REG - Warpaint London PLC Brand Architekts Grp - Recommended Offer for Brand Architekts Group plc
05/12/2024 07:00
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RNS Number : 8818O Warpaint London PLC 05 December 2024
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
THIS ANNOUNCEMENT IS NOT A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND
BRAND ARCHITEKTS SHAREHOLDERS SHOULD NOT MAKE ANY INVESTMENT DECISION IN
RELATION TO THE NEW WARPAINT SHARES EXCEPT ON THE BASIS OF INFORMATION IN THE
SCHEME DOCUMENT WHICH IS PROPOSED TO BE PUBLISHED IN DUE COURSE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
5 December 2024
RECOMMENDED CASH ACQUISITION
of
Brand Architekts Group plc
by
Warpaint London plc
to be implemented by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
· The boards of Warpaint London plc ("Warpaint") and Brand Architekts
Group plc ("Brand Architekts") are pleased to announce that they have reached
agreement on the terms and conditions of a recommended cash offer to be made
by Warpaint for the entire issued, and to be issued, ordinary share capital of
Brand Architekts (the "Acquisition"). It is intended that the Acquisition will
be implemented by way of a court-sanctioned scheme of arrangement under Part
26 of the 2006 Act.
· Under the terms of the Acquisition, each Brand Architekts
Shareholder will be entitled to receive:
for each Brand Architekts Share: 48 pence in cash (the "Cash Offer")
· The Acquisition values Brand Architekts' entire issued, and to be
issued, ordinary share capital at approximately £13.88 million on a fully
diluted basis.
· The price of the Cash Offer per Brand Architekts Share represents a
premium of approximately:
· 100 per cent. to the Closing Price of 24 pence per Brand Architekts
Share on 4 December 2024 (being the last Business Day before the date of this
announcement);
· 85.42 per cent. to the average price of 25.89 pence per Brand
Architekts Share for the 3-month period ended 4 December 2024 (being the last
Business Day before the date of this announcement); and
· 95.78 per cent. to the average price of 24.52 pence per Brand
Architekts Share for the 12-month period ended 4 December 2024 (being the last
Business Day before the date of this announcement).
· As an alternative to the Cash Offer, Eligible Brand Architekts
Shareholders may elect to receive 0.0916 New Warpaint Shares ("Consideration
Shares") for each Brand Architekts Share they hold (the "Alternative Share
Offer") instead of the Cash Offer to which they would otherwise be entitled.
The New Warpaint Shares will be issued credited as fully paid and will rank
pari passu in all respects with the Warpaint Shares in issue at the time the
New Warpaint Shares are issued pursuant to the Acquisition.
· Based on Warpaint's share price of 524 pence on 4 December 2024 (being
the last Business Day before the date of this announcement), 0.0916 of a New
Warpaint Share (issued under the Alternative Share Offer) is equivalent to 48
pence per Brand Architekts Share.
· Accordingly, and on the basis of the above, the price of the Cash
Offer and the Alternative Share Offer (the "Offer Price") values each Brand
Architekts Share at 48 pence as at 4 December 2024 (being the last Business
Day before the date of this announcement).
· Eligible Brand Architekts Shareholders will only be able to elect for
the Alternative Share Offer in relation to their entire holding of Brand
Architekts Shares and not part only. Such Consideration Shares will be issued
on the terms described in paragraph 3 below of this announcement. Eligible
Brand Architekts Shareholders who do not positively and validly elect to
receive the Alternative Share Offer, as well as Restricted Brand Architekts
Shareholders, will automatically receive the Cash Offer.
· Warpaint has received irrevocable undertakings to vote in favour of
the resolutions relating to the Scheme and the Acquisition at the Meetings (or
in the event that the Acquisition is implemented by a Takeover Offer, to
accept such Takeover Offer), in respect of, in aggregate, 8,760,470 Brand
Architekts Shares (representing approximately 31.35 per cent. of the existing
issued ordinary share capital of Brand Architekts as at 4 December 2024, being
the last Business Day before the date of this announcement).
· If, on or after the date of this announcement and prior to the
Acquisition becoming Effective, any dividend and/or other distribution and/or
other return of capital or value is announced, declared, made or paid or
becomes payable in respect of the Brand Architekts Shares, Warpaint reserves
the right to reduce the consideration payable pursuant to the Cash Offer (and,
as the case may be, the exchange ratio in relation to the Alternative Share
Offer) by an amount up to the aggregate amount of such dividend and/or
distribution and/or other return of capital or value. In such circumstances,
Brand Architekts Shareholders would be entitled to receive and retain any such
dividend, distribution and/or other return of capital or value.
Background to and reasons for the Acquisition
· Warpaint has a successful strategy of focusing on growing profitable
sales of its branded products globally, whilst increasing overall margins.
This has been achieved through increasing sales with Warpaint's existing
retail customers and winning new major retailers. The Warpaint Board believes
that there continues to be significant growth opportunities for Warpaint and
accordingly, the Warpaint Group remains focused on continuing to execute on
this organic growth strategy.
· Having followed Brand Architekts for some time, as another company
admitted to trading on AIM operating in a similar sector, the Warpaint Board
believes that the Acquisition at this time is an exciting and relatively low
risk opportunity to further bolster Warpaint's growth opportunities.
· Warpaint has a strong track record of successfully acquiring,
integrating and growing businesses with complementary brands, offerings and
customers, with the acquisitions of Retra Holdings Limited ("Retra") in 2017
and Marvin Leeds Marketing Services, Inc. in 2018. Both acquisitions were
earnings enhancing and have contributed to the strong overall growth of the
Warpaint business. In particular, revenues and profits before tax from Retra
grew by 55 per cent. and 123 per cent. respectively between the years ended 31
December 2017 and 31 December 2023.
· The Warpaint Board considers that Brand Architekts provides a similar
opportunity as its previous acquisitions, and that the Acquisition will
enhance Brand Architekts' proposition and profitability as part of a larger,
successful health, beauty and personal care business.
· Warpaint believes that Brand Architekts has a number of high-quality
health, beauty and personal care brands with a well-established customer base
which complements Warpaint's existing customer relationships and its brand
portfolio. Warpaint believes the Acquisition will strengthen the Enlarged
Warpaint Group's customer proposition and facilitate cross-selling
opportunities by leveraging a wider brand offering and broader customer
relationships.
· In addition, while Brand Architekts has grown its gross margins
over recent financial periods, it carries a high overhead cost base relative
to the level of gross profit generated by the business, in part as a result of
being a small company carrying the corporate and governance costs associated
with a public quotation. The Warpaint Board believes that the level of
overheads relative to the scale of the Brand Architekts Group is inefficient
and has impacted profitability. Warpaint believes that the Acquisition will
provide the opportunity to generate cost synergies and reduce overheads to a
more efficient level which should increase Brand Architekts' profitability.
Accordingly, the Warpaint Board expects the Acquisition to be earnings
enhancing to Warpaint in the year ending 31 December 2025.
Recommendation
· The Brand Architekts Directors, who have been so advised by Singer
Capital Markets as to the financial terms of the Cash Offer and Alternative
Share Offer, consider the terms of each of the Cash Offer and Alternative
Share Offer to be fair and reasonable. In providing its advice to the Brand
Architekts Directors, Singer Capital Markets has taken into account the
commercial assessments of the Brand Architekts Directors. Singer Capital
Markets is providing independent financial advice to the Brand Architekts
Directors for the purposes of Rule 3 of the Takeover Code.
· Accordingly, the Brand Architekts Directors intend to recommend
unanimously that Brand Architekts Shareholders vote in favour of the Scheme at
the Court Meeting and the Resolution to be proposed at the General Meeting
(or, in the event that the Acquisition is implemented by way of a Takeover
Offer, to accept or instruct the acceptance of the Takeover Offer), as the
Brand Architekts Directors who hold Brand Architekts Shares have irrevocably
undertaken to do in respect of their own beneficial holdings totalling
1,910,213 Brand Architekts Shares (representing approximately 6.84 per cent.
of the existing issued ordinary share capital of Brand Architekts as at 4
December 2024, being the last Business Day before the date of this
announcement). Further details of these undertakings are set out in
Appendix 3 to this announcement.
· In deciding which of the Cash Offer and the Alternative Share Offer to
elect for, Brand Architekts Shareholders should consider their individual tax
and financial situation. Brand Architekts Shareholders should consider whether
the Alternative Share Offer is suitable in light of their own personal
circumstances and investment objectives, and are therefore strongly
recommended to seek their own independent financial, tax and legal advice and
to read in full this announcement (including the key factors set out in the
Alternative Share Offer paragraph below) and, when published, the Scheme
Document, before deciding whether to elect to receive the Alternative Share
Offer. The Brand Architekts Board will notify their intentions in respect of
their own beneficial holdings and their elections for either the Cash Offer or
Alternative Share Offer within the Scheme Document.
Background to and reasons for the recommendation
· In August 2019, following the disposal of Brand Architekts'
manufacturing business and associated assets, Brand Architekts focused its
strategy exclusively on its owned brands, investing in organic growth and
exploring selective acquisitions to enhance profitability and scale. In line
with this, and alongside the launch of new project lines, Brand Architekts
acquired InnovaDerma plc in May 2022 to offer a wider range of higher-margin
products to its commercial customer base and increase the Brand Architekts
Group's international expansion effort.
· Whilst significant progress has been made to deliver these
strategic priorities, trading conditions over the period have been
challenging. Supply and cost headwinds through the pandemic have been coupled
with demand challenges from the cost-of-living crisis, particularly in
self-tan. These factors have led to recent successive years of underlying
operating losses. Accordingly, Brand Architekts has prioritised reducing
losses, margin improvement and returning the business to profitability.
· The immediate priorities for Brand Architekts are to drive brand
awareness of Skinny Tan and Super Facialist, with an expected year-on-year
increase in digital awareness and acquisition campaigns, with more investment
in TikTok and influencers. Historically Brand Architekts has been successful
in securing new distribution, but maintaining listings requires necessary
advertising and promotional spend to generate the appropriate return on sales.
· The Brand Architekts Directors continue to be confident in the
Brand Architekts Group's strategic and financial aims, and in building the
required foundations to enable the Brand Architekts Group to return to
profitability and achieve its medium and long-term goals. However, the Brand
Architekts Directors are mindful that trading conditions remain challenging
and that the acceleration of the strategic aims of the Brand Architekts Group
requires investment to further drive brand awareness and there are therefore
risks to the delivery of the strategy in the short to medium term.
· The Brand Architekts Board recognises that the market for Brand
Architekts Shares is relatively illiquid, making it challenging for Brand
Architekts Shareholders to monetise their holdings should they so wish. The
Acquisition provides Brand Architekts Shareholders the opportunity for an
immediate, certain and attractive realisation of cash.
· The Brand Architekts Board believes that the Acquisition will
provide Brand Architekts Shareholders with an opportunity to receive an
immediate and certain value per Brand Architekts Share, in cash, at a
significant premium (of 100 per cent. to the closing price of a Brand
Architekts Share on 4 December 2024, being the last Business Day before the
date of this announcement) that may not otherwise be available and would, in
any event, be subject to the successful execution of Brand Architekts'
strategy and the realisation of its longer-term growth prospects.
· The Brand Architekts Board notes that Peter Gyllenhammar, Brand
Architekts' largest shareholder with an interest in approximately 24.51 per
cent. of the existing issued ordinary share capital of Brand Architekts as at
4 December 2024, being the last Business Day before the date of this
announcement), is supportive of the Acquisition and has given an irrevocable
undertaking to Warpaint to vote in favour of the Scheme.
· After careful consideration of all relevant factors, the Brand
Architekts Directors have concluded that the terms of each of the Cash Offer
and Alternative Share Offer are in the best interests of Brand Architekts and
the Brand Architekts Shareholders as a whole. As such, the Brand Architekts
Directors unanimously intend to recommend that Brand Architekts Shareholders
vote in favour of the Acquisition.
Irrevocable undertakings
· In total, including irrevocable undertakings from the Brand
Architekts Directors, Warpaint has received irrevocable undertakings to vote
in favour of the resolutions relating to the Scheme and the Acquisition at the
Meetings (or in the event that the Acquisition is implemented by a Takeover
Offer, to accept, or procure or (as the case may be) instruct, acceptance of
such Takeover Offer), in respect of, in aggregate, 8,760,470 Brand Architekts
Shares (representing approximately 31.35 per cent. of the existing issued
ordinary share capital of Brand Architekts as at 4 December 2024, being the
last Business Day before the date of this announcement).
· These comprise of the following irrevocable undertakings:
· Warpaint has received irrevocable undertakings from the Brand
Architekts Directors who hold Brand Architekts Shares to vote (or, where
applicable, instruct voting) in favour of the resolutions relating to the
Scheme and the Acquisition at the Meetings (or in the event that the
Acquisition is implemented by a Takeover Offer, to accept or instruct the
acceptance of such Takeover Offer) in respect of, in aggregate, 1,910,213
Brand Architekts Shares (representing approximately 6.84 per cent. of the
existing issued ordinary share capital of Brand Architekts as at 4 December
2024, being the last Business Day before the date of this announcement). The
undertakings from the Brand Architekts Directors will remain binding in the
event that a higher competing offer for Brand Architekts is made.
· Warpaint has received an irrevocable undertaking from Brand
Architekts' largest shareholder, Peter Gyllenhammar, to vote (or, where
applicable, procure voting) in favour of the resolutions relating to the
Scheme and the Acquisition at the Meetings (or in the event that the
Acquisition is implemented by a Takeover Offer, to accept or procure
acceptance of such Takeover Offer) in respect of 6,850,257 Brand Architekts
Shares (representing approximately 24.51 per cent. of the existing issued
ordinary share capital of Brand Architekts as at 4 December 2024, being the
last Business Day before the date of this announcement). The undertaking from
Peter Gyllenhammar will remain binding in the event that a higher competing
offer for Brand Architekts is made. Peter Gyllenhammar has elected to receive
the Cash Offer for his Brand Architekts Shares.
· Further details of these irrevocable undertakings (including the
circumstances in which they cease to be binding) are set out in Appendix 3 to
this announcement.
Information on Warpaint
· Warpaint is a specialist supplier of colour cosmetics and the owner
of the W7 and Technic brands. W7 is sold in the United Kingdom primarily to
major retailers and internationally to local distributors or retail chains.
The Technic brand is sold in the United Kingdom and continental Europe with a
focus on the gifting market, principally for high street retailers and
supermarkets. In addition, Warpaint also supplies cosmetics under its other
brand names of Man'stuff, Body Collection and Chit Chat, each targeting a
different demographic. The Warpaint Shares were admitted to trading on the
London Stock Exchange's AIM market in 2016 and to the OTCQX in the United
States in May 2024.
Information on Brand Architekts
· Brand Architekts is a beauty brand specialist which offers a portfolio
of problem-solving challenger beauty brands, sold throughout the UK and
internationally. Brand Architekts' focus is on brands and products that
engender high levels of consumer loyalty and reflect the focus on
high-performance problem-solving solution-led brands for everyday beauty.
Brand Architekts' brand portfolio encompasses female skincare, self-tan and
male grooming. Brands (including Super Facialist, Skinny Tan and Dirty Works)
are available on the high street in leading pharmacy and drugstore chains; in
national grocery stores; on the platforms of global e-tailers; and through
ecommerce websites.
Timetable and conditions
· It is intended that the Acquisition will be implemented by way of a
court‑sanctioned scheme of arrangement under Part 26 of the 2006 Act
(although Warpaint reserves the right to effect the Acquisition by way of a
Takeover Offer, subject to the consent of the Panel and the terms of the
Cooperation Agreement).
· The Acquisition will be put to Brand Architekts Shareholders at the
Court Meeting and the General Meeting and is conditional on, among other
things, the approval by the requisite majorities of Brand Architekts
Shareholders at the Meetings and the satisfaction or (where applicable) waiver
of the Conditions and certain further terms referred to in Appendix 1 to this
announcement. To become Effective, the Scheme must be approved by a majority
in number of Brand Architekts Shareholders, present and voting at the Court
Meeting, whether in person or by proxy, representing 75 per cent. or more in
value of the Scheme Shares voted. In addition, a special resolution
implementing the Scheme must be passed by Brand Architekts Shareholders
representing at least 75 per cent. of votes cast at the General Meeting.
· The Conditions to the Acquisition are set out in full in Appendix 1 to
this announcement along with certain other terms; the full terms and
conditions will be provided in the Scheme Document.
· It is expected that the Scheme Document, containing further
information about the Acquisition and notices of the Court Meeting and General
Meeting, together with the associated Forms of Proxy and a Form of Election,
will be posted to Brand Architekts Shareholders as soon as practicable and in
any event within 28 days of this announcement (or such later time as Brand
Architekts, Warpaint and the Panel agree).
· The Acquisition is currently expected to complete in the first quarter
of 2025, subject to the satisfaction or (where applicable) waiver of the
Conditions. An expected timetable of key events relating to the Acquisition
will be set out in the Scheme Document.
· Commenting on the Acquisition, Sam Bazini CEO of Warpaint, said:
"The proposed acquisition of Brand Architekts provides an attractive strategic
opportunity to supplement our on-going international organic growth by
integrating Brand Architekts' highly complementary brands into Warpaint's
portfolio and leveraging the enhanced range of brands across a wider number of
customer relationships. Additionally, as part of a larger group we believe
applying our established supply and distribution channels and approach to
Brand Architekts will improve efficiency, reduce costs and drive
profitability. We are looking forward to working with the Brand Architekts
team to realise Brand Architekts' potential."
· Commenting on the Acquisition, Roger McDowell, Chair of Brand
Architekts, said:
"The Brand Architekts Board has worked hard to deliver on the Brand Architekts
Group's strategic priorities against a challenging environment and continues
to have confidence in its brands and longer-term prospects. However, the Brand
Architekts Board recognises the certainty of value of the Cash Offer at a 100
per cent. premium to the current share price, against the backdrop of an
uncertain macro-economic environment. The Acquisition will strengthen the
enlarged business for the benefit of all our customers, employees and other
stakeholders. The Brand Architekts Directors believe this Acquisition is in
the best interests of its shareholders and as such are unanimously
recommending the Acquisition to its shareholders."
This summary should be read in conjunction with the following announcement and
the Appendices. The conditions to, and certain further terms of, the
Acquisition are set out in Appendix 1. The bases and sources for certain
financial information contained in this announcement are set out in
Appendix 2. Details of irrevocable undertakings received by Warpaint are set
out in Appendix 3. Certain definitions and terms used in this announcement
are set out in Appendix 4.
The person responsible for arranging release of this announcement on behalf of
Warpaint is Sam Bazini. The person responsible for arranging release of this
announcement on behalf of Brand Architekts is Geoff Ellis.
Enquiries
Warpaint c/o IFC Advisory
Sam Bazini (Chief Executive Officer)
Eoin Macleod (Managing Director)
Neil Rodol (Chief Financial Officer)
Shore Capital (Financial Adviser, Nominated Adviser and Broker to Warpaint) +44 20 7408 4090
Patrick Castle (Corporate Advisory)
Daniel Bush (Corporate Advisory)
Lucy Bowden (Corporate Advisory)
Fiona Conroy (Corporate Broking)
IFC Advisory (Financial PR & IR) +44 20 3934 6630
Tim Metcalfe, Graham Herring, Florence Chandler
Brand Architekts +44 20 3166 2840
Quentin Higham (Chief Executive Officer)
Geoff Ellis (Chief Financial Officer)
Singer Capital Markets (Rule 3 Adviser, Nominated Adviser and Broker to Brand +44 20 7496 3000
Architekts)
Jen Boorer (Investment Banking)
James Todd (Investment Banking)
Jalini Kalaravy (Investment Banking)
Fladgate LLP is acting as legal adviser to Warpaint in connection with the
Acquisition.
