REG - Brighton Pier Group - Proposed Cancellation

Brighton PierAnnouncement

02/04/2025 07:04

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RNS Number : 2407D  Brighton Pier Group PLC (The)  02 April 2025

2 April 2025

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication
of this announcement, this information is now considered to be in the public
domain.

 

Brighton Pier Group PLC

Proposed Cancellation of Admission of the Ordinary Shares to trading on AIM

Re-registration as a Private Limited Company

Adoption of New Articles

Notice of General Meeting

and

Trading Update

Brighton Pier Group PLC, a diversified UK leisure and entertainment
business, today announces the proposed voluntary cancellation of the admission
of its ordinary shares of £0.25 each ("Ordinary Shares") from trading on
AIM (the "Cancellation"), pursuant to Rule 41 of the AIM Rules for Companies
(the "AIM Rules"), re-registration of the Company as a private limited company
(the "Re-registration") and adoption of new articles of association (the "New
Articles") (the "Proposals").

The Directors have conducted a careful review of the benefits and drawbacks to
the Company and the Shareholders in retaining the Company's quotation on AIM
and believe that seeking Shareholder approval for the proposed Cancellation
and Re-registration at the earliest opportunity in line with AIM Rule 41 and
the Companies Act is in the best interests of the Company and the Shareholders
as a whole. In addition, in connection with the Re-registration, it is
proposed that the New Articles be adopted to reflect the change in the
Company's status to a private company limited by shares.

A circular (the "Circular") will be posted to Shareholders later today, and
includes notice of a general meeting of the Company which is being convened
for 10 a.m. on 22 April 2025 (the "General Meeting") at Cavendish Capital
Markets Limited at One Bartholomew Close, London, EC1A 7BL, for the purposes
of considering and, if thought fit, passing the requisite shareholder
resolution to approve the proposed Cancellation (the "Cancellation
Resolution") and Re-registration (the "Re-registration Resolution", together
the "Resolutions"). In accordance with the requirements of Rule 41 of the AIM
Rules and the Companies Act 2006, the Cancellation and Re-Registration,
respectively, are each conditional upon the approval of not less than 75 per
cent of the votes cast by Shareholders (whether present in person or by proxy)
at the General Meeting.

If the Cancellation Resolution is passed at the General Meeting, it is
anticipated that the Cancellation will become effective at 7.00 a.m. on 2 May
2025. Approval of the Re-registration Resolution is conditional upon the
passing of the Cancellation Resolution. If both resolutions are passed, it is
anticipated that the Re-registration will become effective in the week
commencing 12 May 2025.

If the Cancellation becomes effective, Cavendish will cease to be the
nominated adviser of the Company pursuant to the AIM Rules and the Company
will no longer be required to comply with the AIM Rules. However, the Company
will remain subject to the Takeover Code for a period of two years after the
Cancellation, details of which are set out in the Circular.

Should the Resolutions be passed, and for the period of time that the Company
continues to be supported by a wide shareholder base, the Company intends to
continue to provide certain facilities and services to Shareholders that they
currently enjoy as shareholders of an AIM company. The Company will:

·      continue to communicate information about the Company (including
annual accounts) to its Shareholders, as required by the Companies Act; and

·      implement the Matched Bargain Facility which would facilitate
Shareholders buying and selling Ordinary Shares on a matched bargain basis
following Cancellation.

Further information on the Cancellation, Re-registration, the General Meeting
and the New Articles is set out below or in the Circular.

The Board urges Shareholders that they are not required, if they do not wish,
to dispose of their Ordinary Shares in any manner. However, Shareholders
should note that, despite the measures the Company shall establish, if the
Cancellation proceeds, their ability to trade their Ordinary Shares may be
reduced.

Should the Resolutions be passed, a Shareholder has three options with respect
to its shareholding in the Company:

1.   remain a continuing Shareholder of the following the Cancellation and
Re-registration of the Company as a private entity;

2.   sell Ordinary Shares prior to the Cancellation, which will occur
following the proposed last day of trading on 1 May 2025; or

3.   sell Ordinary Shares via the Matched Bargain Facility, for which
further details are provided below.

