REG - HSQ Investment Ltd Kingswood Holdings - Offer for Kingswood Holdings Limited
25/03/2025 07:00
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RNS Number : 0340C HSQ Investment Limited 25 March 2025
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the contents of this document and what action
you should take, you are recommended to seek your own personal financial,
legal and tax advice immediately from your stockbroker, bank manager,
solicitor, accountant, fund manager or other appropriate 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 resident
elsewhere, another appropriately authorised independent financial adviser in
the relevant jurisdiction.
Kingswood Shareholders should read the whole of this document (including all
information incorporated into this document by reference to another source).
In addition, this document should be read in conjunction with the accompanying
personalised Form of Acceptance.
If you sell or otherwise transfer or have sold or otherwise transferred all of
your Kingswood Shares (other than to HSQ pursuant to the Offer), please
forward this document with the accompanying documentation (other than any
documents or forms personalised to you) immediately to the purchaser or
transferee, or to the stockbroker, bank or other agent through whom the sale
or transfer was effected, for onward transmission to the purchaser or
transferee. However, this document and any accompanying document must not be
forwarded, distributed or transmitted in, into or from any Restricted
Jurisdiction.
If you sell or otherwise transfer or have sold or otherwise transferred only
part of your registered holding of Kingswood Shares, you should retain these
documents and consult the stockbroker, bank or other agent through whom the
sale or transfer was effected. If you have recently purchased or otherwise
been transferred Kingswood Shares in certificated form, notwithstanding
receipt of this document from the transferor, you should contact the Receiving
Agent. If calling from within the United Kingdom, you should contact the
Receiving Agent on 0371 664 0321, or if calling from outside the United
Kingdom, you should call +44 (0) 371 664 0321 or by submitting a request in
writing to the Receiving Agent at MUFG Corporate Markets, Central Square, 29
Wellington Street, Leeds LS1 4DL. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the UK will be charged at the
applicable international rate. Lines are open between 9.00 a.m. and
5.30 p.m., Monday to Friday (excluding public holidays in England and Wales).
If you have any questions about this document or the accompanying Form of
Acceptance, or are in any doubt as to how to complete the Form of Acceptance
(if you hold Kingswood Shares in certificated form) or as to how to make an
Electronic Acceptance (if you hold Kingswood Shares in uncertificated form),
or wish to obtain an additional personalised Form of Acceptance, please
contact the Receiving Agent. If calling from within the United Kingdom, you
should contact the Receiving Agent on 0371 664 0321, or if calling from
outside the United Kingdom, you should call +44 (0) 371 664 0321 or by
submitting a request in writing to the Receiving Agent at MUFG Corporate
Markets, Central Square, 29 Wellington Street, Leeds LS1 4DL. Calls are
charged at the standard geographic rate and will vary by provider. Calls
outside the UK will be charged at the applicable international rate. Lines are
open between 9.00 a.m. and 5.30 p.m., Monday to Friday (excluding public
holidays in England and Wales). Please note that the Receiving Agent cannot
provide any financial, legal or tax advice and that calls may be recorded and
monitored for security and training purposes.
Neither this document nor any of the accompanying documents do, or are
intended to, constitute or form part of any offer or invitation to purchase,
otherwise acquire, subscribe for, sell or otherwise dispose of, any securities
or the solicitation of any vote or approval, in any jurisdiction in which such
offer, invitation or solicitation is unlawful. The release, publication or
distribution of this document and/or the accompanying documents (in whole or
in part) in or into jurisdictions other than the United Kingdom may be
restricted by the laws of those jurisdictions and therefore persons into whose
possession this document and/or any accompanying document comes should inform
themselves about, and observe, any applicable restrictions. Any failure to
comply with these restrictions may constitute a violation of the securities
laws and regulations of any such jurisdiction. In particular, this document
should not be released, published, distributed, forwarded or transmitted, in
whole or in part, in, into or from any Restricted Jurisdiction.
UNCONDITIONAL CASH OFFER
for
KINGSWOOD HOLDINGS LIMITED
by
HSQ INVESTMENT LIMITED
Your attention is drawn to the letter from the Chairman of Kingswood which
contains the unanimous recommendation of the Independent Kingswood Directors
that you accept or procure the acceptance of the Offer and which is set out in
Part II (Letter from the Chairman of Kingswood Holdings Limited) of this
document.
The procedure for acceptance of the Offer is set out in paragraph 15 of Part I
(Letter from HSQ Investment Limited) of this document and in respect of
Kingswood Shares held in certificated form, in the Form of Acceptance. To
accept
the Offer in respect of Kingswood Shares held in certificated form, you must
complete and return the accompanying Form of Acceptance as soon as possible
and, in any event, so as to be received by the Receiving Agent by no later
than
1.00 p.m. (London time) on the Closing Date in accordance with paragraph 15 of
Part I (Letter from HSQ Investment Limited) of this document. Acceptances in
respect of Kingswood Shares held in uncertificated form should be made
electronically through CREST so that the TTE instruction settles by no later
than 1.00 p.m. (London time) on the Closing Date in accordance with paragraph
15 of Part I (Letter from HSQ Investment Limited). If you are a CREST
sponsored member, you should refer to your CREST sponsor as only your CREST
sponsor will be able to send the necessary TTE instruction to Euroclear.
Please refer to the Expected Timetable of Principal Events on page 9 for the
dates and times of key events (including payment dates) relating to the Offer.
The Offer will close no earlier than 15 April 2025. Kingswood Shareholders are
encouraged to ACCEPT the Offer as soon as possible. As the Offer is
unconditional from the outset, an accepting Kingswood Shareholder will not be
entitled to withdraw an acceptance of the Offer.
Definitions used in this document are as defined in Part VI (Definitions) of
this document unless defined elsewhere herein or the context requires
otherwise. Kingswood Shareholders may request hard copy forms of these
documents.
Cavendish Capital Markets Limited ("Cavendish"), which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom, is acting
exclusively for Kingswood and for no one else in connection with the subject
matter of this document and will not be responsible to anyone other than
Kingswood for providing the protections afforded to clients of Cavendish or
for providing advice in relation to the contents of this document or any
matters referred to in this document.
Panmure Liberum Limited ("Panmure Liberum"), which is authorised and regulated
by the Financial Conduct Authority in the United Kingdom, is acting
exclusively for HSQ and for no one else in connection with the subject matter
of this document and will not be responsible to anyone other than HSQ for
providing the protections afforded to clients of HSQ or for providing advice
in relation to the contents of this document or any matters referred to in
this document.
In providing the cash confirmation required under Rule 2.7(d) of the Code,
Panmure Liberum is satisfied that HSQ is not a client of such significance to
Panmure Liberum or its affiliates as to impair the independence of the cash
confirmation. Panmure Liberum considers HSQ to be an incidental customer for
the purposes of the Takeover Code.
Panmure Liberum and Cavendish have each given and not withdrawn their consent
to the publication of this document with the inclusion herein of the
references to their names in the form and context in which they appear.
No person has been authorised to give any information or make any
representations other than those contained in this document and, if given or
made, such information or representations must not be relied upon as having
been authorised by Kingswood, the Independent Kingswood Directors, HSQ, the
HSQ Directors or by Cavendish and Panmure Liberum or any other person involved
in the Offer. The statements contained in this document are made as at the
date of this document, unless some other time is specified in relation to them
and publication of this document shall not give rise to any implication that
there has been no change in the facts set out in this document since such
date.
IMPORTANT NOTICES
The contents of this document are not to be construed as legal, business,
financial or tax advice. If you are in any doubt about the contents of this
document, you should consult your own legal adviser, financial adviser or tax
adviser for legal, business, financial or tax advice.
Overseas jurisdictions
Unless otherwise determined by HSQ or required by the Takeover Code and
permitted by applicable law and regulation, the availability of the Offer and
the release and/or distribution of this document in or into jurisdictions
other than the United Kingdom or Guernsey may be restricted by the laws and
regulations of those jurisdictions and therefore persons who are not resident
in the United Kingdom or Guernsey into whose possession this document comes
should inform themselves about and observe any such restrictions. Failure to
comply with any such restrictions may constitute a violation of the securities
laws of any such jurisdiction. Copies of this document and the personalised
Form of Acceptance relating to the Offer are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from any Restricted Jurisdiction, and persons receiving such documents
(including custodians, nominees and trustees) must not mail or otherwise
distribute or send it in, into or from such Restricted Jurisdictions as doing
so may violate the securities laws of such jurisdictions and invalidate any
purported acceptance of the Offer. Unless otherwise permitted by applicable
law and regulation, the Offer may not be made directly or indirectly, in or
into, 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 Offer may not be capable of acceptance by any such use, means,
instrumentality or facilities.
This document has been prepared in compliance with English law and regulation
(including the Takeover Code) and Guernsey law, and the information disclosed
may not be the same as that which would have been disclosed if this document
had been prepared in accordance with the laws and regulations of jurisdictions
outside England or Guernsey.
This document is not an offer of securities for sale in the United States,
Canada, Australia, or Japan or in any other jurisdiction in which such an
offer is unlawful.
Neither the Securities and Exchange Commission in the United States nor any
state securities commission in the United States has reviewed, approved, or
disapproved this document or any of the proposals contained in this document.
Forward-Looking Statements
This document (including information incorporated by reference into this
document), statements made regarding the Offer, and other information to be
published by HSQ and Kingswood, contain statements which are, or may be deemed
to be, "forward-looking statements". Forward-looking statements are
prospective in nature and not based on historical facts, but rather on current
expectations and projections of the management of HSQ and Kingswood 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 document include statements
with respect to the financial condition, results of operations and business of
Kingswood and certain plans and objectives of HSQ with respect thereto and
other statements other than historical facts. Often, but not always,
forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts and may use words such as
"anticipate", "target", "expect", "estimate", "forecast", "intend", "plan",
"budget", "scheduled", "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could" or other words of similar meaning. These
statements are based on assumptions and assessments made by Kingswood and/or
HSQ in light of their experience and their perception of historical trends,
current conditions, future developments and other factors they believe
appropriate. By their nature, forward-looking statements involve known and
unknown risk and uncertainty and other factors which may cause actual
results, performance or developments to differ materially from those expressed
in or implied by such, because they relate to events and depend on
circumstances that will occur in the future. Although HSQ and/or Kingswood
believe that the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will prove to
have been correct and you are therefore cautioned not to place undue reliance
on these forward-looking statements which speak only as at the date of this
document. Neither HSQ nor Kingswood assumes any obligation to update or
correct the information contained in this document (whether as a result of new
information, future events or otherwise), except as required by applicable
law.
No Profit Forecasts or Estimates
No statement in this document is intended, or is to be construed, as a profit
forecast, profit estimate or quantified financial benefits statement for any
period and no statement in this document should be interpreted to mean that
earnings or earnings per share for Kingswood for the current or future
financial years would necessarily match or exceed the historical published
earnings or earnings per share for Kingswood.
Disclosure Requirements of the Takeover Code
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 p.m. (London time) on the tenth
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 p.m. (London time) on the tenth 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 p.m. (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 Takeover Panel's website at
www.thetakeoverpanel.org.uk (http://www.thetakeoverpanel.org.uk/) ,
(http://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.
Information Relating to Kingswood Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by Kingswood Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Kingswood may be
provided to HSQ 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.
Publication on website and availability of hard copies
In accordance with Rule 26.1 of the Takeover Code, a copy of this document and
a sample Form of Acceptance will be available free of charge (subject to any
applicable restrictions with respect to persons resident in Restricted
Jurisdictions) on HSQ's and Kingswood's website (https://arena.pollencap.com
and https://www.kingswood-group.com (http://www.kingswood-group.com/)
(http://www.kingswood-group.com/) respectively) by no later than 12.00 noon
(London time) on 26 March 2025.
Neither the contents of these websites, nor the content of any other website
accessible from hyperlinks on such websites, is incorporated into, or forms
part of, this document.
In accordance with Rule 30.3 of the Takeover Code, Kingswood Shareholders and
persons with information rights may request a hard copy of this document, free
of charge, by contacting the Receiving Agent. If calling from within the
United Kingdom, you should contact the Receiving Agent on 0371 664 0321, or if
calling from outside the United Kingdom, you should call +44 (0) 371 664 0321
or by submitting a request in writing to the Receiving Agent at MUFG Corporate
Markets, Central Square, 29 Wellington Street, Leeds LS1 4DL. Calls are
charged at the standard geographic rate and will vary by provider. Calls from
outside the United Kingdom will be charged at the applicable international
rate. Lines are open between 09.00 - 17.30, Monday to Friday excluding public
holidays in England and Wales. You may also request that all future documents,
announcements and information to be sent to you in relation to the Offer be in
hard copy form.
Rounding
Certain figures included in this document 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 the figures that precede them.
Date of publication
This document is dated 25 March 2025.
WHERE TO FIND HELP
You will find answers to some of the questions most often asked by
shareholders about takeover offers and the procedure for accepting the Offer
in Part I (Letter from HSQ Investment Limited) of this document.
If you have further questions on the Offer more generally, you should contact
the Receiving Agent. As the Offer is unconditional from the outset, an
accepting Kingswood Shareholder will not be entitled to withdraw an acceptance
of the Offer.
If calling from within the United Kingdom, you should contact the Receiving
Agent on 0371 664 0321, or if calling from outside the United Kingdom, you
should call +44 (0) 371 664 0321 or by submitting a request in writing to the
Receiving Agent at MUFG Corporate Markets, Central Square, 29 Wellington
Street, Leeds LS1 4DL. Calls are charged at the standard geographic rate and
will vary by provider. Calls from outside the United Kingdom will be charged
at the applicable international rate. Lines are open between 09.00 - 17.30,
Monday to Friday excluding public holidays in England and Wales. Please note
that the Receiving Agent will only be able to provide information contained in
this document and cannot provide any financial, legal or tax advice and calls
may be recorded and monitored for security and training purposes. You are
reminded that if you are a CREST Sponsored Member, you should contact your
CREST Sponsor before taking any action.
ACTION TO BE TAKEN
If Kingswood Shareholders wish to accept the Offer, it is important that they
follow the instructions contained in this document and, if their Kingswood
Shares are held in certificated form, the Form of Acceptance.
If Kingswood Shareholders have not received all of these documents, please contact the Receiving Agent on the relevant telephone number set out in the paragraph under the section headed "Shareholder Helpline" below.
If you hold your Kingswood Shares in certificated form (that is, not in
CREST), you should complete the accompanying personalised Form of Acceptance
in accordance with the instructions printed thereon and in paragraph 15 of
Part I (Letter from HSQ Investment Limited) of this document. You may also
obtain additional Forms of Acceptance by contacting the Receiving Agent on
0371 664 0321, or if calling from outside the United Kingdom, you should call
+44 (0) 371 664 0321 or by submitting a request in writing to the Receiving
Agent at MUFG Corporate Markets, Central Square, 29 Wellington Street, Leeds
LS1 4DL. Calls are charged at the standard geographic rate and will vary by
provider. Calls from outside the United Kingdom will be charged at the
applicable international rate. Lines are open between 09.00 - 17.30, Monday to
Friday excluding public holidays in England and Wales. The completed Form of
Acceptance, together with your share certificate(s) and/or other document(s)
of title, should be returned as soon as possible by post using, if posted in
the United Kingdom, the enclosed reply-paid envelope to the Receiving Agent at
MUFG Corporate Markets, Central Square, 29 Wellington Street, Leeds LS1 4DL so
as to arrive no later than
1.00 p.m. (London time) on 15 April 2025. If you are posting in the United
Kingdom, the enclosed reply- paid envelope has been provided for your
convenience. It is recommended to allow four Business Days for delivery. Any
Form of Acceptance received electronically will be rejected as an invalid
acceptance of the Offer.
The latest time for the Receiving Agent to receive your Form of Acceptance
will be 1.00 p.m. (London time) on the Closing Date. You should allow
sufficient time for posting for your Form of Acceptance to be received. It is
recommended to allow four Business Days for delivery.
If you hold your Kingswood Shares in uncertificated form (that is, in CREST),
you should follow the procedures set out in paragraph 15 of Part I (Letter
from HSQ Investment Limited) of this document and ensure that an Electronic
Acceptance is made by you or on your behalf and that settlement is made no
later than 1.00 p.m. (London time) on the Closing Date. If you hold your
Kingswood Shares as a CREST sponsored member, you should refer to your CREST
sponsor as only your CREST sponsor will be able to send the necessary TTE
instruction to Euroclear.
The latest time for receipt of an Electronic Acceptance through CREST (applicable only for Kingswood Shareholders who hold their Kingswood Shares in uncertificated form) will be 1.00 p.m. (London time) on the Closing Date.
The Offer will remain open for acceptances until HSQ confirms the Closing
Date, with shareholders receiving at least 14 days' notice prior to the
specified closing date (which cannot be less than 21 days after the posting of
this Offer Document). Such notice will be given to Kingswood Shareholders via
an announcement through a Regulatory Information Service and will advise of
the final settlement date, with such announcement being made available on
HSQ's website at: https://arena.pollencap.com and on Kingswood's website at
https://www.kingswood-gr (http://www.kingswood-group.com/) oup.com/.
(http://www.kingswood-group.com/)
Further details about how to submit your Form of Acceptance and how to make your Electronic Acceptance are set out in Part B and Part C, respectively, of Part III (Further terms of the Offer and Acceptances) of this document.
Holdings of Kingswood Shares in certificated or uncertificated form will be
treated as separate holdings for the purpose of calculating entitlements and
you are required to accept in relation to each holding separately.
This section should be read in conjunction with the rest of this document and,
in the case of Kingswood Shares held in certificated form, the Form of
Acceptance. Kingswood Shareholders are recommended to seek
financial advice from their stockbroker, bank manager, solicitor, accountant
or other independent financial adviser authorised under the FSMA if they are
resident in the United Kingdom or, if not, from another appropriately
authorised independent financial adviser in the relevant jurisdiction.
Settlement
Kingswood Shareholders who accept the Offer early, i.e. on or prior to 1 pm on
15 April 2025, will receive the consideration payable to them under the Offer
earlier (i.e. by 29 April 2025). Kingswood Shareholders who accept the Offer
after 1 pm on 15 April 2025 and until the Offer remains open for acceptances
will only receive the consideration payable to them under the Offer within 14
calendar days of receipt of such acceptance.
Shareholder Helpline
If you have any questions about this document or the accompanying documents,
or are in any doubt as to how to complete the Form of Acceptance (if you hold
Kingswood Shares in certificated form) or as to how to make an Electronic
Acceptance (if you hold Kingswood Shares in uncertificated form), or wish to
obtain an additional Form of Acceptance, please contact the Receiving Agent on
0371 664 0321, or if calling from outside the United Kingdom, you should call
+44 (0) 371 664 0321 or by submitting a request in writing to the Receiving
Agent at MUFG Corporate Markets, Central Square, 29 Wellington Street, Leeds
LS1 4DL. Calls are charged at the standard geographic rate and will vary by
provider. Calls from outside the United Kingdom will be charged at the
applicable international rate. Lines are open between 09.00 - 17.30, Monday to
Friday excluding public holidays in England and Wales. Please note that the
Receiving Agent cannot provide any financial, legal or tax advice and calls
may be recorded and monitored for security and training purposes.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
The dates and times below are indicative only and are based on current
expectations and may be subject to change.
If any of the dates and/or times in this expected timetable change, notice of
the revised dates and/or times will be given to Kingswood Shareholders by
announcement through a Regulatory Information Service, with such announcement
being made available on HSQ's website at https://arena.pollencap.com and
Kingswood's website at https://www.kingswood-gr
(http://www.kingswood-group.com/) oup.com. Further updates and changes to
these times will be notified in the same way.
Unless otherwise stated, all times referred to in this document and timetable
below are London times. EVENT TIME AND/OR DATE
Announcement of the
Offer
18 March 2025
Publication and posting of this document and the personalised
Form of
Acceptance
25 March 2025
Day
21**
15 April 2025
Last day of trading in the Kingswood Shares on
AIM
16 April 2025 Cancellation of admission to trading of the Kingswood Shares on
AIM
17 April 2025 Latest date for the settlement of consideration to Kingswood
Shareholders who accepted the Offer on or prior to 1.00 p.m. (London time) on
15 April 2025 (being the 21st day following the
date on which this document was
published)
29 April 2025
Latest date for the settlement of consideration to Kingswood Shareholders who
accept the Offer after 1.00 p.m. (London time)
on 15 April 2025 and on or prior to 1.00 p.m. on the Closing Date 14
calendar days of such receipt Day 60
24 May 2025
** The Offer will remain open for acceptances until HSQ confirms the Closing
Date, with shareholders receiving at least 14 days' notice prior to the
specified closing date (which cannot be earlier than 15 April 2025). Such
notice will be given to Kingswood Shareholders via an announcement through a
Regulatory Information Service and will advise of the final settlement date,
with such announcement being made available on HSQ's website at
https://arena.pollencap.com and Kingswood's website at
https://www.kingswood-gr (http://www.kingswood-group.com/) oup.com/.
(http://www.kingswood-group.com/)
PART I
LETTER FROM HSQ INVESTMENT LIMITED
25 March 2025
To the Shareholders of Kingswood Holdings Limited and, for information only,
to holders of awards and options under the Kingswood share plans and persons
with information rights.
Dear Shareholder,
UNCONDITIONAL CASH OFFER FOR KINGSWOOD HOLDINGS LIMITED
1. Introduction
On 18 March 2025, the board of directors of HSQ and the Independent Kingswood
Directors announced in the Rule 2.7 Announcement that they had reached
agreement on the terms of an unconditional cash offer pursuant to which HSQ
would acquire the entire issued and to be issued ordinary share capital of
Kingswood not already owned by HSQ at a price of 7 pence per ordinary share.
This document sets out the full terms and conditions of the Offer and provides
information on how you can accept the Offer.
This document and, if you hold Kingswood Shares in certificated form, the
accompanying personalised Form of Acceptance, contain the formal Offer
(including its terms and conditions) for your Kingswood Shares. Acceptances of
the Offer should be received as soon as possible and, in any event, by no
later than
1.00 p.m. (London time) on the Closing Date.
Your attention is drawn to the Letter from the Chairman of Kingswood set out in Part II (Letter from the Chairman of Kingswood Holdings Limited) of this document. That letter contains, amongst other things, the background to and reasons for the unanimous recommendation of the Independent Kingswood Directors.
The Independent Kingswood Directors who hold Kingswood Shares have irrevocably
undertaken to HSQ to accept, or procure acceptance of, the Offer in respect of
in aggregate 737,750 Kingswood Shares (representing, in aggregate
approximately 0.11% of the Kingswood Shares as at the Last Practicable Date).
Your attention is also drawn, in particular, to the further terms of the Offer
set out in Part III (Further terms of the Offer and Acceptances) to this
document and the information relating to HSQ and Kingswood in paragraphs 6 and
7 of this letter, respectively.
2. Summary of the Offer
Under the terms of the Offer, Kingswood Shareholders will be entitled to
receive:
7 pence in cash for each Kingswood Share held
The Offer values the entire issued share capital of Kingswood at approximately
£48.03m on a fully diluted basis. Having regard to the financial profile of
the Group, and HSQ's intentions for the Group described in paragraph 5 below,
HSQ considers that the Offer provides Kingswood Shareholders with the
opportunity to realise their investment in Kingswood for cash in a scenario
where HSQ believes there is limited prospect of any future liquidity for the
Kingswood Shares.
Other terms of the Offer
The Offer is subject to valid acceptances being received from Kingswood
Shareholders but is not subject to any minimum level of acceptance and is
unconditional from the outset. No regulatory approvals are required in respect
of the making or the acceptance of the Offer. Should the Offer achieve
acceptances and/or acquisitions amounting to 90% or more in value of the
Kingswood Shares subject to the Offer (excluding Kingswood Shares which are
Excluded Shares), HSQ will invoke its statutory rights under part XVIII of the
Companies Law to compulsorily acquire any remaining Kingswood Shares not
tendered under the Offer,
which, if invoked, would enable it to secure 100% ownership of Kingswood. The
Offer will remain open for acceptances until HSQ confirms the Closing Date,
with shareholders receiving at least 14 days' notice prior to the specified
date (which cannot be earlier than 21 days after the posting of this Offer
Document). Such notice will be given to Kingswood Shareholders via an
announcement through a Regulatory Information Service and will advise of the
final settlement date, with such announcement being made available on HSQ's
website at https://arena.pollencap.com and Kingswood's website at
https://www.kingswood-group.com/ (http://www.kingswood-group.com/) .
If, on or after the date of this Offer, any dividend and/or other distribution
and/or return of capital is declared, made or paid, or becomes payable in
respect of the Kingswood Shares, the cash consideration payable under the
terms of the Offer for the Kingswood Shares shall be reduced by an amount
equal to the amount of such dividend and/or other distribution and/or return
of capital, in which case any reference in this document to the cash
consideration payable under the terms of the Offer will be deemed to be a
reference to the cash consideration as so reduced. In such circumstances, the
relevant Kingswood Shareholder will be entitled to receive and retain such
dividend and/or other distribution and/or return of capital. Any revision of
the Offer price 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 Offer.
Kingswood Shares will be acquired by HSQ pursuant to the Offer fully paid and
free from all liens, charges, encumbrances and other third party rights of any
nature whatsoever and together with all rights attaching to them as at
completion of the Offer, including the right to receive and retain all
dividends and distributions (if any) declared, made or paid following the
Offer closing.
