Acquisition
March 09 2004 - 2:01AM
UK Regulatory
RNS Number:2923W
10 Group PLC
09 March 2004
9 March 2004
10 GROUP PLC ("10 Group")
PROPOSED ACQUISITION OF OAKBURN IMPORT/EXPORT LIMITED ("Oakburn")
Key points
- Proposed acquisition of Oakburn, a supplier of flooring products
- Consideration for acquisition is an initial consideration of #400,000
satisfied by the payment of #50,000 in cash and the allotment of
35,000,000 new ordinary shares in 10 Group representing some 23.98 per cent
of the enlarged issued ordinary share capital plus a further allotment of
10,000,000 new ordinary shares subject to the achievement by Oakburn of a
pre-tax profit of a minimum of #250,000 for the financial year ending 30
September 2004
- Oakburn's directors to join the 10 Group Board, providing experience of
supplying flooring products and other DIY and home furnishings markets
- Proposed Open Offer of up to 48,964,136 New Ordinary Shares at 1p per
share on the basis of 2 New Ordinary Shares for every 1 Existing Share
held, with an excess application facility and 1 Warrant for every 2 New
Ordinary Shares subscribed, underwritten by Seymour Pierce Ellis Limited
and Placing of 16,000,000 New Ordinary Shares at 1p per share and 1 Warrant
for every 2 New Ordinary Shares subscribed
- Proposed adoption of new articles of association
- Proposed change of name to Ashdene Group Plc
Commenting on the proposed acquisition,Neil McGowan, the Chairman, said "Since
the realisation of the majority of 10 Group's assets, the Board has been seeking
to identify a suitable acquisition. The directors believe that the acquisition
of Oakburn will begin to restore shareholder value."
For further information, please contact:
10 Group Jonathan Burrow - 01562 827787
Oakburn Import/Export Limited Alan Wilson - 01926 421240
City Financial Associates Limited John Shaw - 020 7090 7800
Proposed acquisition of Oakburn Import/Export Limited, Proposed Open Offer of up
to 48,964,136 New Ordinary Shares of 1p per share on the basis of 2 New Ordinary
Shares for every 1 Existing Share held, withan excess application facility and
1 Warrant for every 2 New Ordinary Shares subscribed underwritten by Seymour
Pierce Ellis Limited and Placing of 16,000,000 New Ordinary Shares at 1p per
share and 1 Warrant for every 2 New Ordinary Shares subscribed, proposed
adoption of new articles of association and proposed change of name to Ashdene
Group Plc.
The Board of 10 Group announces the Company has conditionally agreed to acquire
the entire issued share capital of Oakburn, a supplier of flooring products, for
an initial consideration of #400,000 to be satisfied by the payment of #50,000
in cash and the allotment of 35,000,000 Initial Consideration Shares. The
Company will pay additional consideration of up to #100,000 to be satisfied by
the allotment of 10,000,000 Deferred Consideration Shares subject to the
achievement by Oakburn of a pre-tax profit of a minimum of #250,000 for the year
ended 30 September 2004. The Initial Consideration Shares will represent
approximately 23 per cent. of the Enlarged Issued Ordinary Share Capital at
Admission, assuming no exercise of the Warrants. The Vendor has undertaken not
to dispose of any Consideration Shares for a period of one year from Admission.
In order to fund the Acquisition and provide working capital for the Group after
settling certain liabilities, the Company is offering by way of an Open Offer up
to 48,964,136 New Ordinary Shares at 1p per New Ordinary Share to Shareholders
on the Company's share register on the Record Date, being 5 March 2004.
Additionally, Seymour Pierce Ellis, on behalf of the Company has placed a
further 16,000,000 New Ordinary Shares at 1p each. For every 2 New Ordinary
Shares subscribed under both the Open Offer and the Placing, the subscriber will
receive 1 Quoted Warrant.
In view of the fact that the Acquisition constitutes a reverse takeover of 10
Group under the AIM Rules, it therefore requires the prior approval of
Shareholders at an Extraordinary General Meeting.
WorkingCapital
10 Group made a loss on ordinary activities before taxation of #689,462 in the
nine months to 30 September 2003 and had net liabilities of #55,866 at that
date. In the absence of completion of the Proposals the Directors believe that
theCompany would not be able to meet its liabilities and the Directors would
have no alternative but to put the Company into liquidation.
Information on the Enlarged Group
Information on 10 Group
10 Group has continued the policy of realising the Group's assets and all
trading operations have now been sold or closed. Of the properties owned by the
Company, the freehold premises in Birmingham were sold in August 2003 for
#750,000 and this paid off the mortgages totalling #654,000.
