REG - Colefax Group PLC - Tender Offer

ColefaxAnnouncement

01/09/2023 07:00

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RNS Number : 0324L  Colefax Group PLC  01 September 2023

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR
FROM THE UNITED STATES OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018

Capitalised terms in this announcement, unless otherwise defined, have the
same meanings given to them in the Circular published today which is available
to view on the Company's website at https://www.colefaxgroupplc.com/

COLEFAX GROUP PLC

("Colefax", the "Group" or the "Company")

Announcement of Tender Offer

and

Posting of Circular

 

The Company is pleased to announce today the launch of a proposed Tender Offer
by Peel Hunt to purchase up to 14.0 per cent. of the Company's issued share
capital. The Tender Offer is being proposed in line with the authority to
purchase Shares on-market that was granted by Shareholders at the Company's
2022 Annual General Meeting held on 29 September 2022.

 

The Company has engaged Peel Hunt to implement the Tender Offer. Pursuant to
the Tender Offer, Peel Hunt will purchase, as principal, up to a maximum of
1,013,254 Shares (being 14.0 per cent. of the Company's issued ordinary share
capital).

 

The Company has granted a put option to Peel Hunt pursuant to the Repurchase
Agreement under which Peel Hunt may require the Company to purchase at the
Tender Price the Shares purchased by Peel Hunt pursuant to the Tender Offer.
Shares that are purchased from Peel Hunt by the Company will be cancelled.

 

A Circular providing more information in relation to the Tender Offer and
setting out the terms and conditions of and the procedure for participating in
the Tender Offer, will be posted to Shareholders today.

 

Outline of the Tender Offer

 

The key points to the Tender Offer are as follows:

·              The Tender Offer is for up to 14.0 per cent. of the
Company's issued share capital (the Company does not hold any Shares in
treasury). Under the Tender Offer, each Shareholder is entitled to have up to
14.0 per cent. of his or her shareholding purchased by Peel Hunt at the Tender
Price.

·              The Tender Offer is being made at the lower of: (i) 700
pence per Share; or (ii) 105 per cent. of the average closing mid-market price
per Share as derived from the London Stock Exchange Daily Official List over
the five Business Days immediately preceding the Take-up Announcement Date.

·              Assuming a Tender Price of 700 pence, the Tender Offer
is being made at:

o  a discount of 7.6 per cent. to the closing mid-market price per Share on
31 August 2023;

o  a discount of 3.5 per cent. to the 30 day volume weighted average price
per Share on 31 August 2023; and

o  a discount of 1.8 per cent. to the 90 day volume weighted average price
per Share on 31 August 2023.

·              Shareholders will be able to decide whether to tender
none, some or all of their Shares within the overall limits of the Tender
Offer.

·              Tenders in excess of a Shareholder's Basic Entitlement
will only be accepted to the extent that other Shareholders tender less than
their Basic Entitlement or do not tender any Shares and will, if necessary, be
scaled back on a pro rata basis (save that tenders from Shareholders who hold
1,000 Shares or less will be accepted in full subject to there being capacity
to purchase those Shares in accordance with the terms of the Tender Offer).

Any Shares purchased by Peel Hunt under the Tender Offer which Peel Hunt
subsequently requires the Company to purchase under the terms of the
Repurchase Agreement will be cancelled. The Tender Offer is subject to the
conditions set out in the Repurchase Agreement being fulfilled. Following
completion of the Repurchase Agreement, the Company's issued share capital
will be reduced to 6,224,281 Shares, assuming the maximum 1,013,254 Shares
(being 14.0 per cent. of the Company's issued share capital) are bought back.
The Tender Offer is open to Shareholders on the register of the Company at
6.00 p.m. on 21 September 2023 (the 'Record Date').

There is no guarantee that the Tender Offer will take place. The Tender Offer
will not proceed if any of the conditions specified in paragraph 2 of Part III
of the Circular are not satisfied or if it is withdrawn by the Company at any
point prior to the announcement of the results of the Tender Offer. The
non-fulfilment of the specified conditions would mean that the Tender Offer
could not be implemented and that the Company would have to bear the abortive
costs of making the Tender Offer.