The Board can make no recommendation as to whether or not individual
Shareholders should seek to sell their Ordinary Shares in light of the
proposed Cancellation. Shareholders should carefully consider the advantages
and disadvantages of tendering Ordinary Shares into the exchange facility.
Shareholders who are in any doubt as to what they should do are advised to
seek their own independent advice from a professional adviser duly authorised
and regulated by the FCA.  This is a matter for individual Shareholders and
will depend on their personal, financial and fiscal circumstances.

Current trading

The Company trading results (on a pre-highlighted items basis) for the 12
month period ended 29 December 2024 are in line with current market
expectations.

In the first 12 weeks of the current reporting period, total Group sales of
£4.2 million were £0.1 million lower than the equivalent weeks trading in
the previous year (2024: total Group sales of £4.3 million). A warm weather
spell during March, combined with the introduction of the higher £2
admissions charge for non-residents, resulted in total sales at the Pier of
£1.8 million, which were £0.1 million higher year-on-year (2024: total sales
of £1.7 million). Conversely, trading in the Bars and Golf divisions has seen
a slow start, with total sales of £1.0 million and £1.4 million
respectively, each £0.1 million lower than the prior weeks' equivalent in
2024 (2024: Bars total sales of £1.1 million, Golf total sales of £1.5
million). As in previous years, there are no sales for Lightwater Valley in
the first 12 weeks of the financial year, due to the normal seasonal winter
closure of the park.

Background and reasons for proposed Cancellation, Re-registration and adoption
of New Articles

Over the past several years, the Company has faced persistent challenging
trading conditions, impacted by, inter alia, COVID-19, repeat bad weather
during peak summer trading periods, recent significant Budget increases in
National Insurance to commence from 6 April 2025, pressures on consumer
discretionary spending and a change in consumer behaviours. Accordingly, the
Company has necessarily focused its strategy on cost savings, disposals of
underperforming assets and health of the balance sheet, limiting its ability
to invest in growing the business. Whilst the Directors believe that the
Company has been effective in this regard, trading challenges have continued
and the Board has accordingly been undertaking a review of its strategic
options.

Government increases in the National Minimum Wage, high interest rates,
together with increases in energy and other costs flowing from the events in
Ukraine has significantly increased the Group's cost base.

This cost of living crisis is also having a material impact on how consumers
purchase. As prices rise, consumers are cutting back on non-essential spending
which is impacting all parts of the Hospitality and Leisure industry which
includes most of the Group's business activities.

In reaching its conclusion to pursue the Cancellation, the Board has consulted
certain Shareholders and has considered the following key factors amongst
others:

a)   Costs and regulatory burden: The considerable cost and management time
and the legal and regulatory burden associated with maintaining the Company's
admission to trading on AIM are, in the Board's opinion, disproportionate to
the benefits of the Company's continued admission to trading on AIM. Given the
lower costs associated with unquoted company status, it is estimated that the
Cancellation will materially reduce the Company's recurring administrative and
adviser costs by between £250,000 and £300,000 per annum, which the Board
believes would be a significant reduction in overhead cost burden that in turn
would allow for cash to be invested directly into supporting the longer-term
growth strategy of the business. The Company expects to realise additional
cost savings from reduced regulatory expenses.

b)   Refinancing: Post the Cancellation, the board intends to actively
pursue a partial refinancing of the bank debt. The board are in early stage
discussions with the two major shareholders regarding this refinancing. The
professional fees involved in any such possible transaction will be
significantly lower if the business is unquoted than if it is done as a quoted
company. There can be no certainty any such refinancing will take place.

c)   Lack of liquidity: There continues to be limited liquidity in the
Ordinary Shares on Aim and, as a result, the Board believes that Shareholders
are not provided with opportunities to trade in meaningful volumes or with
frequency in an active market in Ordinary Shares.