Addleshaw Goddard LLP is acting as legal adviser to Brand Architekts in
connection with the Acquisition.
Disclaimers
Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited
(either individually or collectively "Shore Capital"), which are authorised
and regulated by the Financial Conduct Authority in the United Kingdom, are
acting as Financial Adviser, Nominated Adviser and Sole Broker exclusively for
Warpaint and no one else in connection with the matters set out to in this
announcement and will not regard any other person as their client in relation
to such matters and will not be responsible to anyone other than Warpaint for
providing the protections afforded to clients of Shore Capital nor for
providing advice in relation to the contents of, or any matter referred to in,
this announcement or any transaction or arrangement referred to herein.
Neither Shore Capital and Corporate Limited nor Shore Capital Stockbrokers
Limited, nor any of their subsidiaries or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Shore Capital in connection with this announcement, any statement
contained herein, any transaction or arrangement referred to herein, or
otherwise.
Singer Capital Markets Advisory LLP ("Singer Capital Markets"), which is
authorised and regulated in the United Kingdom by the FCA, is acting as
financial adviser and nominated adviser exclusively to Brand Architekts and
no-one else in connection with the matters described in this announcement and
will not be responsible to anyone other than Brand Architekts for providing
the protections afforded to clients of Singer Capital Markets nor for
providing advice in connection with the subject matter of this announcement.
Neither Singer Capital Markets nor any of its affiliates (nor any of their
respective directors, partners, officers, employees or agents) owes or accepts
any duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Singer Capital Markets in connection with this announcement,
any statement contained herein, the Takeover Offer or otherwise. No
representation or warranty, express or implied, is made by Singer Capital
Markets as to the contents of this announcement.
Further information
This announcement is for information purposes only and is not intended to, and
does not, constitute, or form part of, an offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of, any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of Brand
Architekts in any jurisdiction in contravention of applicable law. The
Acquisition will be implemented solely pursuant to the terms of the Scheme
Document (or, if the Acquisition is implemented by way of a Takeover Offer,
the offer document), which will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the Acquisition.
Any vote in respect of the Scheme or other response in relation to the
Acquisition should be made only on the basis of the information contained in
the Scheme Document (or, if the Acquisition is implemented by way of a
Takeover Offer, the offer document).
This announcement does not constitute a prospectus, prospectus equivalent
document or exempted document.
The statements contained in this announcement are made as at the date of this
announcement, unless some other time is specified in relation to them, and
publication of this announcement shall not give rise to any implication that
there has been no change in the facts set forth in this announcement since
such date.
If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.
Overseas Shareholders
The release, publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and therefore any
persons who are subject to the law of any jurisdiction other than the UK
should inform themselves of, and observe, any applicable legal or regulatory
requirements. Any failure to comply with such requirements may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person. This announcement has been prepared in accordance
with and for the purpose of complying with English law, the Takeover Code, the
AIM Rules, the Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules and information disclosed may not be the same as that which
would have been prepared in accordance with the laws of jurisdictions outside
England and Wales.
The availability of the Acquisition to Brand Architekts Shareholders who are
not resident in and citizens of the UK may be affected by the laws of the
relevant jurisdictions in which they are located or of which they are
citizens. Persons who are not resident in the UK should inform themselves of,
and observe, any applicable legal or regulatory requirements of their
jurisdictions. In particular, the ability of persons who are not resident in
the United Kingdom to vote their Brand Architekts Shares with respect to the
Scheme at the Court Meeting, or to appoint another person as proxy to vote at
the Court Meeting on their behalf, may be affected by the laws of the relevant
jurisdictions in which they are located. Any failure to comply with the
applicable restrictions may constitute a violation of the securities laws of
any such jurisdiction. To the fullest extent permitted by applicable law, the
companies and persons involved in the Acquisition disclaim any responsibility
or liability for the violation of such restrictions by any person. Further
details in relation to Overseas Shareholders will be contained in the Scheme
Document.
Unless otherwise determined by Warpaint or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, directly or indirectly, in, into, from, or by the use of mails or
any means or instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate or foreign
commerce of, or of any facility of a national, state or other securities
exchange of, any Restricted Jurisdiction where to do so would violate the laws
in that jurisdiction and no person may vote in favour of the Scheme by any
such use, means, instrumentality or from within a Restricted Jurisdiction or
any other jurisdiction if to do so would constitute a violation of the laws of
that jurisdiction. Copies of this announcement and any formal documentation
relating to the Acquisition are not being, and may not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in or into or
from any Restricted Jurisdiction and persons receiving such documents
(including, without limitation, agents, custodians, nominees and trustees) may
not mail or otherwise forward, distribute or send the same in or into or from
any Restricted Jurisdiction. Doing so may render invalid any related purported
vote in respect of the Acquisition. If the Acquisition is implemented by way
of a Takeover Offer (unless otherwise permitted by applicable law and
regulation), the Takeover Offer may not be made, directly or indirectly, in,
into, from, or by the use of mails or any means or instrumentality (including,
but not limited to, facsimile, e-mail or other electronic transmission, telex
or telephone) of interstate or foreign commerce of, or of any facility of a
national, state or other securities exchange of, any Restricted Jurisdiction
and the Takeover Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities.
The availability of New Warpaint Shares issued pursuant to the Acquisition to
Brand Architekts Shareholders who are not resident in the United Kingdom or
the ability of those persons to hold such shares may be affected by the laws
or regulatory requirements of the relevant jurisdictions in which they are
resident. Persons who are not resident in the United Kingdom should inform
themselves of, and observe, any applicable legal or regulatory requirements.
Brand Architekts Shareholders who are in any doubt about such matters should
consult an appropriate independent professional adviser in the relevant
jurisdiction without delay.
Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.
Notice to US Brand Architekts Shareholders
Brand Architekts Shareholders in the United States should note that the
Acquisition relates to the securities of a company organised under the laws of
England and Wales and is proposed to be effected by means of a scheme of
arrangement under the 2006 Act. This announcement, the Scheme Document and
certain other documents relating to the Acquisition have been or will be
prepared in accordance with English law, the AIM Rules, the Takeover Code and
UK disclosure requirements, and the format and style applicable to a scheme of
arrangement under the 2006 Act, all of which differ from those in the United
States. A transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules of Section 14(e) or the proxy solicitation
rules of Section 14(a) under the US Exchange Act. Accordingly, the Scheme is
subject to the disclosure requirements of and practices applicable in the
United Kingdom to schemes of arrangement, which differ from the disclosure
requirements and practices of the United States tender offer and proxy
solicitation rules.
Brand Architekts' financial statements, and all financial information that is
included in this announcement or that may be included in the Scheme Document,
or any other documents relating to the Acquisition, have been prepared in
accordance with the UK adopted International Accounting Standards and may not
be comparable to financial statements of companies in the United States or
other companies whose financial statements are prepared in accordance with US
generally accepted accounting principles. US generally accepted principles
differ in certain respects from the UK adopted International Accounting
Standards. None of the financial information in this announcement has been
audited in accordance with the auditing standards generally accepted in the US
or the auditing standards of the Public Company Accounting Oversight Board of
the US.
The New Warpaint Shares issuable to Eligible Brand Architekts Shareholders
under the Scheme have not been and will not be registered under the US
Securities Act, and such New Warpaint Shares will be issued to Eligible Brand
Architekts Shareholders in reliance on the exemption from registration set
forth in Section 3(a)(10) of the US Securities Act. Section 3(a)(10) of the US
Securities Act exempts the offer and sale of securities issued in exchange for
one or more bona fide outstanding securities from the general requirement of
registration where the terms and conditions of the issuance and exchange of
such securities have been approved by a court authorized to grant the
approval, after a hearing upon the fairness of the terms and conditions of the
issuance and exchange at which all persons to whom the securities will be
issued have the right to appear and receive timely notice thereof. The Court
is authorized to conduct a hearing at which the fairness of the terms and
conditions of the Scheme will be considered. Subject to the approval of the
Scheme by the Brand Architekts Shareholders at the Court Meeting, a hearing on
the Scheme will be held at which all Brand Architekts Shareholders are
entitled to appear and be heard. The approval of the Court will constitute the
basis for the exemption under Section 3(a)(10) of the US Securities Act for
the securities to be exchanged and issued to Eligible Brand Architekts
Shareholders pursuant to the Scheme. Before the Sanction Hearing, the Court
will be informed of this effect of the approval of the Scheme. The exchange
and issuance of the Brand Architekts Shares and New Warpaint Shares to
Eligible Brand Architekts Shareholders pursuant to the Scheme will also be
exempt from registration under the securities laws of the applicable states of
the United States.
The Brand Architekts Shares and New Warpaint Shares received pursuant to the
Scheme will be freely transferable under United States federal securities
laws, except that the US Securities Act imposes restrictions on the resales of
those securities by persons who are "affiliates" of Brand Architekts or
Warpaint, as the case may be, after the completion of the Scheme or within 90
days before completion of the Scheme. As defined in Rule 144 under the US
Securities Act, an "affiliate" of an issuer is a person that directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, the issuer. Usually, this includes the
directors, executive officers and significant shareholders of the issuer.
It may be difficult for US holders of Brand Architekts Shares to enforce their
rights and any claims they may have arising under US federal securities laws
in connection with the Acquisition, since Brand Architekts is organised under
the laws of a country other than the United States, and some or all of its
officers and directors may be residents of countries other than the United
States, and most of the assets of Brand Architekts are located outside of the
United States. US holders of Brand Architekts Shares may not be able to sue a
non-US company or its officers or directors in a non-US court for violations
of US federal securities laws. Further, it may be difficult to compel a non-US
company and its affiliates to subject themselves to a US court's jurisdiction
or judgment.
If Warpaint were to elect to implement the Acquisition by means of a Takeover
Offer, such Takeover Offer may be made in compliance with applicable US
securities laws and regulations including, to the extent applicable, Section
14(e) of the US Exchange Act and Regulation 14E thereunder, and will be made
in accordance with the Takeover Code. Such a Takeover Offer may be made in the
United States by Warpaint and no one else. Accordingly, the Acquisition may be
subject to disclosure and other procedural requirements, including with
respect to withdrawal rights, offer timetable, settlement procedures and
timing of payments that are different from those applicable under US domestic
tender offer procedures and law.
The receipt of cash pursuant to the Acquisition by a Brand Architekts
Shareholder in the United States as consideration for the transfer of its
Brand Architekts Shares pursuant to the Scheme will likely be a taxable
transaction for United States federal income tax purposes and under any
applicable United States state and local income tax laws. Each Brand
Architekts Shareholder in the United States is urged to consult its
independent professional tax or legal adviser immediately regarding the US
federal, state and local income and non-income tax consequences of the
Acquisition applicable to it, as well as any consequences arising under the
laws of any other taxing jurisdiction.
THE NEW WARPAINT SHARES ISSUABLE PURSUANT TO THE SCHEME HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SEC OR THE STATE SECURITIES REGULATORY AUTHORITY OF ANY
STATE OF THE UNITED STATES, NOR HAS THE SEC OR THE SECURITIES REGULATORY
AUTHORITY OF ANY STATE OF THE UNITED STATES PASSED ON THE ADEQUACY OR ACCURACY
OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENCE.
Forward-Looking Statements
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by Warpaint and Brand Architekts contain statements
which are, or may be deemed to be, "forward-looking statements".
Forward-looking statements are prospective in nature and are not based on
historical facts, but rather on current expectations and projections of the
management of Warpaint and Brand Architekts about future events, and are
therefore subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied by the
forward-looking statements.
The forward-looking statements contained in this announcement include
statements relating to the expected effects of the Acquisition on Warpaint and
Brand Architekts (including their future prospects, developments and
strategies), the expected timing and scope of the Acquisition and other
statements other than historical facts. Often, but not always, forward-looking
statements can be identified by the use of forward-looking words such as
"prepares", "plans", "expects" or "does not expect", "is expected", "is
subject to", "budget", "projects", "synergy", "strategy", "scheduled", "goal",
"estimates", "forecasts", "cost-saving", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases or
statements that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. Forward-looking
statements may include statements relating to the following: (i) future
capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion
and growth of Warpaint's, any member of the Warpaint Group's, Brand
Architekts' or any member of the Brand Architekts Group's operations and
potential synergies resulting from the Acquisition; and (iii) the effects of
global economic conditions and governmental regulation on Warpaint's, Brand
Architekts' or any member of the Warpaint Group's or Brand Architekts Group's
business.
Although Warpaint and Brand Architekts believe that the expectations reflected
in such forward-looking statements are reasonable, Warpaint and Brand
Architekts can give no assurance that such expectations will prove to be
correct. By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those expressed or
implied by such forward-looking statements, and no undue reliance should be
placed on any such forward-looking statements.
These factors include, but are not limited to: the ability to complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other Conditions on the proposed terms and
schedule; changes in the global political, economic, business and competitive
environments and in market and regulatory forces; changes in future exchange
and interest rates; changes in tax rates; future business combinations or
disposals; changes in general economic and business conditions; changes in the
behaviour of other market participants; changes in the anticipated benefits
from the proposed transaction not being realised as a result of changes in
general economic and market conditions in the countries in which Warpaint, the
Warpaint Group, Brand Architekts and the Brand Architekts Group operate, weak,
volatile or illiquid capital and/or credit markets, changes in tax rates,
interest rate and currency value fluctuations, the degree of competition in
the geographic and business areas in which Warpaint and Brand Architekts
operate and changes in laws or in supervisory expectations or requirements.
Other unknown or unpredictable factors could cause actual results to differ
materially from those expected, estimated or projected in the forward-looking
statements. If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual results may
differ materially from those expected, estimated or projected. Such
forward-looking statements should therefore be construed in the light of such
factors. Neither Warpaint nor Brand Architekts, nor any of their respective
associates or directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed or implied
in any forward-looking statements in this announcement will actually occur.
You are cautioned not to place any reliance on these forward-looking
statements.
Other than in accordance with their legal or regulatory obligations, neither
Warpaint nor Brand Architekts is under any obligation, and Warpaint and Brand
Architekts expressly disclaim any intention or obligation, to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 pm (London time) on the 10(th) business day following the
commencement of the offer period and, if appropriate, by no later than 3.30 pm
(London time) on the 10(th) business day following the announcement in which
any securities exchange offeror is first identified. Relevant persons who deal
in the relevant securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position Disclosure must
instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain details of
the dealing concerned and of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule 8. A
Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no
later than 3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Publication on a website
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
and the documents required to be published by Rule 26 of the Takeover Code
will be made available, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, on Warpaint's website at
https://www.warpaintlondonplc.com/investors/Brand-Architekts-Group-plc
(https://url.avanan.click/v2/___https:/www.warpaintlondonplc.com/investors/Brand-Architekts-Group-plc___.YXAxZTpzaG9yZWNhcDphOm86ODQ0ZDYzOTY3ZDhhYzBmYzdkODJiM2NhZThmNzA1MjU6Njo3NDg1OmMzYjQ5YzAzNjFmNTgzMGVhMzU0OGM2ZjA4NjE3MmU1OTAxZmNiNTRhOWMwZjQ0YjQ3MTViOGMxODQ1NjQ0OTA6cDpUOk4)
and on Brand Architekts' website at https://www.brandarchitektsplc.com/
(https://url.avanan.click/v2/___https:/www.brandarchitektsplc.com/___.YXAxZTpzaG9yZWNhcDphOm86ODQ0ZDYzOTY3ZDhhYzBmYzdkODJiM2NhZThmNzA1MjU6NjpmZTc3OjY2ZjJlN2RlOGI3ZDA0MjM4MTBiM2VlNzJlZTI4Nzg5OTg4MDcwNTMzNzVhZjhiZGVhN2I1M2QzYjVhODVjMGU6cDpUOk4)
by no later than 12 noon (London time) on the Business Day following this
announcement. For the avoidance of doubt, neither the content of these
websites nor of any website accessible from hyperlinks set out in this
announcement is incorporated by reference or forms part of this announcement.
No profit forecasts, estimates or quantified financial benefits statements
No statement in this announcement is intended as a profit forecast, profit
estimate or quantified financial benefits statement for any period and no
statement in this announcement should be interpreted to mean that earnings or
earnings per share for Brand Architekts for the current or future financial
years would necessarily match or exceed the historical published earnings or
earnings per share for Brand Architekts.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, Brand Architekts
Shareholders, persons with information rights and participants in the Brand
Architekts Share Plans may request a hard copy of this announcement, free of
charge, by contacting Brand Architekts' registrars, Computershare Investor
Services PLC, during business hours on 03707 020 003 within the United Kingdom
or on +44 (0) 370 702 0003 from overseas or by submitting a request in writing
to Computershare Investor Services PLC, The Pavilions, Bridgwater Road,
Bristol BS13 8AE, United Kingdom, with an address to which the hard copy may
be sent. Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the applicable
international rate. For persons who receive a copy of this announcement in
electronic form or via a website notification, a hard copy of this
announcement will not be sent unless so requested. In accordance with Rule
30.3 of the Takeover Code, such persons may also request that all future
documents, announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain other
information provided by Brand Architekts Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Brand Architekts may be provided to Warpaint during the
offer period as required under Section 4 of Appendix 4 of the Takeover Code to
comply with Rule 2.11(c) of the Takeover Code.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of figures that precede them.
General
Warpaint reserves the right to elect to implement the Acquisition by way of a
Takeover Offer as an alternative to the Scheme (subject to the Panel's consent
and the terms of the Cooperation Agreement). In such event, save as provided
in the Takeover Code, the Acquisition will be implemented on substantially the
same terms, so far as applicable, as those which will apply to the Scheme,
subject to appropriate amendments to reflect, among other things, the change
in method of effecting the Acquisition (including, without limitation: (i) the
inclusion of an acceptance condition set at 90 per cent. of the Brand
Architekts Shares to which such Takeover Offer relates (or such other
percentage as Warpaint may, subject to the rules of the Takeover Code and with
the consent of the Panel, decide); and (ii) those required by, or deemed
appropriate by, Warpaint under applicable law).
In the event that the Acquisition is to be implemented by way of a Takeover
Offer, Brand Architekts Shares will be acquired pursuant to the Takeover Offer
fully paid and free from all liens, charges, equitable interests, encumbrances
and rights of pre-emption and any other interests of any nature whatsoever and
together with all rights attaching thereto including the right to receive and
retain all dividends and distributions declared, made or paid, or any other
return of capital (whether by way of reduction of share capital, repurchase,
redemption or otherwise) made, by reference to a record date after the
Effective Date.
If the Acquisition is effected by way of a Takeover Offer and such Takeover
Offer becomes or is declared unconditional and sufficient acceptances are
received, Warpaint intends to: (i) request that the London Stock Exchange
cancels admission of the Brand Architekts Shares to trading on AIM; and (ii)
exercise its rights (to the extent such rights are available) to apply the
provisions of Chapter 3 of Part 28 of the 2006 Act to acquire compulsorily the
remaining Brand Architekts Shares in respect of which the Takeover Offer has
not been accepted.
Investors should be aware that Warpaint may purchase Brand Architekts Shares
otherwise than under any Takeover Offer or the Scheme, including pursuant to
privately negotiated purchases.
Rule 2.9 of the Takeover Code
For the purposes of Rule 2.9 of the Takeover Code, Warpaint confirms that, as
at 4 December 2024, it had in issue 77,742,723 ordinary shares of 25 pence
each. The International Securities Identification Number ("ISIN") for these
shares is GB00BYMF3676.
