REG-One Media iP Group Plc: Proposed Fundraise of a minimum of £7.9 million
31/08/2018 07:05
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31 August 2018
One Media IP Group plc (“OMIP” or the “Company”)
Proposed Fundraise of a minimum of £7.9 million and Notice of Extraordinary
General Meeting
Proposed Placing to raise a minimum of £1.9 million and
proposed Issue of up to £6 million in Loan Notes
Introduction
One Media IP Group plc (AIM: OMIP), an 'intellectual property' (IP) owner and
controller of music and video rights, is pleased to announce a proposed
Placing and Subscription to raise a minimum of £1.9 million of new equity
capital at an issue price of 6 pence per new Ordinary Share, and the proposed
issue of up to £6 million of Loan Notes.
The Placing will be conducted by way of an accelerated bookbuild, which will
be launched immediately following this announcement. The total number of New
Ordinary Shares will be determined following the Bookbuild. Panmure Gordon is
acting as sole broker to the Company in connection with the Bookbuild.
Highlights
* Placing – the Placing is being conducted by way of an accelerated
bookbuild exercise, to raise a minimum of £1.9 million.
* Placing Price – The placing price of 6 pence per New Ordinary Share
represents a premium of 240 per cent. to the price of 2.5 pence per Ordinary
Share at which Lord Michael Grade and Ivan Dunleavy first invested in the
Company in December 2017.
* Debt – Debt funding of up to £6 million (gross) in unsecured fixed rate
loan notes is to be provided by BGF. The Loan Notes will be split into three
tranches of £1.9 million, £2.325 million and £1.775 million respectively.
Tranche 1 will be drawn down immediately on Admission. Tranches 2 and 3 will
be available for draw down for a period of 24 months from 30 August 2018,
subject to certain conditions being satisfied, including the granting of
approval to the draw down by BGF’s internal investment committee.
* Use of Proceeds – The Company intends that the net proceeds from the
equity fundraise and the issue of the Loan Notes will be used to acquire music
publishing rights, artist recordings and songwriters’ rights.
*
The Bookbuild is expected to close no later than 4.30 p.m. (London time) on 31
August 2018. The timing of the closing of the Bookbuild and the final number
and allocation of the Placing Shares to be issued at the Placing Price are to
be determined at the discretion of the Company and Panmure Gordon.
* The allotment of the New Ordinary Shares is conditional, inter alia, upon
the Company obtaining approval of the Shareholders at an extraordinary general
meeting of the Company to be convened for 11.00 a.m. on 19 September 2018 to
grant the Directors the authority to allot the New Ordinary Shares and to
dis-apply statutory pre-emption rights which would otherwise apply to such
allotment.
*
Following the close of the Bookbuild, a further announcement will be made
confirming final details of the Placing and the Subscription.
For further information, please contact:
One Media IP Group plc
Ivan Dunleavy, Chairman Michael Infante, Chief Executive +44 (0)175 378 5500
Cairn Financial Advisers LLP (Nominated Adviser)
Liam Murray, Jo Turner +44 (0)20 7213 0880
Panmure Gordon (UK) Limited (Broker)
Andrew Potts, James Stearns +44 (0)20 7886 2500
Luther Pendragon Ltd (Financial PR)
Harry Chathli, Claire Norbury +44 (0)20 7618 9100
This Announcement should be read in its entirety. In particular, you should
read and understand the information provided in the "Important Notices"
section of this Announcement.
Introduction
OMIP is an 'intellectual property' (IP) owner and controller of music and
video rights and a B2B and B2C digital content provider, licensing
intellectual property rights for music and video. It exploits its catalogue of
over 250,000 music tracks and 10,000 hours of video by re-compiling its
content for download, streaming and sublicensing through over 600 territorial
digital music and video stores worldwide. The Company delivers digital music
and video content through aggregators to over 600 global digital stores
including iTunes, Spotify, Amazon, Google, Deezer, Tidal, Audible and YouTube.
