Watchstone Group PLC Retention of warranty escrow monies (4866Q)

TIDMWTG

RNS Number : 4866Q

Watchstone Group PLC

29 November 2016

Watchstone Group plc

("Watchstone" or the "Group")

Retention of warranty escrow monies

Watchstone Group plc (LON:WTG) notes the announcement by Slater and Gordon Limited (ASX: SGH) that it has obtained an opinion from an independent barrister in respect of the warranty escrow relating to the sale of the Professional Services Division in May 2015 ("Opinion").

Watchstone has received a copy of the Opinion, which states that a warranty claim presented by Slater and Gordon Limited and/or Slater and Gordon (UK) 1 Ltd (together "SGH") has on balance a prospect of success and that, if successful, such claim would be likely to have a value of GBP53m. Accordingly, GBP50m is to be retained in the warranty escrow account until the warranty claim is resolved.

The Opinion is solely for the purpose of determining whether the warranty escrow may be released to Watchstone at this time. It does not pre-judge the outcome of any legal proceedings. Watchstone remains satisfied that the warranty claim has no merit and will defend it robustly if proceedings are brought.

During the process leading to the Opinion, Watchstone had no right to require disclosure of key evidence in the possession of SGH which would be relevant to the merits and quantum of the warranty claim. Watchstone believes this evidence will be available to it in the event that SGH issues proceedings and it intends to seek disclosure of such information at the earliest possible opportunity.

Capital return

Watchstone will now not proceed with its further capital return to shareholders until the warranty claim detailed above is resolved.

Balance sheet update

As at 25 November 2016, Watchstone had cash of GBP83.1m (excluding the Warranty Escrow).

Watchstone will make further announcements in due course, as appropriate.

For further information:

 
 Watchstone Group plc                         Tel: 03333 448048 
 
   Peel Hunt LLP, Nominated Adviser          Tel: 020 7418 
   and broker                                    8900 
 Dan Webster

This information is provided by RNS

The company news service from the London Stock Exchange

END

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November 30, 2016 02:00 ET (07:00 GMT)

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