For the purposes of Rule 2.9 of the Takeover Code, Brand Architekts confirms
that, as at 4 December 2024, it had in issue 27,943,180 ordinary shares of 5
pence each. The ISIN for these shares is GB0008667304.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
THIS ANNOUNCEMENT IS NOT A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND
BRAND ARCHITEKTS SHAREHOLDERS SHOULD NOT MAKE ANY INVESTMENT DECISION IN
RELATION TO THE NEW WARPAINT SHARES EXCEPT ON THE BASIS OF INFORMATION IN THE
SCHEME DOCUMENT WHICH IS PROPOSED TO BE PUBLISHED IN DUE COURSE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
5 December 2024
RECOMMENDED CASH ACQUISITION
of
Brand Architekts Group plc
by
Warpaint London plc
to be implemented by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
1 Introduction
The boards of directors of Warpaint and Brand Architekts are pleased to
announce that they have reached agreement on the terms and conditions of a
recommended cash offer to be made by Warpaint for the entire issued, and to be
issued, ordinary share capital of Brand Architekts.
It is intended that the Acquisition will be implemented by way of a
court‑sanctioned scheme of arrangement under Part 26 of the 2006 Act
(although Warpaint reserves the right to effect the Acquisition by way of a
Takeover Offer, subject to the consent of the Panel and the terms of the
Cooperation Agreement). The Conditions to the Acquisition are set out in full
in Appendix 1 to this announcement.
2 The Acquisition
Under the terms of the Acquisition, which will be subject to the Conditions
and further terms set out in Appendix 1 to this announcement and the full
terms and conditions to be set out in the Scheme Document, each Brand
Architekts Shareholder will be entitled to receive:
for each Brand Architekts Share: 48 pence in cash
The Acquisition values Brand Architekts' entire issued, and to be issued,
ordinary share capital at approximately £13.88 million on a fully diluted
basis.
The Offer Price per Brand Architekts Share represents a premium of
approximately:
· 100 per cent. to the Closing Price of 24 pence per Brand Architekts
Share on 4 December 2024 (being the last Business Day before the date of this
announcement);
· 85.42 per cent. to the average price of 25.89 pence per Brand
Architekts Share for the 3-month period ended 4 December 2024 (being the last
Business Day before the date of this announcement); and
· 95.78 per cent. to the average price of 24.52 pence per Brand
Architekts Share for the 12-month period ended 4 December 2024 (being the last
Business Day before the date of this announcement).
As an alternative to the Cash Offer, Eligible Brand Architekts Shareholders
will be entitled to elect to receive 0.0916 New Warpaint Shares for each Brand
Architekts Share they hold instead of the Cash Offer to which they would
otherwise be entitled. Based on Warpaint's share price of 524 pence on 4
December 2024 (being the last Business Day before the date of this
announcement), 0.0916 of a New Warpaint Share is equivalent to 48 pence per
Brand Architekts Share. Accordingly, and on the basis of the above, each of
the Cash Offer and the Alternative Share Offer values each Brand Architekts
Share at 48 pence as at 4 December 2024 (being the last Business Day before
the date of this announcement).
The Brand Architekts Shares will be acquired pursuant to the Acquisition fully
paid and free from all liens, charges, equities, encumbrances, rights of
pre‑emption and any other interests of any nature whatsoever and together
with all rights attaching thereto, including without limitation voting rights
and the right to receive and retain in full all dividends and other
distributions (if any) announced, declared, made or paid, or any other return
of capital (whether by way of reduction of share capital, repurchase,
redemption or otherwise) made, with a record date on or after the Effective
Date.
Brand Architekts does not intend to pay a dividend or make any other
distribution or return of capital or value between the date of this
announcement and the Acquisition becoming Effective. If, on or after the date
of this announcement and prior to the Acquisition becoming Effective, any
dividend and/or other distribution and/or other return of capital or value is
announced, declared, made or paid or becomes payable in respect of the Brand
Architekts Shares, Warpaint reserves the right to reduce the consideration
payable pursuant to the Cash Offer (and, as the case may be, the exchange
ratio in relation to the Alternative Share Offer) by an amount up to the
aggregate amount of such dividend and/or distribution and/or other return of
capital or value, in which case any reference in this announcement to the
consideration payable under the terms of the Acquisition will be deemed to be
a reference to the consideration as so reduced. Any exercise by Warpaint of
its rights referred to in this paragraph shall be the subject of an
announcement and, for the avoidance of doubt, shall not be regarded as
constituting any revision or variation of the terms of the Scheme or the
Acquisition. In such circumstances, Brand Architekts Shareholders would be
entitled to receive and retain any such dividend, distribution and/or other
return of capital or value.
3 ALTERNATIVE SHARE OFFER
Under the terms of the Alternative Share Offer and as an alternative to the
Cash Offer, Eligible Brand Architekts Shareholders (other than Restricted
Brand Architekts Shareholders) will be entitled to elect to receive 0.0916 New
Warpaint Shares for each Brand Architekts Share they hold instead of the Cash
Offer to which they would otherwise be entitled.
In deciding which of the Cash Offer or Alternative Share Offer to elect for,
the Brand Architekts Board believes that the Brand Architekts Shareholders
should take into account the key factors below:
· Warpaint's shares may not be a suitable investment for all Brand
Architekts Shareholders. The value of Warpaint's shares may go down as well as
up and Brand Architekts Shareholders may receive less than the current value
of the Alternative Share Offer should they elect for the Alternative Share
Offer and then decide to sell the shares in the future;
· the risk appetite, investment horizon, current asset allocation,
liquidity requirements, investment objectives and available capital of each
individual Brand Architekts Shareholder;
· the individual tax and financial circumstance of each individual
Brand Architekts Shareholder;
· the Brand Architekts Board cannot predict what short-term effect,
if any, the Warpaint Fundraising will have on the market price of the Warpaint
Shares;
· the Alternative Share Offer ratio has been calculated based on
Warpaint's share price of 524 pence on 4 December 2024 (being the last
Business Day before the date of this announcement) and the Brand Architekts
Board offers no view on the current price of Warpaint Shares relative to the
Warpaint Group's net asset value, nor by reference to other established
metrics for determining value;
· Warpaint Shares are admitted to trading on AIM. The AIM market is
designed primarily for emerging or smaller companies to which a higher
investment risk tends to be attached than to larger or more established
companies;
· Warpaint may fail to realise the anticipated benefits and synergies
expected from the Acquisition which could adversely affect the Warpaint
business, its financial condition and operating results, any of which may
impact the price of Warpaint Shares; and
· the Alternative Share Offer allows Brand Architekts Shareholders to
participate in the potential future value creation of the Enlarged Warpaint
Group which may ultimately deliver greater value than the Cash Offer (although
this cannot be guaranteed).
Brand Architekts Shareholders are encouraged to take into account these key
factors outlined above in deciding which of the Cash Offer or Alternative
Share Offer to elect for, and are strongly recommended to seek their own
independent financial, tax and legal advice.
Eligible Brand Architekts Shareholders will only be able to elect for the
Alternative Share Offer in relation to their entire holding of Brand
Architekts Shares and not part only.
Eligible Brand Architekts Shareholders who do not positively and validly elect
to receive the Alternative Share Offer, as well as Restricted Brand Architekts
Shareholders, will automatically receive the Cash Offer.
Elections under the Alternative Share Offer will not affect the entitlements
of those Brand Architekts Shareholders who do not make such elections.
If the issue of New Warpaint Shares to any person who is a Restricted Brand
Architekts Shareholder, or to any person who is reasonably believed to be a
Restricted Brand Architekts Shareholder, would or may infringe the laws of a
jurisdiction outside England and Wales or would or may require any
governmental or other consent or any registration, filing or other formality
which cannot be complied with, or compliance with which would be unduly
onerous, Warpaint may at its discretion determine that such Restricted Brand
Architekts Shareholder shall either (i) not have allotted or issued to him,
her or it New Warpaint Shares and that the New Warpaint Shares which would
otherwise have been attributable to such Restricted Brand Architekts
Shareholder under the terms of the Acquisition shall be sold in the market and
the cash proceeds of such sale be forwarded to such person or (ii) that the
New Warpaint Shares shall be issued to such Restricted Brand Architekts
Shareholder but shall be sold in the market on his, her or its behalf and the
cash proceeds of such sale forwarded to the relevant Restricted Brand
Architekts Shareholder (in each case after deduction of broking fees and other
sale costs and expenses).
Under the terms of the Acquisition, Brand Architekts Shareholders may receive
in aggregate up to 1,932,111 New Warpaint Shares in respect of shares
currently in issue in the capital of Brand Architekts (excluding any Brand
Architekts Shares that could have been elected to be received by Peter
Gyllenhammar on the basis he has already elected to receive the Cash Offer).
If Brand Architekts Shareholders elect to receive the full amount of 1,932,111
New Warpaint Shares and no Brand Architekts Shareholders receive the Cash
Offer (with the exception of Peter Gyllenhammar who has already elected to
receive the Cash Offer), immediately following completion of the Acquisition,
existing Brand Architekts Shareholders will represent approximately 2.42 per
cent. of the Enlarged Warpaint Group and Warpaint Shareholders will represent
approximately 97.58 per cent. of the Enlarged Warpaint Group. Applications
will be made to the London Stock Exchange for the New Warpaint Shares to be
admitted to trading on AIM.
The New Warpaint Shares will be issued credited as fully paid and will rank
pari passu in all respects with the Warpaint Shares in issue at the time the
New Warpaint Shares are issued pursuant to the Acquisition, including in
respect of the right to receive and retain in full all dividends and other
distributions (if any) announced, declared, made or paid or any other return
of capital (whether by reduction of share capital or share premium account or
otherwise) made, in each case, by reference to a record date falling on or
after the Effective Date. The holders of the Warpaint Shares and New Warpaint
Shares shall also each have the right to receive notices of general meetings
of Warpaint and to attend, speak and vote at them. Irrespective of the date on
which the Effective Date falls, Brand Architekts Shareholders who receive New
Warpaint Shares pursuant to the Scheme shall not be entitled to receive any
final dividend or interim dividend declared or paid by Warpaint by reference
to a record date falling prior to the Effective Date. The New Warpaint Shares
will be issued in registered form and will be capable of being held in both
certificated and uncertificated form.
The timetable for (i) the issuance of the New Warpaint Shares, (ii) the
crediting of CREST accounts of Eligible Brand Architekts Shareholders who have
validly elected for the Alternative Share Offer and who hold their Brand
Architekts Shares in uncertificated form, and (iii) the despatch of share
certificates in respect of New Warpaint Shares who have validly elected for
the Alternative Share Offer and who hold their Brand Architekts Shares in
certificated form, will be set out in the Scheme Document.
Fractions of New Warpaint Shares will not be allotted or issued
pursuant to the Acquisition, and entitlements of Scheme Shareholders will be
rounded down to the nearest whole number of New Warpaint Shares and all
fractions of New Warpaint Shares will be aggregated and sold in the market as
soon as practicable after the Effective Date. The net proceeds of such sale
(after deduction of broking fees and other sale costs and expenses, together
with any tax or foreign exchange conversion fees payable on the sale) will be
distributed in due proportions to Scheme Shareholders who would otherwise have
been entitled to such fractions (rounded down to the nearest penny), save that
individual entitlements to amounts of less than £10.00 will be retained for
the benefit of the Enlarged Warpaint Group.
Further details in relation to the Alternative Share Offer and which Brand
Architekts Shareholders are ineligible to participate will be contained in the
Scheme Document and the related Form of Election.
4 Background to and reasons for the Acquisition
Warpaint has a successful strategy of focusing on growing profitable sales of
its branded products globally, whilst increasing overall margins. This has
been achieved through increasing sales with Warpaint's existing retail
customers and winning new major retailers. The Warpaint Board believes that
there continues to be significant growth opportunities for Warpaint and
accordingly, the Warpaint Group remains focused on continuing to execute on
this organic growth strategy.
Having followed Brand Architekts for some time, as another company admitted to
trading on AIM operating in a similar sector, the Warpaint Board believes that
the Acquisition at this time is an exciting and relatively low risk
opportunity to further bolster Warpaint's growth opportunities.
Warpaint has a strong track record of successfully acquiring, integrating and
growing businesses with complementary brands, offerings and customers, with
the acquisitions of Retra Holdings Limited ("Retra") in 2017 and Marvin Leeds
Marketing Services, Inc. in 2018. Both acquisitions were earnings enhancing
and have contributed to the strong overall growth of the Warpaint business. In
particular, revenues and profits before tax from Retra grew by 55 per cent.
and 123 per cent. respectively between the years ended 31 December 2017 and 31
December 2023.
The Warpaint Board considers that Brand Architekts provides a similar
opportunity as its previous acquisitions, and that the Acquisition will
enhance Brand Architekts' proposition and profitability as part of a larger,
successful health, beauty and personal care business.
Warpaint believes that Brand Architekts has a number of high-quality health,
beauty and personal care brands with a well-established customer base which
complements Warpaint's existing customer relationships and its brand
portfolio. Warpaint believes the Acquisition will strengthen the Enlarged
Warpaint Group's customer proposition and facilitate cross-selling
opportunities by leveraging a wider brand offering and broader customer
relationships.
In addition, while Brand Architekts has grown its gross margins over recent
financial periods, it carries a high overhead cost base relative to the level
of gross profit generated by the business, in part as a result of being a
small company carrying the corporate and governance costs associated with a
public quotation. The Warpaint Board believes that the level of overheads
relative to the scale of the Brand Architekts Group is inefficient and has
impacted profitability. Warpaint believes that the Acquisition will provide
the opportunity to generate cost synergies and reduce overheads to a more
efficient level which should increase Brand Architekts' profitability.
Accordingly, the Warpaint Board expects the Acquisition to be earnings
enhancing to Warpaint in the year ending 31 December 2025.
5 Recommendation
The Brand Architekts Directors, who have been so advised by Singer Capital
Markets as to the financial terms of the Cash Offer and Alternative Share
Offer, consider the terms of each of the Cash Offer and Alternative Share
Offer to be fair and reasonable. In providing its advice to the Brand
Architekts Directors, Singer Capital Markets has taken into account the
commercial assessments of the Brand Architekts Directors. Singer Capital
Markets is providing independent financial advice to the Brand Architekts
Directors for the purposes of Rule 3 of the Takeover Code.
Accordingly, the Brand Architekts Directors intend to recommend unanimously
that Brand Architekts Shareholders vote in favour of the Scheme at the Court
Meeting and the Resolution to be proposed at the General Meeting (or, in the
event that the Acquisition is implemented by way of a Takeover Offer, to
accept or instruct the acceptance of the Takeover Offer), as the Brand
Architekts Directors who hold Brand Architekts Shares have irrevocably
undertaken to do in respect of their own beneficial holdings totalling
1,910,213 Brand Architekts Shares (representing approximately 6.84 per cent.
of the existing issued ordinary share capital of Brand Architekts as at 4
December 2024, being the last Business Day before the date of this
announcement). Further details of these undertakings are set out in
Appendix 3 to this announcement.
In deciding which of the Cash Offer and the Alternative Share Offer to elect
for, Brand Architekts Shareholders should consider their individual tax and
financial situation. Brand Architekts Shareholders should consider whether the
Alternative Share Offer is suitable in light of their own personal
circumstances and investment objectives, and are therefore strongly
recommended to seek their own independent financial, tax and legal advice and
to read in full this announcement (including the key factors set out in the
Alternative Share Offer paragraph below) and, when published, the Scheme
Document, before deciding whether to elect to receive the Alternative Share
Offer. The Brand Architekts Board will notify their intentions in respect of
their own beneficial holdings and their elections for either the Cash Offer or
Alternative Share Offer within the Scheme Document.
6 Background to and reasons for the recommendation
In August 2019, following the disposal of Brand Architekts' manufacturing
business and associated assets, Brand Architekts focused its strategy
exclusively on its owned brands, investing in organic growth and exploring
selective acquisitions to enhance profitability and scale. In line with this,
and alongside the launch of new project lines, Brand Architekts acquired
InnovaDerma plc in May 2022 to offer a wider range of higher-margin products
to its commercial customer base and increase the Brand Architekts Group's
international expansion effort.
Whilst significant progress has been made to deliver these strategic
priorities, trading conditions over the period have been challenging. Supply
and cost headwinds through the pandemic have been coupled with demand
challenges from the cost-of-living crisis, particularly in self-tan. These
factors have led to recent successive years of underlying operating losses.
Accordingly, Brand Architekts has prioritised reducing losses, margin
improvement and returning the business to profitability.
The immediate priorities for Brand Architekts are to drive brand awareness of
Skinny Tan and Super Facialist, with an expected year-on-year increase in
digital awareness and acquisition campaigns, with more investment in TikTok
and influencers. Historically Brand Architekts has been successful in securing
new distribution, but maintaining listings requires necessary advertising and
promotional spend to generate the appropriate return on sales.
The Brand Architekts Directors continue to be confident in the Brand
Architekts Group's strategic and financial aims, and in building the required
foundations to enable the Brand Architekts Group to return to profitability
and achieve its medium and long-term goals. However, the Brand Architekts
Directors are mindful that trading conditions remain challenging and that the
acceleration of the strategic aims of the Brand Architekts Group requires
investment to further drive brand awareness and there are therefore risks to
the delivery of the strategy in the short to medium term.
The Brand Architekts Board recognises that the market for Brand Architekts
Shares is relatively illiquid, making it challenging for Brand Architekts
Shareholders to monetise their holdings should they so wish. The Acquisition
provides Brand Architekts Shareholders the opportunity for an immediate,
certain and attractive realisation of cash.
The Brand Architekts Board believes that the Acquisition will provide Brand
Architekts Shareholders with an opportunity to receive an immediate and
certain value per Brand Architekts Share, in cash, at a significant premium
(of 100 per cent. to the closing price of a Brand Architekts Share on 4
December 2024, being the last Business Day before the date of this
announcement) that may not otherwise be available and would, in any event, be
subject to the successful execution of Brand Architekts' strategy and the
realisation of its longer-term growth prospects.
The Brand Architekts Board notes that Peter Gyllenhammar, Brand Architekts'
largest shareholder with an interest in approximately 24.51 per cent. of the
existing issued ordinary share capital of Brand Architekts as at 4 December
2024, being the last Business Day before the date of this announcement), is
supportive of the Acquisition and has given an irrevocable undertaking to
Warpaint to vote in favour of the Scheme.
In addition to the financial terms of the Acquisition (including the terms of
each of the Cash Offer and Alternative Share Offer, respectively) in its
evaluation of Warpaint as suitable owners of Brand Architekts from the
perspective of all stakeholders, the Brand Architekts Directors have also
taken into account Warpaint's intentions for the business, management and
employees and other stakeholders of Brand Architekts, as set out in paragraph
10 below. In particular, the Brand Architekts Directors note that Warpaint has
confirmed that it will seek to continue with the growth plan of the UK
business and the importance placed by Warpaint on the existing employees and
other stakeholders of Brand Architekts.
The Brand Architekts Board acknowledges the strategic rationale of combining
Warpaint and Brand Architekts and notes Warpaint's belief that the Acquisition
will enhance Brand Architekts' proposition and profitability as part of a
larger, successful health, beauty and personal care business.
It is with regret that the Brand Architekts Directors note the potential for
some headcount reductions and that some roles may be reduced in scope or
involve redeployment, following a full review expected to be undertaken by
Warpaint. The Brand Architekts Directors welcome the assurance that Warpaint
expects to develop a full understanding of exactly the roles and tasks
undertaken by each employee as part of its review of Brand Architekts'
operations and before determining any headcount reductions. Brand Architekts
believes that the Enlarged Warpaint Group will provide ongoing Brand
Architekts employees with opportunities to continue their careers as part of a
larger business.
The Brand Architekts Directors recognise that combining the head offices is a
logical step in integrating the businesses, with Brand Architekts' main
business operations being within a 10 mile radius of Warpaint's main corporate
office. At an appropriate time following the Meetings, the Brand Architekts
Directors expect to give notice to terminate the lease on the head office so
that it terminates in July 2025.