The Company’s catalogue of nostalgic music tracks is from a range of genres
spanning soul to classical music and rock to pop and including performances
from over 1,700 diverse artists such as George McCrae, Merle Haggard, Ricky
Valance, Edwin Starr, Evelyn Thomas, Mungo Jerry, Eric Burdon, the Troggs,
Marv Johnson and the Royal Philharmonic Orchestra. The Company looks to
exploit its music tracks and over 10,000 hours of video by recompiling the
content for sale through digital music and video stores. In addition, its
library of content is available for TV shows, movies, adverts and websites
requiring synchronised music. The Company owns all the rights to the Men &
Motors TV shows (originally Granada/ITV) that were aired on British TV between
1996 and 2010. Comprising over 3,400 shows, Men & Motors is available for
viewing on OMIP’s YouTube channel. The Company is looking to rework the
format for digital TV broadcast in the future.
OMIP has a team of full-time creative technicians, all of whom are YouTube
certified, who digitise the content, create the metadata, re-compile and
prepare the digital music and video releases using bespoke in-house developed
software. Additionally, OMIP makes its library of content available for TV
shows, movies, adverts and websites requiring synchronised music. OMIP focuses
on music performed by well-known artists from every genre. Its classical music
library of over 10,000 performances includes the Point Classics catalogue
comprising some of the most renowned masterpieces by the world’s greatest
composers.
Recently OMIP has developed a content discovery and analytical software
service, 'Technical Copyright Analysis Tool' (“TCAT”), which allows record
companies, publishers and law firms to search certain digital stores, such as
iTunes, Apple Music and Spotify, and carry out a forensic digital audit on
behalf of owners to ensure that their music has not been used without
licensing agreements being in place. A major record label and the largest
independent music distributor are now using this service.
A substantial proportion of the Company’s revenues are generated in US
Dollars and as such the Company has a significant exposure to this currency.
Description of the Company’s activities
The Company’s principal activity is the acquisition and exploitation of
intellectual property rights over music, video and spoken word via digital
platforms, and its music content is also licensed (on an ad-hoc basis) for use
in TV and film, advertising, video games and on corporate websites.
Initially, the Company focused on music catalogue acquisition, which later
expanded to video and spoken word as the popularity of these formats and
access to technology grew.
In addition, it has been developing TCAT as an in-house originated SaaS
(Software as a Service) product to license to the major music distributors and
record labels.
The music industry has witnessed a major change as a result of the increased
adoption of streaming services. After a period of decline, sales of recorded
music have returned to growth, principally driven by streaming. With music
streaming set to grow, not only is the Company expected to benefit from sales
of its portfolio of digital content, it is also able to provide a vital
service to copyright owners through TCAT, which can track and monitor where
their music is made available for sale.
Lord Michael Grade and Ivan Dunleavy identified that the Company was set to
benefit from the return to growth of the music industry and, in December 2017,
they made an equity investment in the Company totalling £375,000. In April
2018 they were both appointed to the Board and Ivan Dunleavy became
Non-Executive Chairman of the Board.
Background to and reasons for the Proposed Placing
The Directors have been reviewing options to scale up the business, given
their belief that the music industry will continue to benefit from the growth
generated by streaming services, through the acquisition of music publishing
rights and songwriters’ rights. The impact of streaming is expected to
positively benefit music publishing revenues, which Goldman Sachs believes
will rise from US$5.4 billion in 2015 to US$9.3 billion in 2030.
In order to exploit this opportunity the Directors are seeking to raise a
minimum of £1.9 million of new equity capital, and up to £6 million through
the issue of Loan Notes, to purchase music rights.
New Consultancy Arrangements
Consultancy Agreement with Ninelives
On Admission the Company intends to enter into an agreement with Ninelives,
pursuant to which Ninelives will provide the services of Andrew Michael to the
Company. Andrew will be responsible for identifying potential opportunities
for the Company to acquire new music IP rights catalogues which are being
sold.
