LMR Luminar Grp

RNS Number:2429N
Luminar PLC
05 December 2006



Luminar plc


Proposed Disposal of the Entertainment Division and Non-Core units



Highlights



*           Proposed Disposal of the Entertainment Division and non-core units
(together the "Disposal Estate") to a new company ("NewCo") through:

-           a non-recourse sale of the freehold and long leasehold properties in
the Disposal Estate and a 20% share in NewCo to Prestbury for #76.8 million

-           sale of the Disposal Estate to NewCo for #19.0 million to be
satisfied by way of loan notes

-           Luminar will retain an interest in the Disposal Estate by virtue of
a 49% shareholding in NewCo and Management holding 31%



*           On completion, Luminar will receive cash consideration of  #76.8
million, Loan Notes with a principal value of #19.0 million and will retain 49%
equity shareholding in NewCo



*           Surplus proceeds from the proposed Disposal will be returned to
shareholders in due course. This is in addition to the existing share buyback
programme to which the Board remains committed



*           From completion, Luminar will provide central and administration
services to NewCo via a Transitional Services Agreement at cost for a period of
12 months



*           This transaction will reduce Luminar's corporate cost base by c. #3m



*           The proposed Disposal will allow management to accelerate its stated
strategy which is focussed on developing and operating high quality branded
destination dancing venues





Commenting on the proposed Disposal, Stephen Thomas, Chief Executive of Luminar:




"This transaction is the best possible outcome for shareholders, allowing
Luminar to be solely focussed on branded destination dancing venues and
accelerate our strategy. Under their new ownership, these businesses will have
the opportunity of reaching their full potential. We remain committed to
returning value to shareholders and the surplus proceeds from this disposal will
be added to those already earmarked for shareholders."





Luminar plc



Proposed Disposal of the Entertainment Division and Non-Core units



Luminar today announces that it has entered into a conditional agreement for a
non-recourse sale of the 19 freehold properties and the one long leasehold
property comprised in the Disposal Estate and a 20% share in NewCo to Prestbury
for #76.8 million.  NewCo is a new company formed by Luminar, Management and
Prestbury who have subscribed or agreed to subscribe for shares in NewCo which
will result in shareholdings on completion of 49%, 31% and 20% respectively. An
Employee Benefit Trust has been established holding 30.5% of Management's equity
under which various performance criteria need be satisfied before any equity
vests. NewCo will be a holding company for the NewCo Subsidiaries. On
completion, Prestbury will grant leases for the 20 sale properties to the NewCo
Subsidiaries and Luminar will sell the operating businesses (98 units) and
leasehold interests of the Disposal Estate to the NewCo Subsidiaries in
consideration for Loan Notes with a principal value of #19.0 million (together
the "Transaction" or the "Disposal"). NewCo will be largely managed by the
Entertainment Division's existing management team and both Luminar and Prestbury
will have board representation. On completion of the Transaction, Luminar will
receive cash consideration of #76.8 million (pre transaction costs), Loan Notes
with a principal value of #19.0m and will retain an interest in the Disposal
Estate by virtue of a 49% equity shareholding in NewCo.



The Transaction is expected to complete in January 2007 and is conditional,
amongst other things, on approval by the Company's shareholders.



Background to and reasons for the Disposal



The proposed Disposal follows the statement of commitment to dispose of the
Entertainment Division made in the Preliminary Announcement in May 2006 and the
update provided in the Interim Results on 15 November 2006 outlining the
Company's intention to enter into a disposal transaction. It will allow Luminar
to accelerate its strategy which is focussed on building its position as the
leading developer and operator of high quality branded destination dancing
venues. The brands which are being developed and rolled out as part of this
strategy are Oceana, Lava & Ignite and Liquid.



The Board believes that Prestbury's offer for the freehold and long leasehold
properties and NewCo's offer for the Disposal Estate fully reflects the future
prospects of the Disposal Estate given the prevailing market conditions, the
impact of legislative reforms in licensing and smoking, current trade and
Luminar's strategic objectives. The Company will continue to focus its
management and capital resources on its portfolio of branded destination dancing
venues. This strategy is intended to build on Luminar's considerable operational
strengths in the late night market to provide a differentiated product in a
challenging market segment to deliver sustainable high returns on investment.



