REG - AssetCo PLC - Share Reorganisation, Notice of AGM & Results
28/01/2025 07:00
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RNS Number : 8482U AssetCo PLC 28 January 2025
28 January 2025
LEI: 213800LFMHKVNTZ7GV45
AssetCo plc ("AssetCo" or the "Company")
PROPOSED SHARE REORGANISATION, NOTICE OF GENERAL MEETING
AND NOTICE OF RESULTS
The Board of AssetCo is pleased to announce proposals for a share
reorganisation which will better represent the key elements of the Company's
two principal existing business interests, River Global and Parmenion. The
Company intends to issue a circular to shareholders today ("Circular")
proposing:
(i) the reorganisation of the Company's share capital by
sub-dividing and reclassifying the Company's Existing Ordinary Shares into New
A Ordinary Shares and New B Shares (the Share Reorganisation);
(ii) that the Company seek admission to trading on AIM in
respect of both the New A Ordinary Shares and the New B Shares;
(iii) that in order to implement the Share Reorganisation
the Company adopt Amended Articles; and
(iv) that the Company change its name to River Global PLC.
Full details of the proposed Share Reorganisation together with an update on
the Company's trading are set out below and in the Circular that will shortly
be sent to shareholders. The Share Reorganisation is subject to shareholder
approval which will be sought at a general meeting of the Company to be held
at 10.00 am on 6 March 2025 at Shoosmiths LLP, 1 Bow Churchyard, London, EC4M
9DQ.
Martin Gilbert, Executive Chairman of AssetCo, commented: "The Share
Reorganisation will benefit the Company and Shareholders as the new share
structure better reflects the value proposition of the Company's two separate
and distinct business interests, River Global and Parmenion. It is anticipated
that this will enable a more consistent valuation of the Company in the
mid-term as well as making the Company's shares more attractive. The Directors
unanimously recommend that you vote in favour of the Resolutions being
proposed at the General Meeting."
Notice of Results
The Company gives notice that it will be announcing its full year results for
the year ended 30 September 2024 on, or around, Wednesday 5 March 2025.
For further information, please contact:
AssetCo plc Deutsche Numis
Gary Marshall, CFOO Nominated adviser and joint broker
Martin Gilbert, Chairman Giles Rolls / Charles Farquhar
Tel: +44 (0) 7788 338157 Tel: +44 (0) 20 7260 1000
Panmure Gordon (UK) Limited H/Advisors Maitland
Joint broker Neil Bennett
Atholl Tweedie Rachel Cohen
Tel: +44 (0) 20 7886 2500 Tel: +44 (0) 20 7379 5151
For further details, visit the website, www.assetco.com
(http://www.assetco.com)
Ticker: AIM: ASTO.L
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Circular posted to Shareholders 28 January 2025
Latest time and date for receipt of Forms of Proxy 10 a.m. on 4 March 2025
Record Date 6 p.m. on 4 March 2025
General Meeting 6 March 2025
Expected date on which the New A Ordinary Shares and the New B Shares will be 8 a.m. on 12 March 2025
admitted to trading on AIM
Expected date on which CREST accounts credited with 8 a.m. on 12 March 2025
New A Ordinary Shares and New B Shares
Expected date by which definitive new share certificates are to be despatched Week commencing 12 March 2025
KEY STATISTICS
Number of Existing Ordinary Shares in issue 149,292,970
ISIN code for the Existing Ordinary Shares GB00BQ2K3557
SEDOL code for the Existing Ordinary Shares BQ2K355
Number of New A Ordinary Shares in issue following the Share Reorganisation 149,292,970
Number of New B Shares in issue following the Share Reorganisation 149,292,970
ISIN code for the New A Ordinary Shares GB00BTDR2R10
ISIN code for the New B Shares GB00BTDR2S27
SEDOL code for the New A Ordinary Shares BTDR2R1
SEDOL code for the New B Shares BTDR2S2
TIDM ASTO
New TIDM on change of name for the New A Ordinary Shares RVRG
New TIDM on change of name for the New B Shares RVRB
LEI 213800LFMHKVNTZ7GV45
All references to times and dates in this announcement are to London time.
Each of the times and dates in this announcement is subject to change. If any
of the above times and/or dates change, the revised time and/or date will be
notified to Shareholders through a regulatory information service.