The Brand Architekts Directors are reassured that Warpaint does not intend to
make any changes to the agreed employer contributions into Brand Architekts'
existing defined benefit and defined contribution pension schemes or the level
of benefits for existing members, or redeploy any of Brand Architekts' fixed
assets outside its head office. The Brand Architekts Directors further welcome
the statement that Warpaint intends to continue with product development for
the Brand Architekts business.
Consequently, the Brand Architekts Directors believe that the Acquisition
represents the best opportunity for Brand Architekts to accelerate its growth
strategy for the benefit of all stakeholders.
After careful consideration of all relevant factors, the Brand Architekts
Directors have concluded that the terms of each of the Cash Offer and
Alternative Share Offer are in the best interests of Brand Architekts and the
Brand Architekts Shareholders as a whole. As such, the Brand Architekts
Directors unanimously intend to recommend that Brand Architekts Shareholders
vote in favour of the Acquisition.
7 Information relating to Warpaint AND CURRENT TRADING
Information on Warpaint
Warpaint is a specialist supplier of colour cosmetics and the owner of the W7
and Technic brands. W7 is sold in the United Kingdom primarily to major
retailers and internationally to local distributors or retail chains. The
Technic brand is sold in the United Kingdom and continental Europe with a
focus on the gifting market, principally for high street retailers and
supermarkets. In addition, Warpaint also supplies cosmetics under its other
brand names of Man'stuff, Body Collection and Chit Chat, each targeting a
different demographic. The Warpaint Shares were admitted to trading on the
London Stock Exchange's AIM market in 2016 and to the United States' OTCQX in
May 2024.
Warpaint current trading
On 17 September 2024, Warpaint announced with its results for the six months
ended 30 June 2024 that positive business momentum had continued post period
end. Since then, the Warpaint Group has seen continued strong momentum and the
Warpaint Board expects the results for the year ended 31 December 2024 to be
in line with its expectations.
Trading in the US has been particularly strong in the second half, benefitting
from an initial order from Walmart for both W7 and Chit Chat products.
Warpaint now expects to report US revenue growth of around 20 per cent. for
the year (in US dollar terms) at a significantly higher margin to that
achieved in 2023, following the reduced focus on deep discounters.
Constructive talks are ongoing with Walmart regarding the supply of all year
round and gifting ranges for 2025.
The Warpaint Group's gross margin for 2024 as a whole is expected to be
comfortably above the level achieved last year (2023: 39.9 per cent.).
Looking forward to 2025, in the UK, Superdrug is expected to roll out W7
colour cosmetics into a significant number of new stores, and is in talks to
roll out accessories into several hundred stores. In Tesco, confirmation of a
150-store expansion of the Group's W7 impulse offering during 2025 has been
received. Additionally, Boots has agreed to take a number of gifting products
for the first time for Christmas 2025, which will be stocked in several
hundred stores.
After a successful launch of W7 product into Etos in the Netherlands at the
end of 2023, Warpaint has received confirmation of an expansion of the product
assortment in all Etos stores, and the roll out of a 'back wall' fixture with
an enhanced product range is now taking place.
Warpaint is currently in talks with other large new retailers in Europe, the
US and the UK with a view to stock the Warpaint Group's products.
8 Information relating to Brand Architekts
Brand Architekts is a beauty brand specialist which offers a portfolio of
problem-solving challenger beauty brands, sold throughout the UK and
internationally. Brand Architekts' focus is on brands and products that
engender high levels of consumer loyalty and reflect the focus on
high-performance problem-solving solution-led brands for everyday beauty.
Brand Architekts' brand portfolio encompasses female skincare, self-tan and
male grooming. Brands (including Super Facialist, Skinny Tan and Dirty Works)
are available on the high street in leading pharmacy and drugstore chains; in
national grocery stores; on the platforms of global e-tailers; and through
ecommerce websites.
Brand Architekts announced its full year results for the year ended 30 June
2024 on 21 October 2024 and has since posted its Annual Report and Accounts to
Brand Architekts Shareholders.
For its financial year ended 30 June 2024 Brand Architekts reported sales of
£17 million (2023: £20.1 million), gross profit margins of 41.2 per cent.
(2023: 39.7 per cent.) and an underlying operating loss of £0.4 million
(2023: loss of £1.2 million). As at 30 June 2024 the Brand Architekts Group
reported cash balances of £7.0 million (2023: £8.2 million).
Trading for the current financial year remains in line with Brand Architekts
management's expectations.
9 Irrevocable undertakings
In total, including irrevocable undertakings from the Brand Architekts
Directors, Warpaint has received irrevocable undertakings to vote in favour of
the resolutions relating to the Scheme and the Acquisition at the Meetings (or
in the event that the Acquisition is implemented by a Takeover Offer, to
accept, or procure or (as the case may be) instruct, acceptance of such
Takeover Offer), in respect of, in aggregate, 8,760,470 Brand Architekts
Shares (representing approximately 31.35 per cent. of the existing issued
ordinary share capital of Brand Architekts as at 4 December 2024, being the
last Business Day before the date of this announcement).
These comprise of the following irrevocable undertakings:
· Warpaint has received irrevocable undertakings from the Brand
Architekts Directors who hold Brand Architekts Shares to vote (or, where
applicable, instruct voting) in favour of the resolutions relating to the
Scheme and the Acquisition at the Meetings (or in the event that the
Acquisition is implemented by a Takeover Offer, to accept or instruct the
acceptance of such Takeover Offer) in respect of, in aggregate, 1,910,213
Brand Architekts Shares (representing approximately 6.84 per cent. of the
existing issued ordinary share capital of Brand Architekts as at 4 December
2024, being the last Business Day before the date of this announcement). The
undertakings from the Brand Architekts Directors will remain binding in the
event that a higher competing offer for Brand Architekts is made.
· Warpaint has received an irrevocable undertaking from Brand
Architekts' largest shareholder, Peter Gyllenhammar, to vote (or, where
applicable, procure voting) in favour of the resolutions relating to the
Scheme and the Acquisition at the Meetings (or in the event that the
Acquisition is implemented by a Takeover Offer, to accept or procure
acceptance of such Takeover Offer) in respect of 6,850,257 Brand Architekts
Shares (representing approximately 24.51 per cent. of the existing issued
ordinary share capital of Brand Architekts as at 4 December 2024, being the
last Business Day before the date of this announcement). The undertaking from
Peter Gyllenhammar will remain binding in the event that a higher competing
offer for Brand Architekts is made. Peter Gyllenhammar has elected to receive
the Cash Offer for his Brand Architekts Shares.
Further details of these irrevocable undertakings (including the circumstances
in which they cease to be binding) are set out in Appendix 3 to this
announcement.
10 STRATEGIC PLANS FOR BRAND ARCHITEKTS, ITS Directors, management, employees, pensions, locations AND OTHER MATTERS
Strategic plans for Brand Architekts
Warpaint believes that the Acquisition provides the opportunity to accelerate
revenue growth by cross selling the Enlarged Warpaint Group's brands across a
broader customer base. Warpaint intends to apply its extensive experience and
existing relationships within the cosmetic sector to expand and drive market
penetration of Brand Architekts' key brands.
Additionally, Warpaint believes there is a significant opportunity to reduce
Brand Architekts' overheads and improve efficiency to increase profitability.
It anticipates improving efficiency and reducing overheads over time in a
range of areas, including through:
· leveraging a larger, optimised supplier base, combined with
Warpaint's local sourcing and quality assurance functions, which Warpaint
expects will reduce the production and operating costs of the Brand Architekts
product range;
· rationalising the Enlarged Warpaint Group's wider business supplier
base, such as IT services;
· making extensive costs savings by bringing Brand Architekts'
logistics activities, which are currently handled by a third party, within
Warpaint's own internal logistics operations;
· removing duplicated public company and associated governance costs;
· consolidating Brand Architekts' business operations (currently
based in Teddington) into Warpaint's own site in Iver, which is within a 10
miles radius of Brand Architekts' main business operations;
· reviewing Brand Architekts' organisation structure and optimising
the allocation and level of employee resources across the differing business
areas; and
· improving working capital efficiency within the Brand Architekts
product range.
Following the Acquisition becoming Effective, Warpaint intends to partner with
Brand Architekts' management team to undertake a full review of Brand
Architekts' operations and proposition to consider how to most effectively
implement the opportunities for increasing revenue generation and reducing
Brand Architekts overheads as set out above. Warpaint expects to undertake and
complete this review within approximately six months from the Effective Date.
Board, management and employees
Warpaint places great importance on the skills and experience of Brand
Architekts' employees who have contributed to the Brand Architekts business.
Warpaint notes that Brand Architekts operates with only 48 employees and that
Brand Architekts has different roles, reporting lines and responsibilities to
the Warpaint organisational structure. Therefore, Warpaint's review of Brand
Architekts' operations is expected to encompass developing a full
understanding of exactly the roles and tasks undertaken by each employee to
determine the efficiencies which can be generated. This review may result in
some headcount reduction or redeployment, and, if there is any such reduction,
the level might be material when considered and judged on a relative basis
against Brand Architekts' small employee base of only 48 people. Once Brand
Architekts ceases to be a quoted company, some central management, corporate
and support functions, including PLC-related functions, may be reduced in
scope, which will form an important part of this employee review.
Any headcount reduction will be subject to applicable employee information and
consultation requirement, and any reduction in headcount could arise from
natural attrition as employees leave the Enlarged Warpaint Group. It is
expected that, on the Effective Date, each non-executive Brand Architekts
Director, including the non-executive chairman, will resign with immediate
effect.
Warpaint confirms that, following the Effective Date, the existing statutory
and contractual employment and pension rights will be fully safeguarded for
all employees of the Brand Architekts Group in accordance with applicable
laws.
Warpaint notes that, outside of board members, no headcount reduction resulted
from the acquisitions of Retra in 2017 and Marvin Leeds Marketing Services,
Inc. in 2018. When Warpaint acquired Retra in 2017 it had 56 employees, and
having successfully generated strong growth in Retra's brand portfolio, Retra
currently employs 66 staff members.
Pension schemes
Warpaint does not intend to make any changes, unless required to do so by
applicable law, to the agreed employer contributions into Brand Architekts'
existing defined benefit and defined contribution pension schemes (including
with regard to current arrangements for the funding of any scheme deficit in
the defined benefit pension scheme), the level of benefits for existing
members or the admission of new members to such pension schemes following the
Effective Date. Warpaint notes the Brand Architekts Pension Scheme was closed
to accrual in 2015.
Places of business, headquarters, fixed assets and research and development
Brand Architekts' headquarters are currently located in Teddington, within a
10 mile radius of Warpaint's main corporate office. Brand Architekts' current
lease on its headquarters can be terminated in July 2025. Warpaint intends to
procure that Brand Architekts terminates that lease and intends to consolidate
Brand Architekts' business operations into its own existing headquarters in
Iver, Buckinghamshire. Other than this change, Warpaint does not currently
intend to undertake any other redeployment of Brand Architekts' fixed assets.
Warpaint intends to continue with product development (research and
development) for the Brand Architekts business including ongoing improvement
to existing Brand Architekts products as well as the development of new
products.
Trading facilities
Brand Architekts is currently admitted to trading on AIM. As set out in
paragraph 17 below, an application will be made to the London Stock Exchange
for the cancellation of the admission to trading of Brand Architekts Shares on
AIM shortly following the Effective Date. It is also intended that Brand
Architekts will be re-registered as a private limited company and for this to
take effect as soon as practicable following the Effective Date.
No post-offer undertakings
No statement in this paragraph 10 constitutes a post-offer undertaking for the
purposes of Rule 19.5 of the Code.
11 Financing of the Acquisition
Warpaint intends to finance the Cash Consideration from its own cash
resources. These cash resources are initially being provided to Warpaint by
way of loans from two of Warpaint's directors, Samuel Bazini and Eoin Macleod
(the Directors' Loans). The funds from the Directors' Loans have been placed
in escrow.
Warpaint intends to repay the Directors' Loans from the proceeds of the
Warpaint Fundraising which is being launched by Warpaint shortly after this
announcement by way of a separate announcement.
Shore Capital, in its capacity as financial adviser to Warpaint, is satisfied
that sufficient resources are available to Warpaint to satisfy in full the
Cash Consideration payable to Brand Architekts Shareholders under the terms of
the Acquisition.
12 AIM Rule 13
The Warpaint Board considered various alternative ways to obtain the financing
set out in paragraph 11. The cost of this short term funding was significant
and accordingly Sam Bazini (SB) and Eoin Macleod (EM) offered to provide the
Directors' Loans at no cost to Warpaint and on the terms set out below. The
Warpaint Board (excluding SB and EM) have considered this offer and resolved
to accept it as it was comfortably the most cost-effective and practical way
to obtain this finance. SB and EM have requested Warpaint to donate the
interest that they would have earned from the Directors' Loans to UK
children's charities, which the Warpaint Board is happy to do.
As SB and EM are directors of Warpaint they are considered to be related
parties of Warpaint and therefore the Directors' Loans for the purposes of
financing the Acquisition are deemed to be related party transactions pursuant
to Rule 13 of the AIM Rules. The Warpaint Board (excluding SB and EM)
consider, having consulted with Warpaint's Nominated Adviser, Shore Capital,
that the terms of the Directors' Loans are fair and reasonable insofar as the
Warpaint Shareholders are concerned.
The Directors' Loans consist of:
· a loan from SB of £8,500,000 to Warpaint; and
· a loan from EM of £5,500,000 to Warpaint.
The Directors' Loans are each on the same terms and contain the following
terms:
· interest is payable by Warpaint on the full amount of each
Directors Loan at the Bank of England's base rate plus 0.5 per cent. until the
date on which the relevant loan is repaid in full;
· each Directors Loan is repayable (a) by Warpaint on receipt of the
cash proceeds from the Warpaint Fundraising, or (b) if the Warpaint
Fundraising does not raise the full amount anticipated by Warpaint, by
Warpaint on receipt of the cash proceeds from the Warpaint Fundraising with
the remainder being paid as and when Warpaint's cash flow and working capital
requirements permit;
· Warpaint will cover all costs incurred by SB and EM in providing
the Directors' Loans to Warpaint;
· there are no conditions, no provisions relating to events of
default and no security is granted by Warpaint; and
· there is no fixed term for the Directors' Loans and no deadline by
which Warpaint is required to repay the Directors' Loans.
13 Offer‑related arrangements
Confidentiality Agreement
Brand Architekts and Warpaint entered into a confidentiality agreement on 10
October 2024 pursuant to which both parties have undertaken to keep certain
information relating to each other confidential and not to disclose such
information to third parties except to certain permitted disclosees for the
purposes of evaluating the Acquisition or if required by applicable laws or
regulations.
Cooperation Agreement
Pursuant to a cooperation agreement dated 5 December 2024: (a) Warpaint has
agreed to provide Brand Architekts with certain information for the purposes
of the Scheme Document and to otherwise assist with the preparation of the
Scheme Document; (b) Warpaint and Brand Architekts have agreed certain
arrangements in respect of the Brand Architekts Share Plans; and (c) the
parties have agreed to certain provisions if the Acquisition should switch to
a Takeover Offer.
The Cooperation Agreement terminates, amongst other things, if: (a) agreed in
writing between Warpaint and Brand Architekts; (b) prior to the Long Stop
Date, any Condition becomes incapable of satisfaction; (c) the Brand
Architekts Directors withdraw their recommendation of the Acquisition or if
the Brand Architekts Directors recommend a competing proposal by a third
party; (d) the Acquisition is withdrawn, terminates or lapses; or (e) the
Scheme does not become Effective by the Long Stop Date.
14 Disclosure of interests in Brand Architekts securities
Except for the irrevocable undertakings referred to in paragraph 9 above and
Appendix 3, as at 4 December 2024 (being the last Business Day before the
date of this announcement) neither Warpaint, nor any of its directors, nor, so
far as Warpaint is aware, any person treated as acting in concert (within the
meaning of the Takeover Code) with it for the purposes of the Acquisition (i)
had any interest in or right to subscribe for any relevant securities of Brand
Architekts, or (ii) had any short positions in respect of relevant securities
of Brand Architekts (whether conditional or absolute and whether in the money
or otherwise), including any short position under a derivative, any agreement
to sell or any delivery obligation or right to require another person to
purchase or take delivery, or (iii) has borrowed or lent any relevant
securities of Brand Architekts (including, for these purposes, any financial
collateral arrangements of the kind referred to in Note 3 on Rule 4.6 of the
Takeover Code) save for any borrowed shares which have been either on-lent or
resold, or (iv) is a party to any dealing arrangement of the kind referred to
in Note 11 on the definition of acting in concert in the Takeover Code.
It has not been practicable for Warpaint to make enquiries of all of its
concert parties in advance of the release of this announcement. Therefore, if
Warpaint becomes aware, following the making of such enquiries, that any of
its concert parties have any additional interests in the relevant securities
of Brand Architekts, all relevant details in respect of Warpaint's concert
parties will be included in Warpaint's Opening Position Disclosure in
accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Takeover Code
which must be made at or before 12 noon (London time) on 19 December 2024.
15 Brand Architekts Share PlanS
Participants in the Brand Architekts Share Plans will be contacted regarding
the effect of the Acquisition on their options and awards under the Brand
Architekts Share Plans. Details of the impact of the Scheme on the Brand
Architekts Share Plans and the proposals will be set out in the Scheme
Document.
16 Scheme process
The Acquisition is subject to the Conditions and certain further terms
referred to in Appendix 1 to this announcement and to the full terms and
conditions to be set out in the Scheme Document, and will only become
Effective if, among other things, the following events occur on or before the
Long Stop Date (or such later date, if any, (a) as Warpaint and Brand
Architekts may agree, or (b) in a competitive situation as may be specified by
Warpaint with the consent of the Panel, and in each case that (if so required)
the Court may allow):
· a resolution to approve the Scheme is passed by a majority in
number of Brand Architekts Shareholders present and voting (and entitled to
vote) at the Court Meeting, either in person or by proxy, representing 75 per
cent. or more in value of the Scheme Shares held by those Brand Architekts
Shareholders;
· the Resolution necessary to implement the Scheme is passed by the
requisite majority of Brand Architekts Shareholders at the General Meeting;
· following the Court Meeting and General Meeting and satisfaction
and/or waiver (where applicable) of the other Conditions, the Scheme is
sanctioned by the Court (without modification, or with modification on terms
agreed by Warpaint and Brand Architekts);
· following such sanction, a copy of the Scheme Court Order is
delivered to the Registrar of Companies; and
· the London Stock Exchange having acknowledged to Warpaint that the
application for the admission of the New Warpaint Shares to trading on AIM has
been approved and that the New Warpaint Shares will be admitted to trading on
AIM.
The Conditions in paragraphs 1 and 2 of Appendix 1 to this announcement
provide that the Scheme will lapse if:
· the Court Meeting and the General Meeting are not held by the
22(nd) day after the expected date of the Court Meeting and the General
Meeting to be set out in the Scheme Document in due course (or such later
date, if any, (a) as Warpaint and Brand Architekts may agree or (b) (in a
competitive situation) as may be specified by Warpaint with the consent of the
Panel, and in each case that (if so required) the Court may allow);
· the Sanction Hearing to approve the Scheme is not held by the
22(nd) day after the expected date of the Sanction Hearing to be set out in
the Scheme Document in due course (or such later date as Warpaint may
determine with the agreement of Brand Architekts or with the consent of the
Panel and the approval of the Court, if such approval is required); or
· the Scheme does not become Effective by 11.59 p.m. on the Long
Stop Date (or such later date as Warpaint may determine with the agreement of
Brand Architekts or with the consent of the Panel and the approval of the
Court, if such approval is required).
If any of the Conditions in paragraphs 1, 2.1(ii), 2.2(ii), 2.3(ii) of Part A
of Appendix 1 to this announcement is not capable of being satisfied by the
date specified therein, Warpaint shall make an announcement through a
Regulatory Information Service as soon as practicable and, in any event, by
not later than 8.00 a.m. on the Business Day following the date so specified,
stating whether Warpaint has invoked that Condition, (where applicable) waived
that Condition or, with the agreement of Brand Architekts, specified a new
date by which that Condition must be satisfied.
