MBL Group PLC Disposal of the Garden & Home Division (0352I)
March 16 2018 - 10:58AM
UK Regulatory
TIDMMUBL
RNS Number : 0352I
MBL Group PLC
16 March 2018
16 March 2018
The information communicated in this announcement contains
inside information for the purposes of Article 7 of Regulation
596/2014.
MBL Group PLC
("MBL" or the "Company" or the "Group")
Disposal of the Garden & Home division
MBL Group plc (AIM: MUBL) announces that it has disposed of its
entire shareholding in Redworth Limited and its subsidiary, The
Garden and Home Trading Company Limited (together the "Garden &
Home division"), to Invalesco Limited for a total cash
consideration of GBP0.8 million (the "Transaction").
Background
As previously announced, following a review of the Group's
operations at the end of 2016, the Board concluded that a third
party may be better placed to develop the potential in the Group's
trading businesses and take them forward to the next phase of their
development. The Board set out on the 22 December 2017 that it had
examined the business and discussed the sales process, agreed to
its continuation, was mandated by shareholders and would continue
to look for buyers. The Board has therefore recently been
conducting, and continues to conduct, a formal sales process
regarding each of the Company's trading businesses. The Company
received a number of initial offers for the Garden & Home
division and reverted to all prospective purchasers to procure
revised offers. Initial and revised offers were reviewed by the
board and its advisers. The decision was made to proceed with the
sale to Invalesco Limited.
Redworth Limited holds the entire share capital of The Garden
and Home Trading Company Limited. The company sells garden bird and
wildlife related products via mail order and online retail
channels. In the year to 31 March 2017, the Group's last audited
Report & Accounts, the Garden & Home division had revenue
of approximately GBP6.4 million, made a profit before tax of
approximately GBP0.247 million and had net assets of approximately
GBP0.989 million. Since 1 April 2017 the business has seen a
decline in revenue and gross margin, as was noted in the interim
results announcement released in December 2017, and this trend has
continued.
Terms of the Transaction
The total consideration is GBP0.8 million payable in cash. The
consideration is payable in three instalments being GBP0.1 million
on 16 March 2018, GBP0.325 million on 31 May 2018 and GBP0.375
million on 31 August 2018. The Company has received security
commitments in respect of assets, including property and shares,
which exceeds the outstanding consideration.
Related Party Transaction
The Transaction is classified as a related party transaction for
the purposes of the AIM Rules by virtue of the fact that Invalesco
Limited is wholly owned by Martina Allan. Martina Allan is the
beneficial owner of 4,520,399 Ordinary shares in MBL owned by The
Allan Family Trust, which represents 26.14 per cent. of the issued
share capital of MBL. This would make The Allan Family Trust a
"substantial shareholder" in the Company, as defined in the AIM
Rules. In addition, Anton Lane, the non-executive chairman of the
Company is a Trustee of The Allan Family Trust. The Independent
Director of MBL, James Reynolds, having consulted with SPARK
Advisory Partners Limited, as Nominated Adviser to the Company,
considers the terms of the sale of the Garden & Home Division
fair and reasonable insofar as the shareholders are concerned. In
providing advice to the Independent Director, SPARK Advisory
Partners Limited has taken into account the Independent Director's
commercial assessments of this related party transaction.
Effect on the Group
The effect on the Group will be a substantial reduction in
trading operations pursuant to the strategic review and sales
process as outlined above. The Home Entertainment division,
Windsong International Limited, continues to operate as before, and
the Board intends to continue to pursue the sale process with a
view to realising value for shareholders and returning capital in
the short term.
Further announcements will be made as appropriate.
ENDS
For further information, please contact:
MBL Group plc Tel: 01772 440440
Anton Lane
James Reynolds
SPARK Advisory Partners Limited Tel: 0113 370 8970
(NOMAD)
Mark Brady
This information is provided by RNS
The company news service from the London Stock Exchange
END
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