d)   Market volatility: As a result of the limited liquidity of Ordinary
Shares described above, small trades in Ordinary Shares can have a significant
impact on price and, therefore, market valuation which, the Board believes, in
turn has a materially adverse impact on: (a) the Company's status within its
industry; (b) the perception of the Company among its customers, suppliers and
other partners; (c) staff morale; and (d) the Company's ability to seek
appropriate financing or realise an appropriate value for any material future
sales or disposals.

e)   Challenges related to the Company's position as a micro-cap stock:
Growing the company, a UK micro-cap stock, comes with a range of challenges,
which, in the Board's view, stem from the Company's small market valuation,
limited resources, and the dynamic nature of the market. These challenges
include, but are not limited to: (i) access to capital; (ii) a lack of
visibility amongst analysts, media and potential investors; (iii) increased
volatility in Company valuation unrelated to Company performance leading to
higher risk perception; and (iv) an aversion from potential new investors
seeking stability and a valuation that aligns with Company performance. For
these reasons, the Board believes that the Company is unlikely to attract the
material investment it requires from third party equity investors whilst
current market conditions continue to prevail, and does not see such
conditions changing in the medium term. Consequently, the Board believes that
the most likely source of future funds would be through private capital and
debt funding. Furthermore, the UK small and micro-cap markets have changed
significantly since the Company's IPO and the Directors believe that the
Company's current public market valuation reflects neither the current status
of the business nor its underlying potential.

f)    Strategic flexibility: The Board believes that an unquoted company
can take and implement decisions more quickly than a company which is publicly
traded as a result of the more flexible regime that is applicable to a private
company; and

g)   Future trading of shares: The Board believes that it can make
satisfactory arrangements for Shareholders to transfer their shares
periodically via a matched bargain trading facility.

A summary of the principal effects of the Cancellation can be found in Part 2
of the Circular.

Therefore, as a result of this review, the Board has unanimously concluded
that the proposed Cancellation and Re-registration is in the best interests of
the Company and its Shareholders as a whole. The Board makes no
recommendation as to whether or not individual Shareholders should seek to
sell their Ordinary Shares in light of the proposed Cancellation either
pursuant to the exchange facility or otherwise. Shareholders should carefully
consider the advantages and disadvantages of tendering Ordinary Shares into
the exchange facility as set out in the Circular.

Exchange Facility and Matched Bargain Facility

The Directors are aware that certain Shareholders may wish to acquire or
dispose of Ordinary Shares in the Company following the Cancellation.

Therefore, the Company has made arrangements for the Matched Bargain Facility
to assist Shareholders to trade in the Ordinary Shares to be put in place from
the day of Cancellation if the Resolution is passed. The Matched Bargain
Facility will be provided by J P Jenkins Limited ("JP Jenkins"). JP Jenkins is
a liquidity venue for unlisted or unquoted assets in companies, enabling
shareholders and prospective investors to buy and sell equity on a matched
bargain basis. JP Jenkins is a trading name of InfinitX Limited and Appointed
Representative of Prosper Capital LLP (FRN453007).

Under the Matched Bargain Facility, Shareholders or persons wishing to acquire
or dispose of Ordinary Shares will be able to leave an indication with JP
Jenkins, through their stockbroker (JP Jenkins is unable to deal directly with
members of the public), of the number of Ordinary Shares that they are
prepared to buy or sell at an agreed price. In the event that JP Jenkins is
able to match that order with an opposite sell or buy instruction, they would
contact both parties and then effect the bargain. Should the Cancellation
become effective and the Company put in place the Matched Bargain Facility,
details will be made available to Shareholders on the Company's website at
www.brightonpiergroup.com and directly by letter or e-mail (where
appropriate).

Following Cancellation, the provision of the Matched Bargain Facility will be
kept under review by the Board and, in determining whether to continue to
offer a Matched Bargain Facility, the Company shall consider expected (and
communicated) Shareholder demand for such a facility as well as the
composition of the Company's register of members and the costs to the Company
and Shareholders. Shareholders should therefore note that there can be no
certainty that the Matched Bargain Facility will continue to be in place for
an extended period of time following Cancellation although it is the Board's
expectation that this will be in place for at least five years following
Cancellation.

