquisition of the entire issued and to
be issued share capital of HML to be effected
by way of the Offer (or if BDB Nominee so elects
by way of a Scheme of Arrangement (subject
to Panel consent));
"AIM" AIM, a market operated by the London Stock
Exchange;
"AIM Rules" the AIM Rules for Companies published by the
London Stock Exchange (as amended from time
to time);
"Announcement" this announcement including its Appendices
made pursuant to Rule 2.7 of the Code dated
30 July 2020;
"Appendices" the appendices to this Announcement;
"Authorisations" regulatory authorisations, grants, orders,
recognitions, confirmations, arrangements,
consents, licences, clearances, certificates,
permissions, exemptions or approvals;
"BDB Nominee" BDB Nominee Company Limited, a company incorporated
in England and Wales under registration number
12708049 with limited liability having its
registered office at 6 Stratton Street, London
W1J 8LD;
"BDB Nominee Directors" the board of directors of BDB Nominee as at
the date of this Announcement;
"BDB Nominee Group" BDB Nominee and its direct and indirect holding
companies (including, for the avoidance of
doubt, HPE V);
"BDB Nominee Ordinary ordinary shares of 10 pence each in the capital
Shares" of BDB Nominee;
"BDB Nominee ZRP Shares" redeemable, zero dividend redeemable preference
shares of GBP1 each in the capital of BDB Nominee;
"Bloomberg" Bloomberg L.P., a financial software services,
news and data company;
"Board" the board of directors of HML or BDB Nominee
(as applicable) and the terms "HML Board" and
"BDB Nominee Board" shall be construed accordingly;
"Business Day" a day (other than a Saturday, Sunday or UK
public holiday) on which clearing banks in
the City of London are open for the transaction
of general commercial business;
"Closing Price" the closing middle market price of an HML Share
on a particular trading day as derived from
the AIM Appendix to the Daily Official List
for that trading day;
"CMA" a UK statutory body established under the Enterprise
and Regulatory Reform Act 2013;
"CMA Phase 2 Reference" a reference of the Offer to the chair of the
CMA for the constitution of a group under Schedule
4 to the Enterprise and Regulatory Reform Act
2013;
"Code" the City Code on Takeovers and Mergers in the
UK issued by the Panel;
"Companies Act 2006" the Companies Act 2006 (as amended from time
to time);
"Conditions" the conditions to implementing the Offer as
set out in Appendix I to this Announcement
and to be set out in the Offer Document;
"Confidentiality Agreement" the confidentiality agreement entered into
by HML and Harwood on 14 May 2020 in respect
of confidential information relating to HML;
"Daily Official List" the Daily Official List published by the London
Stock Exchange;
"Dealing Disclosure" has the same meaning as in Rule 8 of the Code;
"Fairly Disclosed" as publicly announced by or on behalf of HML
through (i) a Regulatory Information Service
on or before the date of this Announcement,
(ii) the publication of such information on
the main website maintained by HML before the
date of this Announcement, (iii) filings made
with the Registrar of Companies and appearing
on HML's or any member of the Wider HML Group's
file at Companies House within the last two
years, (iv) in this Announcement, or (v) as
otherwise fairly disclosed by any member of
the HML Group or any of its professional advisers,
including any of its legal advisers and any
of its financial advisers, to a member of the
BDB Nominee Group or any of its professional
advisers, including to any of its legal advisers
and any of its financial advisers, before the
date of this Announcement (including all matters
fairly disclosed in the written replies, correspondence,
documentation and information provided in an
electronic data room created by or on behalf
of HML or sent to any member of the BDB Nominee
Group or any of its professional advisers during
the due diligence process and whether or not
in response to any specific request for information
made by any member of the BDB Nominee Group
or any of its professional advisers);
"FCA Condition" the FCA condition in paragraph 1(b)(ii) of
Part A of Appendix I to this Announcement;
"Financial Conduct the Financial Conduct Authority in its capacity
Authority" or "FCA" as the competent authority for the purposes
of Part VI of the FSMA, including its successor(s)
from time to time;
"finnCap" finnCap Limited, the financial adviser, Rule
3 adviser, nominated adviser and broker to
HML;
"First Closing Date" the date which falls 21 days after the date
of posting of the Offer Document;
"Form of Acceptance" the form of acceptance and authority relating
to the Offer, which will accompany the Offer
Document;
"FSMA" the Financial Services and Markets Act 2000
(as amended from time to time);
"Harwood" or "Harwood Harwood Capital LLP, a limited liability partnership
Capital" incorporated in England and Wales under the
Limited Liability Partnerships Act 2000 under
registered number OC304213;
"Harwood Capital Management" Harwood Capital Management Limited, a company
incorporated in England and Wales under registration
number 07667924 with limited liability having
its registered office at 6 Stratton Street,
London W1J 8LD;
"Harwood Capital Management Harwood Capital Management and its subsidiaries;
Group"
"Harwood Funds" certain discretionary investment management
and/or advisory clients of Harwood and/or the
Harwood Capital Management Group, including,
inter alia, Oryx and HPE V;
"HML" or the "Company" HML Holdings plc, a public limited company
incorporated in England and Wales with registered
number 05728008 whose registered office is
at 9-11 The Quadrant, Richmond, Surrey TW9
1BP;
"HML Directors" the board of directors of HML as at the date
of this Announcement;
"HML Group" HML and its subsidiary undertakings;
"HML Share Option the share option schemes in HML;
