Disposal, Name Change and Notice of GM
21/04/2022 07:00
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RNS Number : 8213I Immedia Group PLC 21 April 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS CONSIDERED TO BE IN THE
PUBLIC DOMAIN.
21 April 2022
Immedia Group Plc
("Immedia" or "the Company" or "the Group")
(to be renamed Immediate Acquisition Plc)
Disposal of Immedia Broadcast Limited
Change of Name and Notice of General Meeting
Introduction
Immedia announces the Disposal of its wholly owned subsidiary, Immedia
Broadcast Limited, which is subject, inter alia, to Shareholders' approval at
a General Meeting which is to be held at 10.00 a.m. on 9 May 2022 at the
offices of Charles Russell Speechlys LLP, 5 Fleet Place, London EC4M 7RD. In
addition, the Company is proposing to change its name to Immediate Acquisition
Plc with effect from Completion of the Disposal.
The Disposal will represent a fundamental change of business, as well as a
related party transaction, under the AIM Rules for Companies following
completion of which, the Company will become an AIM Rule 15 cash shell.
The purpose of the Circular is to provide you with details of the Proposals,
to explain the background to and the reasons for the Proposals and why the
Independent Directors (in respect of the Disposal) recommend that Shareholders
vote in favour of Resolutions 1 and 2 and all Directors recommend that
Shareholders vote in favour of Resolution 3, all to be proposed at the General
Meeting.
The Circular, and notice of the General Meeting are available on the Company's
website: http://www.immediaplc.com/
Definitions
Definitions in this announcement have the same meaning as in the Circular to
Shareholders dated 21 April 2022.
For further information please contact:
Immedia Group Plc Tel: +44 (0) 1635 556200
Tim Hipperson, Non-executive Chairman
Ross Penney, Chief Executive
SPARK Advisory Partners Limited (Nomad) Tel: +44 (0) 203 368 3550
Mark Brady
Neil Baldwin
SP Angel Corporate Finance LLP (Broker) Tel: +44 (0) 207 470 0470
Abigail Wayne
Buchanan Communications Tel: +44 (0) 207 466 5000
Chris Lane
Background to and reasons for the Disposal
As announced previously, in the Directors' opinion, the Company has
experienced a challenging trading environment in the last few years, due
primarily to both Brexit and the impact of Covid-19. The Company's core retail
sector business, operated through Immedia Broadcast Limited, has been
challenged beyond expectations and, although the Company sought to scale-up
Immedia Broadcast's operations via acquisition, prevailing circumstances made
undertaking such a transaction difficult.
For some time, the Directors have believed that Immedia Broadcast Limited
would trade more efficiently as a private company, due in part to being able
to save the significant costs of being a quoted company, and to this end have
been exploring divestment options for the business. Whilst the Board
received some indications of interest from third parties, such indications
were not sufficiently certain or compelling and therefore the Independent
Directors have agreed to undertake the disposal to Immedia Broadcast's
management team.
Current Trading
As previously announced in the Trading Update on 21 December 2021, Immedia
Broadcast Limited experienced a significantly improved outlook for H2 2021,
with September and October 2021 being two of the best trading months in the
Group's history, helped hugely by the creative content and AV installation
work done for participants at COP26 in Glasgow.
Whilst the upturn in trade was significant and trading in Q1 2022 has been
promising, the operations remain too small to readily absorb the costs of
being a PLC and generate a return for investors. Accordingly, the Independent
Directors believe that, despite the UK's apparent recovery from the pandemic,
there remains significant uncertainties in the economy and the growth of the
Group would continue to be limited in the foreseeable future.
Details of the Disposal
The Company is proposing to dispose of its main trading subsidiary, Immedia
Broadcast Limited. Therefore, the Company has entered into a conditional sale
and purchase agreement with AVC Immedia Limited, a company owned by Ross
Penney, John Trevorrow, Keith Robertson, Euan McMorrow and Mark Horrocks in
relation to the Disposal (the "Disposal Agreement").
Under the terms of the Disposal Agreement, AVC Immedia Limited will acquire
the entire issued capital of Immedia Broadcast Limited for a total
consideration of £2.0 million, of which £1.718 million will be paid on
completion of the Disposal with the balance of £282,000 payable in 12 equal
monthly instalments, beginning one month after Completion.
The Disposal will represent a fundamental change of business for the Company,
as well as a related party transaction under the AIM Rules. This is because
the proposed purchaser, AVC Immedia Limited, is owned in part by Ross Penney,
John Trevorrow and Mark Horrocks, each of whom are Directors of the Company.
Should the Disposal complete, the Company will become an AIM Rule 15 cash
shell.