Andrew Michael founded Ninelives Capital Limited, which arranges financing
solutions for rights owners, performers and creators of recorded music who are
looking to raise capital from their music IP rights, either by way of sale or
the securing of finance, in 2016. Andrew has over 28 years’ experience in
the banking sector, including having been a member of the Barclays Bank media
team and establishing the Music & Entertainment Division at Investec. At
Investec, he was involved in numerous deals including funding world tours and
events, advancing against future royalties and providing lending facilities to
music publishing companies.
Andrew has a successful track record in offering lending facilities to rights
owners and creators of recorded music. He has extensive contacts across the
music industry, spanning artists, songwriters, managers, lawyers and
accountants, which will be invaluable to the Group going forward.
Under the terms of the consultancy agreement, Ninelives will provide the
Company with a right of first refusal on all music IP rights acquisitions that
Andrew Michael sources. The Company will then have 30 days’ exclusivity to
decide whether or not an acquisition opportunity will be pursued. If the
Company opts not to pursue an opportunity, Andrew and Ninelives will be
permitted to offer the opportunity to other parties, provided that they are
not competitors of the Group.
The Company has agreed that in the event that Andrew Michael identifies a
potential acquisition which the Company subsequently completes, the Company
shall pay a commission to Ninelives which will be determined depending upon
the nature of the catalogue acquired. It has been agreed that a recoupable
advance on commission of £125,000 shall be paid to Ninelives on Admission and
this shall be set off against commissions payable on introduced music IP
rights acquisitions.
The consultancy arrangement will continue for an initial period of six months,
during which time it can only be terminated in certain limited circumstances,
and shall be renewable by mutual agreement. In the event that during this
initial period Ninelives has not earned sufficient commission to cover the
advance paid by the Company, Andrew Michael must continue to present
opportunities to the Company until sufficient commission has been earned. The
agreement contains standard confidentiality and indemnity provisions and is
governed by English law.
In addition, Ninelives has indicated an intention to invest £125,000 as part
of the Subscription. If this participation is confirmed, following Admission
Ninelives will be subject to a 12 month orderly market arrangement and will
agree that for a period of 12 months from Admission, Ninelives will not deal
or otherwise dispose of any of the Ordinary Shares that will be issued to it
other than through Panmure Gordon (or such other broker appointed by the
Company from time to time) and provided that the dealing will not impair an
orderly market in the Ordinary Shares.
Consultancy Agreement with Nicola Horlick
On Admission the Company intends to enter into a consultancy agreement with
Nicola Horlick, pursuant to which Nicola will source acquisition opportunities
for the Company and will also provide investment advice.
Nicola has 35 years’ experience in fund management and establishing
investment businesses. Together with Michael Grade, she was a bidder for
Imagem Music Company (one of the largest owners of music rights), which was
purchased by Concord Bicycle Music in 2017. As Chief Executive Officer of
Bramdean Asset Management, she launched a music rights fund, Resonant, which
funded film scores (including The King’s Speech, Drive and The Woman in
Black) that created royalty revenue streams. This catalogue was sold to
Resonant’s partner, Cutting Edge Music Holdings, in 2015.
Other senior roles Nicola has held include Managing Director of Morgan
Grenfell Investment Management from 1992 to 1997 and Chief Executive Officer
of SG Asset Management UK from 1997 to 2003. She founded Money & Co. in 2013,
which is a P2P lending platform.
Under the terms of the consultancy agreement, Nicola will spend a minimum of
one day per week on matters for the Company and will not be paid a fee for the
services provided to the Company. The agreement will continue unless
terminated by mutual agreement of the parties. Should the Company raise
further equity capital prior to 31 December 2019, Nicola will become entitled
to a bonus of £100,000 otherwise the agreement will terminate without notice.
The agreement is intended to cover the initial phase of investment of the
monies raised from the Placing and the Loan Notes and as further capital is
raised, new terms of engagement are expected to be discussed. The agreement
contains standard confidentiality and indemnity provisions and is governed by
English law.
Nicola has indicated an intention to invest £225,000 as part of the
Subscription.
