REG - World Chess PLC - Intention to Float

Bayerische Motoren Werke AGAnnouncement

13/10/2022 08:15

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RNS Number : 7170C  World Chess PLC  13 October 2022

13 October 2022

 

World Chess Plc

 

("World Chess" or the "Company" or the "Group")

 

Intention to Float on the London Stock Exchange

 

Proposed placing to raise up to €8 million

 

World Chess Plc, a leading chess organisation seeking to promote the mass
market appeal of chess globally through the commercial offering of chess
related activities, is pleased to announce its intention to seek admission of
its Ordinary Shares to the Official List (by way of Standard Listing under
Chapter 14 of the Listing Rules) and to trading on the London Stock Exchange's
Main Market for listed securities (together, the "Admission"), and a placing
of new shares to raise up to €8m.

 

It is expected that the Admission will become effective and that dealings will
commence in November 2022, under the ticker CHSS. Novum Securities Limited
("Novum") is acting as Financial Adviser to the Company and Retail investors
will be able to register their interest in the IPO by applying through
PrimaryBid prior to Admission.

 

World Chess overview

 

Established in 2017, World Chess Plc is the holding company of a group which
aims to promote the mass market appeal of chess globally through the
commercial offering of chess related activities. This includes the
organisation of top-level tournaments, operation of the official online gaming
platform of the International Chess Federation (FIDE) and other sport,
lifestyle and social activities, and merchandise related to chess.

 

Chess is a global mass participation sport with more than 600 million active
players, with numbers increasing due to the growth of online platforms,
however it is still much less commercialised than other sports. Market
expansion remains in its early stages, and World Chess is well-positioned to
take advantage of the sector's growth through online, in-person and hybrid
chess events and activities, and by providing complementary product offerings
to players, spectators, and partners.

 

The Directors believe that Admission will enable access to capital on an
ongoing basis to fund the Group's growth trajectory through investment in its
online platform and marketing strategies, and will also improve the Group's
public profile.

 

Highlights

●    World Chess aims to make chess more accessible and increase
participation, updating the image of chess, supporting the recent surge in the
popularity of the sport

●     Mission to support the commercial growth of chess and its wider
enjoyment around the world through a complementary product and service
offering, the World Chess Ecosystem

 

●     World Chess Ecosystem covers official online FIDE gaming platform,
events and competitions, clubs, media, talent, sponsorship and merchandise.

 

●     Partner of the International Chess Federation ("FIDE") since 2012,
with an exclusive position to offer online ratings and titles, recognized by
FIDE, to players.

 

●     Operator of FIDE Online Arena, the official FIDE online gaming
platform, allowing subscribing players of all levels to participate in ranked
online matches, and organiser of top-level professional tournaments including
the Grand Prix series

 

●    World Chess is leading the way for chess to catch up with other
sports and compete for global attention through growing media, sponsorship and
talent management activities

●    Commercial potential of chess historically overlooked by global
media and business despite chess being a global, mass participation sport,
typically over-represented in higher income and educational qualification
demographic groups

 

●    Experienced and passionate management team with extensive experience
working in the chess industry

Ilya Merenzon, Chief Executive Officer of World Chess, said: "I am pleased to
be announcing our intention to float on the London market at a
transformational time for chess and for our business. There continues to be an
explosion of interest in chess, which has accelerated through recent years and
even more during the pandemic. To keep pace with this growth we are scaling up
our operations and expanding our range of services internationally.

 

"We believe chess is the only remaining mass participation sport not yet fully
benefitting from the creativity and investment of the commercial sector. As
the business world begins to recognise the opportunity to profitably offer
chess fans more of what they want, there is an incredible opportunity to
continue increasing interest in chess worldwide. Our goal is to build on the
foundations of millennia of people playing chess for fun as well as for
intellectual challenge, reinvent the game of chess so it fits more easily into
modern lifestyles and, above all, ensure chess is accessible to more people.

 

"Our ecosystem business model supports fans through their lifelong chess
experience. We help players, sponsors and partner organisations, and are
committed to a sustainable approach to business. We have the advantage of
being an established brand with almost a decade of experience hosting
high-level events globally. Our online offering benefits from using a newly
built technology platform to leverage the established World Chess brand.

 

"We are hugely passionate about chess and can't wait to take the next step in
developing the sport that looks like a hybrid of e-sports with a Nobel prize
awards ceremony."

 

 

For more information please visit wordchess.com/us/investors or contact:

 

 World Chess               (mailto:enrico@ms-holdings.com) Via Yellow Jersey (see below)

 Ilya Merenzon, CEO
 Novum Securities Limited  +44 (0) 20 7399 9400

 David Coffman             DCoffman@novumsecurities.com (mailto:DCoffman@novumsecurities.com)

 Yellow Jersey PR

 Tom Randell               +44 (0) 79 4875 8681

 Henry Wilkinson           +44 (0) 79 5140 2336
 Annabelle Wills           +44 (0) 77 7519 4357

                           worldchess@yellowjerseypr.com (mailto:worldchess@yellowjerseypr.com)

 

Background

World Chess Plc was established in January 2017 together with the key
operational company of the group World Chess Events Limited (UK). World Chess
Plc subsequently acquired World Chess US, Inc. (USA) and World Chess Rus LLC
(RUS), two companies that participated in the World Chess project prior to the
registration of the holding. These acquisitions took place respectively in
2017 and 2018. World Chess Digital Limited (Hong Kong) was acquired in June
2019 and later ceased its operations following the transfer of its business
out of the UK operational entity. In October 2021, World Chess Europe GmbH was
established in Germany to address the Brexit bureaucratic complexities. In
2022 following the Russian invasion of Ukraine World Chess relocated all its
business activities out of Russia, selling all its Russian assets and with all
Russian staff relocated. The company incorporated World Chess Sakartvelo
Limited in Tbilisi (Georgia) to continue its projects in the Eastern region.
All of the companies listed above, with the exception of World Chess Rus LLC
which has been sold, are 100% owned by World Chess Plc.

