REG - Impellam Group plc - Declaration of Dividend in Specie

ImpellamAnnouncement

08/02/2024 07:15

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RNS Number : 4013C  Impellam Group plc  08 February 2024

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INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO ANY PERSON TO
SUBSCRIBE FOR OR PURCHASE ANY SECURITY.

FOR IMMEDIATE RELEASE

8 February 2024

Impellam Group plc ("Impellam" or the "Company")

Declaration of Dividend in Specie

On 13 December 2023, the boards of directors of Impellam, HeadFirst Global
B.V. and Heather Global PLC ("Bidco") announced that they had reached
agreement on the terms and conditions of a recommended acquisition pursuant to
which Bidco will acquire the entire issued, and to be issued, ordinary share
capital of Impellam (the "Acquisition"). The Acquisition is being effected by
means of a scheme of arrangement under Part 26 of the Companies Act 2006 (the
"Scheme").

Impellam published a shareholder circular relating to the Scheme on 22
December 2023 (the "Scheme Document"). Capitalised terms used but not defined
in this announcement have the meanings given to them in the Scheme Document,
unless the context requires otherwise.

On 17 January 2024, Impellam announced that, at both the Court Meeting and
General Meeting held on that date in connection with the Acquisition, the
requisite majorities voted in favour of all resolutions necessary to approve
and give effect to the Scheme.

Dividend in specie

In the Scheme Document, the Impellam Board stated its intention to declare,
prior to the Effective Date, a special dividend of, in aggregate, £25
million, equating (on the basis of the Impellam Shares in issue on 12 December
2023, being the last practicable date before the Rule 2.7 Announcement) to
approximately 56.1 pence per Impellam Share, to be settled by way of a
dividend in specie to eligible Impellam Shareholders of the shares in one or
more newly-incorporated subsidiaries of Impellam (the "ShellCo Dividend").

Further to this stated intention, the Impellam Board is pleased to declare the
ShellCo Dividend.

The ShellCo Dividend will be effected through the transfer of new ordinary
shares in each of Heather Venture Holdings Ltd. ("Heather" and "Heather
Shares") and Tapir Holdings Ltd. ("Tapir" and "Tapir Shares", and, together
with Heather, the "ShellCos") to Impellam Shareholders on a pro rata basis.

Impellam Shareholders on the Company's register of members at 5.00 p.m.
(London time) on Friday 16 February 2024 (the "Record Date") will receive one
new Heather Share and one new Tapir Share for each Impellam Share they own on
the Record Date.

The ShellCo Dividend will be for an amount per Impellam Share that is equal to
£25 million divided by the number of Impellam Shares then in issue on the
Record Date. If the Record Date was the date of this announcement, the ShellCo
Dividend would equate to approximately 56.2 pence per Impellam Share. However,
it is expected that the final amount per share will fractionally increase if
Impellam Shares are bought back and cancelled under the Company's 2023
Programme of share buybacks between now and the Record Date.

The ShellCo Dividend is not conditional on the Scheme, and does not require
the approval of Impellam Shareholders. Impellam Shareholders will not have the
option to elect to receive cash instead of ShellCo Shares.

Dividend timetable

The expected timetable of the ShellCo Dividend is as follows:

 

 Ex-Dividend Date:                                         15 February 2024

 Record Date:                                              5.00 p.m. (London time) on 16 February 2024

 Payment Date:                                             11 March 2024

 Despatch of Share Certificates to ShellCo Shareholders:   Within 14 days of the Payment Date

Lord Ashcroft and the Lombard Trust

As the holders of approximately 62.9 per cent. of the Company's issued share
capital, Lord Ashcroft and the Lombard Trust (a family trust connected with
Lord Ashcroft) will hold approximately 62.9 per cent. of the issued share
capital of each ShellCo following payment of the ShellCo Dividend.

 

Information on the ShellCos

 

Capital structure

 

The ShellCos were each incorporated in the British Virgin Islands (the "BVI")
as BVI Business Companies on 24 January 2024. As at the date of this
announcement, the issued share capital of both Heather and Tapir comprises of
one ordinary share of no par value, which is held by the Company and paid up
in cash to £12,500,000 per ShellCo. The ShellCos will have no other assets or
liabilities.