Once the necessary approvals from Brand Architekts Shareholders have been
obtained and the other Conditions have been satisfied or (where applicable)
waived and the Scheme has been approved by the Court, the Scheme will become
Effective upon delivery of a copy of the Court Order to the Registrar of
Companies. Subject to the satisfaction of the Conditions, the Scheme is
expected to become Effective during the first quarter of 2025.
Upon the Scheme becoming Effective: (i) it will be binding on all Brand
Architekts Shareholders, irrespective of whether or not they attended or voted
at the Court Meeting or the General Meeting (and if they attended and voted,
whether or not they voted in favour); and (ii) share certificates in respect
of Brand Architekts Shares will cease to be valid and entitlements to Brand
Architekts Shares held within CREST will be cancelled. In accordance with the
applicable provisions of the Takeover Code, the Cash Consideration for the
transfer of the Scheme Shares to Warpaint will be despatched and the New
Warpaint Shares will be issued no later than 14 days after the Effective Date.
Any Brand Architekts Shares issued before the Scheme Record Time will be
subject to the terms of the Scheme. The Resolution to be proposed at the
General Meeting will, amongst other matters, provide that the Articles be
amended to incorporate provisions requiring any Brand Architekts Shares issued
after the Scheme Record Time (including in satisfaction of any options
exercised under the Brand Architekts Share Plans, and other than to Warpaint
and/or their nominees) to be automatically transferred to Warpaint on the same
terms as the Acquisition (other than terms as to timings and formalities). The
provisions of the Articles (as amended) will avoid any person (other than
Warpaint and their nominees) holding shares in the capital of Brand Architekts
after the Effective Date.
Further details of the Scheme, including expected times and dates for each of
the Court Meeting, the General Meeting and the Sanction Hearing, together with
notices of the Court Meeting and the General Meeting, will be set out in the
Scheme Document. It is expected that the Scheme Document, the Forms of Proxy
and the Form of Election accompanying the Scheme Document will be published as
soon as practicable and in any event within 28 days of this announcement (or
such later date as Warpaint and Brand Architekts may, with the consent of the
Panel, agree and, if required, the Court may approve).
17 Delisting, and cancellation of trading and re‑registration of Brand Architekts
Prior to the Acquisition becoming Effective, Brand Architekts will make an
application to the London Stock Exchange for the cancellation of the admission
to trading of Brand Architekts Shares on AIM, to take effect shortly after the
Effective Date.
The last day of dealings in the Brand Architekts Shares on AIM is expected to
be the Business Day immediately prior to the Effective Date and no transfers
will be registered after 6.00 p.m. (London time) on that date.
On the Effective Date, all of the Brand Architekts Shares will become owned by
Warpaint and the share certificates in respect of those Brand Architekts
Shares will cease to be valid and of value and should be destroyed. In
addition, entitlements to Brand Architekts Shares held within CREST will be
cancelled.
It is intended that Brand Architekts will be re-registered as a private
limited company as soon as practicable on or following the Effective Date.
18 Documents
Copies of the following documents will be available promptly on Warpaint's and
Brand Architekts' websites, subject to certain restrictions relating to
persons resident in Restricted Jurisdictions, at
https://www.warpaintlondonplc.com/investors/Brand-Architekts-Group-plc
(https://url.avanan.click/v2/___https:/www.warpaintlondonplc.com/investors/Brand-Architekts-Group-plc___.YXAxZTpzaG9yZWNhcDphOm86ODQ0ZDYzOTY3ZDhhYzBmYzdkODJiM2NhZThmNzA1MjU6Njo3NDg1OmMzYjQ5YzAzNjFmNTgzMGVhMzU0OGM2ZjA4NjE3MmU1OTAxZmNiNTRhOWMwZjQ0YjQ3MTViOGMxODQ1NjQ0OTA6cDpUOk4)
and https://www.brandarchitektsplc.com/
(https://url.avanan.click/v2/___https:/www.brandarchitektsplc.com/___.YXAxZTpzaG9yZWNhcDphOm86ODQ0ZDYzOTY3ZDhhYzBmYzdkODJiM2NhZThmNzA1MjU6NjpmZTc3OjY2ZjJlN2RlOGI3ZDA0MjM4MTBiM2VlNzJlZTI4Nzg5OTg4MDcwNTMzNzVhZjhiZGVhN2I1M2QzYjVhODVjMGU6cDpUOk4)
respectively and in any event by no later than noon on the Business Day
following this announcement:
· this announcement;
· the Confidentiality Agreement;
· the Cooperation Agreement;
· the Directors' Loans;
· the presentation for the Placing;
· the irrevocable undertakings referred to in paragraph 9 above and
summarised in Appendix 3 to this announcement; and
· the consents from financial advisers to being named in this
announcement.
Neither the content of any website referred to in this announcement, nor any
website accessible from hyperlinks set out in this announcement, is
incorporated into or forms part of this announcement.
19 General
Warpaint reserves the right to elect (with the consent of the Panel, and
subject to the terms of the Cooperation Agreement) to implement the
acquisition of the Brand Architekts Shares by way of a Takeover Offer as an
alternative to the Scheme. In such event, the Takeover Offer will be
implemented on substantially the same terms, so far as is applicable, as those
which would apply to the Scheme.
If the Acquisition is effected by way of a Takeover Offer, and such a Takeover
Offer becomes or is declared unconditional in all respects and sufficient
acceptances are received, Warpaint intends to: (i) make a request to the
London Stock Exchange to cancel the admission to trading of Brand Architekts
Shares on AIM; and (ii) exercise its rights to apply the provisions of Chapter
3 of Part 28 of the 2006 Act so as to acquire compulsorily the remaining Brand
Architekts Shares in respect of which the Takeover Offer has not been
accepted.
Investors should be aware that Warpaint may purchase Brand Architekts Shares
otherwise than under the Scheme or any Takeover Offer, including pursuant to
privately negotiated purchases.
The Acquisition will be on the terms and subject to the conditions set out
herein and in Appendix 1, and to be set out in the Scheme Document. The bases
and sources for certain financial information contained in this announcement
are set out in Appendix 2. Details of irrevocable undertakings received by
Warpaint are set out in Appendix 3. Certain definitions and terms used in
this announcement are set out in Appendix 4. The formal Scheme Document will
be sent to Brand Architekts Shareholders within 28 days of this announcement
(or on such later date as may be agreed between Warpaint and Brand Architekts,
with the consent of the Panel).
Shore Capital and Singer Capital Markets have each given and not withdrawn
their consent to the publication of this announcement with the inclusion
herein of the references to their names in the form and context in which they
appear.
This announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities.
Enquiries
Warpaint c/o IFC Advisory
Sam Bazini (Chief Executive Officer)
Eoin Macleod (Managing Director)
Neil Rodol (Chief Financial Officer)
Shore Capital (Financial Adviser, Nominated Adviser and Broker to Warpaint) +44 20 7408 4090
Patrick Castle (Corporate Advisory)
Daniel Bush (Corporate Advisory)
Lucy Bowden (Corporate Advisory)
Fiona Conroy (Corporate Broking)
IFC Advisory (Financial PR & IR) +44 020 3934 6630
Tim Metcalfe, Graham Herring, Florence Chandler
Brand Architekts +44 20 3166 2840
Quentin Higham (Chief Executive Officer)
Geoff Ellis (Chief Financial Officer)
Singer Capital Markets (Rule 3 Adviser, Nominated Adviser and Broker to Brand +44 20 7496 3000
Architekts)
Jen Boorer (Investment Banking)
James Todd (Investment Banking)
Jalini Kalaravy (Investment Banking)
Fladgate LLP is acting as legal adviser to Warpaint in connection with the
Acquisition.
Addleshaw Goddard LLP is acting as legal adviser to Brand Architekts in
connection with the Acquisition.
Disclaimers
Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited
(either individually or collectively "Shore Capital"), which are authorised
and regulated by the Financial Conduct Authority in the United Kingdom, are
acting exclusively for Warpaint and no one else in connection with the matters
set out to in this announcement and will not regard any other person as their
client in relation to such matters and will not be responsible to anyone other
than Warpaint for providing the protections afforded to clients of Shore
Capital nor for providing advice in relation to the contents of, or any matter
referred to in, this announcement or any transaction or arrangement referred
to herein. Neither Shore Capital and Corporate Limited nor Shore Capital
Stockbrokers Limited, nor any of their subsidiaries or affiliates owes or
accepts any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Shore Capital in connection with this
announcement, any statement contained herein, any transaction or arrangement
referred to herein, or otherwise.
Singer Capital Markets Advisory LLP ("Singer Capital Markets"), which is
authorised and regulated in the United Kingdom by the FCA, is acting as
financial adviser and nominated adviser exclusively to Brand Architekts and
no-one else in connection with the matters described in this announcement and
will not be responsible to anyone other than Brand Architekts for providing
the protections afforded to clients of Singer Capital Markets nor for
providing advice in connection with the subject matter of this announcement.
Neither Singer Capital Markets nor any of its affiliates (nor any of their
respective directors, partners, officers, employees or agents) owes or accepts
any duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Singer Capital Markets in connection with this announcement,
any statement contained herein, the Takeover Offer or otherwise. No
representation or warranty, express or implied, is made by Singer Capital
Markets as to the contents of this announcement.
Further information
This announcement is for information purposes only and is not intended to, and
does not, constitute, or form part of, an offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of, any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of Brand
Architekts in any jurisdiction in contravention of applicable law. The
Acquisition will be implemented solely pursuant to the terms of the Scheme
Document (or, if the Acquisition is implemented by way of a Takeover Offer,
the offer document), which will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the Acquisition.
Any vote in respect of the Scheme or other response in relation to the
Acquisition should be made only on the basis of the information contained in
the Scheme Document (or, if the Acquisition is implemented by way of a
Takeover Offer, the offer document).
This announcement does not constitute a prospectus, prospectus equivalent
document or exempted document.
The statements contained in this announcement are made as at the date of this
announcement, unless some other time is specified in relation to them, and
publication of this announcement shall not give rise to any implication that
there has been no change in the facts set forth in this announcement since
such date.
If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.
Overseas Shareholders
The release, publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and therefore any
persons who are subject to the law of any jurisdiction other than the UK
should inform themselves of, and observe, any applicable legal or regulatory
requirements. Any failure to comply with such requirements may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person. This announcement has been prepared in accordance
with and for the purpose of complying with English law, the Takeover Code, the
AIM Rules, the Market Abuse Regulation and the Disclosure Guidance and
Transparency Rules and information disclosed may not be the same as that which
would have been prepared in accordance with the laws of jurisdictions outside
England and Wales.
The availability of the Acquisition to Brand Architekts Shareholders who are
not resident in and citizens of the UK may be affected by the laws of the
relevant jurisdictions in which they are located or of which they are
citizens. Persons who are not resident in the UK should inform themselves of,
and observe, any applicable legal or regulatory requirements of their
jurisdictions. In particular, the ability of persons who are not resident in
the United Kingdom to vote their Brand Architekts Shares with respect to the
Scheme at the Court Meeting, or to appoint another person as proxy to vote at
the Court Meeting on their behalf, may be affected by the laws of the relevant
jurisdictions in which they are located. Any failure to comply with the
applicable restrictions may constitute a violation of the securities laws of
any such jurisdiction. To the fullest extent permitted by applicable law, the
companies and persons involved in the Acquisition disclaim any responsibility
or liability for the violation of such restrictions by any person. Further
details in relation to Overseas Shareholders will be contained in the Scheme
Document.
Unless otherwise determined by Warpaint or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, directly or indirectly, in, into, from, or by the use of mails or
any means or instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate or foreign
commerce of, or of any facility of a national, state or other securities
exchange of, any Restricted Jurisdiction where to do so would violate the laws
in that jurisdiction and no person may vote in favour of the Scheme by any
such use, means, instrumentality or from within a Restricted Jurisdiction or
any other jurisdiction if to do so would constitute a violation of the laws of
that jurisdiction. Copies of this announcement and any formal documentation
relating to the Acquisition are not being, and may not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in or into or
from any Restricted Jurisdiction and persons receiving such documents
(including, without limitation, agents, custodians, nominees and trustees) may
not mail or otherwise forward, distribute or send the same in or into or from
any Restricted Jurisdiction. Doing so may render invalid any related purported
vote in respect of the Acquisition. If the Acquisition is implemented by way
of a Takeover Offer (unless otherwise permitted by applicable law and
regulation), the Takeover Offer may not be made, directly or indirectly, in,
into, from, or by the use of mails or any means or instrumentality (including,
but not limited to, facsimile, e-mail or other electronic transmission, telex
or telephone) of interstate or foreign commerce of, or of any facility of a
national, state or other securities exchange of, any Restricted Jurisdiction
and the Takeover Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities.
The availability of New Warpaint Shares issued pursuant to the Acquisition to
Brand Architekts Shareholders who are not resident in the United Kingdom or
the ability of those persons to hold such shares may be affected by the laws
or regulatory requirements of the relevant jurisdictions in which they are
resident. Persons who are not resident in the United Kingdom should inform
themselves of, and observe, any applicable legal or regulatory requirements.
Brand Architekts Shareholders who are in any doubt about such matters should
consult an appropriate independent professional adviser in the relevant
jurisdiction without delay.
Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.
Notice to US Brand Architekts Shareholders
Brand Architekts Shareholders in the United States should note that the
Acquisition relates to the securities of a company organised under the laws of
England and Wales and is proposed to be effected by means of a scheme of
arrangement under the 2006 Act. This announcement, the Scheme Document and
certain other documents relating to the Acquisition have been or will be
prepared in accordance with English law, the AIM Rules, the Takeover Code and
UK disclosure requirements, and the format and style applicable to a scheme of
arrangement under the 2006 Act, all of which differ from those in the United
States. A transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules of Section 14(e) or the proxy solicitation
rules of Section 14(a) under the US Exchange Act. Accordingly, the Scheme is
subject to the disclosure requirements of and practices applicable in the
United Kingdom to schemes of arrangement, which differ from the disclosure
requirements and practices of the United States tender offer and proxy
solicitation rules.
Brand Architekts' financial statements, and all financial information that is
included in this announcement or that may be included in the Scheme Document,
or any other documents relating to the Acquisition, have been prepared in
accordance with the UK adopted International Accounting Standards and may not
be comparable to financial statements of companies in the United States or
other companies whose financial statements are prepared in accordance with US
generally accepted accounting principles. US generally accepted principles
differ in certain respects from the UK adopted International Accounting
Standards. None of the financial information in this announcement has been
audited in accordance with the auditing standards generally accepted in the US
or the auditing standards of the Public Company Accounting Oversight Board of
the US.
The New Warpaint Shares issuable to Eligible Brand Architekts Shareholders
under the Scheme have not been and will not be registered under the US
Securities Act, and such New Warpaint Shares will be issued to Eligible Brand
Architekts Shareholders in reliance on the exemption from registration set
forth in Section 3(a)(10) of the US Securities Act. Section 3(a)(10) of the US
Securities Act exempts the offer and sale of securities issued in exchange for
one or more bona fide outstanding securities from the general requirement of
registration where the terms and conditions of the issuance and exchange of
such securities have been approved by a court authorized to grant the
approval, after a hearing upon the fairness of the terms and conditions of the
issuance and exchange at which all persons to whom the securities will be
issued have the right to appear and receive timely notice thereof. The Court
is authorized to conduct a hearing at which the fairness of the terms and
conditions of the Scheme will be considered. Subject to the approval of the
Scheme by the Brand Architekts Shareholders at the Court Meeting, a hearing on
the Scheme will be held at which all Brand Architekts Shareholders are
entitled to appear and be heard. The approval of the Court will constitute the
basis for the exemption under Section 3(a)(10) of the US Securities Act for
the securities to be exchanged and issued to Eligible Brand Architekts
Shareholders pursuant to the Scheme. Before the Sanction Hearing, the Court
will be informed of this effect of the approval of the Scheme. The exchange
and issuance of the Brand Architekts Shares and New Warpaint Shares to
Eligible Brand Architekts Shareholders pursuant to the Scheme will also be
exempt from registration under the securities laws of the applicable states of
the United States.
The Brand Architekts Shares and New Warpaint Shares received pursuant to the
Scheme will be freely transferable under United States federal securities
laws, except that the US Securities Act imposes restrictions on the resales of
those securities by persons who are "affiliates" of Brand Architekts or
Warpaint, as the case may be, after the completion of the Scheme or within 90
days before completion of the Scheme. As defined in Rule 144 under the US
Securities Act, an "affiliate" of an issuer is a person that directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, the issuer. Usually, this includes the
directors, executive officers and significant shareholders of the issuer.
It may be difficult for US holders of Brand Architekts Shares to enforce their
rights and any claims they may have arising under US federal securities laws
in connection with the Acquisition, since Brand Architekts is organised under
the laws of a country other than the United States, and some or all of its
officers and directors may be residents of countries other than the United
States, and most of the assets of Brand Architekts are located outside of the
United States. US holders of Brand Architekts Shares may not be able to sue a
non-US company or its officers or directors in a non-US court for violations
of US federal securities laws. Further, it may be difficult to compel a non-US
company and its affiliates to subject themselves to a US court's jurisdiction
or judgment.
If Warpaint were to elect to implement the Acquisition by means of a Takeover
Offer, such Takeover Offer may be made in compliance with applicable US
securities laws and regulations including, to the extent applicable, Section
14(e) of the US Exchange Act and Regulation 14E thereunder, and will be made
in accordance with the Takeover Code. Such a Takeover Offer may be made in the
United States by Warpaint and no one else. Accordingly, the Acquisition may be
subject to disclosure and other procedural requirements, including with
respect to withdrawal rights, offer timetable, settlement procedures and
timing of payments that are different from those applicable under US domestic
tender offer procedures and law.
The receipt of cash pursuant to the Acquisition by a Brand Architekts
Shareholder in the United States as consideration for the transfer of its
Brand Architekts Shares pursuant to the Scheme will likely be a taxable
transaction for United States federal income tax purposes and under any
applicable United States state and local income tax laws. Each Brand
Architekts Shareholder in the United States is urged to consult its
independent professional tax or legal adviser immediately regarding the US
federal, state and local income and non-income tax consequences of the
Acquisition applicable to it, as well as any consequences arising under the
laws of any other taxing jurisdiction.
THE NEW WARPAINT SHARES ISSUABLE PURSUANT TO THE SCHEME HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SEC OR THE STATE SECURITIES REGULATORY AUTHORITY OF ANY
STATE OF THE UNITED STATES, NOR HAS THE SEC OR THE SECURITIES REGULATORY
AUTHORITY OF ANY STATE OF THE UNITED STATES PASSED ON THE ADEQUACY OR ACCURACY
OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENCE.
Forward-Looking Statements
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by Warpaint and Brand Architekts contain statements
which are, or may be deemed to be, "forward-looking statements".
Forward-looking statements are prospective in nature and are not based on
historical facts, but rather on current expectations and projections of the
management of Warpaint and Brand Architekts about future events, and are
therefore subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied by the
forward-looking statements.
The forward-looking statements contained in this announcement include
statements relating to the expected effects of the Acquisition on Warpaint and
Brand Architekts (including their future prospects, developments and
strategies), the expected timing and scope of the Acquisition and other
statements other than historical facts. Often, but not always, forward-looking
statements can be identified by the use of forward-looking words such as
"prepares", "plans", "expects" or "does not expect", "is expected", "is
subject to", "budget", "projects", "synergy", "strategy", "scheduled", "goal",
"estimates", "forecasts", "cost-saving", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases or
statements that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. Forward-looking
statements may include statements relating to the following: (i) future
capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion
and growth of Warpaint's, any member of the Warpaint Group's, Brand
Architekts' or any member of the Brand Architekts Group's operations and
potential synergies resulting from the Acquisition; and (iii) the effects of
global economic conditions and governmental regulation on Warpaint's, Brand
Architekts' or any member of the Warpaint Group's or Brand Architekts Group's
business.