3. HSQ's views as to the considerations as to whether or not to accept the Offer
In considering the Offer, HSQ believes that Kingswood Shareholders should
consider the financial position of the Group as detailed in paragraph 7 below
and the proposed future strategy for Kingswood as detailed in paragraph 5
below. Further, HSQ believes that Kingswood Shareholders should balance their
desire for an immediate cash realisation now with:
• the current level of liquidity in Kingswood's shares and
their current ability to realise their holdings in the Group;
• the current level of indebtedness of Kingswood, which was
approximately £73.2m as at 31 December 2024; and
• the Kingswood Shares no longer being able to trade on AIM
once the De-Listing (as described in paragraph 4 below) occurs and the
consequent impact on future marketability.
If Kingswood Shareholders are in any doubt as to what action they should take,
they should seek their own independent professional advice from their
stockbroker, bank manager, solicitor, accountant or other independent
financial adviser authorised under the Financial Services and Markets Act
2000, as amended, if they are resident in the United Kingdom or, if not, from
another appropriately authorised independent financial adviser.
4. Delisting of Kingswood
On 18 March 2025, Kingswood made an application to the London Stock Exchange
for the cancellation of admission of the Kingswood Shares to trading on AIM
(the "De-Listing Application"). Since the Kingswood Shares held by HSQ already
represent approximately 89.38% of the Kingswood Shares at the Last Practicable
Date (i.e. not less than 75% of the voting rights attached to the Kingswood
Shares), the De-Listing will not be subject to any minimum level of
acceptance. It is anticipated that the De-Listing will take effect no earlier
than 7.00 a.m. on 17 April 2025.
Such cancellation of admission to trading on AIM of the Kingswood Shares shall
significantly reduce the liquidity and marketability of any Kingswood Shares
that are not assented to the Offer at that time and their value may be
affected as a consequence. Any remaining Kingswood Shareholders (unless their
Kingswood Shares are subsequently acquired by HSQ) would become minority
shareholders in a majority-controlled Guernsey unlisted company and may
therefore be unable to sell their Kingswood Shares. There can be no
certainty that Kingswood would pay any further dividends or other
distributions or that such minority Kingswood Shareholders would again be
offered an opportunity to sell their Kingswood Shares on terms which are
equivalent to or no less advantageous than those under the Offer, or at all.
Please see paragraph 14 for further information on the proposed delisting
process for Kingswood and the principal effects of De-Listing.
Your attention is drawn to Part II (Letter from the Chairman of Kingswood
Holdings Limited) of this document which includes the unanimous recommendation
of the Independent Kingswood Directors and the reasons for their
recommendation.
5. Intentions for Kingswood's Business, Directors, Management, Employees, Pensions, and Locations
Intentions for business
HSQ initially invested in Kingswood in September 2019, providing up to £80m
of growth equity capital to the business to pursue Kingswood's strategy of
creating the leading UK advice led wealth management consolidator. Since the
HSQ investment in 2019, the management team has completed 19 acquisitions,
funded utilising the HSQ growth equity capital and financial debt provided by
a large asset manager. The business is now positioned as a vertically
integrated platform of scale in the UK, and as at 30 June 2024, Group assets
under advice and management ("AUA&M") were approximately £12.9bn.
Over the last 12 months, in order to satisfy the working capital obligations
of Kingswood (including to meet deferred payment obligations relating to
historic acquisitions completed by Kingswood and debt interest payments). HSQ,
or affiliates of HSQ, have provided Kingswood with additional loans, amounting
to in aggregate £25.8m. As at 31 December 2024, the unaudited gross debt in
Kingswood from its senior debt facility, outstanding leases and the loans
provided by HSQ and/or Pollen Street amounted to, in aggregate,
£91.6m. Having regard to the trading of the business, HSQ believes that this
level of indebtedness is too great for the Group. Therefore, to ensure the
long term success for Kingswood, its employees and clients, following the
completion of the Offer pursuant to which the Kingswood Shareholders will have
had the opportunity to realise their investment in Kingswood, HSQ intends to
pursue a sale of the UK and Ireland operations, and has agreed in the MOU that
they will use all reasonable endeavours to arrange for a sale of such business
as soon as reasonably practicable. Although no offer has been received, HSQ
and Pollen Street intend to consider a merger of Kingswood's UK and Ireland
business with another wealth management company that is an existing portfolio
company of funds managed and advised by Pollen Street. HSQ believes that this
has the prospect of delivering the long-term capital investment that the UK
and Ireland operations requires which would provide all advisers and clients
within these businesses an exciting opportunity for growth.
If such a sale were pursued and completed, the sale proceeds would first be
applied to satisfying the Group's existing third-party debt facility, the
various additional debt instruments that have been provided by Pollen Street
and/or HSQ and satisfaction of the contingent liability under the Make Whole
Instrument, as detailed further in paragraph 11 of Part A of Part V
(Additional Information) of this document. Given the circumstances described
in paragraph 4 above, there could be no guarantee of any value attributable to
the Kingswood Shares.
The investment that the Group has in Kingswood US, LLC will continue to focus
on organic growth over the next twelve months with no material change to its
business model being considered.
The statements contained in this section do not constitute post-offer undertakings under Rule 19.5 of the Takeover Code.
Intentions for directors, management and employees
The independent non-executive directors intend to resign from the Board on the
cancellation of admission of the Kingswood Shares to trading on AIM.
HSQ recognises that Kingswood is a people business, and it is important to
offer long term security and certainty to all stakeholders. As at the date of
this document, no firm decisions have been made by HSQ with respect to any
specific actions which may be taken in relation to Kingswood's management or
employees.
As at the date of this document, HSQ does not intend to make any material
change to the conditions of employment or in the balance of the skills and
functions of the employees and management. If a sale of the UK and Ireland
business is sold as a separate division, it is expected that a review of
certain central functions of Kingswood would be undertaken, which may result
in rationalisation within certain of the central functions.
As at the date of this document, HSQ does not intend to make any changes to
the continued employment of the directors or employees of Kingswood US, LLC.
Intentions for pensions
As at the date of this document, HSQ does not intend to make any changes to
the contributions rate, the accrual of benefits for existing members or the
rules applicable to the admission of new members that currently applies to
Kingswood's defined contribution pension plans. Pension rights of employees
and former employees of the UK and Ireland businesses will be protected in
accordance with applicable laws.
Intentions for locations of business
As at the date of this document, HSQ does not intend to make any changes to
the location of Kingswood's headquarters or the functions carried out at
Kingswood's headquarters, however, if there is a sale of the UK and Ireland
business this may change, as referred to above.
Intentions for fixed assets
As at the date of this document, HSQ does not intend to make any changes to
Kingswood's fixed assets, and there is no intention to redeploy any of the
fixed assets to another location.
Intentions for research and development
As at the date of this document, Kingswood has no expenditure on research and
development, which HSQ does not intend to change.
Intentions for the existing trading facilities for the relevant securities of Kingswood
Following the publication of the Rule 2.7 Announcement, Kingswood made an
application to the London Stock Exchange for the cancellation of admission of
the Kingswood Shares to trading on AIM, as detailed further in paragraph 14
below.
In Part II (Letter from the Chairman of Kingswood Holdings Limited) of this
document, the Independent Kingswood Directors have given due consideration to
HSQ's intentions for Kingswood as set out above.
6. Information on HSQ
HSQ is a wholly owned indirect subsidiary of funds managed and/or advised by
Pollen Street Capital Limited ("Pollen Street"). Pollen Street is a global,
independent alternative asset investment management company focused on the
financial and business services sectors. It was established in 2013 and now
has over
£5 billion gross AUM across private equity and credit strategies.
On 13 March 2025, HSQ acquired all of KPI's shares in Kingswood and as a
result HSQ now owns 89.38% of Kingswood's issued share capital.
7. Information on Kingswood
Kingswood is a non-cellular company limited by shares that is incorporated in
Guernsey with company number 42316. Kingswood is an international, fully
integrated wealth and investment management group. It is a trusted provider of
wealth planning and investment management solutions to clients, underpinned by
investment in people and innovation in technology that supports its advisers
and clients.
Kingswood offers a range of investment solutions to its clients included
investment advice and management, the management of personal and company
pensions and wealth planning. Kingswood has a network of 22 offices across the
UK as well as overseas offices in the USA, Ireland and South Africa.
In the accounts for the year ended 31 December 2023, published in June 2024,
Kingswood reported Group revenue of £86.2m split as follows:
• UK & Ireland revenues of £46.6m; and
• US revenues (Kingswood has a 50.1% interest in Kingswood US,
LLC which accordingly is fully consolidated into Group reporting) of £39.6m.
For the year ended 31 December 2023, the Group reported a loss before tax of
£13.3m.
For the six months ended 30 June 2024, announced on 30 September 2024, the
Group reported revenue of
£40.6m split as follows:
• UK & Ireland revenues of £23.4m; and
• US revenues of £17.2m.
For the six months to 30 June 2024 the Group reported operating profit of
£6.1m and a statutory loss before tax of £5.9m.
No Significant Change and Ratings of HSQ
There has been no significant change in the financial or trading position of
HSQ since its incorporation, other than in connection with its investment in
the Company, the Offer and the financing arrangements described in paragraph
12 of this document. HSQ has not been assigned any credit rating by any rating
agency.
8. The Kingswood Directors
The names of the Kingswood Directors and the details of their interests in
Kingswood Shares are set out in paragraphs 2 and 5 of Part A of Part V
(Additional Information) of this document.
At the close of business on the Last Practicable Date the Kingswood Directors
were interested in, in total, 737,750 Kingswood Shares, amounting to 0.11% of
the issued share capital of Kingswood.
The Kingswood Directors do not hold awards and/or options over any Kingswood
Shares.
Particulars of the service contracts and the letters of appointment of the
Kingswood Directors are set out in paragraph 8 of Part A of Part V (Additional
Information) of this document. It is intended that the independent
non-executive directors resign from the Board on the date of cancellation of
admission of the Kingswood Shares to trading on AIM.
9. Irrevocable Undertakings and Letters of Intent
HSQ has received irrevocable undertakings from the following Independent
Kingswood Directors: David Hudd and Jonathan Freeman in respect of, in
aggregate, 737,750 Kingswood Shares (representing, in aggregate, approximately
0.11% of the Kingswood Shares as at the Last Practicable Date).
In addition to the irrevocable undertakings given by the Directors listed
above, HSQ has also received irrevocable undertakings from Gary Wilder and
Jonathan Massing in respect of 1,115,001 and 350,000 Kingswood Shares
respectively (representing, in aggregate, approximately 0.21% of the Kingswood
Shares as at the Last Practicable Date).
HSQ has therefore received indications of support to accept, or to procure the
acceptance of, the Offer in respect of a total of 2,202,751 Kingswood Shares,
representing, in aggregate, approximately 0.32% of the Kingswood Shares as at
the Last Practicable Date. Together with the Kingswood Shares already held by
HSQ, this represents approximately 89.71% of the Kingswood Shares as at the
Last Practicable Date.
Further details of these irrevocable undertakings are set out in paragraph 7
of Part A of Part V (Additional Information) of this document.
10. Offer Related Arrangements
For details of the offer-related arrangements, see paragraph 11 of Part A of
Part V (Additional Information) of this document.
11. Kingswood Share Plans
Kingswood operates the Kingswood share plans to reward and retain its
employees. Participants in the Kingswood share plans will be contacted
regarding the effect of the Offer on their rights under the Kingswood share
plans in separate letters to be sent via email.
12. Financing of the Offer
The cash consideration necessary to satisfy the Offer in full will be funded
from HSQ's existing cash resources. Panmure Liberum, in undertaking the cash
confirmation exercise for HSQ, confirms that it is satisfied that sufficient
resources are available to HSQ to enable it to satisfy the full cash
consideration payable under the terms of the Offer.
13. Terms of the Offer
The Offer is unconditional from the outset and is not subject to any minimum
level of acceptance. Acceptances under the Offer are final and binding with no
rights of withdrawal save as otherwise agreed in writing between HSQ and any
particular Kingswood Shareholder or as otherwise permitted by HSQ (either
generally or for any particular Kingswood Shareholder).
The Offer will remain open for acceptances until HSQ confirms the Closing
Date, with shareholders receiving at least 14 days' notice prior to the
specified closing date (which cannot be earlier than 21 days after the posting
of this Offer Document). Such notice will be given to Kingswood Shareholders
via an announcement through a Regulatory Information Service and will advise
of the final settlement date, with such announcement being made available on
HSQ's website at https://arena.pollencap.com and Kingswood's website at
https://www.kingswood-group.com/ (http://www.kingswood-group.com/) . The Offer
will be open for acceptance until
1.00 p.m. (London time) on the Closing Date.
14. Delisting and Squeeze-out
If HSQ receives acceptances under the Offer in respect of, and/or otherwise
acquires, 90% or more in value of the Kingswood Shares to which the Offer
relates, HSQ intends to exercise its rights pursuant to the provisions of part
XVIII of the Companies Law to acquire compulsorily any Kingswood Shares not
acquired or agreed to be acquired by or on behalf of HSQ pursuant to the Offer
or otherwise on the same terms as the Offer.
On 18 March 2025, Kingswood made an application to the London Stock Exchange
for the cancellation of admission of the Kingswood Shares to trading on AIM
(the "De-Listing Application"). Since the Kingswood Shares held by HSQ already
represent approximately 89.38% of the Kingswood Shares at the Last Practicable
Date (i.e. not less than 75% of the voting rights attached to the Kingswood
Shares), the De-Listing Application will not be subject to any minimum level
of acceptance and is unconditional from the outset. It is anticipated that the
De-Listing will take effect no earlier than 7.00 a.m. on 17 April 2025.
The principal effects of De-Listing will be that:
• As HSQ is not proposing that there will be any matched
bargain facility, there will not be a formal market mechanism enabling the
Kingswood Shareholders to trade Kingswood Shares;
• while the Kingswood Shares will remain freely transferrable
(subject to the provisions of the Articles and the Companies Law), it is
possible that the liquidity and marketability of the Kingswood Shares
will, in the future, be more constrained than at present and the value of such
shares may be adversely affected as a consequence;
• Kingswood Shareholders will no longer be afforded the
protections given by the AIM Rules, such as the requirement to be notified of
certain events, and the separate requirement to seek shareholder approval for
certain other corporate events, including substantial transactions, related
party transactions and fundamental changes in Kingswood's business;
• Cavendish will cease to be Kingswood's nominated adviser and
broker;
• whilst Kingswood's CREST facility will remain in place
immediately post the De-Listing, Kingswood's CREST facility may be cancelled
in the future. Although the Kingswood Shares will remain transferable, they
may cease to be transferable through CREST. In this instance, Kingswood
Shareholders who hold Kingswood Shares in CREST will receive share
certificates;
• in the absence of a formal market and quote, it may be more
difficult for Kingswood Shareholders to determine the market value of their
investment in Kingswood at any given time;
• stamp duty will potentially be payable on transfers of
Kingswood Shares as the Kingswood Shares will no longer be traded on AIM; and
• the De-Listing may have personal taxation consequences for
Kingswood Shareholders. Kingswood Shareholders who are in any doubt about
their tax position should consult their own professional independent tax
adviser.
In the event that the De-Listing becomes effective, Kingswood Shareholders
unable, or unwilling, to hold Kingswood Shares in a private company may
consider selling their Kingswood Shares pursuant to the Offer.
Upon De-Listing, liquidity in, and marketability of, the Kingswood Shares will
be very limited. As such, interests in Kingswood Shares are unlikely
thereafter to be readily capable of sale and where a buyer is identified, it
may be difficult to place a fair value on any such sale. While there can be no
guarantee that Kingswood Shareholders will be able to sell any Kingswood
Shares, any Kingswood Shareholder seeking to do so following the De-Listing
should contact Kingswood in writing at the registered office of Kingswood,
Mont Crevelt House, Bulwer Avenue, St. Sampson, Guernsey GY2 4LH. Kingswood
will then be able to advise as to whether the Directors are aware of any
prospective buyers for any Kingswood Shares which the holder thereof wishes to
sell at that time.
15. Procedure for Acceptance
Kingswood Shareholders who hold their Kingswood Shares in certificated form
should read this paragraph in conjunction with the Form of Acceptance and Part
B and Part C of Part III (Further terms of the Offer and Acceptances) of this
document. Kingswood Shareholders who hold their shares in uncertificated form
(that is, through CREST) should read this paragraph in conjunction with Part B
and Part C of Part III (Further terms of the Offer and Acceptances) of this
document. The instructions on the Form of Acceptance are deemed to form part
of the terms of the Offer.
The Offer will remain open for acceptances until HSQ confirms the Closing
Date, with shareholders receiving at least 14 days' notice prior to the
specified closing date (which cannot be earlier than 21 days after the posting
of this Offer Document). Such notice will be given to Kingswood Shareholders
via an announcement through a Regulatory Information Service and will advise
of the final settlement date, with such announcement being made available on
HSQ's website at https://arena.pollencap.com and Kingswood's website at
https://www.kingswood (http://www.kingswood-group.com/) -group.com/
(http://www.kingswood-group.com/) . The Offer will be open for acceptance
until 1.00 p.m. (London time) on the Closing Date.
If you have any questions about this document or the accompanying documents,
or are in any doubt as to how to complete the Form of Acceptance (if you hold
Kingswood Shares in certificated form) or as to how to make an Electronic
Acceptance (if you hold Kingswood Shares in uncertificated form), or wish to
obtain an additional Form of Acceptance, please contact the Receiving Agent on
0371 664 0321, or if calling from outside the United Kingdom, you should call
+44 (0) 371 664 0321 or by submitting a request in writing to
the Receiving Agent at MUFG Corporate Markets, Central Square, 29 Wellington
Street, Leeds LS1 4DL. Calls are charged at the standard geographic rate and
will vary by provider. Calls from outside the United Kingdom will be charged
at the applicable international rate. Lines are open between 09.00 - 17.30,
Monday to Friday excluding public holidays in England and Wales. Please note
that the Receiving Agent cannot provide any financial, legal or tax advice and
calls may be recorded and monitored for security and training purposes.
(a) Kingswood Shares held in certificated form
(i) Completion of the Form of Acceptance
Your personalised Form of Acceptance accompanies this document.
You may also obtain additional Forms of Acceptance, by contacting the
Receiving Agent on 0371 664 0321, or if calling from outside the United
Kingdom, you should call +44 (0) 371 664 0321 or by submitting a request in
writing to the Receiving Agent at MUFG Corporate Markets, Central Square, 29
Wellington Street, Leeds LS1 4DL. Calls are charged at the standard geographic
rate and will vary by provider. Calls from outside the United Kingdom will be
charged at the applicable international rate. Lines are open between 09:00 -
17:30, Monday to Friday excluding public holidays in England and Wales. The
Receiving Agent will send you a personalised Form of Acceptance within 10
Business Days, and you will be instructed to return the Form of Acceptance in
accordance with the instructions set out below and on the Form of Acceptance.
To accept the Offer in respect of Kingswood Shares held in certificated form
(that is, not in CREST), you must complete the personalised Form of Acceptance
in accordance with the instructions set out below and on the Form of
Acceptance. The instructions printed on the Form of Acceptance are deemed to
form part of the terms of the Offer. You should complete a separate Form of
Acceptance for Kingswood Shares held in certificated form but under different
designations. If you have any queries as to how to complete the Form of
Acceptance, please contact the Receiving Agent on 0371 664 0321, or if calling
from outside the United Kingdom, you should call +44 (0) 371 664 0321 or by
submitting a request in writing to the Receiving Agent at MUFG Corporate
Markets, Central Square, 29 Wellington Street, Leeds LS1 4DL. Calls are
charged at the standard geographic rate and will vary by provider. Calls from
outside the United Kingdom will be charged at the applicable international
rate. Lines are open between 09.00 - 17.30, Monday to Friday excluding public
holidays in England and Wales. Please note that the Receiving Agent cannot
provide any financial, legal or tax advice and calls may be recorded and
monitored for security and training purposes. Additional Forms of Acceptance
are available from the Receiving Agent upon request.
• To accept the Offer in respect of all your Kingswood Shares
in certificated form - you must insert in Box 3A the total number of Kingswood
Shares in respect of which you wish to accept the Offer and sign Box 4A or 4B,
as applicable, of the enclosed Form of Acceptance. In the case of joint
holders, all joint holders must sign Box 4A. In all cases, if you are an
individual, you must sign Box 4A on the Form of Acceptance in the presence of
a witness who should also sign in accordance with the instructions printed on
it for execution by individuals. Any Kingswood Shareholder that is a company
should execute Box 4B on the Form of Acceptance in accordance with the
instructions printed on it for execution by a company. If you do not insert a
number in Box 3A of the Form of Acceptance, or if you insert in Box 3A a
number which is greater than the number of Kingswood Shares that you hold and
you have signed in Box 4A or Box 4B, your acceptance will be deemed to be in
respect of all the certificated Kingswood Shares registered in your name.
• To accept the Offer in respect of less than all your
Kingswood Shares in certificated form - you must insert in Box 3A of the
enclosed Form of Acceptance such lesser number of Kingswood Shares in respect
of which you wish to accept the Offer in accordance with the instructions
printed thereon. You should then follow the procedure set out in paragraph (i)
above in respect of such lesser number of Kingswood Shares.
(ii) Return of the Form of Acceptance
To accept the Offer in respect of Kingswood Shares held in certificated form,
the completed, signed and (if applicable) witnessed Form of Acceptance should
be returned by post to the Receiving Agent at MUFG Corporate Markets at
Central Square, 29 Wellington Street, Leeds LS1 4DL together (subject to
paragraph 15(a)(iii) below) with the relevant share certificate(s) and/or
other document(s) of title, as soon as possible and, in any event, so as to be
received not later than 1.00 p.m. (London time) on the Closing Date. A
reply-paid envelope for use in the United Kingdom only is enclosed for your
convenience. It is recommended to allow four Business Days for delivery. No
acknowledgement of receipt of documents will be given.
Any Form of Acceptance received electronically in respect of Kingswood Shares
held in certificated form will be rejected as an invalid acceptance of the
Offer.
Any Form of Acceptance received in an envelope post-marked in a Restricted
Jurisdiction or otherwise appearing to HSQ or its agents to have been sent
from any of these jurisdictions may be rejected as an invalid acceptance of
the Offer. The attention of Kingswood Shareholders holding Kingswood Shares
and who are citizens or residents of jurisdictions outside the United Kingdom
is drawn to paragraph 6 of Part A of Part III (Further terms of the Offer and
Acceptances) of this document.
(iii) Share certificates not readily available or lost
If your Kingswood Shares are in certificated form, a completed, signed and
witnessed Form of Acceptance should be accompanied by the relevant share
certificate(s) and/or other document(s) of title. If for any reason the
relevant share certificate(s) and/or other document(s) of title is/are not
readily available or is/are lost, you should nevertheless complete, sign and
lodge the Form of Acceptance as stated above so as to be received by the
Receiving Agent by post at MUFG Corporate Markets Central Square, 29
Wellington Street, Leeds LS1 4DL, not later than 1.00 p.m. (London time) on
the Closing Date. You should send with the Form of Acceptance any share
certificate(s) and/or other document(s) of title which you may have available,
accompanied by a letter stating that the remaining documents will follow as
soon as possible or that you have lost one or more of your share
certificate(s) and/or other document(s) of title. You should then arrange for
the relevant share certificate(s) and/or other document(s) of title to be
forwarded as soon as possible thereafter but in any event so as to arrive by
no later than 1.00 p.m. (London time) on the Closing Date. It is recommended
to allow four Business Days for delivery.
If you have lost your share certificate(s) and/or other document(s) of title,
and you are accepting the offer for 1,000,000 or fewer Kingswood Shares,
please tick Box 3B at the time of submission of the Form of Acceptance. You do
not need to provide a separate letter of indemnity for the lost share
certificate(s) and/or other document(s) of title. If you have lost your share
certificate(s) and/or other document(s) of title and you are accepting the
offer for more than 1,000,000 Kingswood Shares at the time of submission of
the Form of Acceptance, you should tick Box 3C and separately write as soon as
possible to the Receiving Agent at MUFG Corporate Markets Central Square, 29
Wellington Street, Leeds LS1 4DL, requesting a letter of indemnity for the
lost share certificate(s) and/or other document(s) of title. When completed in
accordance with the instructions given, you should return the letter of
indemnity by post to the Receiving Agent at MUFG Corporate Markets Central
Square, 29 Wellington Street, Leeds LS1 4DL, so as to arrive by no later than
1.00 p.m. (London time) on the Closing Date. It is recommended to allow four
Business Days for delivery.
If, following the submission of a Form of Acceptance and prior to the Closing Date, you acquire further Kingswood Shares which bring your total holding of Kingswood Shares in certificated form to more than 1,000,000, but you have not provided a letter of indemnity relating to your lost share certificate(s) and/or other document(s) of title, your Form of Acceptance may be rejected.
If subsequently available, you should then arrange for the relevant share
certificate(s) and/or other document(s) of title to be forwarded as soon as
possible. If you have lost your share certificate(s) and/or other document(s)
of title, you should, as soon as possible, write to or telephone the Receiving
Agent at MUFG Corporate Markets, Central Square, 29 Wellington Street, Leeds
LS1 4DL on 0371 664 0321, or if calling from outside the United Kingdom, you
should call +44 (0) 371 664 0321 between 8.30 a.m. and 5.30 p.m., requesting a
letter of indemnity for the lost share certificate(s) and/or other document(s)
of title which, when completed in accordance with the instructions given,
should be returned by post to the Receiving Agent as stated above. New share
certificates should be obtained from the Receiving Agent in its capacity as
Kingswood's registrars.