BOARD RESPONSIBILITIES
Michael Infante, Chief Executive Officer
Michael Infante, founder of OMIP, will continue to oversee the existing
activities as Chief Executive and as a main Board Executive Director as well
as bringing the benefit of his years of experience to the scale up of music IP
rights acquisition activities and, importantly, assisting with driving
incremental sales revenues from the Company's IP assets, both acquired and
created.
Ivan Dunleavy
Following Admission, Ivan Dunleavy’s responsibilities will be changed from
Non-Executive Chairman to Executive Chairman.
Overview of scale up of existing business activities
Acquisition of music publishing rights and songwriters’ rights
The Directors believe that music publishing and songwriters’ rights can be
purchased from individual songwriters and small publishing companies at a
lower multiple of NPS than the reported acquisition prices of some of the
larger music publishing catalogues, giving rise to a possible arbitrage
opportunity. The major rights owners tend to buy libraries and portfolios of
rights rather than rights for individual songs or small portfolios. The buyers
of large portfolios and libraries are often backed by financial institutions.
The recovery that is being seen by the music industry, driven by the growth in
streaming, is believed by the Directors to further strengthen the case for a
buy and build strategy. There is also an opportunity to exploit the music
rights purchased more effectively and to ensure that royalties are being
properly collected. OMIP’s TCAT product is expected to assist in ensuring
that revenues are increased. In addition, the Company’s experience in
deriving revenues from its existing portfolio will be used to identify
opportunities to further grow the revenues from the ownership of these
newly-acquired music rights.
In 2017 the major recording companies (Sony Music, Universal Music Group and
Warner Music Group) had a 58.8 per cent. share of the global music publishing
market. Within the remaining 41.2 per cent. there is a highly fragmented long
tail of ownership of music rights, typically owned by the writer/co-writer,
record producers, record labels and family estates from which the Directors
will seek to acquire such music rights.
The OMIP management team will work with artists’ business managers, personal
managers, accountants and lawyers to identify opportunities to buy music
rights. Through this pro-active approach, the management team believes that
the Company will be able to deploy the debt and equity capital raised quickly
and efficiently.
How music publishing works
Song writing and producing is the act of creating music. Publishing exploits
the musical creation through various revenue outlets. The music
publisher (or publishing company) is responsible for ensuring the
songwriters and composers receive payment when their compositions are used
commercially. The copyrights owned and administered by publishing companies
are one of the most important forms of intellectual property in the music
industry. Publishing companies play a central role in managing this vital
asset. A songwriter or composer “assigns” the copyright of their
composition to a publishing company. In return, the publishing company
licenses compositions, helps monitor where compositions are used,
collects royalties and distributes them to the composers. They also secure
commissions for music and promote existing compositions to recording artists,
film and television.
The creator of a song, the songwriter, owns the “composition” rights. The
songwriter typically, by way of a publisher, grants a license to an artist to
make a recording or a performance of the song. The artist, typically through a
record label, may then, depending on the contractual arrangements in place, be
entitled to a payment for every copy sold of their recording of that song (the
technical term is a phono-record, which covers vinyl, CDs, tapes or
downloads). The recording artist (or a record label) then owns the rights to
the “sound recording” or “master” and also receives payments for every
copy of the recording made. If the songwriter is also the recording artist,
then they will typically receive both of these royalty streams. If another
artist wants to perform a “cover” of the song, the songwriter or the owner
of the composition rights (if they have been sold) will be entitled to payment
for each copy, download or stream of the song. In order to do this, the new
artist, typically through its record label, must procure a mechanical license.
The payments are called the mechanical royalties.
In the US, the royalty rates paid are set by the Copyright Royalty Board
(“CRB”). The CRB was created by the Copyright Royalty and Distribution
Reform Act 2004. When an artist wants to record a song, a statutory license is
created by law, which gives the licensee the right to a compulsory license
with the songwriter being entitled to the statutory rate per copy. However,
the licensee can negotiate a lower rate with the songwriter or the owner of
the composition rights, but in practice the latter is only likely to agree if
the artist is particularly well known and is likely to generate a very high
rate of sales. The CRB confirmed in January 2018 that songwriters and music
publishers’ royalties from on-demand subscription services would increase
during the five-year term between 2018 and 2022 to 15.1 per cent. of revenue,
an increase of up to 43.8 per cent. on the revenues prior to 2018.