The Disposal also requires approval by Shareholders under the Companies Act
2006 as it constitutes a substantial property transaction with a director,
given Ross Penney and John Trevorrow are Directors of both the Company and the
acquiring entity, and Mark Horrocks is a shareholder in the acquiring entity.
Summary of the Disposal Agreement
On 20 April 2022, the Company entered into the Disposal Agreement, pursuant to
which it has conditionally agreed to dispose of the entire issued share
capital of Immedia Broadcast Limited to AVC Immedia Limited for an aggregate
total consideration of £2,000,000 to be satisfied as follows:
1. by the payment of £1,718,000, in cash, immediately
following completion of the Disposal ("Completion"); and
2. by the payment of deferred consideration of, in
aggregate, £282,000, which shall be payable in 12 equal monthly instalments
of £23,500 with the first such instalment to be paid on the date falling one
month after Completion and each of the remaining 11 instalments to be paid on
the same date in each of the 11 subsequent months.
In addition, the Disposal Agreement includes a provision that, in the event
that AVC Immedia Limited disposes of some or all of the shares or assets of
Immedia Broadcast Limited or any of its or its holding company's shares are
admitted to trading on a recognised investment exchange (each, a "Trigger
Event") within 18 months of Completion, additional consideration (calculated
by reference to, as applicable, the consideration received, or value of, the
relevant Trigger Event) will become due and payable to the Company.
The Disposal Agreement is conditional on the passing of the Resolutions at the
General Meeting and Completion occurring on or before the date falling three
months after the date of the Disposal Agreement.
Due to the nature of the Disposal and the fact that Immedia Broadcast
Limited's existing management team control AVC Immedia Limited, the Company
has given only limited fundamental warranties and a short form and limited tax
covenant in the Disposal Agreement, which are appropriate for a transaction of
this nature.
Residual Assets and Future Intentions
On Completion, the Company intends to adopt a capital growth strategy through
the monetisation of its remaining assets, in an orderly manner, and the
pursuit of an acquisition of a company in the technology or fintech sectors.
Upon receipt of the initial Disposal proceeds the Company will have a total
cash balance of c. £1.718m less costs associated with the Disposal. In
addition to this amount the Company's assets include the Sprift Loan of
£1.05m and 84,200 Ordinary Shares in Audioboom plc, which has a total value
of c. £1.82m, as at close of business on 20 April 2022, being the latest
practicable date prior to publication of the circular.
The Sprift Loan remains outstanding as at the date of the circular and the
intention is to dispose of this loan note, at face value, for cash. In the
meantime, the loan interest continues to be received on a monthly basis.
Over and above the existing cash and investments the Company also intends to
utilise the shareholder support inherent in the outstanding shareholder
warrants. There are 12,000,000 warrants outstanding with an exercise price
of 35p with a warrant expiry date of 30 June 2022. If exercised in full this
could result in an additional £4.2m of funding to finance any potential
acquisition.
Upon Completion, the Company will become an AIM Rule 15 cash shell (see below)
and will therefore be dependent upon the ability of the Board to identify
suitable acquisition targets. The Directors have continued to investigate a
number of potential acquisitions in the technology and fintech sector; none of
which they have yet committed to pursue at this time. There is therefore no
guarantee that the Company will be able to acquire an identified opportunity
at an appropriate price, or at all. As a consequence, the cash resources and
management time may be expended on investigative work and due diligence.
AIM Rule 15
In accordance with AIM Rule 15, the Disposal constitutes a fundamental change
of business of the Company. On Completion, the Company will cease to own,
control or conduct all or substantially all, of its existing trading business,
activities or assets, save as set out in the paragraph headed "Residual Assets
and Future Intentions" above.
The Company will therefore become an AIM Rule 15 cash shell and, as such, will
be required to make an acquisition or acquisitions which constitute(s) a
reverse takeover under AIM Rule 14 (including seeking re-admission as an
investing company (as defined under the AIM Rules)) on or before the date
falling six months from Completion or be re-admitted to trading on AIM as an
investing company under the AIM Rules (which requires the raising of at least
£6 million), failing which the Company's Ordinary Shares would then be
suspended from trading on AIM pursuant to AIM Rule 40. Admission to trading on
AIM would be cancelled six months from the date of suspension should the
reason for the suspension not be rectified during that period.
Any failure in completing an acquisition or acquisitions which constitute(s) a
reverse takeover under AIM Rule 14, including seeking re-admission as an
investing company (as defined under the AIM Rules), will result in the
cancellation of the Company's Ordinary Shares from trading on AIM.