Information on the Disposal Estate



The Disposal Estate is made up of 67 units in the Entertainment Division and a
further 31 units which are considered by the Board to be non-core to the
Company's key brands and strategy. The Entertainment Division consists of:



n                          Chicago Rock Cafe - 54 units located throughout the
UK primarily in the centre of regional and national towns which are classically
designed venues targeting "twenty something" customers with a mix of food and
drinks and entertainment based around music memories and nostalgia; and

n                          Jumpin Jaks - 13 entertainment led venues which focus
on live acts to create a unique party environment.



The 31 non-core units are predominantly unbranded nightclubs which Luminar
considers to be unsuitable for conversion into branded destination dancing
venues and therefore do not fit with the Company's future strategy.  For the
year ended 2 March 2006, the Disposal Estate reported sales of #119.3 million,
EBITDA of #29.5 million (pre exceptional costs) and operating profit of #19.0
million (pre exceptional costs).  The gross assets of the Disposal Estate for 31
August 2006 were #128.9 million.



The Management is being led by David Crabtree, the current Managing Director of
the Entertainment Division, and includes Mark Lindsell and a new appointment at
Finance Director, Andrew Finding.



From completion and for a period of 12 months, Luminar will provide central and
administration services to NewCo via a Transitional Services Agreement ("TSA").
The scope of services provided to NewCo will include finance, purchasing, HR and
development resource.  The TSA will help the progress being made in the ongoing
initiative of reducing the corporate cost base. Luminar estimate that the cost
of services recharged to NewCo will total #1.3 million over the 12 month period.




Financial effects of the Transaction



The total consideration receivable by Luminar is approximately #95.8 million, of
which #76.8 million is payable in cash on completion and deferred consideration
(pursuant to the Loan Notes) of #19.0 million plus accrued interest. The
Disposal will be earnings dilutive for Luminar shareholders. In line with the
previously stated strategy, any surplus proceeds will be returned to Luminar
shareholders in due course. This is in addition to the ongoing share buy back
programme which was commenced in May 2006.




The proposed Disposal is conditional, amongst other things, upon Luminar
receiving the approval of its shareholders at an Extraordinary General Meeting
("EGM"), which is expected to take place in January 2007.  Assuming shareholder
approval is obtained and certain other conditions are fulfilled, completion is
expected to occur soon after the EGM.  A circular to Luminar shareholders,
including the notice for the EGM, will be posted in December.



                                                                 5 December 2006



For further information please contact:



Luminar plc

Stephen Thomas, Chief Executive              Tel:  01908 544 100
Nick Beighton, Finance Director



Prestbury
Nick Leslau                                  Tel:  020 7647 7647
Sandy Gumm


Rothschild (for Luminar)
Robert Leitao                                Tel:  020 7280 5000
James Murray



College Hill (for Luminar)
Matthew Smallwood                            Tel:  020 7457 2020



Disclaimer



This announcement has been issued by, and is the sole responsibility of, Luminar
plc.



N M Rothschild & Sons Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting as financial adviser to
the Company in connection with the proposed disposal and will not be responsible
to any person other than the Company for providing the protections afforded to
customers of N M Rothschild & Sons Limited, or for advising any such person on
the contents of this announcement or any other transaction, arrangement or
matter referred to in this announcement.



The following definitions apply throughout this announcement unless the context
requires otherwise:



"Loan Notes"              loan notes to be issued by the NewCo Subsidiaries



"Luminar" or "Company"    Luminar plc or, where the context requires, a member 
                          of the Luminar group of companies



"Management"              the management team of the Entertainment Division 
                          led by David Crabtree, Mark Lindsell and Andrew Finding



"NewCo"                   Saturn Entertainment Holdings Limited (to be renamed)



"NewCo Subsidiaries"      the subsidiaries of Newco, namely Saturn (CRC) Limited, 
                          Saturn (Jaks) Limited and Saturn (Zodiac) Limited



"Prestbury"               Prestbury 1 Limited Partnership or, where the context 
                          requires, a member of the Prestbury group






                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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