(iv) Validity of Acceptance
Without prejudice to Part B and Part C of Part III (Further terms of the Offer
and Acceptances) of this document, subject to the provisions of the Takeover
Code, HSQ reserves the right to treat as valid in whole or in part any
acceptance of the Offer which is not entirely in order or which is not
accompanied by the relevant share certificate(s) and/or other document(s) of
title. In that event, subject to the provisions of the Takeover Code, no
payment of the cash consideration under the Offer will be made until after the
relevant share certificate(s) and/or other document(s) of title or indemnities
reasonably satisfactory to HSQ have been received.
(b) Kingswood shares held in uncertified form (that is, in CREST)
(i) General
If your Kingswood Shares are in uncertificated form, to accept the Offer you
should take (or procure the taking of) the action set out below to transfer
the Kingswood Shares in respect of which you wish to accept the Offer to the
appropriate escrow balance(s), specifying the Receiving Agent (in its capacity
as a CREST participant under the Receiving Agent's participant ID referred to
below) as the escrow agent, as soon as possible and in any event so that the
TTE instruction settles not later than 1.00 p.m. (London time) on the Closing
Date. Note that settlement cannot take place on weekends or public holidays
(or other times at which the CREST system is non-operational). You should
therefore ensure you time the input of any TTE instructions accordingly.
The input and settlement of a TTE instruction in accordance with this
paragraph 15(b)(i) will (subject to satisfying the requirements set out in
Part B and Part C of Part III (Further terms of the Offer and Acceptances) of
this document) constitute an acceptance of the Offer in respect of the number
of Kingswood Shares so transferred to escrow.
If you are a CREST sponsored member, you should refer to your CREST sponsor before taking any action. Only your CREST sponsor will be able to send the TTE instruction(s) to Euroclear in relation to your Kingswood Shares.
After settlement of a TTE instruction, you will not be able to access the
Kingswood Shares concerned in CREST for any transaction or charging purposes.
The Receiving Agent will transfer the Kingswood Shares concerned in accordance
with Part C of Part III (Further terms of the Offer and Acceptances) of this
document.
You are recommended to refer to the CREST Manual for further information on
the CREST procedure outlined below.
You should note that Euroclear does not make available special procedures, in CREST, for any particular corporate action. Normal system timings and limitations will therefore apply in connection with a TTE instruction and its settlement. You should therefore ensure that all necessary action is taken by you (or by your CREST sponsor) to enable a TTE instruction relating to your Kingswood Shares to settle prior to 1.00 p.m. (London time) on the Closing Date. In this connection, you are referred in particular to those
sections of the CREST Manual concerning the practical limitations of the CREST
system and timings.
The latest time for receipt of an Electronic Acceptance through CREST will be
1.00 p.m. (London time) on the Closing Date. The latest time and date by which
the Offer can be accepted in certificated form will be 1.00 p.m. (London time)
on the Closing Date. A separate announcement will be made in due course
confirming the timetable and the relevant deadline for accepting the Offer,
including on CREST. The Offer will remain open for acceptances until HSQ
confirms the Closing Date, with shareholders receiving at least 14 days'
notice prior to the specified closing date (which cannot be earlier than 21
days after the posting of this Offer Document). Such notice will be given to
Kingswood Shareholders via an announcement through a Regulatory Information
Service and will advise of the final settlement date, with such announcement
being made available on HSQ's website at https://arena.pollencap.com and
Kingswood's website at https://www.kingswood-gr
(http://www.kingswood-group.com/) oup.com/. (http://www.kingswood-group.com/)
(ii) To accept the Offer
To accept the Offer in respect of Kingswood Shares held in uncertificated
form, you should send (or, if you are a CREST sponsored member, procure that
your CREST sponsor sends) to Euroclear a TTE instruction in relation to such
shares. A TTE instruction to Euroclear must be properly authenticated in
accordance with Euroclear's specifications for transfers to escrow and must
contain the following details (being an Electronic Acceptance):
• the number of Kingswood Shares in respect of which you wish
to accept the Offer (i.e. the number of Kingswood Shares to be transferred to
escrow);
• your member account ID;
• your participant ID;
• the participant ID of the escrow agent, MUFG Corporate
Markets, in its capacity as a CREST receiving agent, being RA10;
• the member account ID(s) of the escrow agent, MUFG Corporate
Markets, in its capacity as a CREST receiving agent, being HSQKIN01;
• the ISIN of the relevant Kingswood Shares (this is
"GG00BKY4K072");
• the intended settlement date. This should be as soon as
possible and, in any event, not later than 1.00 p.m. (London time) on the
Closing Date;
• the corporate action number for the transaction; this is
allocated by Euroclear and can be found by viewing the relevant corporate
action details on screen in CREST;
• CREST standard delivery instructions priority of 80; and
• a contact name and telephone number (inserted in the shared
note field).
If you hold Kingswood Shares in uncertificated form through one or more
intermediaries, such as a stockbroker, custodian bank or clearing system, you
should confirm the instruction deadline which such intermediaries have
established to accept the Offer on your behalf. The custodian bank or
stockbroker may set an earlier deadline for receiving instructions from you in
order to permit the custodian bank or stockbroker to communicate acceptances
to the Receiving Agent in a timely manner.
(iii) Validity of Acceptances
Holders of Kingswood Shares in uncertificated form who wish to accept the
Offer should note that a TTE instruction will only be a valid acceptance of
that Offer as at the relevant closing
date if it has settled at or before 1.00 p.m. (London time) on that date. A
Form of Acceptance which is received in respect of Kingswood Shares held in
uncertificated form may be treated as an invalid acceptance and may be
disregarded.
Without prejudice to Part B and Part C of Part III (Further terms of the Offer
and Acceptances) of this document, subject to the provisions of the Takeover
Code, HSQ reserves the right to treat as valid in whole or in part any
acceptance of the Offer which is not entirely in order or which is not
accompanied by the relevant TTE instruction. In that event, subject to the
provisions of the Takeover Code, no payment of the cash consideration under
the Offer will be made until after the relevant TTE instruction reasonably
satisfactory to HSQ has been received. HSQ will make an appropriate
announcement if any of the details contained in this paragraph 15(b) alter for
any reason.
(iv) Overseas Shareholders
The attention of Kingswood Shareholders holding Kingswood Shares in
uncertificated form and who are citizens or residents of jurisdictions outside
the United Kingdom is drawn to Part C of Part III (Further terms of the Offer
and Acceptances) and Part B of Part V (Additional Information) of this
document.
(v) General
Normal CREST procedures (including timings) apply in relation to any Kingswood
Shares that are, or are to be, converted from uncertificated to certificated
form, or from certificated to uncertificated form, during the course of the
Offer (whether any such conversion arises as a result of a transfer of
Kingswood Shares or otherwise). Holders of Kingswood Shares who are proposing
so to convert any such shares are recommended to ensure that the conversion
procedures are implemented in sufficient time to enable the person holding or
acquiring the shares as a result of the conversion to take all necessary steps
in connection with an acceptance of the Offer (in particular, as regards
delivery of share certificate(s) and/or other document(s) of title or
transfers to an escrow balance as described above) prior to 1.00 p.m. (London
time) on the Closing Date.
16. Settlement
Kingswood Shareholders who accept the Offer early, i.e. on or prior to 1 pm on
15 April 2025, will receive the consideration payable to them under the Offer
earlier (i.e. by 29 April 2025). Kingswood Shareholders who accept the Offer
after 1 pm on 15 April 2025 and until the Offer remains open for acceptances
will only receive the consideration payable to them under the Offer within 14
calendar days of receipt of such acceptance.
Payment of the cash consideration
• Where Kingswood Shares are held in uncertified form (that is, in CREST)
Where a valid acceptance relates to Kingswood Shares in uncertificated form,
the payment of cash consideration to which the accepting Kingswood Shareholder
is entitled shall be effected through CREST by HSQ instructing (or procuring
the instruction of) Euroclear to create a CREST assured payment obligation in
accordance with the CREST assured payment arrangements in favour of the
appropriate CREST account through which the relevant Kingswood Shareholder
holds such uncertificated Kingswood Shares in respect of the cash
consideration due to that Kingswood Shareholder.
The instruction by (or on behalf of) HSQ to create an assured payment
arrangement shall be a complete discharge of HSQ's obligations under the Offer
with reference to payments through CREST.
The CREST payment obligations set out above will be created: (i) in the case
of valid acceptances received, complete in all respects, by 15 April 2025,
within 14 days of such date; and (ii) in the case of acceptances received,
complete in all respects, after such date but while the Offer remains open for
acceptance, within 14 days of such receipt, and each applicable holding of
Kingswood Shares credited to any stock account in CREST in respect of which
cash consideration has been paid will be disabled and all applicable Kingswood
Shares in respect of which cash consideration has been paid will be removed
from CREST in due course thereafter.
HSQ reserves the right to pay cash consideration to all or any relevant CREST
shareholders by cheque if for any reason it wishes to do so.
• Where Kingswood Shares are held in certificated form
Where a valid acceptance relates to Kingswood Shares in certificated form,
settlement of the cash consideration shall be despatched by cheque or by such
other method as may be approved by the Panel. Your attention is drawn in
particular to paragraphs 15(a)(iii) and 15(a)(iv) above which set out the
steps to be taken if your Form of Acceptance is not accompanied by the
relevant share certificate(s) and/or other document(s) of title and the
consequences thereof.
Subject to the above, all deliveries of cheques required to be made pursuant
to the Offer shall be effected by posting them, (i) in the case of valid
acceptances received, complete in all respects, by 15 April 2025, within 14
days of such date; and (ii) in the case of acceptances received, complete in
all respects, after such date but while the Offer remains open for acceptance,
within 14 days of such receipt, by first class post or by such other method as
may be approved by the Panel, addressed to the persons entitled to them at
their respective addresses as appearing in the Register at the Closing Date
(or, in the case of joint holders, at the address of that one of the joint
holders whose name stands first in the Register in respect of such joint
holding at such time) and neither Kingswood nor HSQ (nor any of their
respective nominees or agents) shall be responsible for any loss or delay in
the transmission of cheques sent in this way.
All cash consideration due to Kingswood Shareholders shall be paid in sterling
and, in the case of a cheque, drawn on a UK clearing bank.
All cheques shall be made payable to the Kingswood Shareholder(s) (except
that, in the case of joint holders, HSQ reserves the right to make cheques
payable to the joint holder whose name stands first in the Register in respect
of such joint holding at the Closing Date) and the encashment of any such
cheque shall be a complete discharge by HSQ for the obligation to pay the
monies represented thereby.
Payment terms
Cheques will not be mailed to any Kingswood Shareholder who holds their
Kingswood Shares in certificated form where Kingswood and/or the Receiving
Agent has identified a verification issue with the information provided for
that Kingswood Shareholder or any underlying beneficial holders, where the
information is required for the purpose of payment of the relevant
consideration to the Kingswood Shareholder, which needs to be addressed before
payment of the relevant consideration to such Kingswood Shareholder can be
made. In these circumstances, the Receiving Agent will, hold the relevant
consideration for such Kingswood Shareholders and engage with each of them to
verify their identity and payment details before payment of such consideration
is made to them.
In addition, and without prejudice to the foregoing, no electronic payment
shall be made to any Kingswood Shareholder where Kingswood and/or the
Receiving Agent has been unable to validate the electronic payment details to
the satisfaction of Kingswood and/or the Receiving Agent. The Receiving Agent
shall also have the power to withhold any consideration payable to any
Kingswood Shareholder where either Kingswood and/or the Receiving Agent
believes that there is a verification issue with the information provided for
that Kingswood Shareholder or any underlying beneficial holders, where the
information is required for the purpose of payment of the relevant
consideration to the Kingswood Shareholder.
• General
All documents and remittances sent to Kingswood Shareholders will be sent at
the risk of the person(s) entitled thereto.
Except with the consent of the Panel, settlement of the consideration to which
any accepting Kingswood Shareholder is entitled under the Offer will be
implemented in full in accordance with the terms of the Offer free of any
lien, right of set-off, counterclaim or other analogous right to which any
person may otherwise be, or claim to be, entitled against such Kingswood
Shareholder, and will be effected in the manner described in this document.
17. Overseas Shareholder
Overseas Shareholders should refer to Part B of Part V (Additional
Information) of this document which contains important information relevant to
such Overseas Shareholders.
The implications of the Offer for Overseas Shareholders may be affected by the
laws of their relevant jurisdictions. Overseas Shareholders should inform
themselves about and observe any applicable legal requirements. It is the
responsibility of each Overseas Shareholder to satisfy themselves as to the
full observance of the laws of the relevant jurisdiction in connection with
the Offer, including the obtaining of any governmental, exchange control or
other consents which may be required, or the compliance with other necessary
formalities which are required to be observed and the payment of any issue,
transfer or other taxes due in such jurisdiction. If you remain in doubt, you
should consult your professional adviser in the relevant jurisdiction without
delay.
This document does not constitute an offer to sell or issue or the
solicitation of an offer to buy or subscribe for shares in any jurisdiction in
which such offer or solicitation is unlawful.
This document and the accompanying Form of Acceptance have been prepared for
the purposes of complying with English law, the applicable requirements of the
Companies Act, the Takeover Code, the Panel, the AIM Rules, the FCA and the
London Stock Exchange and applicable securities law and the information
disclosed may not be the same as that which would have been disclosed if this
document had been prepared in accordance with the laws of any other
jurisdiction.
18. United Kingdom Taxation
A summary of relevant UK taxation, which is intended as a general guide only,
is set out in Part C of Part V (Additional Information) of this document. If
you are in any doubt as to your tax position, or you are subject to taxation
in a jurisdiction other than the United Kingdom, you are strongly advised to
consult an appropriate independent professional adviser.
19. Further Information
The terms of the Offer are set out in Part III (Further terms of the Offer and
Acceptances) of this document. Your attention is drawn in particular to the
letter from the Chairman of Kingswood set out in Part II (Letter from the
Chairman of Kingswood) of this document, and the further information contained
in this document and, if your Kingswood Shares held in certificated form, to
the accompanying Form of Acceptance which should be read in conjunction with
this document.
20. Action to be taken To accept the Offer:
• If your Kingswood Shares are in uncertificated form (that
is, in CREST), you should NOT return the Form of Acceptance but instead ensure
that an Electronic Acceptance is made by you or on your behalf as soon as
possible and that settlement is no later than 1.00 p.m. (London time) on the
Closing Date.
• If your Kingswood Shares are in certificated form, the Form
of Acceptance must be completed, signed and returned as soon as possible
(together with your share certificate(s) and/or other document(s) of title),
and in any event so as to be received by the Receiving Agent at MUFG Corporate
Markets, Central Square, 29 Wellington Street, Leeds LS1 4DL no later than
1.00
p.m. (London time) on the Closing Date.
The Offer will remain open for acceptances until HSQ confirms the Closing
Date, with shareholders receiving at least 14 days' notice prior to the
specified closing date (which cannot be earlier than 15 April 2025). Such
notice will be given to Kingswood Shareholders via an announcement through a
Regulatory Information Service and will advise of the final settlement date,
with such announcement being made available on Kingswood's website at
https://www.kingswood-group.com/ (http://www.kingswood-group.com/) .
If you have any questions relating to acceptance of the Offer, please contact
the Receiving Agent. If calling from within the United Kingdom, you should
contact the Receiving Agent on 0371 664 0321, or if calling from outside the
United Kingdom, you should call +44 (0) 371 664 0321 or by submitting a
request in writing to the Receiving Agent at MUFG Corporate Markets, Central
Square, 29 Wellington Street, Leeds LS1 4DL. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the UK will be
charged at the applicable international rate. Lines are open between 9.00 a.m.
and 5.30 p.m., Monday to Friday (excluding public holidays in England and
Wales). Please note that the Receiving Agent cannot provide any financial,
legal or tax advice and that calls may be recorded and monitored for security
and training purposes.
Yours faithfully,
Duncan Gerard
Director
HSQ Investment Limited
PART II
LETTER FROM THE CHAIRMAN OF KINGSWOOD HOLDINGS LIMITED
Directors:
Registered office:
David Hudd (Non-Executive
Chairman)
Mont Crevelt House
Peter Coleman (Chief Executive
Officer)
Bulwer Avenue Jonathan Freeman (Non-Executive
Director)
St. Sampson Duncan Gerard (Non-Executive
Director)
Guernsey
Gemma Godfrey (Non-Executive
Director)
GY2 4LH
Lindsey McMurray (Non-Executive Director) Jane Millar (Non-Executive Director)
25 March 2025
To holders of shares ("Kingswood Shares") in Kingswood Holdings Limited
("Kingswood", the "Company" or the "Group") and, for information only, to
holders of options under the Kingswood share plans and persons with
information rights
Dear Shareholder
Unconditional recommended cash offer for Kingswood by HSQ Investment Limited
("HSQ") and
Cancellation of admission to trading of the Kingswood Shares on AIM
1. Introduction
On 18 March 2025, HSQ and the Independent Kingswood Directors (as defined
below) announced that they had agreed the terms of an unconditional
recommended cash offer (the "Offer") for the entire issued and to be issued
ordinary share capital of Kingswood not already held by HSQ at a price of 7
pence per Kingswood Share.
HSQ currently owns 89.39% of Kingswood's issued share capital and, pursuant to
a request from HSQ, the Company has already submitted an application to AIM to
cancel the admission to trading. The cancellation date is currently
anticipated to be on or around 17 April 2025.
I am writing to you today, on behalf of the Independent Kingswood Directors,
to set out the reasons why the Independent Kingswood Directors consider the
terms of the Offer to be fair and reasonable and are unanimously recommending
that you accept, or procure the acceptance of, the Offer as the Independent
Kingswood Directors that own Kingswood Shares have irrevocably undertaken to
do.
I also draw your attention to the letter from HSQ set out in Part I (Letter
from HSQ Investment Limited) of this document which gives details about the
Offer, and to the additional information set out in Part A of Part V
(Additional Information) of this document. In accordance with Rule 24.1(a) of
the Takeover Code, the Independent Kingswood Directors have given their
consent to the publication of this document within 14 days of the date of the
Rule 2.7 Announcement.
2. Summary of the terms of the Offer
Under the terms of the Offer, which is unconditional from the outset and
subject to the terms set out in Part III (Further terms of the Offer) and, in
the case of Kingswood Shares held in certificated form, the Form of
Acceptance, Kingswood Shareholders who accept the Offer shall be entitled to
receive:
7 pence in cash for each Kingswood Share held
The Offer values the entire issued share capital of Kingswood at approximately
£48.03m on a fully diluted basis. Having regard to the financial profile of
the Group, and HSQ's intentions for the Group and the imminent De-Listing
described in Part I (Letter from HSQ Investment Limited) of this document, the
Independent Kingswood Directors consider that the Offer provides holders of
Kingswood Shares ("Kingswood Shareholders") with the opportunity to realise
their entire investment in the Company for cash in a scenario where the
Independent Kingswood Directors have taken into account HSQ's belief as set
out in the Rule 2.7 Announcement and in Part I (Letter from HSQ Investment
Limited) of this document, that there is limited prospect of any future
liquidity for the Kingswood Shares.
The Offer is subject to valid acceptances being received from Kingswood
Shareholders but is not subject to any minimum level of acceptance and is
unconditional from the outset. No regulatory approvals are required in respect
of the making or the acceptance of the Offer. Should the Offer achieve
acceptances and/or acquisitions amounting to 90% or more in value of the
Kingswood Shares subject to the Offer (excluding Kingswood Shares which are
Excluded Shares), HSQ will invoke its statutory rights under part XVIII of the
Companies Law to compulsorily acquire any remaining Kingswood Shares not
tendered under the Offer, thereby securing 100% ownership of Kingswood. It is
important to note that, as the Offer is unconditional from the outset, an
accepting Kingswood Shareholder will not be entitled to withdraw an acceptance
of the Offer.
If, on or after the posting date of this document, any dividend and/or other
distribution and/or return of capital is declared, made or paid, or becomes
payable in respect of the Kingswood Shares, the cash consideration payable
under the terms of the Offer for the Kingswood Shares shall be reduced by an
amount equal to the amount of such dividend and/or other distribution and/or
return of capital, in which case any reference in this document to the cash
consideration payable under the terms of the Offer will be deemed to be a
reference to the cash consideration as so reduced. In such circumstances, the
relevant Kingswood Shareholder will be entitled to receive and retain such
dividend and/or other distribution and/or return of capital. Any revision of
the Offer price 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 Offer.
3. Background to, and reasons for, the recommendation of the Offer by the Independent Kingswood Directors
The committee of Independent Kingswood Directors
Lindsey McMurray, non-executive director, and Duncan Gerard, non-executive
director, are representatives on the Kingswood board of directors (the
"Board") of Pollen Street Capital Limited ("Pollen Street"), the investment
manager of funds which are the ultimate owners of HSQ. Accordingly, each of
Lindsey McMurray and Duncan Gerard have not participated in the appraisal of
the Offer, as they cannot be considered independent on this matter.
The Board therefore constituted a committee of the five remaining Independent
Kingswood Directors (also excluding Gary Wilder and Jonathan Massing having
recused themselves from any discussions on the Offer prior to their subsequent
resignation as directors) for the purposes of carefully evaluating and
ultimately recommending the Offer (the "Independent Kingswood Directors").
Background
Kingswood is an international, fully integrated wealth and investment
management group. It is a trusted provider of wealth planning and investment
management solutions to clients, underpinned by investment in people and
innovation in technology that supports its advisers and clients. The Company
has wholly-owned
wealth management operations in the UK and majority-owned wealth management
operations in Ireland and also a 50.1% interest in Kingswood US, LLC ("KWUS"),
a financial services business in the USA providing wealth management,
investment banking, equity research and advisory solutions.
Since listing in 2014, the Company has pursued a strategy of organic and
inorganic growth, recognising the opportunities created by the sector dynamics
in the wealth management and financial planning space to expand the Company's
product offering and geographical presence. To provide the funding support to
enable an accelerated acquisition led growth strategy, the Company obtained a
commitment of up to £80m from Pollen Street in 2019. This investment was
provided through HSQ. This commitment was satisfied by the issue of
convertible preference shares that had the right to convert into Kingswood
Shares. With the funding from HSQ, together with a debt facility subsequently
put in place in October 2022, the Company has been able to complete 19
acquisitions since 2019, including the acquisition of the 50.1% interest in
KWUS. This strategy has seen Assets under Advice and Management ("AUA&M")
increase from £2.5bn at 31 December 2019 to £12.3bn at 31 December 2023 and
revenues increase from £10.1m to £86.2m over the same period. As at 31
December 2024, the Group's AUA&M was approximately £13.1bn.
The Company now provides a holistic wealth management offering, encompassing a
comprehensive financial planning, mortgage and investment proposition across
the UK and Ireland serving both retail and corporate clients. An experienced
and effective management team is in place, and the Board believes that there
is substantial potential, with the appropriate levels of investment, to build
both scale and value across the business. A strong risk culture underpins
these ambitions of growth.
On 31 May 2024, it was announced that HSQ had converted all of its convertible
preference shares into Kingswood Shares, resulting in HSQ being beneficially
interested in 68.39% of the Company's issued share capital.
Notwithstanding the Company's growth in revenues and AUA&M, the Company's
performance has been impacted by the headwinds seen across the sector over the
last couple of years. This has resulted in the Company's growth not being as
strong over the period as management had expected. In conjunction with this,
the acquisition strategy has seen the Company's debt position increase
significantly over the last two years, rising from a net cash position of
£39.7m to a net debt position of £48.1m as at 31 December 2023. Between 1
February 2024 and 31 December 2024, HSQ and/ or Pollen Street provided the
Company with a further £21m through additional loans to enable the Company to
meet its obligations in relation to deferred consideration due from previous
acquisitions and in relation to interest payments due on its senior debt
facility.
As at 31 December 2024, the unaudited gross debt in the Company from its
senior debt facility, outstanding leases and the loans provided by HSQ and/or
Pollen Street since February 2024 amounted to, in aggregate,
£91.6m and the unaudited net debt of the Company was approximately £73.2m.
As at 31 December 2024, the Company also had additional expected deferred
consideration obligations over the next 12 months and additional obligations
in respect of its revolving credit facility. Having regard to the trading
position of the Company, these obligations would not be able to be satisfied
through the operating cash flows of the Company and, unless alternative
sources of capital were obtained, HSQ would need to remain the ultimate funder
to enable the Company to meet these obligations. As announced on 12 March
2025, HSQ confirmed that they continued to be supportive of the business but
believed that this was most appropriate from a position as sole institutional
shareholder alongside the Company moving to an unlisted, private company
setting and therefore they have stated that they would be willing to provide
the required near-term funding only on this basis.
On 13 March 2025, HSQ acquired the interests of KPI and, following that
acquisition, HSQ provided a further loan facility which enabled the Company to
satisfy its immediate deferred consideration obligations.
Prior to the acquisition of the KPI stake by HSQ, the Independent Kingswood
Directors were strongly of the view that there was no near term credible
funding route for the Company other than the continued financial support from
HSQ. In reaching this view, the Independent Kingswood Directors had considered
a full range of potential alternative options including but not limited to
equity financing, additional external debt funding, accelerated realisation of
businesses or assets, and third party potential suitors for the Company as
a whole. The Independent Kingswood Directors concluded that, given factors
such as the size of the HSQ shareholding, the debt owed by the Company
(including to HSQ) and the terms of the Make Whole Instrument (which provides
a guaranteed level of return to HSQ of approximately £140.1m), none of such
options were deliverable (either at all or in any meaningful timescale) and
that there could be no certainty as to the remaining value from these
alternatives that would be attributable to the Independent Kingswood
Shareholders and whether such value would be in excess of the 7p per Kingswood
Share available under the Offer.