As well as mechanical rights, there are also performance and synchronisation
rights that accrue to the songwriter/publisher for the use of music in radio,
playing in public areas, streaming (performance royalties) and movies, TV
shows, commercials, music videos and gaming etc. (synchronisation royalties).
Songwriters sign with a performance rights organisation who collects royalties
from radio stations, bars, restaurants and other venues where the music is
used. In the US, most artists sign with the American Society of Composers,
Authors and Publishers (ASCAP) or Broadcast Music, Inc. (BMI). In the UK, the
equivalent organisation is the PRS for Music.
With regard to digital platforms like iTunes, in most markets the platform
pays the collection societies for the publishing element of each sale and also
to the record company for the recording artist’s share. In markets such as
USA, Mexico and India, the digital platform pays the record company and the
record company then pays the publisher for their share of the sale. Streaming
services like Spotify are responsible for making payments to the
songwriter/publishing company and the artist.
Given the complexity involved in managing music publishing rights, it is not
practical for artists to collect all the revenue due to them directly. They
will, therefore, usually engage a music publishing company to administer their
rights for them. In many cases, where rights are sold, songwriters have
decided to monetise their rights and will sell them for a one-off payment.
The Directors believe that of the money spent by consumers on music
consumption, around 10 per cent. is received by the publisher (which is then
shared with the songwriter). Approximately 60 per cent. is received by the
record label (which is then shared with the artist) and 30 per cent. is
received by either the music platform, ticket seller, promotor or collection
agent depending upon how the music is consumed.
Market activity
Recent rights deals have demonstrated that there is high demand for music
publishing and songwriters’ rights. Recent transactions include:
1.
Roundhill acquisition of the Carlin America publishing catalogue (January
2018)
Roundhill reportedly raised approximately US$175 million in equity financing
from institutional investors and around US$75 million in debt from SunTrust to
fund the acquisition of the Carlin America publishing catalogue for US$245
million. Carlin America's artists include Elvis Presley, AC/DC, Artie
Resnick, Bobby Darin, Faron Young, Hank Ballard, Rudy Clark, Fats Domino
and Billie Holiday.
2. Primary Wave acquisition of a share of Bob Marley’s music
publishing catalogue (January 2018)
Primary Wave, backed by institutional investors including BlackRock, acquired
an 80 per cent. share of two publishing catalogues: Bob Marley’s songs and
Blue Mountain Music, including songs from Marley, Toots and the Maytals, Free,
U2 and the Waterboys, from Island Record’s founder Chris Blackwell for
US$50 million.
3. Concord Bicycle Music acquisition of Imagem music publishing
catalogue (June 2017)
Concord Bicycle Music acquired the Imagem music publishing catalogue which
included the Rodgers & Hammerstein and Boosey & Hawkes music catalogues and
publishing rights for pop songs performed by artists such as Kaiser Chiefs,
Justin Timberlake, Wynton Marsalis, Phil Collins, Genesis, The Temper Trap,
Vampire Weekend, M.I.A. and Daft Punk. Imagem was acquired from Stichting
Pensioenfonds ABP for a reported US$600 million.
4. Kobalt Capital acquisition of Songs Music Publishing's
catalogue (December 2017)
Kobalt Capital acquired Songs Music Publishing's catalogue which included
Lorde’s ‘Royals’, The Weeknd’s ‘Can’t Feel My Face’, ‘The
Hills’ and ‘Starboy’, and Mark Ronson’s ‘Uptown Funk’. Kobalt
Capital also now represents Diplo and Major Lazer. The acquisition was for a
reported US$150 million.
5. Universal Music acquisition of Stiff Records’ publishing
catalogue (December 2017)
Universal’s publishing arm acquired the rights to songs owned by Stiff
Records, as well as the labels ZTT and Perfect Songs, from Trevor Horn, the
producer and former member of ’Video Killed the Radio Star‘ band The
Buggles. Stiff Records was the UK independent label behind acts including
Elvis Costello and Madness.