Although Warpaint and Brand Architekts believe that the expectations reflected
in such forward-looking statements are reasonable, Warpaint and Brand
Architekts can give no assurance that such expectations will prove to be
correct. By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future. There are a number of factors that could cause
actual results and developments to differ materially from those expressed or
implied by such forward-looking statements, and no undue reliance should be
placed on any such forward-looking statements.
These factors include, but are not limited to: the ability to complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other Conditions on the proposed terms and
schedule; changes in the global political, economic, business and competitive
environments and in market and regulatory forces; changes in future exchange
and interest rates; changes in tax rates; future business combinations or
disposals; changes in general economic and business conditions; changes in the
behaviour of other market participants; changes in the anticipated benefits
from the proposed transaction not being realised as a result of changes in
general economic and market conditions in the countries in which Warpaint, the
Warpaint Group, Brand Architekts and the Brand Architekts Group operate, weak,
volatile or illiquid capital and/or credit markets, changes in tax rates,
interest rate and currency value fluctuations, the degree of competition in
the geographic and business areas in which Warpaint and Brand Architekts
operate and changes in laws or in supervisory expectations or requirements.
Other unknown or unpredictable factors could cause actual results to differ
materially from those expected, estimated or projected in the forward-looking
statements. If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual results may
differ materially from those expected, estimated or projected. Such
forward-looking statements should therefore be construed in the light of such
factors. Neither Warpaint nor Brand Architekts, nor any of their respective
associates or directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed or implied
in any forward-looking statements in this announcement will actually occur.
You are cautioned not to place any reliance on these forward-looking
statements.
Other than in accordance with their legal or regulatory obligations, neither
Warpaint nor Brand Architekts is under any obligation, and Warpaint and Brand
Architekts expressly disclaim any intention or obligation, to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 pm (London time) on the 10(th) business day following the
commencement of the offer period and, if appropriate, by no later than 3.30 pm
(London time) on the 10(th) business day following the announcement in which
any securities exchange offeror is first identified. Relevant persons who deal
in the relevant securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position Disclosure must
instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain details of
the dealing concerned and of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule 8. A
Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no
later than 3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Publication on a website
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
and the documents required to be published by Rule 26 of the Takeover Code
will be made available, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, on Warpaint's website at
https://www.warpaintlondonplc.com/investors/Brand-Architekts-Group-plc
(https://url.avanan.click/v2/___https:/www.warpaintlondonplc.com/investors/Brand-Architekts-Group-plc___.YXAxZTpzaG9yZWNhcDphOm86ODQ0ZDYzOTY3ZDhhYzBmYzdkODJiM2NhZThmNzA1MjU6Njo3NDg1OmMzYjQ5YzAzNjFmNTgzMGVhMzU0OGM2ZjA4NjE3MmU1OTAxZmNiNTRhOWMwZjQ0YjQ3MTViOGMxODQ1NjQ0OTA6cDpUOk4)
and on Brand Architekts' website at https://www.brandarchitektsplc.com/
(https://url.avanan.click/v2/___https:/www.brandarchitektsplc.com/___.YXAxZTpzaG9yZWNhcDphOm86ODQ0ZDYzOTY3ZDhhYzBmYzdkODJiM2NhZThmNzA1MjU6NjpmZTc3OjY2ZjJlN2RlOGI3ZDA0MjM4MTBiM2VlNzJlZTI4Nzg5OTg4MDcwNTMzNzVhZjhiZGVhN2I1M2QzYjVhODVjMGU6cDpUOk4)
by no later than 12 noon (London time) on the Business Day following this
announcement. For the avoidance of doubt, neither the content of these
websites nor of any website accessible from hyperlinks set out in this
announcement is incorporated by reference or forms part of this announcement.
No profit forecasts, estimates or quantified financial benefits statements
No statement in this announcement is intended as a profit forecast, profit
estimate or quantified financial benefits statement for any period and no
statement in this announcement should be interpreted to mean that earnings or
earnings per share for Brand Architekts for the current or future financial
years would necessarily match or exceed the historical published earnings or
earnings per share for Brand Architekts.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, Brand Architekts
Shareholders, persons with information rights and participants in the Brand
Architekts Share Plans may request a hard copy of this announcement, free of
charge, by contacting Brand Architekts' registrars, Computershare Investor
Services PLC, during business hours on 03707 020 003 within the United Kingdom
or on +44 (0) 370 702 0003 from overseas or by submitting a request in writing
to Computershare Investor Services PLC, The Pavilions, Bridgwater Road,
Bristol BS13 8AE, United Kingdom, with an address to which the hard copy may
be sent. Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the applicable
international rate. For persons who receive a copy of this announcement in
electronic form or via a website notification, a hard copy of this
announcement will not be sent unless so requested. In accordance with Rule
30.3 of the Takeover Code, such persons may also request that all future
documents, announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain other
information provided by Brand Architekts Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Brand Architekts may be provided to Warpaint during the
offer period as required under Section 4 of Appendix 4 of the Takeover Code to
comply with Rule 2.11(c) of the Takeover Code.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of figures that precede them.
General
Warpaint reserves the right to elect to implement the Acquisition by way of a
Takeover Offer as an alternative to the Scheme (subject to the Panel's consent
and the terms of the Cooperation Agreement). In such event, save as provided
in the Takeover Code, the Acquisition will be implemented on substantially the
same terms, so far as applicable, as those which will apply to the Scheme,
subject to appropriate amendments to reflect, among other things, the change
in method of effecting the Acquisition (including, without limitation: (i) the
inclusion of an acceptance condition set at 90 per cent. of the Brand
Architekts Shares to which such Takeover Offer relates (or such other
percentage as Warpaint may, subject to the rules of the Takeover Code and with
the consent of the Panel, decide); and (ii) those required by, or deemed
appropriate by, Warpaint under applicable law).
In the event that the Acquisition is to be implemented by way of a Takeover
Offer, Brand Architekts Shares will be acquired pursuant to the Takeover Offer
fully paid and free from all liens, charges, equitable interests, encumbrances
and rights of pre-emption and any other interests of any nature whatsoever and
together with all rights attaching thereto including the right to receive and
retain all dividends and distributions declared, made or paid, or any other
return of capital (whether by way of reduction of share capital, repurchase,
redemption or otherwise) made, by reference to a record date after the
Effective Date.
If the Acquisition is effected by way of a Takeover Offer and such Takeover
Offer becomes or is declared unconditional and sufficient acceptances are
received, Warpaint intends to: (i) request that the London Stock Exchange
cancels admission of the Brand Architekts Shares to trading on AIM; and (ii)
exercise its rights (to the extent such rights are available) to apply the
provisions of Chapter 3 of Part 28 of the 2006 Act to acquire compulsorily the
remaining Brand Architekts Shares in respect of which the Takeover Offer has
not been accepted.
Investors should be aware that Warpaint may purchase Brand Architekts Shares
otherwise than under any Takeover Offer or the Scheme, including pursuant to
privately negotiated purchases.
Rule 2.9 of the Takeover Code
For the purposes of Rule 2.9 of the Takeover Code, Warpaint confirms that, as
at 4 December 2024, it had in issue 77,742,723 ordinary shares of 25 pence
each. The International Securities Identification Number ("ISIN") for these
shares is GB00BYMF3676.
For the purposes of Rule 2.9 of the Takeover Code, Brand Architekts confirms
that, as at 4 December 2024, it had in issue 27,943,180 ordinary shares of 5
pence each. The ISIN for these shares is GB0008667304.
Appendix 1
Conditions and Further Terms of the Acquisition
Part A
Conditions to the Scheme and Acquisition
The Acquisition will be subject to the terms and conditions set out in this
Appendix and in the Scheme Document.
1. Conditions to the Acquisition
The Acquisition will be conditional on the Scheme becoming unconditional and
becoming Effective, subject to the Takeover Code, by no later than 11.59 p.m.
(London time) on the Long Stop Date.
2. Scheme Approval
The Scheme will be subject to the following conditions:
2.1 (i) its approval by a majority in
number representing 75 per cent. or more in value of Scheme Shares held by
Brand Architekts Shareholders who are on the register of members of Brand
Architekts at the Voting Record Time (or the relevant class or classes
thereof, if applicable), in each case present, entitled to vote and voting,
either in person or by proxy, at the Court Meeting or at any separate class
meeting which may be required by the Court (as applicable) or at any
adjournment of any such meeting; and
(ii) the Court Meeting and any separate class meeting
which may be required by the Court (or any adjournment of any such meeting)
being held on or before the 22nd day after the expected date of the Court
Meeting to be set out in the Scheme Document in due course (or such later
date, if any, (a) as Warpaint and Brand Architekts may agree or (b) (in a
competitive situation) as may be specified by Warpaint with the consent of the
Panel, and in each case that (if so required) the Court may allow);
2.2 (i) the Resolution being duly
passed by the requisite majority or majorities at the General Meeting; and
(ii) the General Meeting being held on or before the 22nd
day after the expected date of the General Meeting to be set out in the Scheme
Document in due course (or such later date, if any, (a) as Warpaint and Brand
Architekts may agree or (b) (in a competitive situation) as may be specified
by Warpaint with the consent of the Panel, and in each case that (if so
required) the Court may allow); and
2.3 (i) the sanction of the Scheme by
the Court with or without modification (but subject to any such modification
being agreed by Warpaint and Brand Architekts) and the delivery of a copy of
the Court Order to the Registrar of Companies; and
(ii) the Sanction Hearing being held on or before the
22nd day after the expected date of the Sanction Hearing to be set out in the
Scheme Document in due course (or such later date, if any, (a) as Warpaint and
Brand Architekts may agree or (b) (in a competitive situation) as may be
specified by Warpaint with the consent of the Panel, and in each case that (if
so required) the Court may allow).
In addition, Warpaint and Brand Architekts have agreed that, subject as stated
in Part B below and to the requirements of the Panel and the Takeover Code,
the Acquisition will be conditional on the following Conditions and,
accordingly, the necessary actions to make the Scheme Effective will not be
taken unless the following Conditions (as amended if appropriate) have been
satisfied or, where relevant, waived:
3. Admission of New Warpaint Shares
The London Stock Exchange having acknowledged to Warpaint or its agent (and
such acknowledgment not having been withdrawn) that the application for the
admission of the New Warpaint Shares to trading on AIM has been approved and
(after satisfaction of any conditions to which such approval is expressed to
be subject (admission conditions)) will become effective as soon as a dealing
notice has been issued by the London Stock Exchange and any admission
conditions have been satisfied.
4. Third Party clearances
4.1 The waiver (or non-exercise within any applicable time
limits) by any Relevant Authority or any other body or person whatsoever in
any jurisdiction (each a Third Party) of any termination right, right of
pre-emption, first refusal or similar right (which is material in the context
of the Wider Brand Architekts Group taken as a whole or in the context of the
Acquisition) arising as a result of or in connection with the Acquisition
including, without limitation, its implementation and financing or the
proposed direct or indirect acquisition of any shares or other securities in,
or control or management of, Brand Architekts by Warpaint or any member of the
Wider Warpaint Group.
4.2 All necessary filings or applications having been made in
connection with the Acquisition and all mandatory statutory or regulatory
obligations in any jurisdiction having been complied with in connection with
the Acquisition or the acquisition by any member of the Wider Warpaint Group
of any shares or other securities in, or control of, Brand Architekts and all
material Authorisations (being Authorisations where the direct consequence of
a failure to obtain such Authorisation would be unlawful in any relevant
jurisdiction or have a material adverse effect on the Wider Brand Architekts
Group or the ability of Warpaint to implement the Acquisition) necessary for
or in respect of the Acquisition including without limitation, its
implementation or the proposed direct or indirect acquisition of any shares or
other securities in, or control of, Brand Architekts or any member of the
Wider Brand Architekts Group by any member of the Wider Warpaint Group having
been obtained in terms and in a form reasonably satisfactory to Warpaint from
all appropriate Third Parties or persons with whom any member of the Wider
Brand Architekts Group has entered into contractual arrangements and all such
material Authorisations necessary to carry on the business of any member of
the Wider Brand Architekts Group which is material in the context of the Wider
Warpaint Group or the Wider Brand Architekts Group, in either case taken as a
whole, or for or in respect of the Acquisition, including without limitation
its implementation, remaining in full force and effect and there being no
notice or intimation of any intention to revoke or not to renew any of the
same at the time at which the Acquisition becomes otherwise unconditional.
4.3 No Third Party having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit, investigation,
enquiry or reference (and, in each case, not having withdrawn the same), or
having enacted, made or proposed any statute, regulation, decision or order,
or change to published practice or having taken any other steps, and there not
continuing to be outstanding any statute, regulation, decision or order, which
in each case would or may reasonably be expected to:
4.3.1 require, prevent or materially delay the divestiture, or
materially alter the terms envisaged for any proposed divestiture by any
member of the Wider Warpaint Group or any member of the Wider Brand Architekts
Group of all or any portion of their respective businesses, assets or property
or impose any limitation on the ability of any of them to conduct their
respective businesses (or any of them) or to own, control or manage any of
their respective assets or properties or any part thereof which, in any such
case, is material in the context of the Wider Warpaint Group or the Wider
Brand Architekts Group in either case taken as a whole or in the context of
the Acquisition;
4.3.2 require, prevent or materially delay the proposed
divestiture by any member of the Wider Warpaint Group of any shares or other
securities in Brand Architekts;
4.3.3 impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Warpaint Group directly or
indirectly to acquire or to hold or to exercise effectively, directly or
indirectly, all or any rights of ownership in respect of shares or loans or
securities convertible into shares or any other securities (or the equivalent)
in any member of the Wider Brand Architekts Group or to exercise voting or
management control over any such member, in each case to an extent which is
material in the context of the Wider Brand Architekts Group taken as a whole
or in the context of the Acquisition;
4.3.4 otherwise adversely affect the business, assets, profits
or prospects of any member of the Wider Warpaint Group or of any member of the
Wider Brand Architekts Group to an extent which is material in the context of
the Wider Warpaint Group or the Wider Brand Architekts Group in either case
taken as a whole or in the context of the Acquisition;
4.3.5 make the Acquisition or its implementation or the
acquisition or proposed acquisition by Warpaint or any member of the Wider
Warpaint Group of any shares or other securities in, or control of, Brand
Architekts void, illegal, and/or unenforceable under the laws of any relevant
jurisdiction, or otherwise, directly or indirectly, restrain, restrict,
prohibit or materially delay the same, or impose material additional
conditions or obligations with respect thereto;
4.3.6 require (save as envisaged in connection with the
Acquisition or, if applicable, sections 974 to 991 (inclusive) of the 2006
Act) any member of the Wider Warpaint Group or the Wider Brand Architekts
Group to offer to acquire any shares or other securities (or the equivalent)
or interest in any member of the Wider Brand Architekts Group or the Wider
Warpaint Group owned by any Third Party, in each case to an extent which is
material in the context of the Wider Warpaint Group or the Wider Brand
Architekts Group in either case taken as a whole or in the context of the
Acquisition;
4.3.7 impose any limitation on the ability of any member of the
Wider Warpaint Group to integrate, conduct or co-ordinate its business, or any
part of it, with the businesses or any part of the businesses of any member of
the Wider Brand Architekts Group which is adverse to and material in the
context of the Wider Brand Architekts Group or the Wider Warpaint Group in
each case taken as a whole or in the context of the Acquisition; or
4.3.8 result in any member of the Wider Brand Architekts Group
ceasing to be able to carry on business under any name under which it
presently does so to an extent which is material in the context of the Wider
Brand Architekts Group taken as a whole or in the context of the Acquisition,
and all applicable waiting and other time periods (including any extensions
thereof) during which any such Third Party could institute, implement or
threaten any action, proceeding, suit, investigation, enquiry or reference or
any other step under the laws of any jurisdiction in respect of the
Acquisition or the acquisition or proposed acquisition of any Brand Architekts
Shares having expired, lapsed or been terminated.
5. Certain matters arising as a result of any arrangement,
agreement, etc.
Except as Disclosed, there being no provision of any agreement, arrangement,
licence, permit or other instrument to which any member of the Wider Brand
Architekts Group is a party or by or to which any such member or any of its
assets are or may be bound, entitled or subject, or any circumstance which, in
each case as a consequence of the Acquisition or the proposed acquisition of
any shares or other securities (or equivalent) in Brand Architekts or because
of a change in the control or management of Brand Architekts or otherwise,
could or might reasonably be expected to result in (in each case to an extent
which is or would be material and adverse in the context of the Wider Brand
Architekts Group, taken as a whole, or in the context of the Acquisition):
5.1 any monies borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or grant available to any such member,
being or becoming repayable or capable of being declared repayable immediately
or earlier than their or its stated maturity date or repayment date or the
ability of any such member to borrow monies or incur any indebtedness being
withdrawn or inhibited or being capable of becoming or being withdrawn or
inhibited;
5.2 any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of any such
member thereunder being terminated or adversely modified or affected or any
obligation or liability arising or any adverse action being taken or arising
thereunder;
5.3 any assets or interests of any such member being or
failing to be disposed of or charged or ceasing to be available to any such
member or any right arising under which any such asset or interest could be
required to be disposed of or charged or could cease to be available to any
such member otherwise than in the ordinary course of business;
5.4 the creation, other than as Disclosed, or enforcement of
any mortgage, charge or other security interest over the whole or any part of
the business, property, assets or interest of any such member or any such
mortgage, charge or other security interest (whenever arising or having
arisen) becoming enforceable;
5.5 the rights, liabilities, obligations or interests of any
such member in, or the business of any such member with, any person, firm,
company or body (or any arrangement or arrangements relating to any such
interest or business) being terminated, adversely modified or affected;
5.6 the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;
5.7 any such member ceasing to be able to carry on business
under any name under which it presently does so;
5.8 the creation or acceleration of any liability, actual or
contingent, by any such member (including any material tax liability or any
obligation to obtain or acquire any material authorisation, notice, waiver,
concession, agreement or exemption from any Third Party or any person) other
than trade creditors or other liabilities incurred in the ordinary course of
business or in connection with the Acquisition; or
5.9 any requirement on any such member to acquire, subscribe,
pay up or repay any shares or other securities (or the equivalent),
and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the
Wider Brand Architekts Group is a party or by or to which any such member or
any of its assets may be bound, entitled or subject, would or might reasonably
be expected to result in any of the events or circumstances as are referred to
in paragraphs 5.1 to 5.9 of this Condition (in each case to an extent which is
or would be material and adverse in the context of the Wider Brand Architekts
Group, taken as a whole, or in the context of the Acquisition).