DEFINITIONS
In this announcement and in the accompanying Circular and Form of Proxy, the
following words and expressions shall, except where the context requires
otherwise, have the following meanings:
"Acquisition" the Company's acquisition of a 30% structured equity interest (subject to
adjustment from time to time) in Parmenion, agreed on 1 July 2021;
"Act" the Companies Act 2006;
"Admission" the admission of the New A Ordinary Shares and the New B Shares to trading on
AIM becoming effective in accordance with the AIM Rules;
"AIM" the AIM market operated by the London Stock Exchange;
"AIM Rules" the rules applicable to companies governing their admission to AIM, and
following admission their continuing obligations to AIM, as set out in the AIM
Rules for Companies published by LSE from time to time;
"Amended Articles" the amended articles of association of the Company to give effect to the Share
Reorganisation;
"Board" or "Directors" the board of directors of the Company;
"Business Day" means a day (other than a Saturday or Sunday) on which banks are generally
open in London for the transaction of normal business;
"certificated" or "in certificated form" the description of a share or other security which is not in uncertificated
form (that is, not in CREST but recorded on the Company's register as being
held in certificated form);
"Circular" means the circular sent to Shareholders on or around 28 January 2025;
"Code" the UK City Code on Takeovers and Mergers;
"Company" AssetCo PLC (company number 04966347) to be renamed River Global PLC, whose
registered office address is 30 Coleman Street, London, England, EC2R 5AL;
"Change of Name" the change of the name of the Company to River Global PLC, pursuant to a
meeting of the Company's Board held on 16 January 2025;
"CREST" the relevant system (as defined in the CREST Regulations) for the paperless
settlement of share transfers and the holding of shares in uncertificated form
operated by Euroclear UK & International Limited;
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No.1/3755) (as
amended);
"DTRs" the Disclosure Guidance and Transparency Rules forming part of the FCA Rules
(as amended from time to time)
"Euroclear" Euroclear UK & International Limited, the operator of CREST;
"Existing Ordinary Shares" the 149,292,970 existing ordinary shares of £0.01 each in the Company in
issue at the date of this announcement;
"FCA" the Financial Conduct Authority;
"Form of Proxy" the form of proxy for use by Shareholders in connection with the General
Meeting enclosed with the Circular;
"General Meeting" or "GM" the general meeting of the Company to be held at the offices of Shoosmiths
LLP; 1 Bow Churchyard, London, EC4M 9DQ, at 10 a.m. on 6 March 2025, notice of
which is set out on page 21 at the end of the Circular;
"HMRC" HM Revenue & Customs;
"ISA" Individual Savings Account;
"London Stock Exchange" or "LSE" London Stock Exchange plc;
"Main Market" the London Stock Exchange's main market for listed securities;
"New Shares" the New A Ordinary Shares and New B Shares created following the Share
Reorganisation;
"New A Ordinary Shares" the new A ordinary shares of £0.005 each in the Company, representing the
Company's principal equities investment management business, created after the
Share Reorganisation and to be admitted to trading on AIM;
"New B Shares" the new B shares of £0.005 each in the Company, representing the Company's
economic interests in Parmenion, created after the Share Reorganisation and to
be admitted to trading on AIM;
"Overseas Shareholders" a Shareholder who is a resident in, or a citizen of, a jurisdiction outside
the United Kingdom;
"Parmenion" Parmenion Capital Partners LLP in which the Company currently holds a 30%
structured interest (subject to adjustment from time to time);
"Preservation" Preservation Capital Partners Limited (company number 10737610), whose
registered office address is 25 Golden Square, London, England, W1F 9LU.
"Record Date" 6 p.m. on 4 March 2025 (or such other time and date as the Directors may
determine);
"Registrar" Computershare Investor Services PLC;
"Resolutions" the resolutions to be proposed at the GM as set out in the Notice of GM on
page 21 at the end of the Circular;
"Restricted Jurisdiction" each of Australia, Canada, Japan, New Zealand, Singapore, the Republic of
South Africa, the United States of America, and any other jurisdiction where
the mailing of this Circular or the accompanying documents into or inside such
jurisdiction would constitute a violation of the laws of such jurisdiction;
"Restricted Share Plans" the AssetCo PLC Employee Restricted Share Plan and the AssetCo PLC Partner
Restricted Share Plan.
"River Global" River Global Investors LLP (limited liability partnership number OC317647),
whose registered office address is 30 Coleman Street, London, England, EC2R
5AL;
"Share Reorganisation" as set out in Resolution 1, the proposed sub-division and reclassification of
the Existing Ordinary Shares;
"Shareholder" a holder of Existing Ordinary Shares;
"Takeover Panel" the panel on Takeovers and Mergers;
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland; and
"uncertificated" or "in uncertificated form" recorded on the relevant register of the share concerned as being held in
uncertificated form in CREST, and title to which, by virtue of the CREST
Regulations, may be transferred by means of CREST.