The Independent Kingswood Directors are also mindful that HSQ now owns 89.39%
of the Company's issued share capital and that they are therefore seeking to
cancel the listing of the Company on AIM, meaning that any shareholders not
accepting the Offer would be minority shareholders in an unlisted Guernsey
company.
Views of the Independent Kingswood Directors on HSQ's intentions for Kingswood
In considering the intention to recommend the Offer to Kingswood Shareholders,
the Independent Kingswood Directors have given due consideration to the
intentions of HSQ for the Company.
The Independent Kingswood Directors welcome that HSQ have confirmed the
importance of offering long term security and certainty to all stakeholders
and that HSQ does not intend to make any material change to the conditions of
employment or in the balance of the skills and functions of the employees and
management albeit that no firm decisions have been made by HSQ with respect to
any specific actions which may or may not be taken in relation to Kingswood's
management and employees.
The Independent Kingswood Directors recognise HSQ's belief that the current
level of indebtedness in the Company is too great for the Group and that
action needs to be taken to ensure the long-term success of Kingswood, its
employees and clients. The Independent Kingswood Directors have noted that HSQ
has undertaken to KPI to use all reasonable endeavours to arrange for a sale
of the UK and Ireland operations and that such a transaction could be a merger
with another wealth management company that is an existing portfolio company
of funds managed and advised by Pollen Street. The Independent Kingswood
Directors welcome initiatives that would have the prospect of delivering
long-term capital investment to the UK and Ireland operations of the Group,
but also note that HSQ has stated that, were such a merger to occur, a review
of certain central functions of the Company would follow, which could result
in rationalisation within certain of the central functions and also in a
change to the location of the Company's headquarters and/or to the functions
carried out there. The Independent Kingswood Directors can make no comment as
to whether or not such a transaction will be consummated.
The Independent Kingswood Directors separately note that no material changes
will be proposed to KWUS' business model over the course of the next 12
months. The Independent Kingswood Directors acknowledge HSQ's confirmation
that it does not intend to create any research and development functions and
also note that HSQ has no plans to redeploy the fixed assets of Kingswood nor
any intention to make any changes to the Company's fixed assets more
generally.
Finally, in the context of their deliberations, the Independent Kingswood
Directors have taken into account the fact that that, once the De-listing is
implemented, Kingswood Shareholders who do not accept the Offer will hold
unlisted Kingswood Shares and, as minority shareholders, would not be afforded
the same level of liquidity, regulatory disclosure rights and protections as
were afforded to them whilst Kingswood remained listed on AIM.
Conclusion
As required by the Code, the Independent Kingswood Directors, together with
their financial adviser Cavendish, have carefully considered and evaluated the
financial terms of the Offer. Cavendish is providing financial advice to the
Independent Kingswood Directors under Rule 3 of the Code.
The Independent Kingswood Directors recognise that the Offer represents an
opportunity for Kingswood Shareholders to realise their entire existing
holdings in Kingswood for cash.
In light of that assessment and also taking into account the financial advice
received from Cavendish, the Independent Kingswood Directors are unanimously
recommending that Kingswood Shareholders accept the Offer (as those
Independent Kingswood Directors who hold Shares have agreed to do in respect
of their own shareholdings).
4. Recommendation
The Independent Kingswood Directors, who have been so advised by Cavendish as
to the financial terms of the Offer, consider the terms of the Offer to be
fair and reasonable. Cavendish is providing independent financial advice to
the Independent Kingswood Directors for the purposes of Rule 3 of the Takeover
Code. In providing its financial advice to the Independent Kingswood
Directors, Cavendish has taken into account the commercial assessments of the
Independent Kingswood Directors.
Accordingly, the Independent Kingswood Directors unanimously recommend that
Kingswood Shareholders accept the Offer as those Independent Kingswood
Directors who hold Kingswood Shares have irrevocable undertaken to do in
respect of, in aggregate, 737,750 Kingswood Shares (representing, in
aggregate, approximately 0.11% of the Kingswood Shares as at the Last
Practicable Date).
5. Irrevocable undertakings
HSQ has received irrevocable undertakings from the following Independent
Kingswood Directors: David Hudd and Jonathan Freeman in respect of, in
aggregate, 737,750 Kingswood Shares (representing, in aggregate, approximately
0.11% of the Kingswood Shares as at the Last Practicable Date).
In addition to the irrevocable undertakings given by the Directors listed
above, HSQ has also received irrevocable undertakings from Gary Wilder and
Jonathan Massing in respect of 1,115,001 and 350,000 Kingswood Shares
respectively (representing, in aggregate, approximately 0.21% of the Kingswood
Shares as at the Last Practicable Date).
HSQ has therefore received indications of support to accept, or to procure the
acceptance of, the Offer in respect of a total of 2,202,751 Kingswood Shares,
representing, in aggregate, approximately 0.32% of the Kingswood Shares as at
the Last Practicable Date. Together with the Kingswood Shares already held by
HSQ, this represents approximately 89.71% of the Kingswood Shares as at the
Last Practicable Date.
Further details of these irrevocable undertakings (including the circumstances
in which they cease to be binding) are set out in Part V to this document.
6. The Memorandum of Understanding between HSQ and KPI
The previous arrangements
On 30 September 2019, and as described in previous announcements, including on
31 May 2024, Kingswood issued a promissory note to HSQ (the "Make Whole
Instrument") which was structured to provide HSQ with a guaranteed return on
its investment in convertible preference shares. Pursuant to this agreement,
which was subsequently modified on 28 December 2021, upon a sale of HSQ's
shares in Kingswood, HSQ had a guaranteed minimum return of an amount equal to
two times the total amount subscribed for their convertible preference shares
prior to 28 December 2021 and an amount equal to one and a half times the
total amount subscribed for their convertible preference shares on or after 28
December 2021. The aggregate level of return guaranteed by Kingswood to HSQ
under the Make Whole Instrument is approximately £140.1m.
Separate to its shareholding in Kingswood, KPI holds an additional economic
interest in Kingswood via HSQ, pursuant to a side letter entered into in
December 2019 (the "Side Letter"). Pursuant to the Side Letter, KPI paid HSQ
£5m in exchange for an economic interest in a portion of the convertible
preference shares that HSQ had at that time subscribed for in Kingswood (the
"Trust Shares"). HSQ agreed in the Side Letter to hold the Trust Shares on
trust for, and to pay any proceeds relating to the Trust Shares to, KPI. On 31
May 2024, it was announced that HSQ had converted all of its convertible
preference shares into Kingswood Shares resulting in HSQ being beneficially
interested in 68.39% of the Company's share capital.
The Side Letter remains in force and, as a result, KPI has a continuing
economic interest of approximately 7% in HSQ's shareholding in Kingswood and
also a 7% interest in HSQ's rights under the Make Whole Instrument.
Finally, as part of the commercial arrangements agreed between HSQ and KPI at
the time of the Side Letter, a call option dated 28 February 2020 between HSQ
and KPI was entered into (the "Call Option"). Under the Call Option, were HSQ
to achieve a certain level of return in connection with its investment in
Kingswood, KPI was entitled to be awarded options over HSQ's shares in
Kingswood that would in turn entitle KPI to certain proceeds from HSQ on any
eventual sale of HSQ's shares in Kingswood.
As a result, whilst KPI has sold its shares in Kingswood to HSQ, it retained
an economic interest in Kingswood through its interests in HSQ's shares in
Kingswood, the Make Whole Instrument and the Call Option. These arrangements
are proposed to be amended as set out below.
The amended arrangements
On 26 February 2025, HSQ and KPI entered into a binding memorandum of
understanding (the "MOU") that sets out the proposed terms to reconstitute the
existing entitlements due to KPI under the Side Letter and the Call Option
(the "Amendment").
The Amendment provides that in respect of any future proceeds distributed by
HSQ, KPI is entitled to the following:
a. KPI shall receive 7% of the proceeds arising and distributed to
HSQ following the sale of the UK and Irish business (whether as a result of
the Make Whole Instrument or otherwise) (the "First Amount");
b. KPI shall receive 7% of the historic unpaid interest due by
Kingswood to HSQ on HSQ's historic shareholding of convertible preference
shares in Kingswood (the "Second Amount");
c. any amounts paid to HSQ by Kingswood in excess of the amounts
received from paragraph (a) above and, to the extent distributed, paragraph
(b) above up to $50m (the "Third Amount") will be distributed by HSQ in the
following proportion: 90% to PSC and 10% to KPI; and
d. any amounts in excess of the First Amount, the Second Amount
and the Third Amount will be distributed by HSQ in the following proportion:
93% to Pollen Street and 7% to KPI.
In addition, under the terms of the MOU, KPI shall have a put right under
which it can require Pollen Street to acquire all of KPI's interests in HSQ
for the lower of: (i) USD 5.25m or (ii) an amount calculated pursuant to a
formula derived from the future value of KWUS. The put right is only
exercisable 3 years after the date of the MOU. The price will be reduced by
any proceeds received by KPI, pursuant to its interests in HSQ, that are in
excess of the First Amount, by the time of exercise (and the exercise of the
put option will extinguish those rights to any further proceeds going
forward).
Acquisition of KPI's shares by HSQ
HSQ acquired all of KPI's shares in Kingswood on 13 March 2025 at a price of
7p per share and as a result HSQ now owns 89.39% of Kingswood's issued share
capital. Having now acquired KPI's shares, it is anticipated that the binding
documentation in relation to the terms set out in the MOU will be completed
shortly. Gary Wilder and Jonathan Massing resigned from the Board on 13 March
2025, when HSQ acquired all of KPI's shares in Kingswood.
The Independent Kingswood Directors' views relating to the Amendment
The Independent Kingswood Directors note that because:
• the Company's current indebtedness exceeds the existing
equity value of the Company and the value implied to the Company by the Offer;
• there can be no certainty as to the likelihood of a future
sale of the Company or its underlying assets nor as to the valuation achieved
on any such sale; and
• HSQ's shareholding following the acquisition of the
Kingswood Shares previously held by KPI, will (regardless of the outcome of
the Offer) be such that any decisions regarding the future strategy and any
decisions that may or may not trigger payments under the Make Whole Instrument
will be subject to HSQ's controlling influence,
there can be no certainty that any payments will be required under the Make
Whole Instrument, and therefore, what future economic benefit (if any) KPI may
or may not receive as a result of the Amendment in excess of that to which it
is entitled pursuant to its existing arrangements with HSQ. For this reason,
neither the Independent Kingswood Directors nor Cavendish are able to form any
clear view on the financial terms of the Amendment nor as to the future value,
if any, that may be payable or receivable subsequent to the Amendment (save
that the Independent Kingswood Directors note the put right afforded to KPI
which, if exercised, provides to KPI an amount that is the lower of: (i) USD
5.25m or (ii) an amount calculated pursuant to a formula derived from the
future value of KWUS (subject to a reduction for any proceeds already received
by KPI, pursuant to its interests in HSQ, that are in excess of the First
Amount, by the time of the exercise of the put option)).
As noted in the paragraph setting out the background to and reasons for the
Independent Kingswood Directors' recommendation for the Offer, the Company has
a significant debt burden and has near term deferred consideration obligations
and additional debt obligations that require urgent funding without which the
Company would be unable to meet its obligations. Since February 2024, HSQ has
provided the capital required by the Company to meet its obligations in the
form of additional loans to the Company. HSQ had informed the Independent
Kingswood Directors that HSQ was only willing to provide further capital
support from a position of sole institutional shareholder which was
conditional on its acquisition of the KPI Shares which occurred on 13 March
2025. Absent that immediate funding support from HSQ, Kingswood would have
been unable to continue trading as a going concern.
The Independent Kingswood Directors are of the view that in these
circumstances, notwithstanding that the terms of the Amendment will not extend
beyond KPI and HSQ, Independent Kingswood Shareholders should be offered the
opportunity to exit their investment on the same terms as KPI at 7 pence per
share, a value that the Independent Kingswood Directors, having been so
advised by Cavendish as to the financial terms, consider to be fair and
reasonable. Cavendish has taken into account the Independent Kingswood
Directors' commercial assessments in forming this view.
As required by, and solely for the purposes of, Rule 16.1 of the Code,
Cavendish (in its capacity as independent adviser to Kingswood for the
purposes of Rule 3 of the Code) considers that the entry into the Amendment is
fair and reasonable, so far as the Independent Kingswood Shareholders are
concerned. In forming this view, Cavendish has taken into account the
commercial assessments of the Independent Kingswood Directors as set out
above.
Save as set out above, and the irrevocable undertakings entered into by the
Independent Kingswood Directors, there are currently no arrangements or
understandings between HSQ and/or KPI and/or Kingswood (or persons acting in
concert with any of HSQ, KPI, or Kingswood) having any connection with or
dependence upon the Offer.
7. Current trading and prospects
In the accounts for the year ended 31 December 2023, published in June 2024,
the Company reported Group revenue of £86.2m split as follows:
• UK & Ireland revenues of £46.6m; and
• US revenues (the Company has a 50.1% interest in KWUS which
accordingly is fully consolidated into Group reporting) of £39.6m.
For the year ended 31 December 2023, the Group reported a loss before tax of
£13.3m.
For the six months ended 30 June 2024, announced on 30 September 2024, the
Group reported revenue of
£40.6m split as follows:
• UK & Ireland revenues of £23.4m; and
• US revenues of £17.2m.
For the six months to 30 June 2024 the Group reported operating profit of
£6.1m and a statutory loss before tax of £5.9m.
As articulated at the time of the announcement of the interim results for the
six months ended 30 June 2024, the business was seeing trading growth
notwithstanding higher levels of adviser and consequently client attrition.
Since 30 June 2024, the Independent Kingswood Directors have been encouraged
by the trading performance of the Company. However, the balance sheet of the
Company as at 30 June 2024 set out the near term deferred consideration
obligations of the Company. In the period between 30 June 2024 and 31 December
2024, HSQ/Pollen Street provided the Company with additional loan facilities
of, in aggregate,
£10m to enable the Company to satisfy its deferred consideration obligations
and interest payment obligations on the Company's debt facility as they fell
due. As set out in paragraph 3 above, as at 31 December 2024 the unaudited
gross debt in the Company from its senior debt facility, outstanding leases
and the loans provided by HSQ and/or Pollen Street since February 2024
amounted to, in aggregate, £91.6m and the unaudited net debt of the Company
was approximately £73.2m. As announced on 12 March 2025, set against this,
the Company continued to have imminent obligations which significantly
exceeded the cash balance available at the end of March 2025. In the absence
of new external financial support, the Company would not have been able to
satisfy these obligations.
Having acquired the KPI stake on 13 March 2025, HSQ obtained a position of
sole institutional shareholder in the Company and has continued to support the
business which included the provision of a further £4.8m loan facility that
provided the capital the Company needed to meet its immediate deferred
consideration obligations.
8. Information on HSQ
Information on HSQ is set out in paragraph 6 of Part I (Letter from HSQ
Investment Limited) of this document.
9. Kingswood share plans
Details of the effect of the Offer on the outstanding rights under the
Kingswood share plans and the appropriate proposals being made, where
required, to participants in the Kingswood share plans in connection with the
Offer are set out in paragraph 11 of Part I (Letter from HSQ Investment
Limited) of this document.
10. Action to be taken by Kingswood Shareholders
Details of the action to be taken by Kingswood Shareholders in respect of the
Offer are set out in paragraph 20 of Part I (Letter from HSQ Investment
Limited) of this document.
The Offer is unconditional from the outset. The Offer will initially be open
for acceptance until 1.00 p.m. (London time) on 15 April 2025. Kingswood
Shareholders who accept the Offer early (i.e. on or prior to
1.00 p.m. (London time) on 15 April 2025) will receive the consideration
payable to them under the Offer earlier (i.e. by 29 April 2025). Kingswood
Shareholders who accept the Offer after 1.00 p.m. (London time) on 15 April
2025 and until the Offer remains open for acceptances will only receive the
consideration payable to them under the Offer within 14 calendar days of
receipt of such acceptance.
Kingswood Shareholders are therefore encouraged to accept the Offer and, if
their Kingswood Shares are held in certificated form, submit their Forms of
Acceptance as soon as possible. As the Offer is unconditional from the outset,
an accepting Kingswood Shareholder will not be entitled to withdraw an
acceptance of the Offer.
Details relating to the cancellation of admission to trading of the Kingswood
Shares on AIM, squeeze-out of Kingswood Shares and settlement of the cash
consideration offered by HSQ are included in paragraphs 4 and 14 of Part I
(Letter from HSQ Investment Limited) of this document.
11. Overseas Shareholders
Overseas shareholders of Kingswood Shares should refer to Part B of Part V
(Additional Information) of this document, which contains important
information relevant to such holders.
12. United Kingdom taxation
Your attention is drawn to Part C of Part V (Additional Information) and
paragraph 1(f) of Part B of Part V (Additional Information) of this document,
which contain a summary of limited aspects of the UK tax treatment of the
Offer. This summary relates only to the position of certain categories of
Kingswood Shareholders (as explained further in Part C of Part V (Additional
Information) of this document), does not constitute tax advice and does not
purport to be a complete analysis of all potential UK tax consequences of the
Offer.
You are strongly advised to contact an appropriate independent professional
adviser immediately to discuss the tax consequences of the Offer on your
particular circumstances, in particular if you are in any doubt about your own
taxation position or you are subject to taxation in a jurisdiction other than
the United Kingdom.
13. Further information
Your attention is drawn to further information contained in Part I (Letter
from HSQ Investment Limited) including, in particular, paragraph 14 which sets
out the potential consequences of the impending cancellation of admission to
trading on AIM of Kingswood Shares, Part III (Further terms of the Offer) and
Part V (Additional Information) of this document, which provide further
details concerning the Offer.
You are advised to read the whole of this document and not just rely on the summary information contained in this letter or the Letter from HSQ.
Yours faithfully
David Hudd
Non-Executive Chairman
Kingswood Holdings Limited
PART III
PART A: FURTHER TERMS OF THE OFFER
The following further terms apply to the Offer, unless the contrary is
expressed or the context requires otherwise.
Unless the context requires otherwise, any reference in this Part A to Part
III (Further terms of the Offer and Acceptances) and in the Form of
Acceptance:
(a) to "acceptances of the Offer" includes deemed acceptances of the
Offer; and
(b) to the "Offer" includes any revision, variation, renewal or
extension of the Offer and includes any election available in connection with
the Offer.
1. Offer timetable and acceptance period
(a) The Offer will be open for acceptance until 1.00 p.m. (London
time) on the Closing Date. The Offer is unconditional from the outset and
acceptances under the Offer are final and binding with no rights of withdrawal
save as otherwise agreed in writing between HSQ and any particular Kingswood
Shareholder or as otherwise permitted by HSQ (either generally or for any
particular Kingswood Shareholder). The Offer will remain open for acceptances
until HSQ confirms the Closing Date, with shareholders receiving at least 14
days' notice prior to the specified closing date (which cannot be earlier than
21 days after the posting of this Offer Document). Such notice will be given
to Kingswood Shareholders via an announcement through a Regulatory Information
Service and will advise of the final settlement date, with such announcement
being made available on HSQ's website at https://arena.pollencap.com and
Kingswood's website at https://www.kingswood-group.com
(http://www.kingswood-group.com/) . The Offer will be open for acceptance
until 1.00 p.m. (London time) on the Closing Date.
(b) The Offer will remain open for acceptance for not less than 21
days from the date of this document. HSQ will give not less than 14 days'
notice to those Kingswood Shareholders who have not accepted the Offer (and to
persons with information rights) of the Closing Date.
2. Announcements
(a) In this Part A (Further terms of the Offer and Acceptances),
references to the making of an announcement or the giving of notice by or on
behalf of HSQ include the release of an announcement to the press and/or the
transmission by whatever means of an announcement to a Regulatory Information
Service.
(b) Unless otherwise consented to by the Panel: (i) an announcement
made otherwise than to a Regulatory Information Service shall be notified
simultaneously to a Regulatory Information Service; and (ii) an announcement
which is published at a time when the relevant Regulatory Information Service
is not open for business shall be distributed to not less than two newswire
services operating in the United Kingdom and submitted for publication as soon
as the relevant Regulatory Information Service re-opens.
(c) A copy of any announcement made by HSQ in accordance with this
paragraph 2 of this Part A will be available, subject to certain restrictions
relating to persons outside the United Kingdom, for inspection on HSQ's
website at https://arena.pollencap.com and Kingswood's website at
https://www.kingswood-group.com (http://www.kingswood-group.com/) promptly
after the making of such announcement and in any event by no later than 12.00
p.m. (London time) on the Business Day following the announcement.
(d) Without limiting the manner in which HSQ may choose to make any
public statement and subject to HSQ's obligations under applicable law and
regulation and paragraph 2(d) of this Part A, HSQ will have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to a Regulatory Information Service.
(e) HSQ shall make an announcement on the Business Day following 15
April 2025 (being Day 21) and every seventh day thereafter.
3. Rights of withdrawal
As the Offer is unconditional from the outset, acceptances under the Offer are
final and binding with no rights of withdrawal save as otherwise agreed in
writing between HSQ and any particular Kingswood Shareholder or as otherwise
permitted by HSQ (either generally or for any particular Kingswood
Shareholder).
4. Revisions of the Offer
(a) Although no revision of the Offer is envisaged, if the Offer (in
its original or any previously revised form(s)) is revised (either in its
terms and conditions or in the value or nature of the consideration offered or
otherwise) and such revision represents on the date on which it is announced
an improvement or no diminution in the value of the revised Offer compared
with the consideration or terms previously offered or in the overall value
received and/or retained by a Kingswood Shareholder (under the Offer or
otherwise) the benefit of the revised Offer will, subject to paragraphs 4(c),
4(d) and 6, of this Part A, be made available to any Kingswood Shareholder who
has accepted the Offer in its original or any previously revised form(s)
("Previous Acceptor"). The acceptance of the Offer by or on behalf of a
Previous Acceptor in its original or any previously revised form(s) shall,
subject as provided in paragraphs 4(c), 4(d) and 6 of this Part A, be treated
as an acceptance of the Offer as so revised and shall also constitute the
irrevocable and separate appointment of HSQ and the Receiving Agent and each
of their directors as such Previous Acceptor's attorney and/or agent with
authority:
(i) to accept any such revised Offer on behalf of such Previous
Acceptor;
(ii) if such revised Offer includes alternative forms of
consideration, to make on behalf of such Previous Acceptor such elections for
and/or accept such alternative forms of consideration in the proportions such
attorney and/or agent in their absolute discretion thinks fit; and
(iii) to execute on behalf of and in the name of such Previous Acceptor
all such further documents (if any) and to do all such further things (if any)
as may be required to give effect to such acceptances and/or elections.
In making any such election and/or acceptance, such attorney and/or agent
shall be able to take into account the nature of any previous acceptances made
by or on behalf of the Previous Acceptor and such other facts or matters as
the attorney and/or agent may reasonably consider relevant. The attorney
and/or agent shall not be liable to any Kingswood Shareholder or any other
person in making such election and/or acceptance or in making any
determination in respect thereof.
(b) Subject to paragraphs 4(c) and 4(d) of this Part A, the powers of
attorney and authorities conferred by this paragraph 4 of this Part A, and any
acceptance of a revised Offer and/or any election pursuant thereto shall be
irrevocable.
(c) The deemed acceptance referred to in paragraph 4(a) of this Part A
shall not apply, and the authorities conferred by that paragraph shall not be
exercised, to the extent that a Previous Acceptor:
(i) in respect of Kingswood Shares in certificated form, lodges with
the Receiving Agent at MUFG Corporate Markets at Central Square, 29 Wellington
Street, Leeds LS1 4DL, within 14 days of the posting of the document
containing the revised offer, a Form of Acceptance (or other form validly
issued by or on behalf of HSQ) in which the Previous Acceptor validly elects
to receive the consideration receivable by them under such revised Offer in
some other manner than that set out in their original or any previous
acceptance; or
(ii) in respect of Kingswood Shares in uncertificated form, sends (or,
if a CREST sponsored member, procures that their CREST sponsor sends) an ESA
instruction to settle in CREST in relation to each Electronic Acceptance in
respect of which an election is to be varied. Each ESA instruction must, in
order for it to be valid and settle, include the following details:
• the number of Kingswood Shares in respect of which the
changed election is made, together with their ISIN number (this is
"GG00BKY4K072");
• the member account ID of the Previous Acceptor, together
with their participant ID;
• the member account ID(s) of the escrow agent, MUFG Corporate
Markets, in its capacity as a CREST receiving agent, being HSQKIN01;
• the Receiving Agent's participant ID, being RA10;
• the CREST transaction ID of the Electronic Acceptance in
respect of which the election is to be changed to be inserted at the beginning
of the shared note field;
• the intended settlement date for the changed election;
• the corporate action number for the Offer allocated by
Euroclear which can be found by viewing the relevant corporate action details
in CREST,
and, in order that the desired change of election can be effected, must
include:
• the member account ID of the Receiving Agent's relevant to
the new election; and
• input with a standard delivery instruction priority of 80.
Any such change of election will be conditional upon the Receiving Agent
verifying that the request is validly made. Accordingly, the Receiving Agent
will on behalf of HSQ reject or accept the requested change of election by
transmitting in CREST a Receiving Agent reject (AEAD) or Receiving Agent
accept (AEAN) message as appropriate.