 

Immediately following the Record Date, the one ordinary share in issue in each
of Heather and Tapir will be subdivided into a number of shares that is equal
to the number of Impellam Shares in issue on the Record Date held by Impellam
Shareholders. The Heather Shares and Tapir Shares will be transferred to
Impellam Shareholders by way of the ShellCo Dividend. Following the transfer
of the Shares in each ShellCo by way of the ShellCo Dividend, the Company will
not hold any shares in the ShellCos.

 

ShellCo directors

Both Heather and Tapir have the same directors, being Philip Osborne and Peter
Gaze (together, the "ShellCo Directors").

 

Philip Osborne

Philip Osborne is a solicitor and member of the Law Society of England and
Wales. Mr. Osborne previously worked as a legal adviser to the London Stock
Exchange and The Securities Association in the United Kingdom and for Clifford
Chance and S.J Berwin & Co. He is a member of the Belize Bar Association.
Mr. Osborne was previously a director of Waterloo Investment Holdings Limited
from 2011 to 2020. Mr. Osborne is a director of Carlisle Support Services
Group Limited. Mr. Osborne and his spouse hold approximately 0.1 per cent. of
the Impellam Shares in issue as of the date of this Announcement.

 

Peter Gaze

Peter Gaze is a Fellow of the Institute of Chartered Accountants in England
and Wales having trained with PricewaterhouseCoopers in London. During its
expansion in the UK and US, Mr. Gaze was a senior financial executive at ADT
Group Limited until 1997 at which time it was acquired by Tyco International.
Mr. Gaze was previously Chief Financial Officer of Waterloo Investment
Holdings Limited from 2011 to 2015. Mr. Gaze is also a non-executive director
of Waterloo Investment Holdings Limited, Marlowe Holdings PLC, Carlisle
Support Services Group Limited and Hawley Group Limited. Mr. Gaze and his
immediate family hold approximately 1.1 per cent. of the Impellam Shares in
issue as of the date of this Announcement.

 

ShellCos' business strategy

Goals and objectives

The ShellCo Directors have informed the Company that the primary goals and
objectives of each ShellCo are to:

a)     establish each ShellCo as a key operator and provider in its chosen
field of activity primarily in the business services sector;

b)    grow each ShellCo over time through a combination of acquisitions and
organic growth; and

c)     maximise shareholder value and returns,

in accordance with the legal constraints discussed below.

Business strategy

The ShellCo Directors have informed the Company that the strategic focus of
each ShellCo will be on business opportunities where one or more of the
following characteristics is present:

a)     there is an opportunity to acquire a controlling stake in
businesses that are underperforming and where operational performance
modification will achieve substantially improved performance and
profitability;

b)    businesses that possess recurring contractual revenues under
multi-year, long term agreements with potentially low annual erosion of the
contract base;

c)     businesses with good potential free cash flow achievable with low
recurring capital expenditure needs;

d)    businesses within a fragmented competitive landscape where there is
potential to execute consolidation of operations and acquisitions, to leverage
of economies of scale and to apply service model replication across multiple
clients;

e)    businesses in sectors where regulatory compliance pressures and
environmental change provide opportunities for outsourcing services to
specialist providers;

f)     businesses in markets where there is opportunity to bundle related
services to achieve operational efficiencies or scale, and improved
profitability for each ShellCo; or

g)     businesses where high operational expertise or brand position
create barriers to entry, or ability to convert customers to longer term
agreements.