PROPOSED SHARE REORGANISATION AND CHANGE OF NAME
1. INTRODUCTION
The Company is proposing to:
(i) implement a reorganisation of its share capital by
sub-dividing and reclassifying the Company's Existing Ordinary Shares into New
A Ordinary Shares and New B Shares (the "Share Reorganisation") pursuant to
Resolution 1 in the Notice of the General Meeting;
(ii) seek admission to trading on AIM in respect of the New A
Ordinary Shares;
(iii) seek admission to trading on AIM in respect of the New B
Shares;
(iv) adopt the Amended Articles pursuant to Resolution 2 in the
Notice of General Meeting; and
(v) change the name of the Company to River Global PLC pursuant
to a proposed meeting of the Company's Board.
The purpose of the Circular is to provide you with information about the
background to, and reasons for, the proposed Share Reorganisation and Change
of Name, to explain why the Board considers the Share Reorganisation and
Change of Name to be in the best interests of the Company and its Shareholders
as a whole, and why the Directors recommend that you vote in favour of the
Resolutions to be proposed at the General Meeting, notice of which will
shortly be sent to Shareholders.
Upon implementation of the Share Reorganisation, Shareholders on the register
of members of the Company on the Record Date, which is expected to be at 6
p.m. on 4 March 2025, will receive one New A Ordinary Share and one New B
Share for every Existing Ordinary Share they hold. For context, as at 27
January 2025 (being the latest practicable date prior to the publication of
the Circular), the Company had 149,292,970 ordinary shares of £0.01 each in
issue.
2. BACKGROUND TO AND REASONS FOR THE PROPOSED SHARE REORGANISATION AND CHANGE OF NAME
The Company is primarily involved in acquiring, managing and operating asset
and wealth management activities and interests, together with other related
services. The strategy has principally focused on making strategic
acquisitions and building organic activities in areas of the asset and wealth
management sector where structural shifts have the potential to deliver
exceptional growth opportunities.
On 1 July 2021, the Company announced that it had reached agreement to acquire
a 30% structured equity interest (subject to adjustment from time to time) in
Parmenion (the Acquisition), a discretionary investment manager and advisory
platform for the wealth and financial planning sector, from Preservation. The
agreed consideration was up to £27.8 million, of which £20.6 million was to
be paid on completion and up to £3.6 million in each of March 2022 and March
2023, contingent on the performance of Parmenion.
The Acquisition of the interest was conditional on approval by the FCA to the
change in controller, which was duly received.
On 1 October 2021 the Company completed the Acquisition and paid Preservation
£20.6 million. In addition to the consideration, the Company paid a further
£1.3 million to reflect their pro ratashare of the costs incurred by
Preservation in the acquisition of Parmenion, together with interest on the
initial consideration from 1 July 2021. The consideration for the Acquisition
has now been paid in full and the Company does not intend to increase its
interest in Parmenion.
In June 2022, following the Parmenion Acquisition, the Company acquired the
active equities asset management business of River Global (formerly known as
River and Mercantile). This acquisition provided a platform to consolidate the
Saracen and Revera equities businesses which had been acquired prior to this,
along with subsequent equities business acquisitions, SVM Investment
Management and Ocean Dial Asset Management. Additional acquisitions (indirect
and direct respectively) included Infrastructure and ETF businesses, both of
which have now been exited.
Over the past eighteen months the Company's business interests have been
simplified considerably and now comprise (i) the wholly owned equities
business, trading under the name 'River Global' and (ii) its structured equity
interest in Parmenion. The Board believes that the factors driving value in
these two lines of business differ significantly in terms of both quantum and
the timing of any distribution and that, as a result, they have the potential
to appeal to quite different types of investors. To fully realise the benefit
that might result from allowing new and existing investors to access these
different value profiles directly, and subject to receiving the requisite
Shareholder approval, the Board has proposed the Share Reorganisation with the
New A Ordinary Shares representing the Company's economic interest in its
principal equities investment management business which is primarily conducted
through the River Global brand, and the New B Shares representing the
Company's economic interest in Parmenion. The New A Ordinary Shares will have
full participation rights other than in respect of the economic interest in
Parmenion, whilst the New B Shares will have limited voting rights and are
limited to receiving the economic benefits of the Parmenion holding.
The Board believes that the Share Reorganisation will benefit the Company and
Shareholders as the new share structure better reflects the value proposition
of the Company's two separate and distinct businesses. It is anticipated that
this will enable a more consistent valuation of the Company in the mid-term as
well as making the Company's shares more attractive to institutional
shareholders in connection with the proposed Admission and the trading of the
New B Shares on AIM. The Share Reorganisation will enable a clear division of
the economic rights attached to the New A Ordinary Shares and the New B
Shares, such that existing Shareholders and prospective investors who would
like to invest in the principal equities investment management business can do
so exclusively by virtue of holding the New A Ordinary Shares, whilst existing
Shareholders and prospective investors who would like to focus on the
Parmenion business can do so by virtue of holding the New B Shares.