(d) The deemed acceptance referred to in paragraph 4(a) of this Part A
shall not apply, and the authorities conferred by that paragraph shall not be
exercised if, as a result thereof, the Previous Acceptor would thereby receive
and/or retain (as appropriate) less in aggregate in consideration under the
revised Offer than they would have received and/or retained (as appropriate)
in aggregate as a result of acceptance of the Offer in the form in which it
was previously accepted by them or on their behalf (unless the Previous
Acceptor has previously agreed in writing to receive and/or retain (as
appropriate) less in aggregate consideration). The authorities conferred by
paragraph 4(a) of this Part A shall not be exercised in respect of any
election available under the revised Offer save in accordance with this
paragraph 4(d).
(e) HSQ and the Receiving Agent reserve the right to treat an executed
Form of Acceptance, Electronic Acceptance or TTE instruction (in respect of
the Offer in its original or any previously revised form(s)) which is received
(or dated) on or after the announcement of any revised Offer as a valid
acceptance of the revised Offer and/or, where applicable, a valid election for
or acceptance of any of the alternative forms of consideration made available
pursuant thereto. Such acceptances shall constitute an authority in the terms
of paragraph 4(a) of this Part A, mutatis mutandis, on behalf of the relevant
Kingswood Shareholder.
(f) HSQ may (with the consent of the Panel and Kingswood) extend the
Offer Period or revise the Offer provided it complies with the requirements of
the Takeover Code, in particular the requirements of Rule 31.3 of the Takeover
Code.
5. Acceptances and purchases
(a) Kingswood Shares will be acquired by HSQ pursuant to the Offer
fully paid and free from all liens, charges, encumbrances and other third
party rights of any nature whatsoever and together with all rights attaching
to them as at completion of the Offer, including the right to receive and
retain all dividends and distributions (if any) declared, made or paid
following the Closing Date.
(b) If, on or after the date of this Offer, any dividend, distribution
or other return of value is declared, paid or made or becomes payable by
Kingswood in respect of the Kingswood Shares, HSQ reserves the right to reduce
the cash consideration payable under the terms of the Offer for the Kingswood
Shares by an amount up to the amount of such dividend, distribution or return
of value. If (but only to the
extent) HSQ exercises that right to make such a reduction in respect of a
dividend, distribution or return of value, Kingswood Shareholders will be
entitled to receive and retain such dividend, distribution or return of value
and references in this document to the cash consideration payable under the
terms of the Offer will be deemed to be references to the cash consideration
as so reduced. If and to the extent that any such dividend or distribution or
return of value has been announced or declared, made or paid or is payable (i)
transferred pursuant to the Offer on a basis which entitles HSQ to receive the
dividend or distribution and to retain it; or (ii) cancelled before payment,
the cash consideration payable under the terms of the Offer shall not be
subject to change in accordance with this paragraph (b). Any exercise by HSQ
of its rights referred to in this paragraph (B) shall not be regarded as
constituting any revision or variation of the Offer.
(c) Except with the consent of the Panel, settlement of the
consideration to which any accepting Kingswood Shareholder is entitled under
the Offer will be implemented in full in accordance with the terms of the
Offer free of any lien, right of set-off, counterclaim or other analogous
right to which any person may otherwise be, or claim to be, entitled against
such Kingswood Shareholder, and will be effected in the manner described in
this document.
(d) The Offer is made on 25 March 2025 and is capable of acceptance
from that date. Copies of this document, a specimen Form of Acceptance, and
any related documents are available (subject to certain restrictions relating
to persons outside the United Kingdom) for inspection on HSQ's website at
https://arena.pollencap.com and Kingswood's website at
https://www.kingswood-group.com (http://www.kingswood-group.com/) and from the
Receiving Agent at the address set out in paragraph 4(c)(i) of this Part A.
(e) In respect of Kingswood Shares in certificated form, the terms,
provisions, instructions and authorities contained in or deemed to be
incorporated in the Form of Acceptance constitute part of the terms of the
Offer. The provisions of this Part A (Further terms of the Offer and
Acceptances) shall be deemed to be incorporated in and form part of each Form
of Acceptance. Words and expressions defined in this document have the same
meanings when used in the Form of Acceptance, unless the context otherwise
requires.
(f) The Offer, all acceptances of it and all elections pursuant to
it, the Form of Acceptance and Electronic Acceptances, all contracts made
pursuant to the Offer, all action taken or made or deemed to be taken or made
pursuant to any of these terms and the relationship between a Kingswood
Shareholder and HSQ and the Receiving Agent shall be governed by and
interpreted in accordance with Guernsey law and English law.
(g) Subject to paragraph 5(g) of this Part A, the Courts of England
and Wales have exclusive jurisdiction to decide any dispute which may arise in
connection with the creation, validity, effect, interpretation or performance
of, or the legal relationships established by the Offer and the Form of
Acceptance or the Electronic Acceptance or otherwise arising in connection
with the Offer and the Form of Acceptance or the Electronic Acceptance. The
execution of a personalised Form of Acceptance or making of an Electronic
Acceptance by or on behalf of a Kingswood Shareholder constitutes such
Kingswood Shareholder's irrevocable submission to the jurisdiction of the
Courts of England.
(h) The agreement in paragraph 5(g) of this Part A is included for the
benefit of HSQ and the Receiving Agent and accordingly, HSQ and the Receiving
Agent shall each retain the right to, and may in its absolute discretion,
bring proceedings in the courts of any other country which may have
jurisdiction. The execution of a Form of Acceptance or making of an Electronic
Acceptance by or on behalf of a Kingswood Shareholder constitutes such
Kingswood Shareholder's irrevocable submission to the jurisdiction of the
courts of any such country.
(i) Any omission or failure to despatch this document or (where
relevant) the Form of Acceptance or any other document relating to the Offer
or any notice required to be despatched under the terms of the Offer to, or
any failure to receive the same by, any person to whom the Offer is made, or
should be made, shall not invalidate the Offer in any way or create any
implication that the Offer has not been made to any such person. Subject to
paragraph 6 of this Part A, the Offer extends to any such person and to all
Kingswood Shareholders to whom this document, (where relevant) the Form of
Acceptance
and any related documents may not be despatched and who may not receive such
documents, and such persons may (subject to certain restrictions relating to
persons outside the United Kingdom) collect copies of those documents from the
Receiving Agent at the address set out in paragraph 4(c)(i) of this Part A or
inspect this document on HSQ's website at https://arena.pollencap.com and
Kingswood's website at https://www.kingswood-group.com
(http://www.kingswood-group.com/) (http://www.kingswood-group.com/) while the
Offer remains open.
(j) All powers of attorney, appointments as agent and authorities on
the terms conferred by or referred to in this Part A (Further terms of the
Offer and Acceptances) or (where relevant) in the Form of Acceptance are given
by way of security for the performance of the obligations of the Kingswood
Shareholder concerned and are irrevocable (in respect of powers of attorney in
accordance with section 4 of the Powers of Attorney Act 1971 and, in the case
of a company incorporated in Guernsey, any powers of attorney are given in
accordance with the Companies Law and, in the case of an individual in
Guernsey, any powers of attorney are given in accordance with the Powers of
Attorney and Affidavits (Bailiwick of Guernsey) Law, 1995, as amended, and in
the case of a trust governed by Guernsey law, any powers of attorney are given
in accordance with the Trusts (Guernsey) Law, 2007, as amended).
(k) Without prejudice to any other provisions of this Part A and
subject to the requirements of the Takeover Code, HSQ and the Receiving Agent
reserve the right to treat acceptances of the Offer as valid (in whole or in
part) if not entirely in order or not accompanied by the relevant TTE
instruction or (as applicable) relevant share certificate(s) and/or other
document(s) of title or if received by or on behalf of any of them at any
place or places or in any manner determined by any of them or otherwise than
as set out in this document or, in respect of Kingswood Shares held in
certificated form, in the Form of Acceptance. In that event, subject to the
provisions of the Takeover Code, no settlement of consideration of the Offer
will be made until after the acceptance is entirely in order and (as
applicable) the relevant transfer to escrow has settled or the relevant share
certificate(s) and/or other document(s) of title or indemnities satisfactory
to HSQ have been received by the Receiving Agent.
(l) All communications, notices, certificates, document(s) of title
and remittances to be delivered by or sent to or from any Kingswood
Shareholders will be delivered by or sent to or from them (or their designated
agents) at their risk. No acknowledgement of receipt of any Form of
Acceptance, transfer by means of CREST, communication, notice, share
certificate(s) and/or other document(s) of title will be given by or on behalf
of HSQ.
(m) If HSQ receives acceptances under the Offer in respect of, and/or
otherwise acquires, 90% or more in value of the Kingswood Shares to which the
Offer relates and 90% or more of the voting rights carried by those shares,
HSQ intends to exercise its rights in accordance with part XVIII of the
Companies Law to acquire compulsorily the remaining Kingswood Shares on the
same terms as the Offer.
(n) HSQ acquired all of KPI's 144,125,262 ordinary shares in Kingswood
on 13 March 2025 and, as a result, HSQ now owns 89.39% of Kingswood's issued
share capital. Having acquired KPI's shares, HSQ confirms that it has
requested that the Company cancel the admission to trading on AIM of the
Kingswood Shares, with such cancellation proposed to take effect after the
Closing Date. The cancellation date is currently anticipated to be on or
around 17 April 2025.
(o) Any reference in this Part A (Further terms of the Offer and
Acceptances) to any law or regulation of any jurisdiction includes: (i) any
subordinate legislation or regulation made under it; (ii) any law or
regulation which it has amended, supplemented or replaced; and (iii) any law
or regulation amending, supplementing or replacing it (whether before or after
the date of this document).
(p) In relation to any acceptance of the Offer in respect of a holding
of Kingswood Shares which are in uncertificated form, HSQ reserves the right
to make such alterations, additions or modifications to the terms of the Offer
as may be necessary or desirable to give effect to any purported acceptance of
the Offer, whether in order to comply with the facilities or requirements of
CREST or otherwise, provided such alterations, additions or modifications are
consistent with the requirements of the Takeover Code or are otherwise made
with the Panel's consent.
(q) For the purposes of this document, the time of receipt of a TTE
instruction, an ESA instruction or an Electronic Acceptance shall be the time
at which the relevant instruction settles in CREST.
(r) Neither HSQ, nor any person acting on behalf of HSQ, shall have
any liability to any person for any loss or alleged loss arising from any
decision as to the treatment of acceptances of the Offer or otherwise in
connection therewith.
(s) The Offer is subject to applicable requirements of the FCA, the
London Stock Exchange, the AIM Rules and the Takeover Code. In the event of
any conflict or inconsistency between the terms of the Offer and the Takeover
Code, the provisions of the Takeover Code shall prevail, and HSQ reserves the
right to (and shall if required by the Panel) make such alterations, additions
or modifications to the terms of the Offer so that any such conflict or
inconsistency is removed.
(t) Any question as to the validity (including time of receipt) of
any acceptance of the Offer and any question as to, or the acceptance of, any
words or markings on a Form of Acceptance will be determined by HSQ, whose
determination (save as the Panel otherwise determines) will be final and
binding. None of HSQ, the Receiving Agent or any other person will be under
any duty to give notification of any defect or irregularity in any purported
acceptance of the Offer or will incur any liability for failure to do so or
for any determination under this paragraph 5(t) of this Part A.
6. Overseas Shareholders
(a) The making and availability of the Offer outside the United
Kingdom and/or to Overseas Shareholders (or to nominees, custodians or
trustees of such persons) may be prohibited or affected by the laws of the
relevant jurisdictions. Such Overseas Shareholders should inform themselves
about and observe any applicable legal requirements. No person receiving a
copy of this document and/or a Form of Acceptance in any jurisdiction other
than the United Kingdom may treat the same as constituting an invitation or
offer to them, nor should they in any event use such Form of Acceptance if, in
the relevant jurisdiction, such invitation or offer cannot lawfully be made to
them or such Form of Acceptance cannot lawfully be used without contravention
of any relevant or other legal requirements. In such circumstances, this
document and/or the Form of Acceptance are sent for information only. It is
the responsibility of such Overseas Shareholder receiving a copy of this
document and/or the Form of Acceptance and wishing to accept the Offer to
satisfy themselves as to the full observance of the laws and regulatory
requirements of the relevant jurisdiction in connection with the Offer,
including obtaining any governmental, exchange control or other consents which
may be required, or compliance with other necessary formalities needing to be
observed and payment of any issue, transfer or other taxes or duties due in
such jurisdiction. Any such Overseas Shareholder will be responsible for any
such issue, transfer or other taxes or other payments by whomsoever payable
and HSQ (and any person acting on behalf of either of them) shall be fully
indemnified and held harmless by such Overseas Shareholder for any such issue,
transfer or other taxes or duties as HSQ (and any person acting on behalf of
either of them) may be required to pay.
If you are an Overseas Shareholder and you are in doubt about your position, you should consult your independent professional adviser in the relevant jurisdiction.
(b) In particular, unless otherwise determined by HSQ or required by
the Takeover Code, and permitted by applicable law and regulation, the Offer
will not be made available, directly or indirectly, in, into or from a
Restricted Jurisdiction where to do so would violate the laws in that
jurisdiction and the Offer may not be made directly or indirectly, in or into,
or by the use of any means (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 Offer may not be capable of
acceptance by any such use or means. Accordingly, copies of this document and
any formal documentation relating to the Offer are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed or sent in
or into or from any Restricted Jurisdiction.
Persons receiving such documents (including without limitation, custodians,
trustees and nominees) must not mail or otherwise forward, distribute or send
them, directly or indirectly, in, into or from any Restricted Jurisdiction or
use Restricted Jurisdiction mails or any such means for any purpose, directly
or indirectly, in connection with the Offer. Doing so may invalidate any
purported acceptance of the Offer. Persons wishing to accept the Offer must
not use such mails or any such means, directly or indirectly, for any purpose,
directly or indirectly, related to acceptance of the Offer.
Envelopes containing a Form of Acceptance, evidence of title or any other
document relating to the Offer should not be postmarked in a Restricted
Jurisdiction or otherwise despatched from a Restricted Jurisdiction and all
accepting Kingswood Shareholders must provide addresses outside a Restricted
Jurisdiction for the remittance of consideration or for the return of the Form
of Acceptance, share certificates and/or other document(s) of title.
(c) A Kingswood Shareholder may be deemed not to have validly accepted
the Offer if:
(i) such Kingswood Shareholder puts "NO" in Box 5 of the Form of
Acceptance and thereby does not give the representations and warranties set
out in paragraph (b) of Part C of this Part 3 (Further terms of the Offer and
Acceptances), having inserted in or having completed Box 6 of the Form of
Acceptance with a registered address in a Restricted Jurisdiction, such
Kingswood Shareholder does not insert in Box 6 of the Form of Acceptance the
name and address of a person or agent outside a Restricted Jurisdiction to
whom such Kingswood Shareholder wishes the consideration to which they are
entitled under the Offer and/or any documents to be sent;
(ii) such Kingswood Shareholder inserts in Box 6 of the Form of
Acceptance the name and address of a person or agent in a Restricted
Jurisdiction to whom such Kingswood Shareholder wishes the consideration to
which they are entitled under the Offer and/or any documents to be sent;
(iii) in any case, the Form of Acceptance is received in an envelope
postmarked in, or which otherwise appears to HSQ or its agent to have been
sent from, a Restricted Jurisdiction;
(iv) such Kingswood Shareholder inserts in the Form of Acceptance a
telephone number in a Restricted Jurisdiction; or
(v) such Kingswood Shareholder makes a Restricted Escrow Transfer (as
defined in paragraph 6(g)(i) of this Part A) pursuant to paragraph 6(g) of
this Part A unless they also make a related Restricted ESA instruction (as
defined in paragraph 6(g)(ii) of this Part A) which is accepted by the
Receiving Agent.
HSQ reserves the right, in its sole discretion, to investigate, in relation to
any acceptance, whether the representations and warranties set out in
paragraph (b) of Part C of this Part 3 (Further terms of the Offer and
Acceptances), could have been truthfully given by the relevant Kingswood
Shareholder and, if such investigation is made and, as a result, HSQ cannot
satisfy itself that such representation and warranty was true and correct, the
acceptance shall not be valid.
(d) If, in connection with the making of the Offer, notwithstanding
the restrictions described above, any person (including, without limitation,
custodians, nominees and trustees), whether pursuant to a contractual or legal
obligation or otherwise, forwards this document, the Form of Acceptance or any
related offering documents, in, into or from a Restricted Jurisdiction or uses
any means (including without limitation, electronic mail, facsimile
transmission, telex, telephone, internet or other forms of electronic
communication) of interstate or foreign commerce of, or any facility of a
national securities exchange of any Restricted Jurisdiction in connection with
such forwarding, such person should:
(i) inform the recipient of such fact;
(ii) explain to the recipient that such action may invalidate any
purported acceptance by the recipient; and
(iii) draw the attention of the recipient to this paragraph 6 of this
Part A.
(e) Any acceptance of the Offer by Kingswood Shareholders who are
unable to give the representations and warranties set out in paragraph (b) of
Part B of this Part 3 (Further terms of the Offer and Acceptances) or (as the
case may be) paragraph (b) of Part C of this Part 3 (Further terms of the
Offer and Acceptances) is liable to be disregarded.
(f) HSQ reserves the right, in its absolute discretion, to treat any
acceptance as invalid if it believes that such acceptance may violate
applicable legal or regulatory requirements.
(g) If a Kingswood Shareholder holding Kingswood Shares in
uncertificated form cannot give the representations and warranties set out in
paragraph (b) of Part C of this Part 3 (Further terms of the Offer and
Acceptances), but nevertheless can provide evidence satisfactory to HSQ that
they can accept the Offer in compliance with all relevant legal and regulatory
requirements, such Kingswood Shareholder may only purport to accept the Offer
by sending (or if a CREST sponsored member, procuring that their CREST sponsor
sends) both:
(i) a TTE instruction to a designated escrow balance detailed below
(a "Restricted Escrow Transfer"); and
(ii) one or more valid ESA instructions (a "Restricted ESA
instruction") which specify the form of consideration which such Kingswood
Shareholder wishes to receive (consistent with the alternatives offered under
the Offer).
Such purported acceptance will not be treated as a valid acceptance unless
both the Restricted Escrow Transfer and the Restricted ESA instruction(s)
settle in CREST and HSQ decides, in its absolute discretion, to exercise its
right described in paragraph 6(h) of this Part A to waive, vary or modify the
terms of the Offer relating to Overseas Shareholders, to the extent required
to permit such acceptance to be made, in each case during the period for which
the Offer is open for acceptance. If HSQ accordingly decides to permit such
acceptance to be made, the Receiving Agent will, on behalf of HSQ, accept the
purported acceptance as an Electronic Acceptance on the terms of this document
(as so waived, varied or modified) by transmitting in CREST a Receiving Agent
accept (AEAN) message. Otherwise, the Receiving Agent will, on behalf of HSQ,
reject the purported acceptance by transmitting in CREST a Receiving Agent
reject (AEAD) message. Each Restricted Escrow Transfer must, in order for it
to be valid and settle, include the following details:
• the ISIN number for the Kingswood Shares (this is
"GG00BKY4K072");
• the number of Kingswood Shares in uncertificated form in
respect of which you wish to accept the Offer (i.e. the number of Kingswood
Shares to be transferred to escrow);
• the member account ID and participant ID of the accepting
Kingswood Shareholder;
• the participant ID of the Receiving Agent specific to a
Restricted Escrow Transfer, being RA10;
• the member account ID of the Receiving Agent for the Offer,
being RESTRICT;
• the intended settlement date. This should be as soon as
possible and, in any event, not later than
1.00 p.m. (London time) on the Closing Date;
• the corporate action reference of the Offer. This is
allocated by Euroclear and will be available on screen from Euroclear;
• input with a standard delivery instruction priority of 80;
and
• a contact name and telephone number in the shared note
field.
Each Restricted ESA instruction must, in order for it to be valid and settle,
include the following details:
• the ISIN number for the Kingswood Shares (this is
"GG00BKY4K072");
• the number of Kingswood Shares relevant to that Restricted
ESA instruction;
• the member account ID and participant ID of the accepting
Kingswood Shareholder;
• the member account ID and participant ID of the Receiving
Agent set out in the Restricted Escrow Transfer;
• the participant ID (being RA10) and the member account ID
(being RESTRICT) of the Receiving Agent relevant to the form of consideration
required;
• the CREST transaction ID of the Restricted Escrow Transfer
to which the Restricted ESA instruction relates to be inserted at the
beginning of the shared note field;
• the intended settlement date. This should be as soon as
possible and in any event not later than
1.00 p.m. (London time) on the Closing Date;
• the corporate action reference of the Offer. This is
allocated by Euroclear and will be available on screen from Euroclear;
• input with a standard delivery instruction priority of 80;
and
• the contact name and telephone number inserted in the shared
note field.
(h) These provisions and any other terms of the Offer relating to
Overseas Shareholders may be waived, varied or modified as regards specific
Kingswood Shareholders or on a general basis by HSQ in its absolute
discretion. Subject thereto, the provisions of this paragraph 6 of this Part A
supersede any terms of the Offer inconsistent with them. References in this
paragraph 6 of this Part A to a Kingswood Shareholder include references to
the person or persons executing a Form of Acceptance and, if more than one
person executes the Form of Acceptance, the provisions of this paragraph 6 of
this Part A shall apply to them jointly and severally.
(i) HSQ reserves the right to notify any matter, including the
making of the Offer, to all or any Kingswood Shareholders:
(i) with a registered address outside the United Kingdom; or
(ii) whom HSQ knows to be a custodian, trustee or nominee holding
Kingswood Shares for persons who are citizens, residents or nationals of
jurisdictions outside the United Kingdom,
by announcement in the United Kingdom through a Regulatory Information Service
or in any other appropriate manner or by notice in the London Gazette or paid
advertisement in one or more newspapers published and circulated in the United
Kingdom. Such notice shall be deemed to have been sufficiently given, despite
any failure by any such Kingswood Shareholder to receive or see that notice.
(j) A reference in this document to a notice or the provision of
information in writing by or on behalf of HSQ is to be construed accordingly.
No such document shall be sent to an address in a Restricted Jurisdiction.
PART B: FORM OF ACCEPTANCE
This Part B applies only to Kingswood Shares held in certificated form. If you
hold all of your Kingswood Shares in uncertificated form, you should ignore
this Part B and instead read Part C of this Part III (Further terms of the
Offer and Acceptances).
For the purposes of Part B of this Part III (Further terms of the Offer and
Acceptances) and the Form of Acceptance, the phrase "Kingswood Shares in
certificated form comprised in the acceptance" shall mean the number of
Kingswood Shares inserted in Box 3A of the Form of Acceptance or, if no number
is inserted (or a number greater than the relevant Kingswood Shareholder's
holding of Kingswood Shares), the greater of:
• the relevant Kingswood Shareholder's entire holding of
Kingswood Shares in certificated form as disclosed by details of the share
register made available to the Receiving Agent prior to the time the relevant
Form of Acceptance is processed by them;
• the relevant Kingswood Shareholder's entire holding of
Kingswood Shares in certificated form as disclosed by details of the share
register made available to the Receiving Agent prior to the latest time for
receipt of Form(s) of Acceptance on the Closing Date; and
• the number of Kingswood Shares in certificated form in
respect of which certificates or an indemnity in lieu thereof is received.
Each Kingswood Shareholder by whom, or on whose behalf, a Form of Acceptance
is executed and delivered to the Receiving Agent irrevocably undertakes,
represents, warrants and agrees to and with HSQ and the Receiving Agent (so as
to bind such Kingswood Shareholder and such Kingswood Shareholder's personal
or legal representatives, heirs, successors and assigns) to the following
effect:
(a) that the execution of the Form of Acceptance (whether or not any
boxes are completed and whether or not the Form of Acceptance is validly
executed as a deed) shall constitute:
(i) an acceptance of the Offer in respect of the number of Kingswood
Shares in certificated form inserted or deemed to be inserted in Box 3A of the
Form of Acceptance; and
(ii) an undertaking to execute any further documents, take any further
action and give any further assurances which may be required to enable HSQ to
obtain the full benefit of this Part B of this Part III (Further terms of the
Offer and Acceptances) and/or to perfect any of the authorities expressed to
be given hereunder and otherwise in connection with such Kingswood
Shareholder's acceptance of the Offer,
in each case on and subject to the terms set out or referred to in this
document and in the form of Acceptance and that each such acceptance shall be
irrevocable provided that if:
(A) Box 3A or any other box is not completed; or
(B) the total number of Kingswood Shares inserted in Box 3A is greater
than the relevant Kingswood Shareholder's holding of Kingswood Shares; or
(C) the acceptance is otherwise completed incorrectly or the number
included is illegible,
but the Form of Acceptance is signed, it will be deemed to be an acceptance of
the Offer in respect of all of the Kingswood Shares in certificated form
registered in that Kingswood Shareholder's name;
(b) that he or she is irrevocably and unconditionally entitled to sell
and transfer the beneficial ownership of the Kingswood Shares comprised or
deemed to be comprised in such acceptance and that such shares are sold fully
paid and free from all liens, charges, equities, encumbrances, rights of
pre-emption and other interests of any nature whatsoever and together with all
rights attaching to them on or after the date of this document, including,
without limitation, voting rights and the right to receive and retain in full
all dividends and other distributions (if any) declared, paid or made, or any
other return of capital (whether by reduction of share capital or share
premium account or otherwise) made, on or after the date of this document.