6. Hipgnosis Song Funds £202 million equity fundraising
Hipgnosis Song Funds Limited listed on the London Stock Exchange raising
approximately £202 million and offering exposure to songs and associated
musical intellectual property rights, which the Directors believe demonstrates
the growing interest in the acquisition of music rights.
Market opportunity
IFPI released its Global Music Report 2018 in April 2018 and reported that the
global recorded music market grew by 8.1 per cent. in 2017, its third
consecutive year of growth since IFPI began tracking the market in 1997. Total
revenues for 2017 were US$17.3 billion.
According to IFPI, streaming remains the main driver of recovering revenues
and, for the first time, has become the single largest revenue source with 176
million users of paid streaming services contributing to year-on-year
streaming growth of 41.1 per cent. Streaming now accounts for 38.4 per cent.
of total recorded music revenue globally and its growth has more than offset a
5.4 per cent. decline in physical revenue and a 20.5 per cent. decline in
download revenue. Total digital income last year accounted for more than half
of all revenue (54 per cent.) for the first time.
According to the British Phonographic Industry’s All About The Music 2018
report, music consumption in the UK in terms of album equivalent sales
increased by 9.5 per cent. in 2017 to 135.1 million. Growth was solely driven
by a 51.5 per cent. increase in the number of tracks streamed on dedicated
audio services such as Spotify, Apple Music, Amazon Unlimited and Deezer.
Track equivalent albums (singles sold divided by 10), physical albums and
digital albums all fell by 24.2 per cent., 9.5 per cent. and 23.4 per cent.
respectively. Recorded music revenues in the UK rose by 10.6 per cent. in
2017. The report noted that UK record labels had seen the highest annual
growth since 1995. Overall, revenues in the UK were almost £840 million,
approaching the level last seen in 2010. Revenues from streaming rose by 41.1
per cent.
Total global recorded music revenues were US$17.3 billion in 2017 up from
US$16.0 billion in 2016. Revenues were split as follows:
Digital
54 per cent.
Physical
30 per cent.
Performance
rights 14 per
cent.
Synchronisation
2 per cent.
The initial wave of technological change in the 1990s resulted in a sharp fall
in music revenues as people were able to access music for free through the
internet. In 1998, consumers spent 7.6 per cent. of their total entertainment
spend on music, but in 2015, this figure was only 4.2 per cent. According to
Nielsen, 93 per cent. of consumers regularly listen to music in the US,
however YouTube estimates only 20 per cent. of consumers currently pay for it.
In 2015, the average spend on music per person per annum in developed markets
was US$15.00 and US$1.00 in emerging markets. However, there is evidence that
the second wave of technological change involving smartphones, smart speakers
and streaming will result in rapid growth in music revenues over the next few
years. Indeed, Goldman Sachs expects global recorded music revenues to reach
US$41 billion by 2030 with subscription streaming accounting for over 68 per
cent. at US$28 billion (US$34 billion including ad-funded streaming revenues).
The growth of streaming has been impressive over the last couple of years. In
the first half of 2016, US consumers streamed 630 million songs per day, a
year-on-year increase of 97 per cent. There are now approximately 57 streaming
platforms in the US and approximately 400 globally. Recent figures suggest
Amazon has around 16 million subscribers through its Amazon Prime Music and
Music Unlimited services, Spotify has around 75 million, Apple Music has
approximately 40 million, Deezer about 6 million and Pandora around 6 million
subscribers (all figures rounded to the nearest million). It is estimated that
streaming revenues grew from US$0.4 billion in 2010 to US$6.6 billion in 2017.
Streaming is most popular with millennials and 4 out of 10 of the most
downloaded apps amongst this age group in 2016 were music apps. In 2016
Spotify estimated 72 per cent. of its US listeners were millennials and
millennials spend more money than the average consumer on music streaming
which means that music is core to most new technology hardware offerings as
manufacturers seek to attract this crucial age group. The Directors believe
that all of this bodes well for the music industry, including music
publishers.