Market Sectors

The ShellCo Directors have informed the Company that they currently intend to
seek business opportunities in organisations providing business and outsourced
services including:

a)     Business Services - Companies in this sector provide operational
support to their customers' key business activities. Examples include
technical support to staff through call centres and digital solutions and
software-as-a-service models.

b)    Business Process Outsourcing Services - In this sector organisations
outsource an entire business process to a third party company. Examples of
process outsourcing services include front office customer contact centres, or
back office human resource and payroll services providers.

c)     Healthcare Support Services - Organisations in this sector address
market requirements for integrated patient centred healthcare. Examples are
the logistical movement of the patient from the hospital to specialty medical
facilities to the home, coordination of homecare and social care services, and
remote monitoring of chronic or ongoing healthcare issues.

d)    Workplace and Facility Services - Organisations in this sector
provide operating staff to perform a combination of support services within a
client's facilities but are generally not responsible for the core business
activities of the client. These services include workplace supplies, reception
and catering, recycling and environmental services, safety and compliance
services, facility cleaning and other support services.

The ShellCo Directors have informed the Company that they believe that these
sectors present an opportunity for creating attractive returns from a
combination of operational improvements, strategic repositioning, business
model re-design, scale through bundling services or buy-and-build
opportunities.

Legal considerations

The ShellCo Directors have informed the Company that the goals and objectives
of the ShellCos and the business strategy to achieve them are consistent with
and will be implemented with the intention that each ShellCo is not and does
not become a collective investment undertaking for the Alternative Investment
Fund Managers Directive (2011/61/EU) as implemented in the UK by the
Alternative Investment Fund Managers Regulations (SI 2013/1773) nor a
non-mainstream pooled investment as defined by the UK's Financial Conduct
Authority i.e. (A) it has a business strategy which includes characteristics
such as running predominantly (i) a commercial activity, involving the
purchase, sale and/or exchange of goods or commodities and/or the supply of
non-financial services, or (ii) an industrial activity, involving the
production of goods or construction of properties, or (iii) a combination of
(i) and (ii); or (B) it will as a holding company invest in the shareholdings
of one or more other companies with the commercial purpose of carrying out its
business strategies through one or more subsidiaries, associated companies or
shareholder participations in order to contribute to their long-term value and
it is not being established for the main purpose of generating returns for its
investors by the divestment of its subsidiaries, associated companies or its
shareholder participations; or (C) a combination of (A) and (B).

 

Bermuda Stock Exchange Listing

The ShellCo Directors have informed the Company that they intend to submit
prospectuses to the Bermuda Stock Exchange as part of the application
procedure for the Heather Shares and the Tapir Shares to be listed on the
Bermuda Stock Exchange. The Board currently expects that the listing will be
completed for both ShellCos within 30 days of this announcement. There can be
no assurance that such listing approval will be obtained and, if obtained,
whether the listing will be maintained by either of the ShellCos.

 

CREST Depositary Interests

Shareholders who hold ordinary shares in the Company in uncertificated form in
CREST are expected to receive their Heather Shares and Tapir Shares in CREST
by way of depository interests representing Heather Shares and Tapir Shares
("ShellCo DIs").

Securities issued by non-UK companies, such as Heather and Tapir, cannot be
directly held or transferred in the CREST system. As a result, the ShellCo
Directors are arranging for Link Market Services Trustees Limited (the
"Depositary") to issue depositary interests representing Heather Shares and
Tapir Shares to allow trading and settlement in respect of the Heather Shares
and Tapir Shares in CREST. Heather Shares and Tapir Shares to be represented
by depositary interests will be transferred to an account of the Depositary
(or a nominated custodian which will hold them as nominee for the Depositary)
which will in turn hold its interest in the underlying Heather Shares and
Tapir Shares on trust for holders of Heather Shares and Tapir Shares. The
Depositary will issue dematerialised depositary interests representing
entitlements to interests in the underlying Heather Shares and Tapir Shares on
a one for one basis. ShellCo DIs are independent securities constituted under
English law and can be traded and settled within the CREST system in the same
way as any other CREST security. Shareholders who hold ordinary shares in the
Company in uncertificated form in CREST on the Record Date are expected to
receive Heather Shares and Tapir Shares in uncertificated form in the form of
ShellCo DIs. The ShellCo DIs will be issued pursuant to the terms of a Deed
Poll to be entered into by the Depositary.