(c) unless "NO" is put in Box 5 of the Form of Acceptance, that such
Kingswood Shareholder:
(i) has not, directly or indirectly, received or sent copies or
originals of this document, the Form of Acceptance or any related offering
documents in, into or from a Restricted Jurisdiction;
(ii) has not, in connection with the Offer or the execution or
delivery of the Form of Acceptance, used, directly or indirectly, any means
(including, without limitation, facsimile transmission email, telephone,
internet or otherwise) of interstate or foreign commerce of, or any facility
of a national securities exchange of any Restricted Jurisdiction;
(iii) is accepting the Offer from outside any Restricted Jurisdiction
and was outside such jurisdictions when the Form of Acceptance was executed,
mailed, sent or delivered;
(iv) is not acting on a non-discretionary basis for a principal as
agent, fiduciary or otherwise unless such Kingswood Shareholder is an
authorised employee of such principal or such principal has given all
instructions with respect to the Offer from outside a Restricted Jurisdiction;
and
(v) if an Overseas Shareholder, has observed the laws of the relevant
jurisdiction in connection with the Offer, obtained all requisite
governmental, exchange control and other required consents, complied with all
necessary formalities and paid any issue, transfer or other taxes or other
requisite payments due in any such jurisdiction in connection with such
acceptance and has not taken or omitted to take any action that will or may
result in HSQ or any other person acting on behalf of it being in breach of
the legal or regulatory requirements of, or be liable for any issue, transfer
or other taxes or duties or other payments in, any such jurisdiction in
connection with the Offer or such Kingswood Shareholder's acceptance thereof;
(d) that, in relation to Kingswood Shares in certificated form, the
execution of the Form of Acceptance and its delivery to the Receiving Agent
constitutes the irrevocable and separate appointment of HSQ and any director
of, or any person authorised by it as such shareholder's attorney and/or agent
(the "attorney") and an irrevocable instruction and authorisation to the
attorney to:
(i) complete and execute all or any form(s) of transfer and/or other
document(s) at the discretion of the attorney in relation to the Kingswood
Shares in certificated form comprised in the acceptance in favour of HSQ or
such other person or persons as HSQ or its agent may direct in connection with
the acceptance of the Offer;
(ii) deliver such form(s) of transfer, renunciation and/or other
document(s) in the attorney's discretion and/or the certificate(s) and/or
other document(s) of title relating to such Kingswood Shares for registration
within six months of the Closing Date; and
(iii) execute all such other documents and do all such other acts and
things as may, in the attorney's opinion, be necessary or expedient for the
purpose of, or in connection with, the acceptance of the Offer and to vest in
HSQ (or its nominee) the full legal title and beneficial ownership of the
Kingswood Shares in certificated form comprised in the acceptance;
(e) that, in relation to Kingswood Shares in certificated form, the
execution of the Form of Acceptance and its delivery to the Receiving Agent
constitutes an irrevocable authority and request, subject to the provisions of
paragraph 6 of Part A of this Part III (Further terms of the Offer and
Acceptances):
(i) to Kingswood and/or its agents to procure the registration of
the transfer of the Kingswood Shares in certificated form comprised in the
acceptance and the delivery of the share certificate(s) and/or other
document(s) of title, or satisfactory indemnities, in respect of the Kingswood
Shares to HSQ or as it may direct; and
(ii) to HSQ and the Receiving Agent or any of their respective agents
to procure the despatch by post (or by such other method as the Panel may
approve) of the cheque for the cash consideration to which an accepting
Kingswood Shareholder is entitled to under the Offer, at the risk of such
Kingswood Shareholder, to the person or agent whose name and address is set
out in Box 1 of the Form of Acceptance (or Box 6 (if completed)) (outside a
Restricted
Jurisdiction), or if no name or address is set out, to the first-named or sole
holder at such holder's registered address (outside a Restricted
Jurisdiction);
(f) that the execution of the Form of Acceptance and its delivery to
the Receiving Agent constitutes the giving of a separate authority to each of
HSQ and the Receiving Agent and any director or agent of, or any person
authorised by it as its agent and/or attorney within the terms set out in
paragraph 4 of Part A of this Part III (Further terms of the Offer and
Acceptances) in respect of the Kingswood Shares in certificated form comprised
in the acceptance;
(g) that, unless the Panel otherwise consents, in respect of Kingswood
Shares in relation to which the Offer has been accepted or deemed to be
accepted and pending registration in the name of HSQ or as it may direct:
(i) HSQ or its agents shall be authorised to direct the exercise of
any votes and any or all other rights and privileges (including the right to
requisition the convening of a general meeting of Kingswood or of any class of
its shareholders) attaching to the Kingswood Shares in certificated form
comprised or deemed to be comprised in such acceptance; and
(ii) the execution of a Form of Acceptance by a Kingswood Shareholder
shall constitute with regard to such Kingswood Shares in certificated form
comprised in the acceptance:
(A) an irrevocable authority to Kingswood and its agents to send any
notice, circular, warrant, document or other communication which may be
required to be sent to such Kingswood Shareholder as a member of Kingswood
(including any share certificate(s) or other document(s) of title) to HSQ at
its registered office;
(B) an irrevocable authority to HSQ and the directors of and any other
person authorised by HSQ, to sign any document and to do such things as may,
in the opinion of that agent and/or attorney, seem necessary or desirable in
connection with the exercise of any votes or other rights or privileges
attaching to the Kingswood Shares held by such Kingswood Shareholder in
certificated form (including, without limitation, signing any consent to short
notice of a general or separate class meeting as such Kingswood Shareholder's
attorney and/or agent and on such Kingswood Shareholder's behalf and/or to
attend and/or execute a form of proxy in respect of such Kingswood Shares
appointing any person nominated by HSQ to attend general and separate class
meetings of Kingswood (and any adjournments thereof) and to exercise the votes
attaching to such shares on such Kingswood Shareholder's behalf, where
relevant); and
(C) the agreement of such Kingswood Shareholder not to exercise any of
such rights without the consent of HSQ and the irrevocable undertaking of such
Kingswood Shareholder not to appoint a proxy to attend any such general
meeting or separate class meeting of Kingswood,
(h) that such Kingswood Shareholder will deliver to the Receiving
Agent, or procure the delivery to the Receiving Agent at the address referred
to in paragraph 4(c)(i) of Part A of this Part III (Further terms of the Offer
and Acceptances) of, share certificate(s) or other document(s) of title in
respect of those Kingswood Shares in certificated form comprised in the
acceptance, or an indemnity acceptable to HSQ in lieu thereof, as soon as
possible, and in any event so as to arrive by no later than the latest
permissible time on the Closing Date;
(i) that such Kingswood Shareholder is the sole legal and beneficial
owner of the Kingswood Shares comprised or deemed to be comprised in such
acceptance or is the legal owner of such Kingswood Shares and has the
necessary capacity and authority to execute the Form of Acceptance;
(j) that the terms and conditions of the Offer contained in this
document shall be deemed to be incorporated in, and form part of, the Form of
Acceptance which shall be read and construed accordingly;
(k) that, if such Kingswood Shareholder accepts the Offer, they will
do all such acts and things as shall be necessary or expedient to vest the
Kingswood Shares in certificated form comprised in the acceptance in HSQ or
its nominee(s) or such other persons as HSQ may decide;
(l) that such Kingswood Shareholder agrees to ratify each and every
act or thing which may be done or effected by HSQ the Receiving Agent or any
of their respective directors or agents or persons authorised by them, as the
case may be, in the exercise of any of any such person's powers and/or
authorities under this document;
(m) that the execution of the Form of Acceptance constitutes such
Kingswood Shareholder's agreement to the terms of paragraphs 5(g) and 5(h) of
Part A of this Part III (Further terms of the Offer and Acceptances);
(n) that the Form of Acceptance shall be deemed to be delivered on its
date of execution and shall take effect as a deed on such date;
(o) that if any provision of Part A or Part B of this Part III
(Further terms of the Offer and Acceptances) shall be unenforceable or invalid
or shall not operate so as to afford HSQ, or the Receiving Agent or any of
their respective directors, agents or persons authorised by them, the benefit
or authority expressed to be given therein, such Kingswood Shareholder shall,
with all practicable speed, do all such acts and things and execute all such
documents as may be required to enable HSQ, and/or the Receiving Agent and any
of their respective directors, agents or persons authorised by them to secure
the full benefits of Part A or Part B of this Part III (Further terms of the
Offer and Acceptances).
References in this Part B to a Kingswood Shareholder shall include references
to the person or persons executing a Form of Acceptance, and in the event of
more than one person executing a Form of Acceptance, the provisions of this
Part B shall apply to them jointly and to each of them.
PART C: ELECTRONIC ACCEPTANCE
This Part C applies only to Kingswood Shares held in uncertificated form, that
is in CREST. If you hold all of your Kingswood Shares in certificated form,
you should ignore this Part C and instead read Part B of this Part III
(Further terms of the Offer and Acceptances).
For the purposes of this Part C of this Part III (Further terms of the Offer
and Acceptances), the phrase "Kingswood Shares in uncertificated form
comprised in the acceptance" shall mean the number of Kingswood Shares which
are transferred by the relevant Kingswood Shareholder by Electronic Acceptance
to an escrow account by means of a TTE instruction.
Each Kingswood Shareholder by whom, or on whose behalf, an Electronic
Acceptance is made irrevocably undertakes, represents, warrants and agrees to
and with HSQ and the Receiving Agent (so as to bind such Kingswood Shareholder
and such Kingswood Shareholder's personal or legal representatives, heirs,
successors and assigns) to the following effect:
(a) that the Electronic Acceptance shall constitute:
(i) an acceptance of the Offer in respect of the number of Kingswood
Shares in uncertificated form to which a TTE instruction relates; and
(ii) an undertaking to execute any documents, take any further action
and give any further assurances which may be required to enable HSQ to obtain
the full benefit of this Part C of this Part III (Further terms of the Offer
and Acceptances) and/or to perfect any of the authorities expressed to be
given hereunder and otherwise in connection with his acceptance of the Offer,
in each case on and subject to the terms set out or referred to in this
document and that each such acceptance and election shall be irrevocable;
(b) that such Kingswood Shareholder:
(i) has not, directly or indirectly, received or sent copies or
originals of this document, the Form of Acceptance or any related offering
documents, in, into or from a Restricted Jurisdiction;
(ii) has not otherwise used in connection with the Offer, directly or
indirectly, any means (including, without limitation, facsimile transmission
email, TTE instruction, telephone, internet or otherwise) of interstate or
foreign commerce of, or any facility of a national securities exchange of any
Restricted Jurisdiction;
(iii) is accepting the offer from outside any Restricted Jurisdiction
and was outside those jurisdictions at the time of the input and settlement of
the relevant TTE instruction(s);
(iv) in respect of the Kingswood Shares to which an Electronic
Acceptance relates, is not acting on a non-discretionary basis for a principal
as agent, fiduciary or otherwise, unless such Kingswood Shareholder is an
authorised employee of such principal or such principal has given all
instructions with respect to the Offer from outside a Restricted Jurisdiction;
and
(v) if an Overseas Shareholder, has observed the laws of the relevant
jurisdiction, obtained all requisite governmental, exchange control and other
required consents, complied with all necessary formalities and paid any issue,
transfer or other taxes or other requisite payments due in any such
jurisdiction in connection with such acceptance and has not taken or omitted
to take any action that will or may result in HSQ or any other person acting
on behalf of them being in breach of the legal or regulatory requirements of
any such jurisdiction in connection with the Offer or such Kingswood
Shareholder's acceptance thereof;
(c) that the Electronic Acceptance constitutes the irrevocable
appointment of HSQ, and any director of, or any person authorised by it as
such Kingswood Shareholder's attorney and/or agent and an irrevocable
instruction and authorisation to the attorney to execute all such documents
and do all such acts and things as may in the attorney's opinion be necessary
or expedient for the purpose of, or in
connection with, the acceptance of the Offer and to vest in HSQ (or its
nominee) the full legal title and beneficial ownership of Kingswood Shares in
uncertificated form comprised in the acceptance;
(d) that the Electronic Acceptance constitutes the irrevocable
appointment of the Receiving Agent as escrow agent for the purposes of the
Offer and an irrevocable instruction and authorisation to transfer to HSQ (or
to such other person or persons as HSQ or its agents may direct) by means of
CREST all or any of the Kingswood Shares in uncertificated form which are
subject of a TTE instruction in respect of that Electronic Acceptance.
(e) that the Electronic Acceptance constitutes an irrevocable
authority and request to HSQ, the Receiving Agent or their respective agents
to procure the making of a CREST payment obligation in favour of the Kingswood
Shareholder's payment bank in accordance with the CREST payment arrangements
in respect of any cash consideration to which such shareholder is entitled
under the Offer, provided that:
(i) HSQ may (if, for reasons, outside its reasonable control, it is
not able to effect settlement through CREST) determine that all or any part of
any such cash consideration shall be paid by cheque despatched by post; and
(ii) if the Kingswood Shareholder concerned is a CREST member whose
registered address is in a Restricted Jurisdiction, any cash consideration to
which such shareholder is entitled may be paid by cheque despatched by post,
in any case at the risk of such Kingswood Shareholder, and such cheque shall
be despatched to the first named holder at such holder's registered address
outside a Restricted Jurisdiction or as otherwise determined by HSQ;
(f) that the Electronic Acceptance constitutes the giving of a
separate authority to each of HSQ and the Receiving Agent and their respective
directors, agents and authorised persons within the terms of paragraph 4 of
Part A of this Part III (Further terms of the Offer and Acceptances) in
respect of the Kingswood Shares in uncertificated form comprised in the
acceptance;
(g) that, unless the Panel otherwise consents, in respect of Kingswood
Shares in relation to which the Offer has been accepted or deemed to be
accepted and pending registration in the name of HSQ or as it may direct:
(i) HSQ and its agents shall be authorised to direct the exercise of
any votes and any or all other rights and privileges (including the right to
requisition the convening of a general meeting of Kingswood or of any class of
its shareholders) attaching to the Kingswood Shares in uncertificated form
comprised or deemed to be comprised in the acceptance; and
(ii) an Electronic Acceptance by a Kingswood Shareholder shall
constitute with regard to such Kingswood Shares in uncertificated form
comprised in the acceptance:
(A) an authority to Kingswood and its agents to send any notice,
circular, warrant, document or other communication which may be required to be
sent to such Kingswood Shareholder as a member of Kingswood (including any
share certificate(s) or other document(s) of title issued as a result of a
conversion of such Kingswood Shares into certificated form) to HSQ at its
registered office;
(B) an irrevocable authority to each of HSQ and the directors of and
any other person authorised by HSQ to sign any document and to do such things
as may, in the opinion of that agent and/or attorney, seem necessary or
desirable in connection with the exercise of any votes or other rights or
privileges attaching to the Kingswood Shares held by such Kingswood
Shareholder in uncertificated form (including, without limitation, signing any
consent to short notice of a general or separate class meeting as such
Kingswood Shareholder's attorney and/or agent and on such Kingswood
Shareholder's behalf and/or to attend and/or execute a form of proxy in
respect of such Kingswood Shares appointing any person nominated by HSQ to
attend general and
separate class meetings of Kingswood (and any adjournments thereof) and to
exercise the votes attaching to such shares on such Kingswood Shareholder's
behalf); and
(C) the agreement of such Kingswood Shareholder not to exercise any of
such rights without the consent of HSQ and the irrevocable undertaking of such
Kingswood Shareholder not to appoint a proxy to attend any such general
meeting or separate class meeting;
(h) that such Kingswood Shareholder is irrevocably and unconditionally
entitled to sell and transfer the beneficial ownership of the Kingswood Shares
comprised or deemed to be comprised in such acceptance and that such shares
are sold fully paid up 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 now or hereafter 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 value on or after the date of this
document;
(i) that such Kingswood Shareholder is the sole legal and beneficial
owner of the Kingswood Shares in uncertificated form in respect of which the
Offer is accepted or deemed to be accepted or is the legal owner of such
Kingswood Shares and has the necessary capacity and authority to effect an
Electronic Acceptance;
(j) that such Kingswood Shareholder will do all such acts and things
as shall, in the opinion of HSQ, be necessary or expedient to vest in HSQ (or
its nominee(s)) the full legal title and beneficial ownership of the Kingswood
Shares in uncertificated form comprised or deemed to be comprised in the
acceptance and to enable the Receiving Agent to perform its function as escrow
agent for the purposes of the Offer;
(k) that such Kingswood Shareholder agrees to ratify each and every
act or thing which may be done or effected by HSQ or the Receiving Agent or
any of their respective directors, agents or persons authorised by them, as
the case may be, in the exercise of any of such person's powers and/or
authorities under this document;
(l) that if, for any reason, any Kingswood Shares in respect of
which a TTE instruction has been effected in accordance with paragraph 15(b)
of Part I (Letter from HSQ Investment Limited) of this document are converted
to certificated form, such Kingswood Shareholder will (without prejudice to
paragraph (g)(ii)(A) of this Part C) immediately deliver, or procure the
immediate delivery of, the share certificate(s) or other document(s) of title
in respect of all such Kingswood Shares as so converted to the Receiving Agent
at the address referred to in paragraph 4(c)(i) of Part A of this Part III
(Further terms of the Offer and Acceptances) or to HSQ at its registered
office or as HSQ or its agents may direct; and such Kingswood Shareholder
shall be deemed upon conversion to undertake, represent, warrant and agree in
the terms set out in Part B of this Part III (Further terms of the Offer and
Acceptances) in relation to such Kingswood Shares without prejudice to the
application of this Part C of Part III (Further terms of the Offer and
Acceptances) as far as HSQ deems appropriate;
(m) that the creation of a CREST payment obligation in favour of such
Kingswood Shareholder's payment bank in accordance with the CREST payment
arrangements referred to in paragraph ((e)) of this Part C shall, to the
extent of the obligation so created, discharge in full any obligation of HSQ
or the Receiving Agent to pay such Kingswood Shareholder the cash
consideration to which they are entitled pursuant to the Offer;
(n) that the making of an Electronic Acceptance constitutes such
Kingswood Shareholder's agreement to the terms of paragraphs 5(f) and 5(g) of
Part A of this Part III (Further terms of the Offer and Acceptances);
(o) that, by virtue of Regulation 24 of the Uncertificated Securities
Regulations 2001, the making of an Electronic Acceptance constitutes an
irrevocable power of attorney by the relevant Kingswood Shareholder in the
terms of all the powers and authorities expressed to be given by Part A, Part
B (where applicable by virtue of paragraph (I) of this Part C) and this Part C
of this Part III (Further
terms of the Offer and Acceptances) to HSQ, the Receiving Agent, and any of
their respective directors or agents; and
(p) that if any provision of Part A or this Part C of this Part III
(Further terms of the Offer and Acceptances) shall be unenforceable or invalid
or shall not operate so as to afford HSQ or the Receiving Agent or any of
their respective directors, agents or persons authorised by them, the benefit
or authority expressed to be given therein, such Kingswood Shareholder shall,
with all practicable speed, do all such acts and things and execute all such
documents that may be required to enable HSQ or the Receiving Agent or any of
their respective directors, agents or persons authorised by them to secure the
full benefits of Part A or this Part C of this Part III (Further terms of the
Offer and Acceptances).
References in this Part C to a Kingswood Shareholder shall include references
to the person or persons making an Electronic Acceptance and, if more than one
makes an Electronic Acceptance, the provisions of this Part C shall apply to
them jointly and to each of them.
PART IV
FINANCIAL AND RATINGS INFORMATION
Part A: Financial information relating to Kingswood
The following sets out financial information in respect of Kingswood as
required by Rule 24.3 of the Code. The documents referred to below, the
contents of which have previously been announced through a Regulatory
Information Service, are incorporated into this document by reference pursuant
to Rule 24.15 of the Code:
• the interim results of Kingswood for the six months ended 30
June 2024, available on Kingswood's website at
https://www.kingswood-group.com;
• the audited accounts of Kingswood for the financial year
ended 31 December 2023, available on Kingswood's website at
https://www.kingswood-group.com; and
• the audited accounts of Kingswood for the financial year
ended 31 December 2022 set out on pages 42-96 of the 2022 Kingswood Annual
Report, available on Kingswood's website at https://www.kingswood-group.com
(http://www.kingswood-group.com/) .
The above documents are available, free of charge, in "read-only" format and
can be printed from the web addresses detailed above. Hard copies of any
documents or information incorporated by reference into this document will not
be provided unless such a request is made.
There are no current ratings or outlooks publicly accorded to Kingswood.
Save as expressly referred to herein, neither the content of Kingswood's
website, nor the content of any website accessible from hyperlinks on
Kingswood's website, is incorporated into, or forms part of, this document.
Part B: Financial information relating to HSQ
The following sets out financial information in respect of HSQ as required by
Rule 24.3 of the Code. The documents referred to below are incorporated into
this document by reference pursuant to Rule 24.15 of the Code:
• the unaudited financial statements of HSQ for the financial
year ended 30 December 2023, available on HSQ website at
https://arena.pollencap.com; and
• the unaudited financial statements of HSQ for the financial
year ended 31 December 2022, available on HSQ website at
https://arena.pollencap.com.
The above documents are available, free of charge, in "read-only" format and
can be printed from the web addresses detailed above. Hard copies of any
documents or information incorporated by reference into this document will not
be provided unless such a request is made.
There are no current ratings or outlooks publicly accorded to HSQ.
Save as expressly referred to herein, neither the content of HSQ's website,
nor the content of any website accessible from hyperlinks on HSQ's website, is
incorporated into, or forms part of, this document.
PART V ADDITIONAL INFORMATION
PART A: ADDITIONAL INFORMATION ON HSQ AND KINGSWOOD
1. Responsibility
(a) The HSQ Directors, whose names are set out in paragraph 2(a) of
this Part A of Part V (Additional Information), accept responsibility for all
the information contained in this document (including for any expressions of
opinion of HSQ or of the HSQ Directors and for any information relating to
HSQ's future intentions for Kingswood), except for that information for which
the Kingswood Directors accept responsibility under paragraph 1(b) below or
for which the Independent Kingswood Directors accept responsibility under
paragraph 1(c) below. To the best of the knowledge and belief of the HSQ
Directors (who have taken all reasonable care to ensure that such is the
case), the information contained in this document (including any expressions
of opinion) for which they accept responsibility is in accordance with the
facts and does not omit anything likely to affect the import of that
information.
(b) The Kingswood Directors, whose names are set out in paragraph 2(b)
of this Part A of Part V (Additional Information), accept responsibility for
all the information contained in this document (including for any expressions
of opinion) in relation to Kingswood, except for that information for which
the HSQ Directors accept responsibility under paragraph 1(a) above or for
which the Independent Kingswood Directors accept responsibility under
paragraph 1(c) below. To the best of the knowledge and belief of the Kingswood
Directors (who have taken all reasonable care to ensure that such is the
case), the information contained in this document (including any expressions
of opinion) for which they accept responsibility is in accordance with the
facts and does not omit anything likely to affect the import of that
information.
(c) The Independent Kingswood Directors, whose names are set out in
paragraph 2(c) of this Part A of Part V (Additional Information), accept
responsibility for the information set out in Part II (Letter from the
Chairman) that relates to the views and opinions of the Independent Kingswood
Directors. To the best of the knowledge and belief of the Independent
Kingswood Directors (who have taken all reasonable care to ensure that such is
the case), the information contained in this document (including any
expressions of opinion) for which they accept responsibility is in accordance
with the facts and does not omit anything likely to affect the import of that
information.
2. HSQ Directors, the Kingswood Directors and the Independent Kingswood Directors
(a) The HSQ Directors and their respective positions are set out
below:
Duncan Gerard Director of HSQ
Lindsey McMurray Director of HSQ
The registered office of HSQ and the business address of the HSQ Directors is
11-12 Hanover Square, London, United Kingdom, W1S 1JJ.
(b) The Kingswood Directors and their respective functions are: David
Hudd
Non-Executive Chairman
Peter Coleman Chief Executive Officer
Jonathan Freeman Non-Executive Director Duncan
Gerard
Non-Executive Director Gemma
Godfrey
Non-Executive Director Lindsey
McMurray
Non-Executive Director Jane
Millar
Non-Executive Director
The registered office of Kingswood, which is also the business address of each
of the Kingswood Directors, is Mont Crevelt House, Bulwer Avenue, St. Sampson,
Guernsey, GY2 4LH.
(c) The Independent Kingswood Directors and their respective functions
are: David
Hudd
Non-Executive Chairman
Peter Coleman Chief Executive Officer
Jonathan Freeman Non-Executive Director Gemma
Godfrey
Non-Executive Director Jane
Millar
Non-Executive Director
The registered office of Kingswood, which is also the business address of each
of the Independent Kingswood Directors, is Mont Crevelt House, Bulwer Avenue,
St. Sampson, Guernsey, GY2 4LH.
3. Market Quotations
The following table shows the closing price for Kingswood Shares on the London
Stock Exchange on:
(a) 11 March 2025, being the last Business Day prior to the commencement of
the Offer Period; (b) the first Business Day of each of the six months
immediately before the date of this document; and (c) as at 24 March 2025,
being the last Business Day prior to publication of this document.