There can be no guarantee as to the level of the liquidity or marketability of
the Ordinary Shares under the Matched Bargain Facility, or the level of
difficultly for Shareholders seeking to realise their investment under the
Matched Bargain Facility.

Before giving your consent to the Cancellation, you may want to take
independent professional advice from an appropriate independent financial
adviser.

If Shareholders wish to buy or sell Ordinary Shares on AIM they must do so
prior to the Cancellation becoming effective. As noted above, in the event
that Shareholders approve the Cancellation, it is anticipated that the last
day of dealings in the Ordinary Shares on AIM will be 1 May 2025 and that the
effective date of the Cancellation will be 2 May 2025.

There can be no guarantee as to the level of the liquidity or marketability of
the Ordinary Shares under the Matched Bargain Facility, or the level of
difficulty for Shareholders seeking to realise their investment under the
Matched Bargain Facility.

Before giving your consent to the Cancellation, you may want to take
independent professional advice from an appropriate independent financial
adviser.

A copy of this announcement and the Circular will be made available on the
Company's website at www.brightonpiergroup.com. Shareholders are strongly
encouraged to read the Circular in full.

Capitalised terms used but not defined in this announcement shall have the
same meanings as are given to such terms in the Circular.

 Enquiries:
 The Brighton Pier Group                                           Tel: 020 7376 6300
 Anne Ackord, Chief Executive Officer                              Tel: 012 7360 9361
 John Smith, Chief Financial Officer                               Tel: 020 7376 6300

 Cavendish Capital Markets Limited (Nominated Adviser and Broker)
 Stephen Keys (Corporate Finance)                                  Tel: 020 7397 8926
 Callum Davidson (Corporate Finance)                               Tel: 020 7397 8923

 

 

Appendix 1

EXTRACTS FROM THE CIRCULAR

 3.           Process for, and principal effects of, the Cancellation
 Under the AIM Rules, it is a requirement that the Cancellation must be
 approved by Shareholders holding not less than 75 per cent. of votes cast by
 Shareholders at the General Meeting. Accordingly, the Notice of General
 Meeting set out in this Circular contains a special resolution to approve the
 Cancellation. Furthermore, Rule 41 of the AIM Rules requires any AIM company
 that wishes the London Stock Exchange to cancel the admission of its shares to
 trading on AIM to notify shareholders and to separately inform the London
 Stock Exchange of its preferred cancellation date at least 20 clear Business
 Days prior to such date. Additionally, the Cancellation will not take effect
 until at least five clear Business Days have passed following the passing of
 the Cancellation Resolution.

 If the Cancellation Resolution is passed at the General Meeting, it is
 proposed that the last day of trading in the Ordinary Shares on AIM will be 1
 May 2025 and that the Cancellation will take effect at 7:00 a.m. on 2 May
 2025.

 If the Cancellation becomes effective, Cavendish will cease to be the
 nominated adviser of the Company pursuant to the AIM Rules and the Company
 will no longer be required to comply with the AIM Rules. However, the Company
 will remain subject to the Takeover Code for a period of two years after the
 Cancellation, details of which are set out below.
 The principal effects of the Cancellation will include the following:
 §   there will be no formal market mechanism enabling the Shareholders to
 trade Ordinary Shares, save for the Matched Bargain Facility referred to in
 paragraph 4.2 below, and no other recognised market or trading facility is
 intended to be put in place to facilitate trading in the Ordinary Shares;
 §   while the Ordinary Shares will remain freely transferable, it is
 possible that, following the publication of this Document, the liquidity and
 marketability of the Ordinary Shares will be further reduced and their value
 adversely affected (however, as set out above, the Directors believe that the
 existing liquidity in the Ordinary Shares is limited in any event);