6. Certain events occurring since Last Accounts Date
Except as Disclosed, no member of the Wider Brand Architekts Group having,
since the Last Accounts Date:
6.1 save as between Brand Architekts and wholly-owned
subsidiaries of Brand Architekts or for Brand Architekts Shares issued under
or pursuant to the exercise of options and vesting of awards granted under the
Brand Architekts Share Plans in the ordinary course, issued or agreed to
issue, authorised or proposed the issue of additional shares of any class;
6.2 save as between Brand Architekts and wholly-owned
subsidiaries of Brand Architekts or for the grant of options and awards and
other rights under the Brand Architekts Share Plans in the ordinary course,
issued, or agreed to issue, authorised or proposed the issue of securities
convertible into shares of any class or rights, warrants or options to
subscribe for, or acquire, any such shares or convertible securities;
6.3 other than to another member of the Wider Brand Architekts
Group, sold (or agreed to transfer or sell) any treasury shares;
6.4 other than to another member of the Brand Architekts
Group, before completion of the Acquisition, recommended, declared, paid or
made or proposed to recommend, declare, pay or make any bonus issue, dividend
or other distribution whether payable in cash or otherwise;
6.5 save for intra-Brand Architekts Group transactions,
authorised, implemented or announced any merger or demerger with any body
corporate or acquired or disposed of or transferred, mortgaged or charged or
created any security interest over any assets or any right, title or interest
in any asset (including shares and trade investments) or authorised or
proposed or announced any intention to propose any merger, demerger,
acquisition or disposal, transfer, mortgage, charge or security interest, in
each case, other than in the ordinary course of business and, in each case, to
the extent which is material in the context of the Wider Brand Architekts
Group taken as a whole or in the context of the Acquisition;
6.6 other than in the ordinary course of business, disposed of
or agreed to dispose of any property, or, other than in the ordinary course of
business, granted or entered into any agreement to grant any lien, equitable
interest, charge, encumbrance or other third party right over any such
property;
6.7 save for intra-Brand Architekts Group transactions, made
or authorised or proposed or announced an intention to propose any change in
its loan capital to the extent which is material in the context of the Wider
Brand Architekts Group taken as a whole or in the context of the Acquisition;
6.8 issued, authorised or proposed the issue of, or made any
change in or to, any debentures or (save for intra-Brand Architekts Group
transactions or save in the ordinary course of business) incurred or increased
any indebtedness or become subject to any liability (actual or contingent);
6.9 purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, save in respect to the matters mentioned in paragraph 6.1 or 6.2 above,
made any other change to any part of its share capital, in each case, to the
extent which is material in the context of the Wider Brand Architekts Group
taken as a whole or in the context of the Acquisition;
6.10 other than pursuant to the Acquisition and except for
intra-Brand Architekts Group transactions, implemented, or authorised,
proposed or announced its intention to implement, any reconstruction, merger,
demerger, amalgamation, scheme, commitment or other transaction or arrangement
otherwise than in the ordinary course of business;
6.11 been unable or, or admitted in writing that it is unable, to
pay its debts as they fall due or having stopped or suspended (or threatened
to stop or suspend) payment of its debts generally or ceased or threatened to
cease carrying on all or a substantial part of its business;
6.12 (other than in respect of a member which is dormant and was
solvent at the relevant time) taken any corporate action or steps or had any
legal proceedings started or threatened against it in relation to the
suspension of payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution or reorganisation or for the appointment
of a receiver, administrative receiver, administrator, manager, trustee or
similar officer of all or any of its assets or revenues or any analogous
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed in each case to the extent which
is material in the context of the Wider Brand Architekts Group taken as a
whole or in the context of the Acquisition;
6.13 commenced negotiations with any of its creditors or taken any
step with a view to rescheduling or restructuring any of its indebtedness or
entered into a composition, compromise, assignment or arrangement with any of
its creditors whether by way of a voluntary arrangement, scheme of
arrangement, deed of compromise or otherwise;
6.14 waived, settled or compromised any claim otherwise than in
the ordinary course of business which is material in the context of the Wider
Brand Architekts Group taken as a whole or in the context of the Acquisition;
6.15 entered into, varied or authorised, or proposed or announced
its intention to enter into or vary any agreement, contract, transaction,
arrangement or commitment (whether in respect of capital expenditure or
otherwise) which:
6.15.1 is of a long-term, onerous or unusual nature or magnitude
(save in the ordinary course of business); or
6.15.2 involves or could reasonably be expected to involve an
obligation which is materially restrictive on the business of any member of
the Wider Brand Architekts Group other than of a nature and extent which is
normal in the context of the business concerned,
and, in either case, which is or would reasonably be expected to be material
and adverse in the context of the Wider Brand Architekts Group taken as a
whole or in the context of the Acquisition;
6.16 entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or passed any
resolution or made any offer (which remains open for acceptance) with respect
to or announced any intention to, or proposed to, effect any of the
transactions, matters or events referred to in this Condition 6;
6.17 made any material alteration to its constitutional documents;
6.18 except in relation to changes made or agreed as a result of,
or arising from, law or changes to law, made or agreed or consented to any
change to:
6.18.1 the terms of the trust deeds constituting the pension
scheme(s) established by any member of the Wider Brand Architekts Group for
its directors, employees or their dependents;
6.18.2 the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable thereunder;
6.18.3 the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined; or
6.18.4 the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued or made,
in each case, which has an effect that is material in the context of the Wider
Brand Architekts Group taken as a whole or in the context of the Acquisition;
6.19 proposed, agreed to provide or modified the terms of any of
the Brand Architekts Share Plans or other benefit constituting a material
change relating to the employment or termination of employment of a material
category of persons employed by the Wider Brand Architekts Group or which
constitutes a material change to the terms or conditions of employment of any
senior employee of the Wider Brand Architekts Group, save as agreed by the
Panel (if required) and by Warpaint, or entered into or changed the terms of
any contract with any director or senior executive;
6.20 other than with the consent of Warpaint, taken (or agreed or
proposed to take) any action which requires, or would require, the consent of
the Panel or the approval of Brand Architekts Shareholders in a general
meeting in accordance with, or as contemplated by, Rule 21.1 of the Takeover
Code; or
6.21 save to the extent arising as a result of any change in
applicable law, entered into or varied in a material way the terms of any
contract, agreement or arrangement with any of the directors or senior
executives of any member of the Wider Brand Architekts Group (save for salary
increases in the ordinary course), other than as agreed by Warpaint and (if
required) by the Panel.
7. No adverse change, litigation or regulatory enquiry
Except as Disclosed, since the Last Accounts Date:
7.1 no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or prospects or
operational performance of any member of the Wider Brand Architekts Group
which, in any such case, is material in the context of the Wider Brand
Architekts Group taken as a whole or in the context of the Acquisition;
7.2 no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider Brand Architekts
Group is or is reasonably likely to become a party (whether as a plaintiff,
defendant or otherwise) and no enquiry, review or investigation by, or
complaint or reference to, any Third Party or other investigative body against
or in respect of any member of the Wider Brand Architekts Group having been
instituted, announced, implemented or threatened by or against or remaining
outstanding in respect of any member of the Wider Brand Architekts Group which
in any such case has had or might reasonably be expected to have a material
adverse effect on the Wider Brand Architekts Group taken as a whole or in the
context of the Acquisition;
7.3 no contingent or other liability of any member of the
Wider Brand Architekts Group having arisen or become apparent to Warpaint or
increased which has had or might reasonably be expected to have a material
adverse effect on the Wider Brand Architekts Group, taken as a whole or in the
context of the Acquisition;
7.4 no enquiry or investigation by, or complaint or reference
to, any Third Party having been threatened, announced, implemented, instituted
by or remaining outstanding against or in respect of any member by or the
Wider Brand Architekts Group which in any case is material in the context of
the Wider Brand Architekts Group taken as a whole;
7.5 no member of the Wider Brand Architekts Group having
conducted its business in breach of any applicable laws and regulations which
in any case is material in the context of the Wider Brand Architekts Group
taken as a whole or in the context of the Acquisition; and
7.6 no steps having been taken which are likely to result in
the withdrawal, cancellation, termination or materially adverse modification
of any licence or permit held by any member of the Wider Brand Architekts
Group which is necessary for the proper carrying on of its business and the
withdrawal, cancellation, termination or materially adverse modification of
which has had, or would reasonably be expected to have, an adverse effect
which is material in the context of the Wider Brand Architekts Group taken as
a whole or in the context of the Acquisition.
8. No discovery of certain matters
Except as Disclosed, Warpaint not having discovered:
8.1 that any financial, business or other information
concerning the Wider Brand Architekts Group as contained in the information
publicly disclosed at any time since the Last Accounts Date prior to the date
of this announcement by or on behalf of any member of the Wider Brand
Architekts Group is materially misleading, contains a material
misrepresentation of fact or omits to state a fact necessary to make that
information not materially misleading and which was not subsequently corrected
before the date of this announcement by disclosure either publicly or
otherwise to Warpaint or its professional advisers, in each case, to the
extent which is material in the context of the Wider Brand Architekts Group
taken as a whole or in the context of the Acquisition;
8.2 that any member of the Wider Brand Architekts Group or
partnership, company or other entity in which any member of the Wider Brand
Architekts Group has a significant economic interest and which is not a
subsidiary undertaking of Brand Architekts, is subject to any liability
(actual or contingent) which is not disclosed in the annual report and
accounts of Brand Architekts for the financial year ended 30 June 2024, in
each case, to the extent which is material in the context of the Wider Brand
Architekts Group taken as a whole or in the context of the Acquisition; or
8.3 any information which affects the import of any
information disclosed at any time by or on behalf of any member of the Wider
Brand Architekts Group and which is material in the context of the Wider Brand
Architekts Group taken as a whole or in the context of the Acquisition.
9. Anti-corruption, economic sanctions, criminal property and
money laundering
Save as Disclosed, Warpaint not having discovered that:
9.1 9.1.1 any past or present member,
director, officer or employee of the Wider Brand Architekts Group is or has at
any time engaged in any activity, practice or conduct which would constitute
an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of
1977 or any other applicable anti-corruption or anti-bribery law, rule or
regulation or any other applicable law, rule or regulation concerning improper
payments or kickbacks; or
9.1.2 any person that performs or has performed services for or
on behalf of the Wider Brand Architekts Group is or has at any time engaged in
any activity, practice or conduct in connection with the performance of such
services which would constitute an offence under the Bribery Act 2010, the US
Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption
legislation or anti-bribery law, rule or regulation or any other applicable
law, rule or regulation concerning improper payments or kickbacks;
9.2 any asset of any member of the Wider Brand Architekts
Group constitutes criminal property as defined by section 340(3) of the
Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition)
or proceeds of crime under any other applicable law, rule or regulation
concerning money laundering or proceeds of crime or any member of the Wider
Brand Architekts Group is found to have engaged in activities constituting
money laundering under any applicable law, rule or regulation concerning money
laundering;
9.3 any past or present member, director, officer or employee
of the Brand Architekts Group, or any other person for whom any such person
may be liable or responsible, is or has engaged in any conduct which would
violate applicable economic sanctions or dealt with, made any investments in,
made any funds or assets available to or received any funds or assets from:
9.3.1 any government, entity or individual in respect of which
US, UK or European Union persons, or persons operating in those territories,
are prohibited from engaging in activities or doing business, or from
receiving or making available funds or economic resources, by US, UK or
European Union laws or regulations, including the economic sanctions
administered by the United States Office of Foreign Assets Control, or HMRC;
or
9.3.2 any government, entity or individual targeted by any of
the economic sanctions of the United Nations, the US, the UK, the European
Union or any of its member states, save that this shall not apply if and to
the extent that it is or would be unenforceable by reason of breach of any
applicable Blocking Law;
9.4 any past or present member, director, officer or employee
of the Wider Brand Architekts Group, or any other person for whom any such
person may be liable or responsible:
9.4.1 has engaged in conduct which would violate any relevant
anti-terrorism laws, rules, or regulations, including but not limited to the
US Anti-Terrorism Act;
9.4.2 has engaged in conduct which would violate any relevant
anti-boycott law, rule or regulation or any applicable export controls,
including but not limited to the Export Administration Regulations
administered and enforced by the US Department of Commerce or the
International Traffic in Arms Regulations administered and enforced by the US
Department of State;
9.4.3 has engaged in conduct which would violate any relevant
laws, rules, or regulations concerning human rights, including but not limited
to any law, rule or regulation concerning false imprisonment, torture or other
cruel and unusual punishment, or child labour; or
9.4.4 is debarred or otherwise rendered ineligible to bid for or
to perform contracts for or with any Relevant Authority or found to have
violated any applicable law, rule or regulation concerning government
contracting or public procurement; or
9.5 any member of the Wider Brand Architekts Group is or has
been engaged in any transaction with any government, entity or individual
targeted by any of the economic sanctions of the United Nations, the US, the
European Union or any other Relevant Authority, or which would cause Warpaint
to be in breach of any law or regulation upon its acquisition of Brand
Architekts, including but not limited to the economic sanctions of the United
States Office of Foreign Assets Control or HM Revenue & Customs in the UK
or any other Relevant Authority.
Part B
Further terms of the Acquisition
1. Subject to the requirements of the Panel and the Takeover
Code, Warpaint reserves the right in its sole discretion to waive, in whole or
in part, all or any of the Conditions set out in Part A of Appendix 1,
except Conditions 1, 2.1(i), 2.2(i), 2.3(i) and 3 which cannot be waived. The
deadlines in any of Conditions 2.1(ii), 2.2(ii) and 2.3(ii) may be extended to
such later date as Warpaint may determine (with the Panel's consent and, if
such approval is required, approval of the Court). If any of Conditions 1,
2.1(ii), 2.2(ii) or 2.3(ii) is not satisfied by the relevant deadline
specified in the relevant Condition, Warpaint shall make an announcement by
8.00 a.m. on the Business Day following such deadline confirming whether,
subject to paragraph 3 below, it has invoked the relevant Condition, waived
the relevant deadline or agreed with Brand Architekts to extend the relevant
deadline in relation to the relevant Condition.
2. Warpaint shall be under no obligation to waive (if capable
of waiver), to determine to be or remain satisfied or to treat as fulfilled
any of the Conditions in Part A of Appendix 1 above by a date earlier than
the latest date for the fulfilment of that Condition notwithstanding that the
other Conditions of the Acquisition may at such earlier date have been waived
or fulfilled and that there are at such earlier date no circumstances
indicating that any of such Conditions may not be capable of fulfilment.
3. Under Rule 13.5(a) of the Takeover Code and subject to
paragraph 4, Warpaint may only invoke a Condition so as to cause the
Acquisition not to proceed, to lapse or to be withdrawn with the consent of
the Panel. The Panel will normally only give its consent if the circumstances
which give rise to the right to invoke the Condition are of material
significance to Warpaint in the context of the Acquisition. This will be
judged by reference to the facts of each case at the time that the relevant
circumstances arise.
4. Conditions 1, 2 and 3 in Part A of Appendix 1 above, and,
if applicable, any Takeover Offer acceptance condition adopted on the basis
specified in this Part B, are not subject to Rule 13.5(a) of the Takeover
Code.
5. Any Condition that is subject to Rule 13.5(a) of the
Takeover Code may be waived by Warpaint.
6. Save as disclosed in this announcement, there is no
agreement or arrangement to which Warpaint is a party which relates to the
circumstances in which it may or may not invoke a Condition.
7. If the Panel requires Warpaint to make an offer or offers
for Brand Architekts Shares under the provisions of Rule 9 of the Takeover
Code, Warpaint may make such alterations to the Conditions as are necessary to
comply with the provisions of that Rule.
8. Warpaint reserves the right to elect to implement the
Acquisition by way of a Takeover Offer as an alternative to the Scheme
(subject to the Panel's consent and the terms of the Cooperation Agreement. In
such event, such Takeover Offer will be implemented on the same terms and
conditions so far as is applicable, as those which would apply to the Scheme
(subject to appropriate amendments and the inclusion of an acceptance
condition set at 90 per cent. of the Brand Architekts Shares (or such other
percentage as Warpaint and Brand Architekts may agree and, where applicable
with the consent of the Panel and in accordance with the terms of the
Cooperation Agreement, being in any case more than 50 per cent. of the voting
rights normally exercisable at a general meeting of Brand Architekts)).
9. The Acquisition will be subject, among other things, to the
Conditions and certain further terms which are set out in this Appendix 1 and
to the full terms which will be set out in the Scheme Document and such
further terms as may be required to comply with the provisions of the AIM
Rules, the provisions of the Takeover Code and the applicable requirements of
the Panel and the London Stock Exchange.
10. In the event that the Acquisition is to be implemented by way
of a Takeover Offer, Brand Architekts Shares will be acquired pursuant to the
Takeover Offer fully paid and free from all liens, charges, equitable
interests, encumbrances and rights of pre-emption and any other interests of
any nature whatsoever and together with all rights attaching thereto including
the right to receive and retain all dividends and distributions declared, made
or paid, or any other return of capital (whether by way of reduction of share
capital, repurchase, redemption or otherwise) made, by reference to a record
date after the Effective Date. If, on or after the date of this announcement
and prior to the Acquisition becoming Effective, any dividend, distribution
and/or other return of capital or value is announced, declared, made or paid
in respect of the Brand Architekts Shares, Warpaint reserves the right to
reduce the consideration payable pursuant to the Cash Offer (and, as the case
may be, the exchange ratio in relation to the Alternative Share Offer) by the
aggregate amount of all or part of any such dividend, distribution and/or
other return of capital or value, in which case any reference in this
announcement to the consideration payable under the terms of the Acquisition
will be deemed to be a reference to the consideration as so reduced. In such
circumstances, Brand Architekts Shareholders would be entitled to receive and
retain any such dividend, distribution and/or return of capital or value. Any
exercise by Warpaint of its rights referred to in this paragraph 10 shall be
the subject of an announcement and, for the avoidance of doubt, shall not be
regarded as constituting any revision or variation of the Acquisition.
11. Fractions of the New Warpaint Shares will not be allotted or
issued pursuant to the Acquisition, but entitlements of Scheme Shareholders
will be rounded down to the nearest whole number of New Warpaint Shares and
all fractions of New Warpaint Shares will be aggregated and sold in the market
as soon as practicable after the Effective Date. The net proceeds of such sale
(after deduction of broking fees and other sale costs and expenses, together
with any tax or foreign exchange conversion fees payable on the sale) will be
distributed in due proportions to Scheme Shareholders who would otherwise have
been entitled to such fractions (rounded down to the nearest penny), save that
individual entitlements to amounts of less than £10.00 will be retained for
the benefit of the Enlarged Warpaint Group. The New Warpaint Shares will be
issued credited as fully paid and will rank pari passu in all respects with
the existing New Warpaint Shares issued and outstanding at the time the New
Warpaint Shares are issued pursuant to the Acquisition, including the right to
receive and retain in full all dividends and other distributions (if any)
announced, declared, made or paid, or any other return of capital (whether by
reduction of share capital or share premium account or otherwise) made, in
each case, by reference to a record date falling on or after the Effective
Date. Applications will be made to the London Stock Exchange for the New
Warpaint Shares to be admitted to trading on AIM.
12. The availability of the Acquisition to persons not resident in
the United Kingdom may be affected by the laws or regulatory requirements of
the relevant jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable requirements.
13. This announcement and any rights or liabilities arising
hereunder, the Acquisition, the Scheme, the Forms of Proxy and the Form of
Election will be governed by the laws of England and Wales and be subject to
the jurisdiction of the Court, to the Conditions set out above and full terms
to be set out in the Scheme Document and such further terms as may be required
to comply with the AIM Rules and the provisions of the Takeover Code. The
Acquisition and Scheme will comply with the applicable requirements of the
2006 Act, the Takeover Code, the Panel, the FCA, the Court, the London Stock
Exchange, the AIM Rules and the Registrar of Companies. This Announcement does
not constitute, or form part of, an offer or invitation to purchase Brand
Architekts Shares, Warpaint Shares or any other securities.
14. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.
Appendix 2
Sources and Bases of Information
In this announcement, unless otherwise stated or the context otherwise
requires, the following sources and bases have been used.
1. The fully diluted issued ordinary share capital of
28,918,180 Brand Architekts Shares is based on:
a) 27,943,180 Brand Architekts Shares in issue as at 4 December 2024
(being the last Business Day before date of this announcement); plus
b) 975,000 Brand Architekts Shares which may be issued after the date of
this announcement to satisfy the exercise of options or vesting award pursuant
to the Brand Architekts Share Plans.
2. The Cash Consideration of 48 pence per Brand Architekts
Share is calculated on the basis of the entire issued and to be issued
ordinary share capital of Brand Architekts (as set out in paragraph 1 above).