Date
Kingswood Share Price (in pence)
24 March
2025
6.75p
11 March
2025
8.5p
3 March
2025
9p
3 February
2025
10p
2 January
2025
10p
2 December
2024
12p
1 November
2024
13p
1 October
2024
12p
4. Interests and Dealings in Relevant Securities
Definitions Used in this Section
For the purposes of this paragraph 4:
"acting in concert" has the meaning given to it in the Code; "connected
adviser" has the meaning given to it in the Code;
"connected person" in relation to a director of Kingswood or HSQ includes: (a)
such director's spouse or civil partner and children or step-children under
the age of 18; (b) the trustee(s) of any trust for the benefit of such
director and/or any person mentioned in (a); (c) any company in which such
director and/or any person mentioned in (a) or (b) is entitled to exercise or
control the exercise of one-third or more of the voting power, or which is
accustomed to act in accordance with the directions of such director or any
such person; and (d) any other person whose interests in shares are taken to
be interests of such director pursuant to Part 22 of the Companies Act 2006;
"control" means an interest, or interests, in shares carrying in aggregate 30%
or more of the voting rights (as defined in the Code) of a company,
irrespective of whether such interest(s) give(s) de facto control;
"dealing" has the meaning given to it in the Code and "dealt" has the
corresponding meaning; "derivative" has the meaning given to it in the Code;
"Disclosure Date" means the close of business on 24 March 2025;
"Disclosure Period" means the period commencing on 12 March 2024 (being the
date 12 months prior to the date of commencement of the Offer Period) and
ending as at the Disclosure Date;
"exempt fund manager" and "exempt principal trader" have the meanings given to
them in the Code;
"financial collateral arrangements" are arrangements of the kind referred to
in Note 3 on Rule 4.6 of the Code;
"interest" in relevant securities has the meaning given to it in the Code;
"Note 11 arrangement" means a dealing arrangement including any indemnity or
option arrangement, and any agreement or understanding, formal or informal, of
whatever nature, relating to relevant securities which may be an inducement to
deal or refrain from dealing;
"Offer Period" means the offer period (as defined by the Code) relating to
Kingswood, which commenced on 12 March 2025;
"relevant HSQ securities" means relevant securities (such term having the
meaning given to it in the Takeover Code in relation to an offeror) of HSQ
including equity share capital of HSQ (or derivatives referenced thereto) and
securities convertible into, rights to subscribe for and options (including
traded options) in respect thereof;
"relevant Kingswood securities" means relevant securities (such term having
the meaning given to it in the Takeover Code in relation to an offeree) of
Kingswood including equity share capital of Kingswood (or derivatives
referenced thereto) and securities convertible into, rights to subscribe for
and options (including traded options) in respect thereof; and
"short position" means any short position (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.
5. Interests in Relevant Securities of Kingswood
Kingswood Directors
(a) As at the Disclosure Date, the interests of the Kingswood
Directors (and their close relatives, related trusts and connected persons) in
Kingswood were as follows:
Number of Kingswood Shares % of Voting Rights
Director
David Hudd 650,000 0.09
Jonathan Freeman 87,750 0.01
(b) As at the Disclosure Date, the Kingswood Directors held no
outstanding options or awards over Kingswood Shares under the Kingswood share
plans.
HSQ
(a) As at the Disclosure Date, HSQ had the following interests in
securities of Kingswood:
Number of Kingswood Shares Interest as a percentage of issued Kingswood Shares
Name Nature of interest interested in
HSQ Owner of Kingswood Shares 613,388,553 89.39%
(b) As at the Disclosure Date, the HSQ Directors (and their close
relatives, related trusts and connected persons) did not hold any interests
in, or rights to subscribe in respect of, relevant Kingswood securities.
(c) Save as disclosed in paragraph (a) and (b) above, as at the
Disclosure Date neither HSQ, nor any HSQ Director, nor, so far as HSQ is
aware, any person acting in concert with any of them nor any person with whom
it or any person acting in concert with any of them has a Note 11 arrangement
has: (i) any interest in or right to subscribe for any relevant Kingswood
securities; (ii) any short positions in
respect of relevant Kingswood securities (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) borrowed or lent
any relevant Kingswood securities (including, for these purposes, any
financial collateral arrangements of the kind referred to in Note 3 on Rule
4.6 of the Takeover Code).
(d) As at the Disclosure Date, other than as disclosed in paragraph 5
(a) above, no person acting in concert with Kingswood held any interests in,
or rights to subscribe in respect of, relevant Kingswood securities.
(e) As at the Disclosure Date, none of the Kingswood Directors held
any interests in, or rights to subscribe in respect of, HSQ securities.
(f) During the Offer Period, neither Kingswood, the Kingswood
Directors nor any person acting in concert with the foregoing, has dealt in
HSQ securities.
(g) Save as disclosed above, as at the Disclosure Date, so far as
Kingswood is aware, neither any person acting in concert with it, nor any
person with whom Kingswood or any person acting in concert with Kingswood has
a Note 11 arrangement has: (i) any interest in or right to subscribe for any
relevant Kingswood securities; (ii) any short positions in respect of relevant
Kingswood securities (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) borrowed or lent any relevant Kingswood
securities (including, for these purposes, any financial collateral
arrangements of the kind referred to in Note 3 on Rule 4.6 of the Takeover
Code).
6. Interests and Dealings - General
(a) Save as disclosed in paragraph 5 above as at the Disclosure Date:
(i) no member of the Wider HSQ Group had any interest in, right to
subscribe in respect of, or any short position (under a derivative or
otherwise) in relation to, or had any agreement to sell or any delivery
obligation or any right to require another person to purchase or take delivery
of, any relevant Kingswood securities, nor, save as set out below, has any
member of the Wider HSQ Group dealt in any relevant Kingswood securities
during the Disclosure Period;
Date of Party Number of Nature of Price per On Exchange/
Dealing Dealing Shares Dealing Share (GBP) Currency Off Exchange
31 May 2024 HSQ 469,263,291 Conversion of preference shares 16.5p GBP Off exchange
13 March 2025 HSQ 144,125,262 Acquisition of Kingswood Shares 7p GBP Off exchange
(ii) none of the HSQ Directors had any interest in, right to subscribe
in respect of, or any short position (under a derivative or otherwise) in
relation to, or had any agreement to sell or any delivery obligation or any
right to require another person to purchase or take delivery of, any relevant
Kingswood securities, nor has any such person dealt in any relevant Kingswood
securities during the Disclosure Period;
(iii) so far as HSQ is aware, no person deemed to be acting in concert
with HSQ had any interest in, right to subscribe in respect of, or any short
position (under a derivative or otherwise) in relation to any, or had any
agreement to sell or any delivery obligation or any right to require another
person to purchase or take delivery of, any relevant Kingswood securities, nor
has any such person dealt in any relevant Kingswood securities during the
Disclosure Period;
(iv) so far as HSQ is aware, no person that has a Note 11 arrangement
with HSQ or (so far as HSQ is aware) any person acting in concert with HSQ had
any interest in, right to subscribe in respect of, or any short position
(under a derivative or otherwise) in relation to, or had any agreement to sell
or any delivery obligation or any right to require another person to purchase
or take delivery of, any relevant Kingswood securities, nor has any such
person dealt in any relevant Kingswood securities during the Disclosure
Period;
(v) neither HSQ nor (so far as HSQ is aware) any person acting in
concert with it, has borrowed or lent any relevant Kingswood securities, save
for any borrowed shares which have been either on-lent or sold;
(vi) neither HSQ nor (so far as HSQ is aware) any person acting in
concert with it has any Note 11 arrangement with any other person.
(b) Save as disclosed in paragraph 5 above, as at the Last Practicable
Date:
(i) no member of the Wider Kingswood Group had any interest in,
right to subscribe in respect of, or any short position (under a derivative or
otherwise) in relation to, or had any agreement to sell or any delivery
obligation or any right to require another person to purchase or take delivery
of, any relevant HSQ securities, nor has any such person dealt in any relevant
HSQ securities during the Offer Period;
(ii) none of the Kingswood Directors had any interest in, right to
subscribe in respect of, or any short position (under a derivative or
otherwise) in relation to, or had any agreement to sell or any delivery
obligation or any right to require another person to purchase or take delivery
of, any relevant Kingswood securities or relevant HSQ securities, nor has any
such person dealt in any relevant Kingswood securities or relevant HSQ
securities during the Offer Period;
(iii) so far as Kingswood is aware, no person deemed to be acting in
concert with Kingswood had any interest in, right to subscribe in respect of,
or any short position (under a derivative or otherwise) in relation to, or had
any agreement to sell or any delivery obligation or any right to require
another person to purchase or take delivery of, any relevant Kingswood
securities, nor has any such person dealt in any relevant Kingswood securities
during the Offer Period; and
(iv) no person who has a Note 11 arrangement with Kingswood or (so far
as Kingswood is aware) any person acting in concert with Kingswood had any
interest in, right to subscribe in respect of, or any short position (under a
derivative or otherwise) in relation to, or had any delivery obligation or any
right to require another person to take delivery of, any relevant Kingswood
securities, nor has any such person dealt in any relevant Kingswood securities
during the Offer Period.
(c) Neither Kingswood, nor any person acting in concert with Kingswood
has borrowed or lent any relevant Kingswood securities, save for any borrowed
shares which have been either on-lent or sold.
(d) Neither Kingswood nor (so far as Kingswood is aware) any person
acting in concert with it has any Note 11 arrangement with any other person.
(e) Save for David Hudd, Jonathan Freeman, Gary Wilder and Jonathan
Massing no persons have given any irrevocable or other commitment to vote in
favour of the Offer.
(f) Save as disclosed in this Document, none of: (i) HSQ or any
person acting in concert with HSQ; or
(ii) Kingswood or any person acting in concert with Kingswood, has, in either
case, any Note 11 arrangement in relation to relevant securities.
(g) Save as disclosed in this document, no agreement, arrangement or
understanding (including any compensation arrangement) exists between HSQ or
any person acting in concert with it and any of the Kingswood Directors or the
recent directors, shareholders or recent shareholders of Kingswood, or any
person interested or recently interested in Kingswood Shares, having any
connection with or dependence upon or which is conditional upon the Offer.
(h) Save as disclosed in this document, there is no agreement,
arrangement or understanding whereby the beneficial ownership of any Kingswood
Shares to be acquired by HSQ pursuant to the Offer will be transferred to any
other person, however HSQ reserves the right to transfer any such shares to
any member of the Wider HSQ Group.
(i) No relevant Kingswood securities have been redeemed or purchased
by Kingswood during the Disclosure Period.
7. Irrevocable Undertakings
(a) HSQ has procured irrevocable undertakings from the Kingswood
Directors who hold Kingswood Shares to accept (or procure the acceptance of,
as applicable) the Offer. Such irrevocable undertakings are in respect of the
following relevant Kingswood securities:
Percentage of Kingswood issued share capital in respect of which
Number of Kingswood Shares in respect undertaking is given as at the Last Practicable
of which undertaking Date (%)
Name of Kingswood Director is given
David Hudd 650,000 0.09
Jonathan Freeman 87,750 0.01
(b) These irrevocable undertakings concern 737,750 Kingswood Shares
(representing, in aggregate, approximately 0.11% of the Kingswood Shares as at
the Last Practicable Date).
(c) These irrevocable undertakings include undertaking to:
(i) accept the Offer;
(ii) not to sell, transfer, charge, grant any option or other right
over or otherwise dispose of or deal (directly or indirectly and whether
beneficially, legally or otherwise) in the relevant Kingswood Shares or any
interest in all or any of them or permit any dealing, nor enter into any
agreement or arrangement (whether conditional or not) to deal, nor accept (or
permit to be accepted) any offer in respect of all or any of such Kingswood
Shares, save with consent of Kingswood;
(iii) continue to have full power and authority to enter into and
perform the irrevocable undertaking in accordance with its terms;
(iv) if required by HSQ, return a duly executed Form of Proxy in respect
of the relevant Kingswood Shares (if certificated), or in the case of
uncertificated shares, to take any action that may be required by HSQ to make
a valid proxy appointment and give valid CREST proxy instructions;
(v) execute all such documents, acts and things as may be necessary
and desirable to be executed in connection with their obligations under the
irrevocable undertaking.
(d) In addition to the irrevocable undertakings given by the
Independent Kingswood Directors listed above, HSQ has also received
irrevocable undertakings from Gary Wilder and Jonathan Massing in respect of
1,115,001 and 350,000 Kingswood Shares respectively (representing, in
aggregate, approximately 0.21% of the Kingswood Shares as at the Last
Practicable Date).
(e) HSQ has therefore received indications of support to accept, or to
procure the acceptance of, the Offer in respect of a total of 2,202,751
Kingswood Shares, representing, in aggregate, approximately 0.32% of the
Kingswood Shares as at the Last Practicable Date. Together with the Kingswood
Shares already held by HSQ, this represents approximately 89.71% of the
Kingswood Shares as at the Last Practicable Date.
8. Service Contracts and Letters of Appointment of Kingswood Directors
Certain details of the Kingswood Directors' service contracts, letters of
appointment and the terms of their appointment with a member of the Kingswood
Group are set out below.
(a) Group Executive Director
Peter Coleman entered into a service agreement with KW Wealth Group Limited as
summarised below.
Peter Coleman was initially appointed interim Chief Executive Officer of the
Group on 4 July 2024 under a fixed term contract of employment dated 4 July
2024 ("PC Interim Service Agreement").
The PC Interim Service Agreement had an effective date of appointment of 4
July 2024 and was for a term of six months. The notice provision was for
either party to give one months' notice unless there was an agreement to waive
this. Immediate termination was also possible in certain circumstances. The
salary was at a rate of £25,000 per month with an annual discretionary bonus.
Peter Coleman's employment and appointment as Chief Executive Officer was made
permanent under the terms of a service agreement dated 9 January 2025 ("PC
Service Agreement") which was effective from 10 January 2025. The PC Service
Agreement replaced the PC Interim Service Agreement.
Under the PC Service Agreement, either party may terminate the appointment by
giving the other party six months' notice. Peter Coleman's employment under
the PC Service Agreement will terminate: (i) by either party giving the other
not less than six months' notice, or (ii) with immediate effect by KW Wealth
Group Limited in specific circumstances such as where Peter Coleman commits
any serious or repeated breach of the PC Service Agreement or is guilty of any
gross misconduct. In addition, the PC Service Agreement enables KW Wealth
Group Limited to terminate Peter Coleman's employment with immediate effect by
making a payment equivalent to his basic salary in lieu of notice or in lieu
of any unexpired part of his notice.
Peter Coleman's base salary under the PC Service Agreement is GPB 300,000 per
year. Salary is subject to annual review in January, with any changes taking
effect from 1 January each year. There is no right to an increase in salary.
Peter Coleman is entitled to participate in Kingswood's discretionary annual
bonus scheme. There is no contractual right to receive a bonus. Peter Coleman
is entitled to an employer pension contribution of 10% of basic salary or a
salary adjustment of 10% in lieu of the pension contribution.
Under the PC Service Agreement, Kingswood will reimburse Peter Coleman for all
fair and reasonable travel and accommodation expenses he incurs in performing
his duties. He is entitled to 30 days' paid holiday in each complete holiday
year, in addition to usual public holidays in England and Wales. Peter Coleman
is subject to post-termination restrictions for a period of 6 months after
termination (reduced by any period of garden leave), in particular a
non-compete, non-solicit and non-deal restrictive covenants.
(b) Kingswood Non-Executive Directors
Jane Millar and Gemma Godfrey entered into letters of appointment dated 8
September 2022 and were each appointed on 6 October 2022. Jonathan Freeman
entered into a letter of appointment dated 5 August 2018. David Hudd was
appointed as Group Chairman on 26 July 2021 and has not entered into
definitive contractual documentation regarding his position as Group Chairman.
Lindsey McMurray and Duncan Gerard are Pollen Street appointees and have not
entered into agreements regarding their position as non-executive Directors of
Kingswood. Lindsey McMurray and Duncan Gerard were appointed on 16 December
2019 and 1 December 2023 respectively. Lindsey McMurray and Duncan Gerard are
not remunerated for these positions and their appointments are terminable on
reasonable notice (as no contractual notice period applies).
The content of Jonathan Freeman, Jane Millar and Gemma Godfrey's (together the
"Contracted non-executive Kingswood Directors") letters of appointment are
materially the same as summarised in this section.
David Hudd is engaged on implied terms and conditions which mirror the
material provisions of the letters of appointment for Jane Millar and Gemma
Godfrey, summarised below. The appointment of each Contracted non-executive
Kingswood Director is subject to their continued satisfactory performance and
any relevant statutory provisions relating to the removal of a director.
Jane Millar and Gemma Godfrey are appointed for an initial term of three years
which commenced on 6 October 2022, unless terminated earlier by either party
and is subject to confirmation by the Board and re-election at annual general
meetings of Kingswood. If not re-elected, they are retired from office under
the articles of association of Kingswood or any relevant statutory provision,
their appointment will terminate automatically with immediate effect and
without compensation.
Jonathan Freeman and David Hudd have been appointed for an indefinite term
until terminated by either party. Jonathan Freeman is subject to
post-termination restrictive covenants for periods of six to twelve months
after termination including non-compete, non-solicit and non-deal
restrictions.
Gemma Godfrey and Jane Millar's appointments are terminable by either party on
one months' written notice. Jonathan Freeman's appointment is terminable by
either party on six months' written notice.
Each of Jane Millar, Jonathan Freeman and Gemma Godfrey are entitled to a
salary of £40,000 per annum. David Hudd is entitled to a salary of £75,000
per annum.
Each of the non-executive Kingswood Directors is subject to customary
post-termination confidentiality obligations.
Gemma Godfrey and Jane Millar's appointment is also terminable by Kingswood
with immediate effect in materially similar circumstances which may include if
the non-executive Kingswood Director: (i) commits a material breach of their
obligations under their letter of appointment, or is guilty of any gross
misconduct affecting any Group company; (ii) commits a serious or repeated
breach or non-observance of their obligations to Kingswood, including a breach
of their duties to Kingswood, whether statutory, fiduciary or owed at
common-law; (iii) is guilty of any fraud or dishonesty or has acted in a
manner which, in the reasonable opinion of Kingswood, brings or is likely to
bring the non-executive Kingswood Director or Kingswood into disrepute or is
materially adverse to the interests of Kingswood; (iv) is convicted of an
arrestable criminal offence (other than an offence under road traffic
legislation in the UK or elsewhere for which a fine or non-custodial penalty
is imposed); (v) is declared bankrupt or has made an arrangement with or for
the benefit of their creditors; (vi) or is disqualified from acting as a
director; or (vii) not complied with Kingswood's anti-corruption and bribery
policy and procedures and/or the Bribery Act 2010. Jonathan Freeman's letter
of appointment does not include any termination provisions bar the requirement
for 6 months' notice and there is no provision for immediate termination.
The Contracted non-executive Kingswood Directors are entitled to reimbursement
of reasonable and properly documented expenses incurred by them in the
performance of their duties, in accordance with and subject to any policy in
place from time to time. In circumstances where it is appropriate for a
non-executive Kingswood Director to seek advice from independent advisers at
Kingswood's expense, Kingswood will reimburse the reasonable cost of
expenditure incurred by the non-executive Kingswood Director in accordance
with its policy and subject to applicable laws.
(c) Other Service Contracts
Save as disclosed above for the Group Executive Director, there are no service
contracts or letters of appointment, between any Kingswood Director or
proposed director of Kingswood and any member of the Kingswood Group and no
such contract or letter of appointment has been entered into or amended within
the six months preceding the date of this document.
9. Kingswood Material Contracts
Save as set out below, neither Kingswood nor any of its subsidiaries has,
during the period beginning on 12 March 2023 (being two years before the
commencement of the Offer Period) and ending on the Last Practicable Date,
entered into any material contract otherwise than in the ordinary course of
business. The following contracts, not being contracts entered into in the
ordinary course of business, and which are or may be material, have been
entered into by Kingswood or its subsidiaries in the period beginning on 12
March 2023 and ending on the Last Practicable Date.
(a) Intercompany Loan Agreements
(i) Kingswood entered into a loan agreement on 16 February 2024 in
relation to a £8,000,000 term loan made by HSQ, repayable on 17 October 2030.
The loan is to be used for general corporate purposes. The rate of interest
payable on the loan is 12% per annum accruing daily.
The loan agreement contains customary termination events (including
non-payment, failure to comply with any other provision under the loan
agreement and insolvency events) and HSQ can demand immediate repayment of the
loan (plus accrued interest and any other payments due under the loan
agreement).
No fees are payable under the terms of the loan agreement. HSQ does not
receive the benefit of security under the terms of the loan agreement.
(ii) Kingswood entered into a loan agreement on 3 May 2024 in relation
to a £3,000,000 term loan made by Pollen Street Limited ("PSL").
The loan is repayable on earliest of:
(1) 29 October 2030;
(2) the date of the sale of more than 50% of the shares in the capital
of Kingswood, or the sale or other disposal of the whole or substantially the
whole of the business or assets of Kingswood and its subsidiaries taken
together, to any person that is not a shareholder of the Kingswood on the date
of the loan agreement (an "Exit"); and
(3) the date of the sale (directly or indirectly) of any of
Kingswood's business, assets or undertakings, undertaken in one or a series of
transactions to any person that is not a shareholder of Kingswood on the date
of the loan agreement (a "Partial Exit"),
subject to that following the Reorganisation Date (as defined in the senior
facility agreement made between, among others, Kingswood, KW UK Financial
Holdings Limited, BlackRock EMMPD III Unlevered (Investment) S.à r.l., and
Global Loan Agency Services Limited on 17 October 2022 as amended from time to
time (the "Senior Facility Agreement")) the loan shall only become repayable
if:
(1) all amounts outstanding under any Facility (as defined in the
Senior Facility Agreement) have been repaid in full; or
(2) the Majority Lenders (as defined in the Senior Facilities
Agreement) have agreed in writing with PSL that such repayment may occur.
The loan is to be used for general corporate purposes. The rate of interest
payable on the loan is 12% per annum accruing daily.
The loan agreement contains customary termination events (including
non-payment, failure to comply with any other provision under the loan
agreement and insolvency events) and PSL can demand immediate repayment of the
loan (plus accrued interest and any other payments due under the loan
agreement).
No fees are payable under the terms of the loan agreement. PSL does not
receive the benefit of security under the terms of the loan agreement.
(iii) Kingswood entered into a loan agreement on 14 August 2024 in
relation to a £6,000,000 term loan made by PSL.
The loan is repayable on earliest of:
(1) 29 October 2030;
(2) the date of an Exit; and
(3) the date of a Partial Exit,
subject to that following the Reorganisation Date (as defined in the Senior
Facility Agreement) the loan shall only become repayable if:
(1) all amounts outstanding under any Facility (as defined in the
Senior Facility Agreement) have been repaid in full; or
(2) the Majority Lenders (as defined in the Senior Facilities
Agreement) have agreed in writing with PSL that such repayment may occur.
The loan is to be used for general corporate purposes. The rate of interest
payable on the loan is 12% per annum accruing daily.
The loan agreement contains customary termination events (including
non-payment, failure to comply with any other provision under the loan
agreement and insolvency events) and PSL can demand immediate repayment of the
loan (plus accrued interest and any other payments due under the loan
agreement).
No fees are payable under the terms of the loan agreement. PSL does not
receive the benefit of security under the terms of the loan agreement.
(iv) Kingswood entered into a loan agreement on 30 October 2024 in
relation to a £4,000,000 term loan made by PSL.
The loan is repayable on earliest of:
(1) 29 October 2030;
(2) the date of an Exit; and
(3) the date of a Partial Exit,
subject to that following the Reorganisation Date (as defined in the Senior
Facility Agreement) the loan shall only become repayable if:
(1) all amounts outstanding under any Facility (as defined in the
Senior Facility Agreement) have been repaid in full; or
(2) the Majority Lenders (as defined in the Senior Facilities
Agreement) have agreed in writing with PSL that such repayment may occur.
The loan is to be used for general corporate purposes. The rate of interest
payable on the loan is 12% per annum accruing daily.
The loan agreement contains customary termination events (including
non-payment, failure to comply with any other provision under the loan
agreement and insolvency events) and PSL can demand immediate repayment of the
loan (plus accrued interest and any other payments due under the loan
agreement).
No fees are payable under the terms of the loan agreement. PSL does not
receive the benefit of security under the terms of the loan agreement.
(v) Kingswood entered into a loan agreement on 13 March 2025 in
relation to a £4,800,000 term loan made by HSQ.
The loan is repayable on earliest of:
(1) 29 October 2030;
(2) the date of an Exit; and
(3) the date of a Partial Exit,
subject to that following the Reorganisation Date (as defined in the Senior
Facility Agreement) the loan shall only become repayable if:
(1) all amounts outstanding under any Facility (as defined in the
Senior Facility Agreement) have been repaid in full; or
(2) the Majority Lenders (as defined in the Senior Facilities
Agreement) have agreed in writing with HSQ that such repayment may occur.
The loan is to be used for general corporate purposes. The rate of interest
payable on the loan is 12% per annum accruing daily.
The loan agreement contains customary termination events (including
non-payment, failure to comply with any other provision under the loan
agreement and insolvency events) and HSQ can demand immediate repayment of the
loan (plus accrued interest and any other payments due under the loan
agreement).
No fees are payable under the terms of the loan agreement. HSQ does not
receive the benefit of security under the terms of the loan agreement.
10. HSQ Material Contracts
Save as set out below and in the Memorandum of Understanding set out in
paragraph 11 below, neither HSQ nor any of its subsidiaries has, during the
period beginning on 12 March 2023 (being two years before the commencement of
the Offer Period) and ending on the Last Practicable Date, entered into any
material contract otherwise than in the ordinary course of business. The
following contracts, not being contracts entered into in the ordinary course
of business and which may or may not be material, have been entered into by
HSQ or its subsidiaries in the period beginning on 12 March 2023 and ending on
the Last Practicable Date:
(i) HSQ and Kingswood entered into a loan agreement on 16 February
2024 in relation to a £8,000,000 term loan made by HSQ, repayable on 17
October 2030. The loan is to be used for general corporate purposes. The rate
of interest payable on the loan is 12% per annum accruing daily.
The loan agreement contains customary termination events (including
non-payment, failure to comply with any other provision under the loan
agreement and insolvency events) and HSQ can demand immediate repayment of the
loan (plus accrued interest and any other payments due under the loan
agreement).