 §   the Ordinary Shares may be more difficult to sell compared to shares of
 companies traded on AIM (or any other recognised market or trading exchange);
 §   in the absence of a formal market and quote, it may be difficult for
 Shareholders to determine the market value of their investment in the Company
 at any given time;
 §   the regulatory and financial reporting regime applicable to companies
 whose shares are admitted to trading on AIM will no longer apply;
 §   Shareholders will no longer be afforded the protections given by the
 AIM Rules, such as the requirement to be notified of price sensitive
 information or certain events and the requirement that the Company seek
 shareholder approval for certain corporate actions, where applicable,
 including substantial transactions, reverse takeovers, related party
 transactions and fundamental changes in the Company's business, including
 certain acquisitions and disposals;
 §   the levels of disclosure and corporate governance within the Company
 will not be as stringent as for a company quoted on AIM;
 §   the Company will no longer be subject to UK MAR regulating inside
 information and other matters;
 §   the Company will no longer be required to publicly disclose any change
 in major shareholdings in the Company under the Disclosure, Guidance and
 Transparency Rules;
 §   the Company will no longer be required to have an independent nominated
 adviser and broker;
 §   whilst the Company's CREST facility will remain in place immediately
 post the Cancellation, the Company's CREST facility may be cancelled in the
 future and, although the Ordinary Shares will remain transferable, they may
 cease to be transferable through CREST (in which case, Shareholders who hold
 Ordinary Shares in CREST will receive share certificates);
 §   stamp duty will become due on transfers of shares and agreements to
 transfer shares unless a relevant exemption or relief applies to a particular
 transfer; and
 §   the Cancellation and Re-registration may have personal taxation
 consequences for Shareholders. Shareholders who are in any doubt about their
 tax position should consult their own professional independent tax adviser.
 The Directors are aware that certain Shareholders may be unable or unwilling
 to hold Ordinary Shares in the event that the Cancellation is approved and
 becomes effective. Shareholders should take independent advice about retaining
 their interests in Ordinary Shares prior to the Cancellation becoming
 effective.
 The above considerations are not exhaustive, and Shareholders should seek
 their own independent advice when assessing the likely impact of the
 Cancellation on them.
 For the avoidance of doubt, the Company will remain registered with the
 Registrar of Companies in England and Wales in accordance with and, subject to
 the Companies Act, notwithstanding the Cancellation and Re-registration.
 The Company currently intends to continue to provide certain facilities and
 services to Shareholders that they currently enjoy as shareholders of an AIM
 company. The Company will:
 §   continue to communicate information about the Company (including annual
 accounts) to its Shareholders, as required by the Companies Act; and
 §   implement the Matched Bargain Facility which would facilitate
 Shareholders buying and selling Ordinary Shares on a matched bargain basis
 following Cancellation.
 The Resolutions to be proposed at the General Meeting include the adoption of
 the New Articles, with effect from the Re-registration. A summary of the
 principal differences between the Current Articles and the proposed New
 Articles is included in Part 2 of this Document. A copy of the New Articles
 and a copy marked up to show changes from the Current Articles can be viewed
 on the Company's website at https://www.brightonpiergroup.com/.

 

 4.           Transactions in the Ordinary Shares prior to and post
 the proposed Cancellation
 4.1.         Prior to Cancellation
 Shareholders should note that they are able to continue trading in the
 Ordinary Shares on AIM prior to Cancellation.
 4.2.         Dealing and settlement arrangements
 The Directors are aware that certain Shareholders may wish to acquire or
 dispose of Ordinary Shares in the Company following the Cancellation.

 Therefore, the Company has made arrangements for the Matched Bargain Facility
 to assist Shareholders to trade in the Ordinary Shares to be put in place from
 the day of Cancellation if the Resolution is passed. The Matched Bargain
 Facility will be provided by J P Jenkins Limited ("JP Jenkins"). JP Jenkins is
 a liquidity venue for unlisted or unquoted assets in companies, enabling
 shareholders and prospective investors to buy and sell equity on a matched
 bargain basis. JP Jenkins is a trading name of InfinitX Limited and
 Appointed Representative of Prosper Capital LLP (FRN453007).