Schemes"
"HML Shareholders" registered holders of HML Shares from time
to time;
"HML Shares" the ordinary shares of 1.5 pence each in the
capital of the Company;
"HPE V" Harwood Private Equity V L.P., a limited partnership
registered in England and Wales on 2 July 2019
under registration number LP020344;
"IFRS" International Financial Reporting Standards
as adopted by the European Union;
"Loan Agreement" the agreement made between (i) BDB Nominee
and (ii) Harwood dated 30 July 2020;
"London Stock Exchange" London Stock Exchange plc, a public company
incorporated in England and Wales under number
02075721, together with any successors thereto;
"Offer" the recommended offer of 37.5 pence in cash
to be made by BDB Nominee for the entire issued
and to be issued share capital of HML on the
terms and conditions to be set out in the Offer
Document (or if BDB Nominee elects (subject
to the consent of the Panel) in the document
relating to the Scheme of Arrangement), including,
where the context so requires, any subsequent
revision, variation, extension or renewal of
such offer;
"Offer Document" the formal document containing the Offer to
be posted to HML Shareholders and others containing,
inter alia, the terms and conditions of the
Offer;
"Offer Period" the offer period (as defined by the Code) relating
to HML, which commenced on 30 July 2020, being
the date of this Announcement, and ending on
the latest of: (i) 1.00 p.m. (London time)
on the First Closing Date; (ii) the time and
date on which the Offer becomes or is declared
unconditional as to acceptances; and (iii)
the time and date on which the Offer lapses
or is withdrawn (or such other date as the
Panel may decide);
"Offer Price" 37.5 pence per HML Share;
"Opening Position has the same meaning as in Rule 8 of the Code;
Disclosure"
"Oryx" Oryx International Growth Fund Limited, a closed-ended
investment company incorporated in Guernsey,
whose shares are traded on the Main Market
of the London Stock Exchange, whose registered
number is GG28917;
"Overseas Shareholders" HML Shareholders (or nominees of, or custodians
or trustees for, HML Shareholders) not resident
in, or nationals or citizens of, the United
Kingdom;
"Panel" the Panel on Takeovers and Mergers in the UK;
"Registrar of Companies" the Registrar of Companies in England and Wales
within the meaning of the Companies Act 2006;
"Regulatory Information a primary information provider which has been
Service" approved by the FCA to disseminate regulated
information and is included in the list maintained
on the London Stock Exchange's website;
"Relevant Authority" any central bank, government or governmental,
quasi-governmental, supranational, statutory,
regulatory, environmental, administrative,
fiscal or investigative body, court, trade
agency, association, institution, environmental
body, employee representative body or any other
body or person whatsoever in any jurisdiction;
"Restricted Jurisdiction" the United States, Canada, Australia, Japan,
South Africa or any other jurisdiction where
making the Offer or making information concerning
the Offer available may (i) constitute a violation
of the relevant laws or regulations of such
jurisdiction, or (ii) result in the requirement
to comply with any governmental or other consents
or any registration, filing or other formality
which BDB Nominee and HML regard as unduly
onerous;
"Rule" a rule of the Code;
"Scheme of Arrangement" as defined in section 895 of the Companies
Act 2006;
"Share Registrars" Share Registrars Limited, The Courtyard, 17
West Street, Farnham, Surrey, GU9 7DR;
"Strand Hanson" Strand Hanson Limited, the financial adviser
to BDB Nominee and Harwood Capital;
"Subscription Agreement" the agreement made between (i) BDB Nominee
and (ii) Harwood, dated 30 July 2020;
"United Kingdom" or the United Kingdom of Great Britain and Northern
"UK" Ireland;
"United States" the United States of America, its territories
and possessions, any state of the United States
of America, the District of Columbia and all
areas subject to its jurisdiction or any political
sub-division thereof;
"Wider BDB Nominee the BDB Nominee Group and associated undertakings
Group" of BDB Nominee and any other body corporate,
partnership, joint venture or person in which
members of the BDB Nominee Group (aggregating
their interests) have an interest of more than
20 per cent. of the voting or equity capital
or the equivalent; and
"Wider HML Group" the HML Group and associated undertakings of
HML and any other body corporate, partnership,
joint venture or person in which members of
the HML Group (aggregating their interests)
have an interest of more than 20 per cent.
of the total voting rights or equity share
capital or the equivalent.
For the purposes of this Announcement, "subsidiary", "subsidiary
undertaking", "parent undertaking", "undertaking" and "associated
undertaking" have the respective meanings given thereto by the
Companies Act 2006.
All references to "GBP", "pounds", "pounds Sterling",
"Sterling", "GBP", "pence", "penny" and "p" are to the lawful
currency of the United Kingdom.
All times referred to in this Announcement are UK times unless
otherwise stated.
In this Announcement, references to the singular include the
plural and vice versa, unless the context otherwise requires and
words importing the masculine gender shall include the feminine or
neutral gender.
All references to legislation in this Announcement are to
English legislation unless the contrary is stated.
Any references to any provision of any legislation shall include
any amendment, modification, re-enactment or extension thereof.
END
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
OFBKKCBQKBKBPOB
(END) Dow Jones Newswires
July 30, 2020 02:00 ET (06:00 GMT)
Hml (LSE:HMLH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Hml (LSE:HMLH)
Historical Stock Chart
From Jul 2023 to Jul 2024