Intentions of the Directors

 

The following Directors have informed the Company that they intend to tender
the following number of Shares into the Tender Offer:

 Name            Number of Shares to be tendered  Percentage of Director's Holding (%)
 David Green     183,873(1)                       14.0%
 Robert Barker   16,194(2)                        14.0%
 Key Hall        8,000                            6.7%
 Wendy Nicholls  9,675                            14.0%

 

 

In each case acceptance by the Company of an application under the Tender
Offer in excess of 14.0% of the applicant's holding is subject to there being
capacity to purchase those Shares in accordance with the terms of the Tender
Offer.

( )

(1)The Shares to be tendered by David Green comprise of 141,878 Shares in his
name and 41,995 Shares in his wife's name.

(2)The Shares to be tendered by Robert Barker comprise of 8,097 Shares in his
name and 8,097 Shares in his wife's name.

 

This summary should be read in conjunction with the full text of the Circular,
when available.

 

Rule 9 Waiver and the Takeover Code

 

The Board has consulted with the Takeover Panel which has agreed that it will
waive any obligation on the Concert Party (as defined in the appendix to this
Announcement) to make a general offer under Rule 9 and Rule 37 of the Takeover
Code as a result of the Tender Offer, provided that the holders of a majority
of the Ordinary Shares held by Independent Shareholders (as defined in the
Circular), confirm in writing that they would approve a Rule 9 Waiver, if a
resolution to approve a Rule 9 Waiver were put to the Independent Shareholders
at the General Meeting. The Company is pleased to announce that it has now
received such written confirmation.

 

 

Expected Timetable

 

 Announcement of Tender Offer                                                 1 September 2023
 Circular sent to Shareholders (together with Tender Offer Application Forms  1 September 2023
 for Shareholders holding certificated Shares)
 Tender Offer opens                                                           1 September 2023
 Latest time and date for receipt of Tender Offer Application Forms and TTE   1.00 p.m. on 21 September 2023
 Instructions in relation to Tender Offer
 Record time and date for the Tender Offer                                    6.00 p.m. on 21 September 2023
 Announcement of take-up level under the Tender Offer                         by 8.00 a.m. on 22 September 2023
 Purchase of Shares under the Tender Offer                                    22 September 2023
 CREST accounts credited with Tender Offer proceeds and revised holdings of   on 29 September 2023
 Shares (or, in the case of unsuccessful tenders, for entire holdings of
 Shares)
 Despatch of cheques for Tender Offer proceeds in respect of successfully     on 29 September 2023
 tendered certificated Shares and despatch of balance share certificates in
 respect of unsold certificated Shares

 

The above times and/or dates are indicative only and may change. If any of the
above times and/ or dates change, the revised times and/or dates will be
notified to Shareholders by announcement through a regulatory information
service of the London Stock Exchange.

 

All references to times in this document are to London times unless otherwise
stated.

 

Enquiries:

 

 Colefax Group plc                 +44 (0)20 7318 6000

 David Green, Chief Executive

 Rob Barker, Finance Director

 Peel Hunt LLP (NOMAD and broker)  +44 (0)20 7418 8900

 Adrian Trimmings

 Andrew Clark

 Lalit Bose

 KTZ Communications                +44 (0)20 3178 6378

 Katie Tzouliadis

 Robert Morton

 

Appendix

 

The Concert Party and the Takeover Code

The Concert Party

David Green, the Chairman and Chief Executive of the Company, together with
certain family members (together, the 'Concert Party') are all considered to
be acting in concert with each other in relation to the Company for the
purposes of the City Code on Takeovers and Mergers (the 'Code'). The Concert
Party currently holds 2,113,386 Ordinary Shares, representing in aggregate
29.2 per cent. of the current issued voting share capital of the Company.