The Board therefore believes that the proposed Share Reorganisation will
better cater to the respective risk appetites of existing Shareholders and
prospective investors. As the New A Ordinary Shares will reflect the economic
interest in the Company's principal equities investment management business,
the Board has proposed that the Company changes its name to River Global PLC
to better align the interests of the A Ordinary shareholders with the
underlying equities business. This change will be effected by a resolution of
the Company's board of directors, immediately after the General Meeting and
subject to the Resolutions being passed.
3. FINANCIAL INTERESTS OF THE NEW A ORDINARY SHARES AND THE NEW B SHARES
The holders of the New A Ordinary Shares will be entitled to all of the
Company's economic interests as at present but excepting those attributable to
the New B Shares as set out below. A trading update on the business is set out
in section 9 below.
As stated above the holders of the New B Shares will be entitled to the
benefits of the Company's economic interest in Parmenion. The Parmenion
interest consists of two component parts:
• a 30% equity shareholding in a Guernsey domiciled
holding company "Shillay TopCo Limited" which was established for the purpose
of buying and holding the entire equity shareholding in Parmenion on behalf of
its shareholders; and
• loan notes held in "Shillay MidCo Limited" a Guernsey
domiciled company and a wholly owned subsidiary of Shillay TopCo Limited.
Parmenion is wholly owned by Shillay MidCo Limited and hence by Shillay TopCo
Limited. The loan notes held in Shillay MidCo Limited were £21.7m at
completion of the Acquisition in October 2021, of which £21.5m attracts
interest at 10% per annum. The interest currently accumulates in the form of
additional loan notes. The amount of loan notes stood at £27.1m as at 30
September 2024.
The holders of the New B Shares will be entitled (in aggregate) to both
components of the Company's current economic interest in Parmenion as outlined
above, as well as any future dividends or capital return received in respect
of that economic interest and the future interest (whether paid in additional
loan notes or in cash). It should be noted that the Company's 30% equity
shareholding in Parmenion may be diluted immediately prior to a sale as a
result of the management incentive scheme in place for Parmenion's management
team, which entitles them to a proportion of the equity to the extent that the
realised value for the Parmenion business exceeds certain targets.
The ongoing costs directly attributable to maintaining and operating the
interest in Parmenion (which will be linked to the New B Shares following the
Share Reorganisation), together with a reasonable proportion of the central
overheads of the Company, will be accrued to be set off against any realisable
value of the Company's interest in the Parmenion shareholding in the event of
a sale or other return of capital. The costs of effecting any transaction in
respect of the interest will also be held against its realisable value.
Pro-Forma Impact of Proposed Share Reorganisation
The following tables show the expected impact of the proposed Share
Reorganisation on the Financial Statements of AssetCo PLC (to be renamed River
Global PLC).
Financial information on the proposed share classes, the New A Ordinary Shares
and the New B Shares will be provided within the Segmental Reporting section
of the Financial Statements of AssetCo PLC (to be renamed River Global PLC).
The tables below are provided for illustration purposes only and may be
subject to revision when presented in the Financial Statements of the Group
for the year ended 30 September 2024.
Restated, Unaudited Analysis of Revenue and Results by Commercial Activity and
Share Rights:
For the six months ended 31 March 2024
New Combined
New Ordinary A
Shares B
Shares Share Classes
Operating Business
Active equities Head office Total Parmenion Investment
Infrastructure Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue
Management fees 6,926 362 - 7,288 - 7,288
Marketing fees - - - - - -
Total revenue to external customers
6,926 362 - 7,288 - 7,288
Segment result
Operating (loss)/profit (2,473) (518) (1,332) (4,323) 1,193 (3,130)
Finance income 16 - 46 62 - 62
Finance costs (49) - (18) (67) - (67)
(Loss) on sale of subsidiary - - - - - -
Share of result of associate - - - - - -
(Loss)/profit before tax (2,506) (518) (1,304) (4,328) 1,193 (3,135)
Income tax - - 154 154 - 154
(Loss)/profit for the period (2,506) (518) (1,150) (4,174) 1,193 (2,981)
Segment assets and liabilities
Total assets 32,117 379 2,341 34,837 25,820 60,657
Total liabilities (4,068) (987) (3,281) (8,336) - (8,336)
Total net assets/(liabilities) 28,049 (608) (940) 26,501 25,820 52,321
4. DETAILS OF THE PROPOSED SHARE REORGANISATION
Upon implementation of the Share Reorganisation, Shareholders on the register
of members of the Company on the Record Date, which is expected to be at 6
p.m. on 4 March 2025, will receive one New A Ordinary Share and one New B
Share for every Existing Ordinary Share they hold. The proportion of the
issued ordinary share capital of the Company held by each Shareholder
following the Share Reorganisation will remain unchanged.