Market conditions may also have a negative impact on the Company's ability to
make an acquisition or acquisitions which constitute(s) a reverse takeover
under AIM Rule 14. There is therefore no guarantee that the Company will be
successful meeting the AIM Rule 15 deadline as described above.
Related Party Transaction
The Disposal constitutes a related party transaction under Rule 13 of the AIM
Rules for Companies. Tim Hipperson and Simon Leathers, the Independent
Directors in respect of the Disposal, consider, having consulted with SPARK,
the Company's Nominated Adviser, that the terms of the Disposal are fair and
reasonable insofar as the Company's Shareholders are concerned. The
Independent Directors in respect of the Disposal have taken into account the
following:
1. Immedia Broadcast Limited has experienced a
challenging trading environment in the last few years due primarily to Brexit
and Covid-19 and was forced to scale back the operations, whilst the business
has restored its financial stability there is no immediate prospect of
developing the scale of the operations to a level that can adequately support
the costs associated with being admitted to trading on AIM; and
2. the Disposal, as it is a fundamental change of
business, will be subject to Shareholders' approval at the General Meeting.
The Independent Directors have also taken into account the principal relevant
considerations that they have identified in relation to the Disposal, which
are set out further in the Circular.
Board Changes & New Company Secretary
Upon Completion, the Executive Directors, Ross Penney and John Trevorrow, will
step down from the Board and leave the three Non-Executive Directors, Tim
Hipperson, Simon Leathers, and Mark Horrocks.
A new Company Secretary, AMBA Secretaries Limited, will also be appointed at
this time.
Change of Name and Registered Office
The Board has agreed with Immedia Broadcast Limited that the Company's name
will be changed to Immediate Acquisition Plc, conditional on the passing of
the Resolutions. Immedia Broadcast Limited will continue to trade under that
name following Completion.
Under the Companies Act 2006, a change of name requires the passing of a
special resolution of Shareholders at a general meeting. Shareholders'
approval is therefore being sought for this change of name pursuant to
Resolution 3.
If Resolution 3 is approved, the change of name will be effective once
Companies House has issued a new certificate on the change of name. The
Company will announce once this has occurred.
The Company will change its registered office to c/o Charles Russell Speechlys
LLP, 5 Fleet Place, London, EC4M 7RD with effect from Completion.
The Company's TIDM, IME.L, will remain unchanged.
Shareholders' Approval
Set out at the end of the Circular is a notice convening the General Meeting
to be held on 9 May 2022 at 10.00 a.m. at the offices of Charles Russell
Speechlys LLP, 5 Fleet Place, London EC4M 7RDat which the following
Resolutions will be proposed:
1. That the sale by the Company of Immedia Broadcast
Limited to AVC Immedia Limited be approved for the purposes of Rule 15 of the
AIM Rules.
2. That the Disposal be approved for the purposes of
section 190 of the Companies Act.
3. That the Change of Name be approved.
Resolutions 1 and 2 will be proposed as ordinary resolutions and Resolution 3
will be proposed as a special resolution.
Action to be taken by Shareholders
Shareholders will find enclosed with the Circular a Form of Proxy for use at
the General Meeting. Shareholders are requested to complete and return the
Form of Proxy to Share Registrars, 3 The Millennium Centre, Crosby Way,
Farnham, Surrey, GU9 7XX in accordance with the instructions printed thereon
as soon as possible but, in any event, to be received no later than 10.00 a.m.
on 5 May 2022 being 48 hours (excluding days that are not business days)
before the time of the General Meeting.
Recommendations
The Independent Directors believe that Resolutions 1 and 2 are in the best
interests of Shareholders and the Company as a whole and accordingly recommend
that the Shareholders vote in favour of Resolutions 1 and 2.
The Independent Directors do not own any Ordinary Shares in the Company and
are therefore unable to vote on the Resolutions to be proposed at the General
Meeting.
Due to their position as owners of the proposed purchaser of Immedia Broadcast
Limited, Ross Penney, John Trevorrow and Mark Horrocks as Directors of the
Company are not considered to be Independent Directors and are not able to
consider Resolutions 1 and 2.
The Independent Directors have considered the alternatives to the Disposal and
have concluded that, out of the alternatives, the Company carrying out the
Disposal and becoming a cash shell is most likely to represent the best value
to the Shareholders in the long term.
Conditional upon Resolutions 1 and 2 being passed, all of the Directors
unanimously recommend Shareholders to vote in favour of Resolution 3 as they
intend to do in respect of their own beneficial shareholdings, which amount,
in aggregate, to 9,313,026 Ordinary Shares, representing approximately 24.78%
of the Company's Ordinary Share capital.
~ Ends ~
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