 Under the Matched Bargain Facility, Shareholders or persons wishing to acquire
 or dispose of Ordinary Shares will be able to leave an indication with JP
 Jenkins, through their stockbroker (JP Jenkins is unable to deal directly with
 members of the public), of the number of Ordinary Shares that they are
 prepared to buy or sell at an agreed price. In the event that JP Jenkins is
 able to match that order with an opposite sell or buy instruction, they would
 contact both parties and then effect the bargain. Should the Cancellation
 become effective and the Company put in place the Matched Bargain Facility,
 details will be made available to Shareholders on the Company's website at
 https://www.brightonpiergroup.com/ and directly by letter or e-mail (where
 appropriate).

 Following Cancellation, the provision of the Matched Bargain Facility will be
 kept under review by the Board and, in determining whether to continue to
 offer a Matched Bargain Facility, the Company shall consider expected (and
 communicated) Shareholder demand for such a facility as well as the
 composition of the Company's register of members and the costs to the Company
 and Shareholders. Shareholders should therefore note that there can be no
 certainty that the Matched Bargain Facility will continue to be in place for
 an extended period of time following Cancellation although it is the Board's
 expectation that this will be in place for at least five years following
 Cancellation.
 There can be no guarantee as to the level of the liquidity or marketability of
 the Ordinary Shares under the Matched Bargain Facility, or the level of
 difficultly for Shareholders seeking to realise their investment under the
 Matched Bargain Facility.

 Before giving your consent to the Cancellation, you may want to take
 independent professional advice from an appropriate independent financial
 adviser.

 If Shareholders wish to buy or sell Ordinary Shares on AIM they must do so
 prior to the Cancellation becoming effective. As noted above, in the event
 that Shareholders approve the Cancellation, it is anticipated that the last
 day of dealings in the Ordinary Shares on AIM will be 1
 (https://ir.sondrel.com/investors) May 2025 and that the effective date of the
 Cancellation will be 2 (https://ir.sondrel.com/investors) May 2025.

 

 9.           Recommendation
 The Directors consider that the Proposals are in the best interests of the
 Company and its Shareholders as a whole and, therefore, unanimously recommend
 that you vote in favour of the Resolutions at the General Meeting as each of
 the Directors intends to vote, or procure the vote, in respect of, in
 aggregate, 11,384,185 Ordinary Shares to which they or their connected persons
 are beneficially entitled.

 

Appendix 2

 EXPECTED TIMETABLE OF PRINCIPAL EVENTS
 Event                                                                          Time and/or date*
 Notice provided to the London Stock Exchange of the proposed Cancellation      2 April 2025
 under AIM Rule 41
 Publication and posting of this Document to Shareholders                       2 April 2025
 Latest time and date for receipt of proxy votes in respect of the General      10 a.m. on 16 April 2025
 Meeting
 General Meeting                                                                10 a.m. on 22 April 2025
 Expected last day of dealings in Ordinary Shares on AIM                        1 May 2025
 Time and date of Cancellation                                                  7.00 a.m. on 2 May 2025
 Matched Bargain Facility for Ordinary Shares expected to commence              7.00 a.m. on 6 May 2025
 Re-registration as a private company                                           By 12 May 2025
 Notes:

 1.   References to times in this Document are to London time, unless
 otherwise stated.
 2.   Each of the times and dates in the above timetable is subject to
 change. If any of the above times and/or dates change, the revised times and
 dates will be notified to Shareholders by an announcement through a Regulatory
 Information Service.

 3.   The Cancellation requires the approval of not less than 75 per cent. of
 the votes cast (in person or by proxy) by Shareholders at the General Meeting.

 4.   The Re-registration requires the approval of not less than 75 per cent.
 of the votes cast (in person or by proxy) by Shareholders at the General
 Meeting.

 

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