Other than the change to nominal value, the New A Ordinary Shares arising out
of the Share Reorganisation will have the same rights as the Existing Ordinary
Shares subject to the interests of the New B Shares. The New B Shares will be
different as to nominal value, voting and dividends from the Existing Ordinary
Shares. If dividends are declared in respect of the Company's economic
interests in Parmenion or if there is a capital distribution as a result of
the sale of the whole or a part of the interest in Parmenion, then
shareholders of the New B Shares will receive either dividends or capital
distribution (as appropriate) after deduction of any costs attributable to the
New B Shares interest. It should be noted that dividends will only be paid
subject to the Company as a whole having sufficient distributable reserves.
If dividends are declared in respect of the Company's principal equities
investment management business, primarily trading under the River Global
brand, then these dividends will be declared in respect of shareholders
holding the New A Ordinary Shares. The New B Shares will have no voting
rights, save in respect of issues affecting the interest of the class of New B
Shares, as defined in the Amended Articles. Neither the New A Ordinary Shares
nor the New B Shares will be redeemable. It should be noted that dividends
will only be paid subject to the Company as a whole having sufficient
distributable reserves.
If you hold a share certificate in respect of your Existing Ordinary Shares in
the Company, your certificate will no longer be valid from the time the
proposed Share Reorganisation becomes effective. On the Record Date, all
shareholders holding Existing Ordinary Shares in certificated form will be
sent new share certificates evidencing the New A Ordinary Shares and New B
Shares to which they are entitled under the Share Reorganisation. Such
certificates are expected to be despatched no later than week commencing 12
March 2025. The certificates will be despatched by first class post, at the
risk of the Shareholder. Upon receipt of the new certificates, you should
destroy any old certificates. Pending the despatch of the new certificates,
transfers of certificated New A Ordinary Shares and New B Shares will be
certified against the Company's share register.
If you hold your Existing Ordinary Shares in uncertificated form, you should
expect to have your CREST account credited with the New A Ordinary Shares and
New B Shares to which you are entitled on implementation of the Share
Reorganisation on 12 March 2025 or as soon as practicable after the Share
Reorganisation becomes effective.
Following the Share Reorganisation and Change of Name, the Company's new SEDOL
codes will be BTDR2R1 (in respect of the New A Ordinary Shares) and BTDR2S2
(in respect of the New B Shares) and its new ISIN codes will be GB00BTDR2R10
(in respect of the New A Ordinary Shares) and GB00BTDR2S27 (in respect of the
New B Shares). The Company's TIDM will change from ASTO to RVRG in respect of
the New A Ordinary Shares and from ASTO to RVRB in respect of the New B
Shares.
5. DETAILS OF THE AMENDED ARTICLES
In order to give effect to the Share Reorganisation, the Company needs to
adopt the Amended Articles to cater for new rights being granted to the New A
Ordinary Shares and New B Shares. It is proposed that the existing articles of
association of the Company be amended and replaced by the Amended Articles to
reflect the Share Reorganisation and to provide for a clear delineation of the
attachment of different economic interests to the New A Ordinary Shares and
the New B Shares.
A short summary of the proposed changes is set out below and a full copy of
the Amended Articles is contained at the end of the Circular. Shareholders are
advised to read the new Amended Articles in full and seek the appropriate
advice on the impact of the changes therein:
1. The inclusion of new definitions for:
• "AIM";
• "A Ordinary Shares";
• "B Shares"; and
• "Parmenion",
in the interpretation section of the Articles.
2. The amendment of the definition of "Ordinary Shares".
3. Pre-emption rights would apply on the allotment of new
shares and it is envisaged that if New A Ordinary Shares were to be allotted,
only the holders of New A Ordinary Shares would participate and vice versa
with the New B Shares.
4. The inclusion of Article 10 ("Voting rights attached to
Shares") which provides that the New A Ordinary Shares will have full voting
rights attached to them, whereas New B Shares will be non- voting save in
respect of matters affecting the class.
5. The amendment of Article 11 ("Variation of rights") which
requires that the rights attached to New Shares cannot be varied or abrogated
to prevent:
a. the voting rights in Article 10 being amended;
b. the New A Ordinary Shares from being detached from the
economic value of the principal equities investment management business; and
c. the New B Shares from being detached from the economic
value of Company's interest in Parmenion,
in each case, without the requisite consents being obtained.
6. The amendment of Article 120 ("Declaration of dividends")
to provide that any dividends declared to holders of:
a. New A Ordinary Shares will be dictated by any distributable
profits being generated by the Company's principal equities investment
management business, subject to the Company as a whole having distributable
reserves; and
b. New B Shares will be dictated by any distributable profits
being generated by the Company's interest in the Parmenion business. It should
be noted that dividends will only be paid subject to the Company as a whole
having sufficient distributable reserves.