The Company has also reached a settlement with the landlords, Taylor Nelson
Sofres plc, of its leasehold premises at 52-54 Broadwick Street and 16/16a
Dufours Place, London W1 in relation to outstanding arrears of rent and
dilapidations. The settlement totalled #496,000 payable in instalments, as more
particularly set out in the circular to shareholders. Other than an outstanding
debt of approximately #230,000, including interest, owed by the Vendor to the
Company pursuant to a loan agreement dated 5 February 2003, which was assigned
by way of security to Taylor Nelson Sofres as part of the settlement, all other
material assets of the Group have now been realised or written off.
Information on Oakburn
Background
Oakburn, which is a wholly owned subsidiary of Oakburn Holdings PLC, sources and
supplies flooring products to the DIY and residential home improvement sectors.
Oakburn commenced trading in 1997 and initially concentrated on the supply of
laminate flooring. However, due to product quality problems, losses were
incurred and growth in turnover was restricted. The directors embarked upon a
strategy of product development into new flooring product sectors. Oakburn has
reversed the trading losses made in the previous years and in the year ending 30
September 2003 made a profit before taxation of #53,918 on a turnover of
#1,479,320.
Reasons for the Acquisition
After substantially completing the asset realisation exercise the Directors
sought an acquisition to provide a profitable base for the development of the
Group. The Directors believe that the acquisition of Oakburn provides such an
opportunity and will enable the Group to enhance shareholder value.
Current Trading and Prospects of the Enlarged Group
Oakburn's business is of a seasonal nature. In the first three months of the
year ending 30 September 2003 Oakburn made a small loss in line with budget.
Oakburn is planning to launch four new ranges of vinyl flooring in the first
half of 2004.
Directors and Proposed Directors
The current directors Neil McGowan (Chairman) and Jonathan Burrow (Non-executive
Director) will remain on the Board and will be joined by Alan Wilson (Proposed
Managing Director) and Michael Daniels (Proposed Finance Director).
Change of Name
The Company is seeking shareholder approval to change its name from 10 Group PLC
to Ashdene Group Plc.
The Open Offer and Excess Applications
The Company is offering up to 48,964,136 New Ordinary Shares by way of an Open
Offer to Qualifying Shareholders to raise up to #489,641.36 before expenses on
the basis of:
2 New Ordinary Shares for every 1 Existing Share
Qualifying Shareholders may subscribe for less than their pro rata entitlement
or for their pro rata entitlement together with any further number of Open Offer
Shares.
Placing
The Company is also raising #160,000 (before expenses) by the issue of
16,000,000 Placing Shares pursuant to the Placing at 1p pershare. The Placing
Shares will represent 10.96 per cent of the Enlarged Issued Ordinary Share
Capital following the Open Offer, Placing and issue of the Initial Consideration
Shares pursuant to the Acquisition.
Quoted Warrants
Pursuant to the Placing and Open Offer, the Company will be issuing, for nil
consideration, Quoted Warrants to persons subscribing for New Ordinary Shares
under the Placing or Open Offer on the basis of one Quoted Warrant for every two
New Ordinary Shares subscribed. Each Quoted Warrant will entitle the holder to
subscribe for one new Ordinary Share at an exercise price of 1p per share. The
Quoted Warrants may be exercised at any time up to the third anniversary of
Admission at which time they will lapse.
The total number of Quoted Warrants in issue at Admission will be approximately
40,732,068 equivalent to 21.82 per cent of the Company's then issued ordinary
share capital, assuming exercise of all the Quoted Warrants but prior to the
exercise of the Non-Quoted Warrants or the allotment of the Deferred
Consideration Shares under the Acquisition Agreement.
Use of Proceeds
The Placing and Open Offer will raise proceeds of approximately #430,141 for the
Company (net of cash expenses). TheDirectors intend that the net proceeds will
satisfy the cash element of the consideration for the acquisition of Oakburn,
pay certain liabilities of the Company and the balance of the funds raised from
the Placing and Open Offer will be used as additional working capital.
Extraordinary General Meeting
The proposals are subject to shareholder approval at an EGM of the Company to be
held at 11.00 am on 1 April 2004 at the offices of Field Fisher Waterhouse, 35
Vine Street, London EC3N 2AA.
Definitions in this announcement apply as they are set out in the admission
document dated 9 March 2004 which is being sent to shareholders of 10 Group
today and is available from the offices of City Financial Associates Limited, 6
Laurence Pountney Hill, London EC4R 0BL.
Expected Timetable
Record date for the Open Offer 5 March 2004
Latest time and date for splitting Application Forms (to satisfy 3.00 p.m. on 26 March 2004
bona fide market claims only)
Latest time and date for receipt of Application Forms and payment 11.00 a.m. on 30 March 2004
under the Open Offer
Latest time and date for receipt of completed Forms ofProxy 11.00 a.m. on 30 March 2004
Extraordinary General Meeting 11.00 a.m. on 1 April 2004
Expected date of commencement of dealings on AIM in New Ordinary 2 April 2004
Shares and Quoted Warrants and CREST accounts credited by
Expected date of despatch of definitive new share and warrant 8 April 2004
certificates
This information is provided by RNS
The company news service from the London Stock Exchange
END
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