The Takeover Code

Under Rule 9 of the Code when:

·      a person acquires an interest in shares which (taken together with
shares in which they and persons acting in concert (as defined by the Code)
with them are interested) carry 30 per cent. or more of the voting rights of a
company subject to the Code; or

·      any person who, together with persons acting in concert with them,
is interested in shares which in aggregate carry not less than 30 per cent. of
the voting rights of a company subject to the Code, but does not hold shares
carrying more than 50 per cent. of the voting rights of the company, and such
person, or any persons acting in concert with them, acquires an interest in
any shares which increase the percentage of shares carrying voting rights in
which they are interested,

that person together with the persons acting in concert with them, is normally
required to extend offers in cash, at the highest price paid by them (or any
persons acting in concert with them) for shares in the company within the
preceding 12 months, to the holders of any class of equity share capital
whether voting or non-voting and also to the holders of any other class of
transferable securities carrying voting rights (a 'Rule 9 Offer').

Rule 37 of the Code states that when a company redeems or purchases its own
voting shares, any resulting increase in the percentage of shares carrying
voting rights in which a person or group of persons acting in concert is
interested will be treated as an acquisition for the purposes of Rule 9.
However, Note 1 of Rule 37.1 states that a person who comes to exceed the
limits in Rule 9.1 as a consequence of a company's redemption or purchase of
its own shares will not normally incur an obligation to make a mandatory offer
unless that person is a director, or the relationship of the person with any
one or more of the directors is such that the person is, or is presumed to be,
acting in concert with any of the directors. A person who has appointed a
representative to the board of the company, and investment managers of
investment trusts, will be treated for these purposes as a director.

The Concert Party's interest in Ordinary Shares might, as a result of the
Tender Offer, increase above 30 per cent. of the voting rights of the Company.
The Tender Offer might, therefore, absent a waiver of the obligation to make a
general offer under Rule 9 and Rule 37 of the Code by the Panel, give rise to
an obligation on the Concert Party to make a general offer for the entire
issued share capital of the Company.

Waiver of the obligation to make a general offer under Rule 9 and Rule 37 of
the Code

Under Rule 37 and Note 1 on the Notes on the Dispensations from Rule 9 of the
Code, the Panel will normally waive the requirement for a Rule 9 Offer if,
inter alia, those shareholders of the Company who are independent of the
persons who would otherwise be required to make an offer and any person acting
in concert with them do not have any interest which may compromise their
independence (the 'Independent Shareholders') pass an ordinary resolution on a
poll at a general meeting approving such a waiver (a 'Waiver Resolution').
Under Note 5 on the Notes on the Dispensations from Rule 9 of the Code, the
Panel may waive the requirement for a Rule 9 Offer and a Waiver Resolution if
Independent Shareholders holding more than 50 per cent. of the Company's
shares capable of being voted on such a Waiver Resolution confirm in writing
that they approve the proposed waiver and would vote in favour of a Waiver
Resolution were one to be put to the Shareholders at a general meeting.

Confirmations and acknowledgements

Independent Shareholders holding more than 50 per cent. of the Company's
Ordinary Shares capable of being voted on a resolution to approve a Waiver
Resolution, being Jupiter Asset Management Limited and Schroder Investment
Management Limited, have confirmed the following:

·      they are beneficial owners of 3,049,208 Ordinary Shares in the
issued share capital of the Company, representing at the date hereof 42.1 per
cent. of the Company's issued share capital carrying voting rights (and 59.5%
of the Ordinary Shares capable of being voted on a resolution to approve a
Waiver Resolution) and have absolute discretion over the manner in which these
Ordinary Shares are voted. These Ordinary Shares are held free of all liens,
pledges, charges and encumbrances;

·      that (a) save for the fact that they are Shareholders, there is no
connection between any Independent Shareholder and the Concert Party; (b) they
do not have any interest or potential interest, whether commercial, financial
or personal, in the outcome of the Tender Offer; and (c) they are an
Independent Shareholder of the Company as defined above; and

·      that, in connection with the Tender Offer: (a) they consent to the
Panel granting a waiver from the obligation for the Concert Party to make a
Rule 9 offer to the Shareholders; (b) they consent to the Panel dispensing
with the requirement that the waiver from such obligation be conditional on a
Waiver Resolution being approved by Independent Shareholders of the Company at
a general meeting; and (c) they would vote in favour of a Waiver Resolution to
waive the obligation for the Concert Party to make a Rule 9 Offer upon
completion of the Tender Offer, if a Waiver Resolution were to be put to the
Independent Shareholders of the Company at a general meeting.