It should be noted that in either case, dividends will only be paid subject to
the Company as a whole having sufficient distributable reserves.
7. The amendment of Article 121 ("Interim dividends") to
provide that any interim dividends declared to holders of:
a. New A Ordinary Shares will be dictated by any distributable
profits being generated by the Company's principal equities investment
management business; and
b. New B Shares will be dictated by any distributable profits
being generated by the Company's interest in the Parmenion business.
It should be noted that in either case, dividends will only be paid subject to
the Company as a whole having sufficient distributable reserves.
8. The inclusion of a new Article 140, to provide that in the
event that there are any capital distributions following a sale or partial
sale of:
a. the Company's mainstream equities investment management
business then all proceeds following the deduction of any transaction costs
shall be payable to the holders of the New A Ordinary Shares and the holders
of the New B Shares shall not be entitled to any such proceeds; and
b. the Company's interest in the Parmenion business then all
proceeds following the deduction of any transaction costs and any ongoing
costs of maintaining the New B Shares will be payable to the holders of the
New B Shares and the holders of the New A Ordinary Shares shall not be
entitled to any such proceeds.
6. ADMISSION TO AIM
The Company will continue to remain subject to the following legal and
regulatory requirements:
1. Shareholders will be required to comply with their
disclosure obligations under AIM Rule 17;
2. the Company will still be subject to the UK MAR regulating
inside information; and
3. the UK City Code on Takeovers and Mergers (the "Code") will
continue to apply to the Company.
7. EFFECTS OF THE PROPOSED SHARE REORGANISATION ON RESTRICTED SHARE PLANS
Under the rules of the Restricted Share Plans, the Remuneration Committee of
the Board has the discretion to adjust the structure of the shares awarded
under the Restricted Share Plans to reflect the impact of the Share
Reorganisation, which it intends to do to seek to preserve the economic
interest of participants.
The Company will provide further communications to participants under separate
communication.
8. AIM AND DISCLOSURE REGULATORY REGIME
The combination of the quotation on AIM of the New A Ordinary Shares and the
New B Shares will provide Shareholders and prospective investors easier access
to liquidity for the particular economic interest they wish to trade as
currently potential investors may be discouraged from acquiring shares which
encompass the economic interests in both the Company's principal equities
investment management business and the Company's interest in the Parmenion
business.
The principal regulatory regime for the Company encompasses the AIM Rules, UK
MAR and the DTRs. Under the AIM Rules, the Company, is at all times required
to have a 'nominated adviser' (as defined in the AIM Rules) to advise and
guide it on its responsibilities under the AIM Rules. The nominated adviser to
the Company is responsible to the LSE for advice and guidance on its
responsibilities under the AIM Rules and for ensuring that announcements and
documents required to be made under the AIM Rules are made and are made on a
timely basis. As such the AIM market is a 'self-regulated' market, in contrast
to the Main Market of the LSE.
Pursuant to Rule 17 of the AIM Rules, an AIM company which is UK incorporated
is also required to comply with DTR 5 (Vote Holder and Issuer Notification
Rules).
UK Takeover Code
The Company is subject to the Code given that it is UK-incorporated with its
place of central management and control being in the UK. Following Admission,
the Code continues to apply to the Company and, as a result, Shareholders are
entitled to the benefit of the takeover offer protections provided under the
Code.
Under Rule 9 of the Code ("Rule 9"), if an acquisition, or a series of
acquisitions over a period of time, of an interest in the New A Ordinary
Shares was to increase the aggregate holding of the acquirer and its concert
parties to shares carrying 30 per cent. or more of the voting rights in the
Company, the acquirer and, depending on the circumstances, its concert
parties, would be required (except with the consent of the Takeover Panel) to
make a cash offer for the outstanding New A Ordinary Shares at a price not
less than the highest price paid for the New A Ordinary Shares by the acquirer
or its concert parties during the previous 12 months. This requirement would
also be triggered by any acquisition of New A Ordinary Shares by a person
holding (together with its concert parties) New A Ordinary Shares carrying
between 30 and 50 per cent. of the voting rights in the Company if the effect
of such acquisition were to increase that person's percentage of the voting
rights. In respect of the New B Shares, as they are non-voting shares, Rule 9
of the Code does not apply to this class of share, meaning a shareholder may
acquire over 30% of the New B Shares without triggering the requirement to
make a mandatory bid for the New B Shares.
Shareholders should also note that as the Company has more than one class of
share capital Rule 14 of the Code ("Rule 14") applies. Specifically,
Shareholders should be aware that under Rule 14.1 (a) where an offer is made
for the New A Ordinary Shares a comparable offer must be made for the New B
Shares. Furthermore, should a voluntary offer be made for the New B Shares
only, then Note 2 on Rule 14.1 would apply such that a comparable offer for
the New A Ordinary Shares is not expected to be required. In both instances,
the Takeover Panel would need to be consulted in advance.