 

Whilst the Company was incorporated as a holding company in 2017, the origins
of the World Chess project, and first activities, date back to 2012. The
relationship with FIDE commenced in 2012 with which Ilya Merenzon and other
core members of the current team were involved.

 

Business model

Currently, the World Chess eco-system develops and commercialises chess on a
global level using product verticals that fit into seven categories:

 

 

Online Platform

The World Chess online platform offers multiple opportunities for chess
players to interact and develop through chess gaming, educational and news
content, and broadcasting of offline chess events. The platform incorporates
the official FIDE online gaming, FIDE Online Arena (FOA), and is the only
place for chess players across the globe to obtain online ratings and titles
recognized by FIDE. It also allows players to participate in online-rated
tournaments.

 

The global online chess market remains relatively undeveloped as a share of
the estimated 600 million adult players globally*, but monthly traffic to
chess websites grew by as much as 75% at the end of H1 of 2020 compared to the
end of 2019*. Chess gaming has also seen strong growth on Twitch.com, a global
streaming platform, where broadcast hours of chess increased by 150% in the
past year.

 

*A 2012 study by YouGov indicated that more than 600 million adults play chess
regularly, and at least 70% of the adult population of countries including US,
UK, Germany, Russia, and India have played chess at some point during their
lives (6).

**Playmagnus Annual Report of 2019

 

Tournaments

World Chess organised three World Chess Championship cycles, including FIDE
Championship Matches in New York and London.

 

Recent changes in the sport have encouraged new forms of chess events and the
Company intends to continue developing its own events which will not be bound
by the limitations of official events. World Chess has developed a signature
format, Armageddon, that is fast paced yet organised according to conventional
chess rules and regulations.

 

Merchandise

World Chess develops and sells official World Chess merchandise, including the
official World Chess Championship Chess Set designed by Pentagram. The chess
sets cover a range of price points from US$32 to US$639, all based on the
official and patented design.

 

World Chess Clubs

In 2022 a new chess club, called World Chess Club Berlin, will open in Berlin
to act as a central European hub for World Chess activities. The new venue
will feature opportunities to host amateur and top-level tournaments all year
round. The venue already hosted FIDE Grand Prix in 2022. It is the Director's
intention to open further chess clubs in major cities in due course.

 

Sponsorship

Sponsorship has been the main source of revenue for the Group since its
inception.  Initially, sponsorship was linked to events organised by World
Chess, however more recently the Group has expanded its sponsorship
opportunities to the online platform.

 

World Chess has a growing portfolio of long-term and repeat event sponsors
including, but not limited to,  Algorand, Unibet, Mercedes Benz and BMW.
These relationships, coupled with the growing media and online interest in
World Chess have enabled the Group to raise amounts ranging from €10,000 to
over €1,000,000 per sponsor often with multi-year arrangements.

 

Media

World Chess has developed a brand that is recognisable, appealing, and
represents a younger, more image conscious side of the global chess community.
This brand has grown through broadcasting, media partners, and a continued
strong social media presence. The Armageddon series, a series  established
and developed by World Chess, has also helped to increase awareness of the
World Chess brand.

 

Talent

The Group has established Chess & Co, an agency to partner brands with
individual chess players. Chess & Co. has been created in response to
corporate interest in partnering their brands with individual chess players.
Unlike other major sports, very few chess players are able to support
themselves to become professionals and the chess community remains largely
self-funded.

 

The Directors believe there are significant opportunities in partnering
players with brands, utilising the reputation of World Chess and leveraging
the pre-existing relationships of World Chess.

 

Marketing strategy

World Chess utilises a variety of channels to promote its products and brand
to its audience, both new and existing online platform users. These channels
are described in more detail below:

 

●    Performance Marketing - the Company markets its products through paid
campaigns via social media and search engines.

 

●    PR - Successful media attention from media sources including The New
York Times, The Guardian, and Der Spiegel.

 

●   Social Media - Total audience of over 400,000 and growing across all
social media platforms, which are used to communicate and promote the World
Chess brand.

 

●    Working in partnership with federations - World Chess has developed
relationships with various national and local clubs to help them develop tools
to manage and organise online tournaments on the Company's Gaming Platform.
Members are prompted toward paid subscriptions by invitation to
paid-subscriber-only events and tournaments and information on subscriber-only
benefits whilst also receiving advertisements of World Chess products.

 

●   Promotion through Events -The Company has a pipeline of events and
tournaments, such as the Grand Prix series which last took place in April
2022, co-organised with FIDE, which further endorse the World Chess brand and
associated products.

 

●   Influencers - World Chess works with several prominent chess players
and chess influencers, such as Wesley So (USA) ranked ninth in the world and
Vidit Gujrathi, one of the highest-ranked Indian players. . The Directors aim
to continue growing this network and create a diverse line up of ambassadors.

 

●   Promotion through Association with FIDE - World Chess has a partnership
with FIDE and utilises this relationship to strengthen the World Chess brand
and products. This includes the World Chess Champion Chess Set, the only chess
set approved by FIDE for the World Chess Championship cycle events.

 

 

Retail Investor offer on PrimaryBid

 

As part of the IPO, World Chess plc has partnered with fintech platform
PrimaryBid to include retail investors who can invest on the same terms as the
institutional investors. Retail investors can register their interest in the
IPO by applying through the PrimaryBid mobile app or by using their ISAs, SIPP
or GIA via certain retail brokers, wealth managers or investment platforms.
PrimaryBid does not charge investors any commission for these services.

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