In giving the confirmations referred to above, the Independent Shareholders
have acknowledged:

·      that the Panel will approve the waiver from the obligation for the
Concert Party to make a Rule 9 Offer without the requirement for the waiver
having to be approved by Independent Shareholders of the Company at a general
meeting;

·      that if no general meeting is held to approve the Waiver Resolution
to waive the obligation for the Concert Party to make a Rule 9 Offer:

i.      there will not be an opportunity for any other person to make any
alternative proposal to the Company conditional on such Waiver Resolution not
being approved by Independent Shareholders of the Company;

ii.     there will not be an opportunity for other Shareholders to make
known their views on the Tender Offer; and

iii.    there will be no requirement for the Company either (i) to obtain
and make known to its Shareholders competent independent advice under Rule 3
of the Code on the Tender Offer and the waiver of the obligation for the
Concert Party to make a Rule 9 offer; or (ii) to publish a circular to
Shareholders of the Company in compliance with Appendix 1 of the Code in
connection with this matter.

The Board has consulted with the Panel which has agreed that it will waive any
obligation on the Concert Party to make a general offer under Rule 9 and Rule
37 of the Code as a result of the Tender Offer and, provided that the holders
of a majority of the Ordinary Shares, held by Independent Shareholders,
confirm in writing that they would approve the Rule 9 Waiver, if a resolution
to approve the Rule 9 Waiver were put to the Independent Shareholders at the
General Meeting.

The holders of a majority of Ordinary Shares, held by Independent
Shareholders, have given that written confirmation and the Board has also now
received the Panel's confirmation that the Panel has granted a waiver of the
obligation on the Concert Party to make a general offer under Rule 9 and Rule
37 of the Code to the extent that such obligation would otherwise arise as a
result of the Tender Offer.

 

Important notice

 

Disclaimer

 

The information contained within this Announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(Regulation 596/2014) as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018. Upon the publication of this
Announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.

 

The information in this announcement is for background purposes only and does
not purport to be full or complete. No reliance may be placed for any purpose
on the information contained in this announcement or its accuracy or
completeness.

 

Peel Hunt LLP is acting for Colefax Group plc in relation to the Tender Offer
and no one else and will not be responsible to anyone other than the Company
for providing the protections afforded to the customers of Peel Hunt LLP nor
for providing any advice in relation to the Tender Offer.

 

This announcement does not constitute, or form any part of, any offer for or
invitation to sell or purchase any securities, or any solicitation of any
offer for securities in any jurisdiction. Any acceptance or other response to
the Tender Offer should be made only on the basis of information contained or
referred to in the Circular which will shortly be available on the Company's
investor relations website http://www.colefaxgroupplc.com and the personalised
Tender Offer Application Form which will be sent to Shareholders who hold
Shares in certificated form (i.e. not in CREST). The Circular and Tender Offer
Application Form will contain important information including the full terms
and conditions of the Tender Offer and how it may be accepted. Shareholders
are urged to read the Circular and, where applicable, the Tender Offer
Application Form, carefully.

 

The Tender Offer is not being made in or into, and is not capable of
acceptance in or from, the United States, Canada, Australia, New Zealand, the
Republic of South Africa or Japan. Custodians, nominees and trustees should
observe these restrictions and should not send or distribute documents in or
into the United States, Canada, Australia, New Zealand, the Republic of South
Africa or Japan.

 

The timetable for the Tender Offer may be influenced by a range of
circumstances such as market conditions. There is no guarantee that the Tender
Offer will occur and Shareholders should not base their financial decisions on
the Company's intentions in relation to the Tender Offer at this stage.

 

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