No fees are payable under the terms of the loan agreement. HSQ does not
receive the benefit of security under the terms of the loan agreement.
(ii) HSQ and Kingswood entered into a loan agreement on 13 March 2025
in relation to a £4,800,000 term loan made by HSQ.
The loan is repayable on earliest of:
(1) 29 October 2030;
(2) the date of an Exit; and
(3) the date of a Partial Exit,
subject to that following the Reorganisation Date (as defined in the Senior
Facility Agreement) the loan shall only become repayable if:
(1) all amounts outstanding under any Facility (as defined in the
Senior Facility Agreement) have been repaid in full; or
(2) the Majority Lenders (as defined in the Senior Facilities
Agreement) have agreed in writing with HSQ that such repayment may occur.
The loan is to be used for general corporate purposes. The rate of interest
payable on the loan is 12% per annum accruing daily.
The loan agreement contains customary termination events (including
non-payment, failure to comply with any other provision under the loan
agreement and insolvency events) and HSQ can demand immediate repayment of the
loan (plus accrued interest and any other payments due under the loan
agreement).
No fees are payable under the terms of the loan agreement. HSQ does not
receive the benefit of security under the terms of the loan agreement.
11. Offer Related Arrangements
The Memorandum of Understanding between HSQ and KPI
The previous arrangements
On 30 September 2019, and as described in previous announcements, including on
31 May 2024, Kingswood issued a promissory note to HSQ (the "Make Whole
Instrument") which was structured to provide PSC with a guaranteed return on
its investment in convertible preference shares. Pursuant to this agreement,
which was subsequently modified on 28 December 2021, upon a sale of HSQ's
shares in Kingswood, HSQ had a guaranteed minimum return of an amount equal to
two times the total amount subscribed for their convertible preference shares
prior to 28 December 2021 and an amount equal to one and a half times the
total amount subscribed for their convertible preference shares on or after 28
December 2021. The aggregate level of return guaranteed by Kingswood to HSQ
under the Make Whole Instrument is approximately £140.1m.
Separate to its shareholding in Kingswood, KPI holds an additional economic
interest in Kingswood via HSQ, pursuant to a side letter entered into in
December 2019 (the "Side Letter"). Pursuant to the Side Letter, KPI paid HSQ
£5m in exchange for an economic interest in a portion of the convertible
preference shares that HSQ had at that time subscribed for in Kingswood (the
"Trust Shares"). HSQ agreed in the Side Letter to hold the Trust Shares on
trust for, and to pay any proceeds relating to the Trust Shares to, KPI. On 31
May 2024, it was announced that HSQ had converted all of its convertible
preference shares into Kingswood Shares resulting in HSQ being beneficially
interested in 68.39% of the Company's share capital. The Side Letter remains
in force and, as a result, KPI has a continuing economic interest of
approximately 7% in HSQ's shareholding in Kingswood and also a 7% interest in
HSQ's rights under the Make Whole Instrument.
Finally, as part of the commercial arrangements agreed between HSQ and KPI at
the time of the Side Letter, a call option dated 28 February 2020 between HSQ
and KPI was entered into (the "Call Option"). Under the Call Option, were HSQ
to achieve a certain level of return in connection with its investment in
Kingswood, KPI was entitled to be awarded options over HSQ's shares in
Kingswood that would in turn entitle KPI to certain proceeds from HSQ on any
eventual sale of HSQ's shares in Kingswood.
As a result, whilst KPI has sold its shares in Kingswood to HSQ, it retained
an economic interest in Kingswood through its interests in HSQ's shares in
Kingswood, the Make Whole Instrument and the Call Option. These arrangements
are proposed to be amended as set out below.
The amended arrangements
On 26 February 2025, HSQ and KPI entered into a binding memorandum of
understanding (the "MOU") that sets out the proposed terms to reconstitute the
existing entitlements due to KPI under the Side Letter and the Call Option
(the "Amendment").
The Amendment provides that in respect of any future proceeds distributed by
HSQ, KPI is entitled to the following:
a. KPI shall receive 7% of the proceeds arising and distributed to
HSQ following the sale of the UK and Irish business (whether as a result of
the Make Whole Instrument or otherwise) (the "First Amount");
b. KPI shall receive 7% of the historic unpaid interest due by
Kingswood to HSQ on HSQ's historic shareholding of convertible preference
shares in Kingswood (the "Second Amount");
c. any amounts paid to HSQ by Kingswood in excess of the amounts
received from paragraph (a) above and, to the extent distributed, paragraph
(b) above up to $50m (the "Third Amount") will be distributed by HSQ in the
following proportion: 90% to PSC and 10% to KPI; and
d. any amounts in excess of the First Amount, the Second Amount
and the Third Amount will be distributed by HSQ in the following proportion:
93% to PSC and 7% to KPI.
In addition, under the terms of the MOU, KPI shall have a put right under
which it can require Pollen Street to acquire all of KPI's interests in HSQ
for the lower of: (i) USD 5.25m or (ii) an amount calculated pursuant to a
formula derived from the future value of Kingswood US. The put right is only
exercisable 3 years after the date of the MOU. The price will be reduced by
any proceeds received by KPI, pursuant to its interests in HSQ, that are in
excess of the First Amount, by the time of exercise (and the exercise of the
put option will extinguish those rights to any further proceeds going
forward).
Acquisition of KPI's shares by HSQ
HSQ acquired all of KPI's shares in Kingswood on 13 March 2025 at a price of
7p per share and as a result HSQ now owns 89.39% of Kingswood's issued share
capital. Having now acquired KPI's shares, it is anticipated that the binding
documentation in relation to the terms set out in the MOU will be completed
shortly. Gary Wilder and Jonathan Massing resigned from the Board on 13 March
2025, when HSQ acquired all of KPIs shares in Kingswood.
12. Governing Law
The Offer shall be governed by and construed in accordance with English law
and Guernsey law. The Courts of England shall have exclusive jurisdiction for
determining any matter which may arise under or in connection with the Offer.
13. Post-Offer Undertakings
No statements in this document constitute "post-offer undertakings" for the
purposes of Rule 19.5 of the Takeover Code.
14. Sources and Bases
In this document, unless otherwise stated or the context otherwise requires,
the bases of calculation and sources of information are used as described
below:
(a) Financial information relating to Kingswood has been extracted or
derived (without any adjustment) from (i) the annual report and accounts of
Kingswood for the year ended 31 December 2023 (ii) the interim accounts of
Kingswood for the six months to 30 June 2024 and (iii) the AUA&M and the
indebtedness of the Company as at 31 December 2024 from Kingswood management
accounts.
(b) References to the existing issued ordinary share capital of
Kingswood and the existing issued Kingswood Shares are to the number of
Kingswood Shares in issue as at the Last Practicable Date,
which was 686,184,011 Kingswood Shares as disclosed by Kingswood in the Rule
2.7 Announcement.
(c) It is assumed that there are no Kingswood Shares which will be
issued on or after the date of the document pursuant to the Kingswood share
plans, given that all of the options issued pursuant to the Kingswood share
plans as at the Last Practicable Date have exercise prices higher than the
Offer price.
(d) The international securities identification number for Kingswood
Shares is GG00BKY4K072.
15. General
(a) There is no agreement, arrangement or understanding under which
any securities acquired pursuant to the Offer will be transferred to any other
person, save that HSQ reserves the right to transfer any such securities to
any other member of the HSQ group.
(b) Save for the irrevocable undertakings described in paragraph 7 of
Part A of Part V (Additional Information) of this document neither:
(i) HSQ; nor
(ii) Kingswood,
has any Note 11 arrangement (including any indemnity or option arrangement),
agreement or understanding, formal or informal, of whatever nature relating to
relevant Kingswood securities, which may be an inducement to deal or refrain
from dealing, with any other person.
(c) As the Offer is unconditional from the outset, there are no
conditions that may be invoked by HSQ in relation to the Offer.
(d) The financial information on HSQ and the Kingswood Group contained
in this document does not constitute statutory accounts within the meaning of
section 434 of the Companies Act and accounts within the meaning of section
245 of the Companies Law respectively.
16. Fees and Expenses
(a) The aggregate fees and expenses expected to be incurred by HSQ in
connection with the Offer are estimated to amount to approximately
£722,460.00 (plus applicable VAT and other taxes). The following are
estimates expected to comprise the aggregate figure (in each case exclusive of
VAT):
Cash confirmation advice £200,000.00
Legal advice £450,000.00
Other costs and expenses £72,460.00
(b) The aggregate fees and expenses expected to be incurred by
Kingswood in connection with the Offer are estimated to amount to
approximately £482,850.00 (plus applicable VAT and other taxes). The
following are estimates expected to comprise the aggregate figure (in each
case exclusive of VAT):
Financial advice £250,000.00
Legal advice
£230,000.00 Other costs and
expenses
£2,850.00
17. Financing the Offer
The cash consideration payable to Kingswood Shareholders under the terms of
the Offer is being financed from debt funding to be invested into HSQ by
Pollen Street group entities.
Panmure Liberum, in undertaking the cash confirmation exercise for HSQ, is
satisfied that sufficient resources are available to HSQ to satisfy in full
the cash consideration payable to Kingswood Shareholders under the terms of
the Offer.
18. No Significant Change
Save as disclosed in Part II (Letter from the Chairman of Kingswood) in this
document, there has been no significant change in the financial or trading
position of Kingswood since 30 June 2024, being the date to which the latest
interim financial information published by Kingswood was published.
19. Consent
Each of Panmure Liberum and Cavendish has given and not withdrawn its consent
to the publication of this document with the inclusion herein of the
references to its name in the form and context in which such references
appear.
20. Effect of Full Acceptance of the Offer on HSQ
If the Offer is accepted in full, HSQ will acquire the entire issued and to be
issued share capital of Kingswood, which will become a wholly-owned subsidiary
of HSQ. Following completion, HSQ's principal asset will be its holding in the
Kingswood Group, and its financial position and trading prospects will
principally be those of the Kingswood Group.
HSQ is a special purpose vehicle which was formed for the purposes of holding
Pollen Street's original investment in the Company, and has no material
trading activities. Its only assets are its existing holding of Kingswood
Shares and a passive minority interest in a listed U.S. entity, which
represents a small portion of its overall assets. HSQ has no material
liabilities other than those arising in connection with the Offer and its
financing.
The Offer is being funded from HSQ's existing cash resources, as further
described in paragraph 12 of Part I (Letter from HSQ Investment Limited) of
this document. Following completion of the Offer, HSQ may implement a capital
structure appropriate for its ownership of the Kingswood Group.
Accordingly, the financial and trading prospects of HSQ following full
acceptance of the Offer will depend entirely on the future performance of the
Kingswood Group.
21. Persons acting in concert
(a) In addition to the HSQ Directors (together with their close
relatives and related trusts) and the members of the Wider HSQ Group
(including HSQ's holding companies and their subsidiaries), the other persons
who, for the purposes of the Takeover Code, are acting in concert with HSQ in
respect of the Offer and who are required to be disclosed are Panmure Liberum
Limited, who are providing cash confirmation advice to HSQ and whose
registered address is 25 Ropemaker Street, London, England, EC2Y 9LY.
(b) In addition to the Kingswood Directors (together with their close
relatives and related trusts) and the members of the Kingswood Group
(including Kingswood's holding companies and their subsidiaries), the other
persons who, for the purposes of the Takeover Code, are acting in concert with
Kingswood in respect of the Offer and who are required to be disclosed are
Cavendish Capital Markets Limited, who are acting as the Rule 3 adviser to
Kingswood and whose registered address is 1 Bartholomew Close, London, EC1A
7BL.
22. Documents available on website
Copies of the following documents will be available promptly on HSQ's and
Kingswood's websites subject to certain restrictions relating to persons
resident in Restricted Jurisdictions at https://arena.pollencap.com and
www.kingswood-group.com (http://www.kingswood-group.com/) ,
(http://www.kingswood-group.com/) respectively and in any event by no later
than 12 noon (London time) on the Business Day following the publication of
this document until the end of the Offer Period:
• this document;
• the Rule 2.7 Announcement;
• the irrevocable undertakings referred to at paragraph 7
above;
• equity commitment letters from Pollen Street Limited to PSC
III Nominee Limited and from PSC III Nominee Limited to HSQ;
• the consent letters of Panmure Liberum and Cavendish;
• a sample Form of Acceptance;
• the Side Letter between HSQ and KPI;
• the MOU between HSQ and KPI; and
• the Facility Agreement between HSQ and the Company dated 13
March 2025.
Neither the contents of Kingswood's and HSQ's websites, nor the content of any
other website accessible from hyperlinks on either such websites, is
incorporated into or forms part of, this document.
PART B: ADDITIONAL INFORMATION FOR OVERSEAS SHAREHOLDERS
GENERAL
(a) This document and the accompanying Form of Acceptance have been
prepared for the purposes of complying with English law, Guernsey law, the
applicable requirements of Companies Law, the Takeover Code, the Panel, the
FCA and the London Stock Exchange and applicable securities law and the
information disclosed may not be the same as that which would have been
disclosed if this document had been prepared in accordance with the laws of
any other jurisdiction.
(b) The release, publication or distribution of this document and any
accompanying documents (in whole or in part) in or into jurisdictions other
than the United Kingdom may be restricted by law and therefore any persons who
are subject to the law of any jurisdiction other than the United Kingdom
should inform themselves of, and observe, any applicable legal or regulatory
requirements. The availability of the Offer to Kingswood Shareholders who are
not resident in and citizens of the United Kingdom may be affected by the laws
of the relevant jurisdictions in which they are located or of which they are
citizens and therefore persons who are not resident in the United Kingdom
should inform themselves of, and observe, any applicable legal or regulatory
requirements of their jurisdictions. 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 Offer disclaim any responsibility or liability for
the violation of such restrictions by any person.
(c) Unless otherwise determined by HSQ or required by the Takeover
Code and permitted by applicable law and regulation, the Offer is not being,
and will not be, made available, in whole or in part, directly or indirectly,
in or into or from a Restricted Jurisdiction where to do so would violate the
laws in that jurisdiction and no person may accept the Offer 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 document and any formal documentation relating to
the Offer are not being, and must 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) must not mail, or
otherwise forward, distribute or send it in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported acceptance of
the Offer. Unless otherwise permitted by applicable law and regulation, the
Offer may not be made directly or indirectly, in or into, 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 Offer may not
be capable of acceptance by any such use, means, instrumentality or
facilities.
(d) This document does not constitute an offer or invitation to
purchase or subscribe for any securities or a solicitation of an offer to buy
any securities pursuant to this document or otherwise in any jurisdiction in
which such offer or solicitation is unlawful.
(e) The Offer shall be subject to the applicable requirements of the
Takeover Code, the Panel, the London Stock Exchange, the FCA and the AIM
Rules.
(f) Overseas Shareholders should consult their own legal and tax advisers with respect to the legal and tax consequences of the Offer.
PART C: TAXATION
The following paragraphs provide summary information on certain aspects of
taxation as a guide only and are not a substitute for independent professional
tax advice. Any tax consequences of the Offer for a Kingswood Shareholder will
depend on their particular circumstances. Any Kingswood Shareholders who are
in any doubt about their tax position, or who are resident for tax purposes,
or otherwise subject to tax, outside the UK, should contact an appropriate tax
adviser.
1. UK TAXATION
The comments set out below summarise certain limited aspects of the UK
taxation treatment for certain Kingswood Shareholders under the Offer and do
not purport to be a complete analysis of all tax considerations relating to
the Offer. They are based on current UK legislation as applied in England and
Wales and what is understood to be current HM Revenue and Customs ("HMRC")
practice (which may not be binding on HMRC), both of which are subject to
change, possibly with retrospective effect. They are not, and should not be
taken as being, advice.
The comments are intended as a general guide for persons holding their
Kingswood Shares legally and beneficially for themselves and do not deal with
certain categories of Kingswood Shareholder such as: persons subject to
special tax regimes (such as collective investment schemes and persons subject
to UK tax on the remittance basis or under the foreign income and gains regime
which will be introduced from 6 April 2025) or able to benefit from specific
reliefs or exemptions (such as charities); brokers, dealers in securities,
intermediaries, insurance companies, trustees of certain trusts, persons
holding their Kingswood Shares as part of hedging or commercial transactions,
persons who have or could be treated for tax purposes as having acquired their
Kingswood Shares in connection with a trade, profession or vocation carried
out in the UK (whether through a branch or agency or otherwise), persons who
are connected with Kingswood or persons who have or could be treated for tax
purposes as having acquired their Kingswood Shares by reason of employment or
as holding their Kingswood Shares as carried interest or in connection with
the provision of investment management services. Nothing in these paragraphs
should be taken as providing personal tax advice. In particular, the following
paragraphs do not refer to UK inheritance tax. They also assume that the tax
changes announced on 30 October 2024 by the UK Government in the Budget are
implemented in full and on the terms announced.
References in this paragraph 1 to "UK Holders" are to Kingswood Shareholders
who (a) are resident for tax purposes in, and only in, the UK at all relevant
times and, in the case of individuals, to whom "split year" treatment does not
apply, and who are domiciled, or deemed domiciled, for tax purposes only in
the UK and/or cannot apply the foreign income and gains regime to their
Kingswood Shares, (b) hold their Kingswood Shares as an investment (other than
under a self-invested personal pension plan or individual savings account) and
(c) are the absolute legal and beneficial owners of their Kingswood Shares.
(a) UK tax on chargeable gains
The transfer of Kingswood Shares to HSQ in exchange for cash consideration
under the Offer should be treated as a disposal of a UK Holder's Kingswood
Shares for the purposes of UK taxation of chargeable gains. Depending on a UK
Holder's specific circumstances (including the UK Holder's capital gains tax
base cost and the availability of any exemptions, reliefs and/or allowable
losses), the disposal of the UK Holder's Kingswood Shares may give rise to a
liability to UK taxation on chargeable gains or an allowable capital loss.
(i) Subject to any available exemption, relief or allowance,
chargeable gains made by a UK Holder who is an individual will generally be
charged to capital gains tax at a rate of either 18% or 24%, depending on the
total amount of the individual's total taxable income and chargeable gains for
the tax year. The chargeable gains annual exempt amount (which for
individuals, is
£3,000 for the tax year running from 6 April 2025 to 5 April 2026), or part
of it, may be available to any individual UK Holder to offset any chargeable
gain (to the extent it is not otherwise utilised).
(ii) Subject to any available exemption, relief or allowance,
chargeable gains of a UK Holder within the charge to UK corporation tax will
be charged to corporation tax on chargeable gains at the applicable
corporation tax rate. For a UK Holder within the charge to UK corporation tax
which acquired its Kingswood Shares before 31 December 2017, an indexation
allowance may be available to reduce the amount of the chargeable gain
realised (but not to create or increase any allowable loss) on a disposal of
those Kingswood Shares.
(b) UK stamp duty and stamp duty reserve tax ("SDRT")
No UK stamp duty or SDRT should be payable by any Kingswood Shareholder on the
transfer of their Kingswood Shares to HSQ.
PART VI DEFINITIONS
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.
Articles
the memorandum and articles of incorporation of Kingswood from time to time.
Business
Day a
day (other than Saturdays, Sundays, and public holidays in the United Kingdom)
on which banks are generally open for business in London and Guernsey.
Cavendish
Cavendish Capital Markets Limited.
certificated or in certificated form in relation to a share or other
security, a share or other security title
to 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
Date
the closing date as will be specified by HSQ through a Regulatory Information
Service, with shareholders receiving at least 14 days' notice prior to the
specified closing date, which shall be no earlier than Day 21.
Code or Takeover Code the City Code on
Takeovers and Mergers.
Companies Law
the Companies (Guernsey) Law 2008, as amended.
CREST
the relevant system (as defined in the Regulations) in respect of which
Euroclear UK & International Limited is the Operator (as defined in the
Regulations).
CREST Manual the
CREST Manual published by Euroclear, as amended from time to time.
Day
21
the 21st day following the date on which this document is published.
Day
60
the 60th day following the date on which this document is published.
De-Listing
the cancellation of admission of the Kingswood Shares to trading on AIM.
Dealing Disclosure a
dealing disclosure in accordance with Rule 8 of the Takeover
Code.
Directors or Board the
directors of Kingswood or any duly authorised committee
thereof, and "Director" means any one of them.
Electronic Acceptance the
inputting and settling of a TTE instruction which constitutes or
is deemed to constitute an acceptance of the Offer on the terms set out in
this document.
ESA instruction
an Escrow Account Adjustment Input (AESN), transaction type "ESA" (as
described in the CREST Manual).
Euroclear
Euroclear UK & International Limited.
Excluded Shares
(i) shares held as treasury shares;
(ii) shares held by HSQ;
(iii) shares held by a nominee of HSQ;
(iv) shares held by a holding company, subsidiary or a fellow subsidiary of
HSQ or a nominee of such a holding company, subsidiary or fellow subsidiary;
(v) a body corporate in which HSQ is a substantially interested;
(vi) a person who is, or is a nominee of, a party to a share acquisition
agreement with HSQ; or
(vii) shares acquired by HSW during the offer period at a price other than the
offer price save where the offer price is raised to match the offer price.
FCA or Financial Conduct Authority
the Financial Conduct Authority or its successor from time to time.
fellow subsidiary
has the meaning ascribed to it in the Companies Law.
Form of Acceptance the form
of acceptance and authority relating to the Offer for use by
Kingswood Shareholders who hold Kingswood Shares in certificated form.
FSMA
the Financial Services and Markets Act 2000, as amended from time to time.
Group
Kingswood and its subsidiary undertakings and, where the context permits, each
of them.
Guernsey
law the
laws, statutes, regulations, ordinances, and other legislative instruments in
force in the Island of Guernsey, including common law and equity as applied in
Guernsey, and any rules, directives, or guidance issued by any regulatory
authority or governmental body having jurisdiction in Guernsey, as amended or
re-enacted from time to time.
holding company
has the meaning ascribed to it in the Companies Law.
HSQ
HSQ Investment Limited, a private company incorporated in England and Wales
with registered number 12156807.
HSQ
Directors
the directors of the board of HSQ, being Duncan Gerard and Lindsey McMurray.
Independent Kingswood Directors the Independent Kingswood Directors of
the Board being, David
Hudd, Peter Coleman, Jonathan Freeman, Gemma Godfrey and Jane Millar.
ISIN
International Securities Identification Number.
Kingswood
Kingswood Holdings Limited, a non-cellular company limited by shares
incorporated in Guernsey with company number 42316.
Kingswood Directors the
Directors of the Board being, David Hudd, Peter Coleman,
Jonathan Freeman, Duncan Gerard, Gemma Godfrey, Lindsey McMurray and Jane
Millar.
Kingswood Shareholders the holders of
Kingswood Shares, but the term shall, where the
context requires, exclude HSQ.
Kingswood Shares
ordinary shares in the capital of Kingswood.
KPI
KPI (Nominees) Limited, a private company incorporated in England and Wales
with registered number 05723493.
Last Practicable Date close of
business on 24 March 2025, being the Business Day
immediately prior to the publication of this document.
London Stock Exchange or LSE London Stock Exchange plc or its successor
from time to time.
Offer
the recommended all cash offer by HSQ for the entire issued, and to be issued,
share capital of Kingswood not already owned, or agreed to be acquired by HSQ.
Offer Document
this document dated 25 March 2025.
Offer
Period
the offer period (as defined in the Takeover Code) relating to Kingswood that
commenced on 12 March 2025 and ending no earlier than 15 April 2025.
Opening Position Disclosure has the meaning given to
it by Rule 8 of the Takeover Code.
Overseas Shareholders any
Kingswood Shareholders who are resident in, ordinarily
resident in, or citizens of, jurisdictions outside the United Kingdom or
Guernsey.
Panel
the Panel on Takeovers and Mergers.
Pollen
Street
Pollen Street Capital Limited, a private company incorporated in England and
Wales with registered number 08741640.
Receiving Agent
MUFG Corporate Markets of Central Square, 29 Wellington Street, Leeds LS1 4DL.
Regulations
Uncertificated Securities Regulations 2001 as amended from time to time.
Regulatory Information Service the regulatory information service as
defined in the handbook of
rules and guidance made by the FCA.
Restricted Jurisdiction any
jurisdiction where the making of the Offer would (a) constitute
a violation of the relevant laws and regulations of such jurisdiction; or (b)
result in a requirement to comply with any governmental or other consent or
any registration, filing, or other formality which HSQ or Kingswood regards as
unduly onerous.
Rule 2.7 Announcement the announcement
made by HSQ under Rule 2.7 of the Takeover
Code on 18 March 2025 regarding the Offer.
Significant Interest in
relation to an undertaking, a direct or indirect interest of 20% or
more of the total voting rights conferred by the equity share capital (as
defined in section 548 of the Companies Act 2006) of such undertaking.
subsidiary
has the meaning ascribed to it in the Companies Law.
TTE instruction
Transfer to Escrow (as defined in the CREST Manual).
UK or United Kingdom the United
Kingdom of Great Britain and Northern Ireland.
uncertified or in uncertificated forma 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 or United States the
United States of America, its territories and possessions, any
state of the United States, the District of Columbia, and all other areas
subject to its jurisdiction.
Wider HSQ Group HSQ and
its subsidiary undertakings, associated undertakings and
any other undertaking in which HSQ and/or such undertakings (aggregating their
interests) have a Significant Interest.
Wider Kingswood Group Kingswood and
its subsidiary undertakings, associated
undertakings and any other undertaking in which Kingswood and/or such
undertakings (aggregating their interests) have a Significant Interest.
74
Sterling Financial Print
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