Each ShellCo's share register, which will be kept by the Registrar, Link
Market Services (Guernsey) Limited, will show the Depositary or its nominated
custodian as the holder of the Heather Shares and Tapir Shares represented by
Depositary Interests but the beneficial interest will remain with the
Shareholders who will continue to receive all the rights attaching to the
Heather Shares and Tapir Shares as they would have if they had themselves been
entered on each ShellCo's share registers. Shareholders can withdraw their
Heather Shares and Tapir Shares back into certificated form at any time using
standard CREST messages.

Dealings, share certificates and CREST Depositary Interests

Definitive share certificates in respect of Heather Shares and Tapir Shares
are expected to be posted to Impellam Shareholders within 14 Days of the
Payment Date. Shareholders who hold ordinary shares in the Company in
uncertificated form in CREST are expected to receive their ShellCo DIs
representing Heather Shares and Tapir Shares on or after the Payment Date,
being 11 March 2024.

In the event that the Depositary arrangements with Link Market Services
Trustees Limited are not concluded by the ShellCos by the Payment Date, then
Shareholders who hold ordinary shares in the Company in uncertificated form in
CREST will receive Heather Shares and Tapir Shares in certificated form, but
will be able to elect to hold their Heather Shares and Tapir Shares in
uncertificated form in the form of ShellCo DIs once the Depositary
arrangements are in place with Link Market Services Trustees Limited.

Share certificates will be despatched at the Shareholders' risk to their
registered address on the Company's share register. In the case of joint
holders, certificates will be despatched to the person whose name appears
first on the Company's share register. Prior to despatch of definitive share
certificates in respect of those Heather Shares and Tapir Shares, it is
intended that transfers of Heather Shares and Tapir Shares will be certified
against the register of members of each ShellCo. No temporary documents of
title for Heather Shares and Tapir Shares will be issued.

Enquiries:

 

 Impellam Group plc
 Julia Robertson, Chief Executive Officer                            Tel: +44 (0) 1582 692 658

 Houlihan Lokey UK Limited (Financial Adviser)
 Thomas Bailey                                                       Tel: +1 (678) 488 0504

 Tim Richardson                                                      Tel: +44 (0) 20 7484 4102
 Canaccord Genuity Limited (Nominated Adviser & Sole Broker)
 Bobbie Hilliam                                                      Tel: +44 (0) 20 7523 8150
 Emma Gabriel

 

Important notices:

 

The release, distribution or publication of this announcement in jurisdictions
other than the United Kingdom may be restricted by the laws of the relevant
jurisdictions and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves about, and
observe, any applicable requirements. The information disclosed in this
announcement may not be the same as that which would have been disclosed if
this announcement had been prepared in accordance with the laws of
jurisdictions outside the United Kingdom. Any failure to comply with the
restrictions may constitute a violation of the securities law of any such
jurisdiction.

 

Notices related to financial advisers:

 

Houlihan Lokey UK Limited ("Houlihan Lokey"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is acting
exclusively as financial adviser to Impellam and no one else in connection
with the matters set out in this announcement and will not be responsible to
anyone other than Impellam for providing the protections afforded to clients
of Houlihan Lokey or for providing advice in relation to contents of this
announcement or any other matters referred to in this announcement. Neither
Houlihan Lokey nor any of its 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
Houlihan Lokey in connection with this announcement, any statement contained
herein or otherwise.

 

Canaccord Genuity Limited ("Canaccord Genuity"), which is authorised and
regulated in the United Kingdom by the FCA, is acting as nominated adviser and
corporate broker exclusively for Impellam and for no one else in connection
with the matters set out in this announcement and will not regard any other
person as its client in relation to the matters referred to in this
announcement and will not be responsible to anyone other than Impellam for
providing the protections afforded to clients of Canaccord Genuity, nor for
providing advice in relation to the contents of this announcement or any other
matter referred to in this announcement.

 

Rule 26.1 disclosure:

In accordance with Rule 26.1 of the Code, a copy of this announcement will be
available on the Company's website at
https://investors.impellam.com/offer-for-impellam-group-plc/ by no later than
12 noon (London time) on the Business Day following the date of this
announcement. The content of the website referred to in this announcement is
not incorporated into and does not form part of this announcement.

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