9. TRADING UPDATE
Assets under management increased from the £2,372 million reported at the end
of June to £2,779 million as at the end of September 2024. This includes the
over £100m new business win reported into the Company's UK Opportunities Fund
(an open-ended collective investment scheme managed and marketed by the
Company) in June 2024, which funded over the course of May 2024. It also
includes the successful launch of one of the two joint ventures we referenced
in June 2024, being the initiative to bring a leading fund manager to market.
Unaudited results for the year ended 30 September 2024 show an operating loss
of £2.9m (after adjusting for discontinued operations and exceptional items)
and an overall loss of £4.0m. This result (which remains subject to
adjustment as part of the year end audit process) keeps us on track with the
trajectory we had previously outlined towards run rate profitability.
Nearly €400m was added to the Group's assets under management in a fund
raising to mark commencement of the joint venture referenced above. Founder
clients invested in two former River Global badged funds now managed by
Jonathan Knowles, previously one of the top equity fund managers for Capital
International Group - one of the largest asset managers in the world. The
revenue share for River Global in respect of the initial founder assets is
relatively small but arrangements for future third party funds are expected to
be more remunerative. Given that Jonathan Knowles and supporting employees of
his firm, Compound Equity Group, operate under the existing River Global
regulatory and operational framework to manage what were previously small,
unprofitable funds, the arrangement capitalises on existing infrastructure and
is revenue enhancing from outset.
Overall, flows for the River Global group to the end of September 2024
remained positive from the last reporting period to the end of March 2024, and
markets also contributed positively.
The Group was notified in October that it had been appointed to manage a
substantial mandate for a UK institution with funding for that mandate due to
take place in March 2025. This win was not included in our budget planning and
would therefore have made a positive contribution in the year ahead.
Unfortunately, however, the Group was terminated as manager in December by a
US institution for whom the Group has managed two portfolios for some six
years. The assets under management (c.£200m) and revenues (c.£1m) relating
to the UK and US institutions essentially offset each other leaving the Group
no worse but no better off on an on-going basis as a result.
Elsewhere, headwinds continue to batter the active equity asset management
industry with some £16bn in outflows from UK Equity fund products alone in
the year to end November. The Group is not immune to this and has seen some
£193m of additional outflows in the first quarter of the new financial year
which requires further management action in order to keep us on the track
towards profitability that we signalled above. The Company's project to
consolidate back-office service providers has been delayed somewhat from the
target the Company had set to deliver around its financial year end but is
otherwise progressing well and is now expected to deliver in the first quarter
of the 2025 calendar year. The synergies associated with that project remain
on track albeit with a later starting point.
Parmenion acquired EBI Portfolios Ltd in September 2022 and together the two
companies had assets under management or advice of £11.7bn as at 31 March
2024 which compares favourably to £10.6bn at the same time in the previous
year. Operating profit for the combined businesses was £15.5m at their
December 2023 year end which again compares favourably to the previous year's
result of £11.9m. Revenue generated by the combined businesses over the year
to end December 2023 amounted to £48.6m. Overall, EBITDA more than tripled in
the three years to end December 2023.
Parmenion continues to garner awards from across the spectrum of investment
platform providers, including "Best model portfolio service 2024" (for its EBI
business) at the Professional Adviser Awards 2024 and first place in 6 out of
11 categories in the Defaqto platform service review 2024. It is Defaqto 5
Star rated and Defaqto Gold Service rated amongst 20 Defaqto ratings covering
all aspects of its business.
Parmenion serviced 1570 financial advisory firms as at end December 2023 and
continues to add functionality to its proprietary technology, importantly
adding a new Platform Switch Service in 2023 which facilitates the process of
transitioning to Parmenion for financial advisory firms,
More generally, Panmure noted in a research note published in October 2023
that "the attractions of the long-term structural growth opportunities in the
investment platform market remain. The addressable market remains vast, at
c.£3trn and growing, with penetration of said market around 31%, leaving
plenty to go for. Structural trends, including an ageing population and
regulatory change, are encouraging saving as the burden of responsibility for
saving for retirement shifts from employer to employee. Given the number of
structural growth drivers, savings products, such as ISAs, remain popular, and
SIPPs are growing in number due to the flexibility they provide. As the
popularity of these products grows, so does that of the investment platforms,
key providers of these products to the wider UK market."
In September 2023, we responded to speculation around the value of our
structured 30% equity interest (before dilution for management interests) in
Parmenion, obtaining an independent valuation of that interest showing a value
of between £75-90m. Based on recent discussions with the Company's advisers,
the Board believes that this continues to represent a fair assessment of the
value of the Company's interest assuming an arm's length sale of the company
as a whole.