3. Unless otherwise stated, all prices for Warpaint Shares and
Brand Architekts Shares, and all premia thereon, have been derived from data
provided by FactSet with reference to the Closing Prices on the relevant
date(s).
4. The average prices have been derived from FactSet data and
have been rounded to two decimal places.
5. Unless otherwise stated, the financial information relating
to Warpaint is extracted (without material adjustment) from: (i) the interim
results for the Warpaint Group for the six months ended 30 June 2024; and (ii)
the annual report and financial statements for the Warpaint Group for the year
ended 31 December 2023.
6. Unless otherwise stated, the financial information relating
to Brand Architekts is extracted (without material adjustment) from the annual
reports and financial statements for the Brand Architekts Group for the years
ended 30 June 2023 and 30 June 2024.
7. The enlarged share capital of Warpaint immediately
following the Acquisition has been calculated as the sum of:
a) the current share capital of Warpaint of 77,742,723 ordinary shares;
plus
b) up to 1,932,111 New Warpaint Shares, which may be issued under the
terms of the Alternative Share Offer to Eligible Brand Architekts Shareholders
(excluding any Brand Architekts Shares that might have been receivable by
Peter Gyllenhammar who has already elected to receive the Cash Offer in
respect of his beneficial interests in Brand Architekts Shares).
For the avoidance of doubt, the above figures do not include any Warpaint
Shares issued in connection with the Warpaint Fundraising.
8. Certain figures included in this announcement have been
subject to rounding adjustments.
Appendix 3
Details of Irrevocable Undertakings
1. Brand Architekts Directors
The following Brand Architekts Directors have given irrevocable undertakings
to vote (or instruct the voting, as applicable) in favour of the resolutions
relating to the Acquisition at the Meetings or, in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept (or instruct
the acceptance of) such Takeover Offer in respect of their own beneficial
holdings of Brand Architekts Shares:
Name Total Number of Percentage of existing issued ordinary share capital of Brand Architekts
Brand Architekts Shares
Quentin Higham 37,037 0.13
Christopher How* 196,686 0.70
Roger McDowell 1,676,490 6.00
Total 1,910,213 6.84
* includes 87,216 Brand Architekts Shares held by Christopher How's close
relatives
These irrevocable undertakings remain binding in the event a competing offer
is made for Brand Architekts.
The obligations of the Brand Architekts Directors under the irrevocable
undertakings given by them shall lapse and cease to have effect on and from
the earlier of the following occurrences:
1.1 where the Scheme (or Takeover Offer as applicable) is
withdrawn or lapses in accordance with its terms;
1.2 if any competing offer for the entire issued and to be issued
share capital of Brand Architekts becomes unconditional (if implemented by way
of a takeover offer) or becomes effective (if implemented by way of a scheme
of arrangement); or
1.3 if Warpaint announces that it does not intend to proceed with
the Acquisition and no new, revised or replacement Scheme or Takeover Offer is
announced by Warpaint in accordance with Rule 2.7 of the Takeover Code at the
same time.
These irrevocable undertakings also extend to any Brand Architekts Shares
acquired by the Brand Architekts Directors, whether as a result of the
exercise of options under the Brand Architekts Share Plans or otherwise.
2. Brand Architekts Shareholders
Peter Gyllenhammar
In addition to the Brand Architekts Directors, Peter Gyllenhammar has given an
irrevocable undertaking to vote (or procure the voting, as applicable) in
favour of the resolutions relating to the Acquisition at the Meetings or, in
the event the Acquisition is implemented by way of a Takeover Offer, to accept
(or procure the acceptance of) such Takeover Offer in respect of his
beneficial interests in Brand Architekts Shares:
Name Total Number of Percentage of existing issued ordinary share capital
Brand Architekts Shares
Peter Gyllenhammar 6,850,257 24.51
Total 6,850,257 24.51
This irrevocable undertaking remains binding in the event a competing offer is
made for Brand Architekts.
The obligations of Peter Gyllenhammar under the irrevocable undertaking given
by him shall lapse and cease to have effect on and from the earlier of the
following occurrences:
2.1 where the Scheme (or Takeover Offer as applicable) is
withdrawn or lapses in accordance with its terms;
2.2 if any competing offer for the entire issued and to be issued
share capital of Brand Architekts becomes unconditional (if implemented by way
of a takeover offer) or becomes effective (if implemented by way of a scheme
of arrangement); or
2.3 if Warpaint announces that it does not intend to proceed with
the Acquisition and no new, revised or replacement Scheme or Takeover Offer is
announced by Warpaint in accordance with Rule 2.7 of the Takeover Code at the
same time.
Peter Gyllenhammar has irrevocably elected to accept the Cash Consideration in
respect of his beneficial interests in Brand Architekts Shares, and has
undertaken to vote against any competing proposal to acquire the entire
issued, and to be issued, ordinary share capital of Brand Architekts.
Peter Gyllenhammar is permitted to sell or dispose of Brand Architekts shares
to a close relative or as part of his bona fide tax planning, provided that
prior to such sale: (i) Warpaint has given its prior written consent and (ii)
the intended transferee or beneficiary enters into and delivers an irrevocable
undertaking to Warpaint on terms no less favourable than the irrevocable
undertaking entered into by Peter Gyllenhammar.
This irrevocable undertaking also binds Peter Gyllenhammar's close relatives
and related trusts, although they do not, as at the time of this announcement,
hold any Brand Architekts securities.
Appendix 4
Definitions
The following definitions apply throughout this document unless the context
otherwise requires:
"2006 Act" the Companies Act 2006, as amended from time to time
"2024 Brand Architekts Annual Report" the annual report and audited accounts of the Brand Architekts Group for the
year ended 30 June 2024
"Acquisition" the proposed acquisition by Warpaint of the entire issued, and to be issued,
ordinary share capital (other than the Excluded Shares) of Brand Architekts by
means of the Scheme, on the terms and subject to the Conditions set out in
this announcement and to be set out in the Scheme Document, or should Warpaint
so elect (subject to the consent of the Panel and the terms of the Cooperation
Agreement), by means of a Takeover Offer
"AIM" the market of that name operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange (as amended
from time to time)
"Alternative Share Offer" the facility under which Eligible Brand Architekts Shareholders are entitled
to elect to receive New Warpaint Shares in respect of their holdings of Brand
Architekts Shares instead of the Cash Consideration
"Articles" the articles of association of Brand Architekts from time to time
"associated undertaking" shall be construed in accordance with paragraph 19 of Schedule 6 to The Large
and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008
(SI 2008/410) but for this purpose ignoring paragraph 19(1)(b) of Schedule 6
to those regulations
"Authorisations" authorisations, orders, grants, recognitions, determinations, confirmations,
consents, licences, clearances, permissions, exemptions or approvals, in each
case of a Third Party
"Blocking Law" (i) any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996
(or any law or regulation implementing such Regulation in any member state of
the European Union); or (ii) any provision of Council Regulation (EC) No
2271/1996 of 22 November 1996, as it forms part of domestic law of the United
Kingdom by virtue of the European Union (Withdrawal) Act 2018
"Brand Architekts" Brand Architekts PLC
"Brand Architekts Directors", "Brand Architekts Board" or "Board of Brand the directors of Brand Architekts as at the date of this announcement or,
Architekts" where the context so requires, the directors of Brand Architekts from time to
time
"Brand Architekts Group" Brand Architekts and its subsidiary undertakings from time to time (and where
the context permits, each of them)
"Brand Architekts Pension Scheme" the Aerosols International Limited Pension Plan
"Brand Architekts Share(s)" the ordinary shares of 5 pence each in the capital of Brand Architekts
"Brand Architekts Shareholder(s)" holders of Brand Architekts Shares
"Brand Architekts Share Plans" the Brand Architekts' 2023 Long Term Share Incentive Plan adopted on 5 June
2023, and the Brand Architekts 2017 Company Share Option Plan adopted on 24
May 2017, each as amended from time to time
"Business Day" a day, not being a public holiday, Saturday or Sunday, on which clearing banks
in London are open for normal business
"Cash Offer" the offer for each Brand Architekts Share of 48 pence in cash under the terms
of the Acquisition
"Cash Consideration" 48 pence in cash per Brand Architekts Share
"certificated" or "certificated form" in relation to a share or other security, a share or other security title
which is recorded in the relevant register of the share or other security as
being held in certificated form (that is, not in CREST)
"Closing Price" the closing middle market price of a Brand Architekts Share as derived from
FactSet on any particular date
"Cooperation Agreement" the agreement dated 5 December 2024 between Warpaint and Brand Architekts
relating to, among other things, the implementation of the Acquisition, as
described in paragraph 12 of this announcement
"Condition" each of the conditions listed in Part A of Appendix 1 and any reference to a
numbered Condition shall be a reference to the Condition set out in the
paragraph of Part A of Appendix 1 bearing such number
"Confidentiality Agreement" the confidentiality agreement dated 10 October 2024 between Warpaint and Brand
Architekts, as described in paragraph 13 of this announcement
"Court" the High Court of Justice in England and Wales
"Court Meeting" the meeting or meetings of Scheme Shareholders to be convened by an order of
the Court pursuant to section 896 of the 2006 Act, notice of which will be set
out in the Scheme Document, at which a resolution will be proposed for the
purpose of considering and, if thought fit, approving the Scheme (with or
without amendment), including any adjournment thereof
"Court Order" the order of the Court sanctioning the Scheme under section 899 of the 2006
Act
"CREST" the relevant system (as defined in the Regulations) in respect of which
Euroclear is the operator (as defined in CREST)
"Daily Official List" the daily official list of the London Stock Exchange
"Dealing Disclosure" an announcement pursuant to Rule 8 of the Code containing details of dealings
in interests in relevant securities of a party to an offer
"Directors' Loans" has the meaning given in paragraph 11 (Financing of the Acquisition) of this
announcement
"Disclosed" the information: (a) disclosed by or on behalf of Brand Architekts: (i) in the
2024 Brand Architekts Annual Report; (ii) in this announcement; or (iii) in
any other announcement to a Regulatory Information Service by or on behalf of
Brand Architekts in the two calendar years prior to the date of this
announcement; or (b) fairly disclosed in writing (including via the virtual
data room operated by or on behalf of Brand Architekts in respect of the
Acquisition) or orally in meetings and calls by Brand Architekts management
prior to the date of this announcement to Warpaint or Warpaint's officers,
employees and advisers (in their capacity as such)
"Disclosure Guidance and Transparency Rules" the Disclosure Guidance and Transparency Rules sourcebook issued by the FCA,
as amended from time to time
"Effective" in the context of the Acquisition: (i) if the Acquisition is implemented by
way of the Scheme, the Scheme having become effective pursuant to its terms;
or (ii) if the Acquisition is implemented by way of the Takeover Offer, the
Takeover Offer having been declared or having become unconditional in
accordance with the requirements of the Takeover Code
"Effective Date" the date on which the Acquisition becomes Effective
"Eligible Brand Architekts Shareholders" a Brand Architekts Shareholder who is not a Restricted Brand Architekts
Shareholder
"Enlarged Warpaint Group" the Warpaint Group as enlarged by the Brand Architekts Group following
completion of the Acquisition
"Euroclear" Euroclear UK & International Limited
"Excluded Shares" any (i) Brand Architekts Shares registered in the name of, or beneficially
owned by Warpaint or any other member of the Warpaint Group, or any nominee of
the foregoing, (if any) at the Scheme Record Time, and (ii) Brand Architekts
Shares held as treasury shares (as defined in section 724(5) of the 2006 Act)
(if any) at the Scheme Record Time
"FCA" the Financial Conduct Authority or its successor from time to time
"FCA Handbook" the FCA's Handbook of rules and guidance as amended from time to time
"Form of Election" the form of election for use by an Eligible Brand Architekts Shareholder who
holds Scheme Shares in certificated form in relation to the Alternative Share
Offer
"Forms of Proxy" the form of proxy for use at the Court Meeting and the form of proxy for use
at the General Meeting, which will accompany the Scheme Document
"General Meeting" the general meeting of Brand Architekts Shareholders to be convened to
consider and if thought fit pass the Resolution, notice of which shall be
contained in the Scheme Document, and any adjournment, postponement or
reconvention thereof
"Last Accounts Date" 30 June 2024
"London Stock Exchange" the London Stock Exchange plc or its successor
"Long Stop Date" 30 June 2025 or such later date, if any, (a) as Warpaint and Brand Architekts
may agree, or (b) (in a competitive situation) as may be specified by Warpaint
with the consent of the Panel, and in each case that (if so required) the
Court may allow
"Market Abuse Regulation" the Market Abuse Regulation (EU) no.596/2014 as it forms part of English law
by virtue of the European Union (Withdrawal) Act 2018
"Meetings" the Court Meeting and the General Meeting
"New Warpaint Shares" the new Warpaint Shares proposed to be issued pursuant to the Acquisition
"Offer Period" the offer period (as defined by the Takeover Code) relating to Brand
Architekts which commenced on 5 December 2024
"Opening Position Disclosure" an announcement pursuant to Rule 8 of the Takeover Code containing details of
interests or short positions in, or rights to subscribe for, any relevant
securities of a party to the Acquisition
"Overseas Shareholders" holders of Scheme Shares who are resident in, ordinarily resident in, or
citizens of, jurisdictions outside the United Kingdom
"Panel" the Panel on Takeovers and Mergers
"Placing" the proposed placing of 2,745,098 new Warpaint Shares at a price of 510
pence per new Warpaint Share to raise gross proceeds (before fees and
expenses) of approximately £14 million
"Registrar of Companies" the Registrar of Companies in England and Wales
"Regulations" the Uncertificated Securities Regulations 2001
"Regulatory Information Service" any information service authorised from time to time by the FCA for the
purpose of disseminating regulatory announcements
"Relevant Authority" any central bank, ministry, governmental, quasigovernmental (including the
European Union), supranational, statutory, regulatory or investigative body or
authority (including any national or supranational antitrust or merger control
authority, any sectoral ministry or regulator and any foreign investment
review body), national, state, municipal or local government (including any
subdivision, court, administrative agency or commission or other authority
thereof), any entity owned or controlled by them, any private body exercising
any regulatory, taxing, importing or other authority, trade agency,
association, institution or professional or environmental body in any
jurisdiction
"relevant securities" shall be construed in accordance with the Code
"Resolution" the special resolution to be proposed at the General Meeting in connection
with the implementation of the Scheme and the amendment of the Articles
"Restricted Jurisdiction" any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure if information concerning the
Acquisition is sent or made available to Brand Architekts Shareholders in that
jurisdiction
"Restricted Brand Architekts Shareholders" a Brand Architekts Shareholder (including an individual, partnership,
unincorporated syndicate, limited liability company, unincorporated
organisation, trust, trustee, executor, administrator or other legal
representative) in, or resident in, or any person whom Warpaint believes to be
in, or resident in, a Restricted Jurisdiction (or any custodian, nominee or
trustee for such persons) and person in any other jurisdiction (other than
persons in the United Kingdom) whom Warpaint is advised to treat as a
restricted overseas person in order to observe the laws of such jurisdiction
or to avoid the requirement to comply with any governmental or other consent
or any registration, filing or other formality which Warpaint regards as
unduly onerous
"Retail Offer" the proposed retail offer by Warpaint of up to 196,078 new Warpaint Shares at
a price of 510 pence per new Warpaint Share, through the Bookbuild platform
for retail investors, to raise gross proceeds (before fees and expenses) of up
to £1 million
"Sanction Hearing" the hearing of the Court at which Brand Architekts will seek an order
sanctioning the Scheme pursuant to Part 26 of the 2006 Act
"Scheme" the proposed scheme of arrangement under Part 26 of the 2006 Act between Brand
Architekts and the holders of the Scheme Shares in connection with the
Acquisition, with or subject to any modification, addition or condition
approved or imposed by the Court and agreed by Brand Architekts and Warpaint
"Scheme Document" the document to be sent to Brand Architekts Shareholders and persons with
information rights containing, amongst other things, the Scheme, the full
terms and conditions of the Scheme and notices of the Meetings
"Scheme Record Time" the time and date to be specified in the Scheme Document, expected to be 6.00
p.m. on the Business Day immediately after the date of the Sanction Hearing
"Scheme Shareholders" holders of Scheme Shares
"Scheme Shares" all Brand Architekts Shares: (i) in issue at the date of the Scheme Document;
(ii) (if any) issued after the date of the Scheme Document but before the
Voting Record Time; and (iii) (if any) issued at or after the Voting Record
Time but before the Scheme Record Time in respect of which the original or any
subsequent holders thereof are, or shall have agreed in writing to be, bound
by the Scheme, in each case remaining in issue at the Scheme Record Time, but
excluding the Excluded Shares
"Shore Capital" Shore Capital and Corporate Limited and/or Shore Capital Stockbrokers Limited,
as the context requires
"Singer Capital Markets" Singer Capital Markets Advisory LLP
"subsidiary", "subsidiary undertaking" and "undertaking" shall be construed in accordance with the 2006 Act
"Takeover Code" the City Code on Takeovers and Mergers issued by the Panel on Takeovers and
Mergers, as amended from time to time
"Takeover Offer" subject to the consent of the Panel and the terms of the Cooperation
Agreement, should the Acquisition be implemented by way of a takeover offer as
defined in Chapter 3 of Part 28 of the 2006 Act, the offer to be made by or on
behalf of Warpaint on the terms and subject to the conditions to be set out in
the related offer document to acquire the entire issued, and to be issued,
share capital of Brand Architekts, and, where the context admits, any
subsequent revision, variation, extension or renewal of such offer
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland
"US" or "USA" the United States of America
"uncertificated" or "in uncertificated form" a share or other security title to which is recorded in the relevant register
of the share or security as being held in uncertificated form, in CREST, and
title to which, by virtue of the Regulations may be transferred by means of
CREST
"US Exchange Act" the US Securities Exchange Act of 1934, as amended
"US Securities Act" the US Securities Act of 1933, as amended
"Voting Record Time" the time and date to be specified in the Scheme Document by reference to which
entitlement to vote on the Scheme will be determined
"Warpaint" Warpaint London plc
"Warpaint Board" the directors of Warpaint as at the date of this announcement or, where the
context so requires, the directors of Warpaint from time to time
"Warpaint Fundraising" the proposed Placing and Retail Offer which are being launched by Warpaint
shortly after this announcement by way of separate announcement
"Warpaint Group" Warpaint and its subsidiary undertakings from time to time (and where the
context permits, each of them)
"Warpaint Shares" the ordinary shares of 25 pence each in the capital of Warpaint
"Warpaint Shareholders" the holders of Warpaint Shares
"Wider Warpaint Group" Warpaint and its associated undertakings and any other body corporate,
partnership, joint venture or person in which Warpaint and such undertakings
(aggregating their interests) have an interest of more than 30 per cent. of
the voting or equity capital or the equivalent
"Wider Brand Architekts Group" Brand Architekts and its associated undertakings and any other body corporate,
partnership, joint venture or person in which Brand Architekts and such
undertakings (aggregating their interests) have an interest of more than 30
per cent. of the voting or equity capital or the equivalent (excluding, for
the avoidance of doubt, Warpaint, and all of its associated undertakings which
are not members of the Brand Architekts Group)
References to an enactment include references to that enactment as amended,
replaced, consolidated or re-enacted by or under any other enactment before or
after the date of this announcement.
All references to "pounds", "pounds Sterling", "Sterling", "GBP", "£",
"pence", "penny" and "p" are to the lawful currency of the United Kingdom.
All times referred to are London time unless otherwise stated.
A reference to "includes" shall mean "includes without limitation", and
references to "including" and any other similar term shall be construed
accordingly.
Words in the singular shall include the plural and vice versa.
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. END OFFGZMGZFDGGDZZRecent news on Brand Architekts
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