10. CHANGE OF NAME, ADMISSION, SETTLEMENT AND DEALINGS
On 16 January 2025, the Company held a Board meeting at which it voted to
change the name of the Company from AssetCo PLC to River Global PLC, which
will only become effective upon completion of the Share Reorganisation. The
name change to River Global PLC will be reflected in the applications to the
London Stock Exchange for the purposes of Admission.
Application will be made to the London Stock Exchange for the New A Ordinary
Shares to be admitted to trading on AIM. It is expected that Admission will
become effective, and that dealings in the New A Ordinary Shares will commence
on AIM, at 8.00 a.m. on 12 March 2025 whereupon the Share Reorganisation will
become effective.
Application will also be made to the London Stock Exchange for the New B
Shares to be admitted to trading on AIM. It is expected that Admission will
become effective, and that dealings in the New B Shares will commence on AIM,
at 8.00 a.m. on 12 March 2025 whereupon the Share Reorganisation will become
effective.
11. RISK FACTORS
The Directors consider the following risks should be considered by
Shareholders prior to deciding how to cast their votes at the General Meeting:
(a) Both the New A Ordinary Shares and the New B Shares are
expected to be relatively illiquid. AIM is a market designed primarily for
smaller companies, to which a higher investment risk tends to be attached than
for larger companies trading on the Main Market of the LSE and may not provide
the liquidity normally associated with the Main Market of the LSE, or on some
other stock exchanges. Accordingly, as a consequence of the Company's New A
Ordinary Shares and the New B Shares trading on AIM, they may be more
difficult to sell compared with shares listed on the Main Market of the LSE.
(b) If there are no distributable reserves available to the
Company, then Shareholders and prospective investors should note that no
dividends or capital distribution will be declared in respect of either the
New A Ordinary Shares or the New B Shares.
(c) The shareholder agreement that governs the relationship
between the Company and Preservation in respect of the Company's economic
interest in Parmenion confers a number of restrictions and obligations on the
parties which limit the Company's ability to dispose of its interest in
certain circumstances.
(d) The New B shares represent a structured equity interest in the
business of Parmenion (as outlined at paragraph 2 above) which is a private
company not itself listed on a public market. The Company intends to undertake
a yearly independent third-party valuation and a half yearly review of
valuation. Given the illiquid nature and limited rights the Company has in
respect of any sale of Parmenion, the valuation obtained may be significantly
different from that that may be achieved in any sale.
(e) Parmenion is a private company and information regarding the
progress of its business is limited and also restricted by the shareholder
agreement referred to in (c) above. Shareholders should not expect to receive
any more information, in the event of the Share Reorganisation proceeding,
than is currently available.
(f) The price of the New B Shares, as well as the New A Ordinary
Shares, and the income derived from them, can go down as well as up. Past
performance is not necessarily a guide to the future. Changes in economic
conditions including, for example, interest rates, rates of inflation,
industry conditions, competition, political and diplomatic events and trends,
tax laws and other factors can substantially and adversely affect equity
investments and the Company's prospects. In particular, potential investors
should be aware of market volatilities attributable to political conflicts
impacting share prices generally.
(g) Downturns in economic conditions globally may adversely
affect the Company's performance and results of operations. The Company's
performance and results of operations are heavily influenced by the condition
of the UK economy. Unfavourable macroeconomic conditions in the UK and
globally, including recessionary economic cycles, higher interest rates,
volatile fuel and energy costs, rising inflation, increased taxes, increased
levels of unemployment, stagnant or declining wages and rises in the cost of
living have resulted, and may result in the future, in a need to streamline
costs and business operations. Other events and developments, including
geopolitical developments, social or political unrest, war, terrorist acts and
other hostilities, outbreaks of disease, natural catastrophes and the effects
of climate change, macroeconomic policy, trade policy and conflicts, business
and consumer sentiment, demographic changes, monetary policy (i.e. interest
rates), commodity prices, public and private debt levels and government
policies targeting public spending, may also in the future have, an indirect
effect on the Company's operations. In particular, the COVID-19 pandemic and
ongoing conflicts in the Middle East and Russia/Ukraine have had a severe and
prolonged effect on the global economy generally, impacting the share value of
many listed entities.
12. RECOMMENDATION
The Directors consider that the proposed Share Reorganisation is in the best
interests of the Company and its Shareholders as a whole.
Accordingly, the Directors unanimously recommend that you vote in favour of
the Resolutions being proposed at the General Meeting, as they intend to do or
procure to be done in respect of their own and their connected persons'
beneficial holdings comprising 38,693,322 of the Existing Ordinary Shares and
representing approximately 25.9% per cent of the Existing Ordinary Shares.
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