The Recording Industry Association of America (“RIAA”) released its
full-year figures for the US recorded music industry in May 2018. They showed
that there was a 17 per cent. year-on-year rise in recorded-music retail
revenues in 2017 from US$7.5 billion in 2016 to US$8.7 billion in 2017. This
growth was driven by paid subscription revenues, which increased by 63 per
cent. to US$4.0 billion in 2017 and accounted for 47 per cent. of recorded
music revenues in the US during the year. Revenues from ad-supported on-demand
streaming services increased by 35 per cent. to US$659 million in 2017 with
approximately 300 billion songs streamed by users.
Streaming has three sub-categories: subscription services (e.g. paid versions
of Spotify, Tidal, Amazon and Apple Music), digital and customised radio (e.g.
Pandora, Sirius XM and other internet radio providers) and ad-supported
on-demand streaming services (e.g. Spotify, Vevo, YouTube and Sound Cloud). In
2017, US revenues for each of these were as follows:
Subscription services
US$4
million
Digital and customised radio
US$914 million
Ad-supported on-demand
US$659 million
Although ad-supported on-demand streaming is the smallest category in the US,
it is proving to be very popular in territories such as China, allowing the
monetisation of music in areas of the world where previously this was not
typically the case. It is expected that the availability of ad-supported
on-demand streaming will result in dramatic growth for streaming services in
emerging markets. China is expected to be one of the fastest growing streaming
markets over the next decade as ownership of smart phones and smart speakers
continues to rise. In 2015, the ad-supported on-demand streaming market
totalled US$1.5 billion and this is likely to rise to over US$7 billion by
2030. To put these figures in context, the global advertising spend in 2018 is
expected to reach US$572 billion with radio accounting for US$32.6 billion of
this.
The growth of streaming is closely linked to the increase in the number of
smartphone users, but in 2015 only 2 per cent. of smartphone users were
subscribed to a paid streaming service. Goldman Sachs estimates that 9 per
cent. of smartphone users will be using a streaming service by 2030. The
advent of free streaming has resulted in a sharp drop in piracy and it is
estimated that the proportion of internet users accessing unlicensed music
services from desktop-based devices fell globally from 30 per cent. to 20 per
cent. between 2012 and 2015. This trend is expected to continue. Growth may
also be stimulated by the adoption and increased penetration of certain
technologies such as internet-connected cars, the availability of 5G mobile
services and voice-activated devices.
The Directors believe that the growth of streaming is extremely good news for
owners of back catalogues and has revitalised the long tail of music through
the creation and distribution of playlists on online music stores and
streaming services. Playlists allow users to discover new artists, both
nascent artists or established artists who are new to the user, and can
increase the revenues available to owners who might otherwise have found that
following their initial release their song stopped generating revenues as time
went on. The lower price point from streaming services compared with
purchasing a back catalogue in physical or digital format is also helping to
revitalise this music. The average Walmart store in the US sells 21,000
tracks, but over 30 million tracks are available on each of Apple Music and
Spotify. Tracks recorded before 2015 accounted for 55.3 per cent. of all music
streaming in the UK in 2017 with 300 tracks from this period having been
played over 10 million times across the course of the year, which illustrates
the revitalisation of the back catalogue. In addition, catalogue songs (those
released more than 18 months ago) accounted for 70 per cent. of all streaming
volumes in 2015, but only represented 50 per cent. of physical album sales and
downloads. The Directors expect that this trend will be very favourable to the
Company as it builds its music rights catalogue.
The impact of streaming is expected to positively impact music publishing
revenues, which Goldman Sachs believes will rise from US$5.4 billion in 2015
to US$9.3 billion in 2030. Again, the Directors anticipate that this trend
will be beneficial to OMIP as it acquires its music rights catalogue.
Competitors
With regard to the acquisition of music rights, the Directors believe there
are a number of parties who are active in the acquisition of music rights, who
fall into three broad categories based on a typical acquisition size:
*
“Small-scale” competitors including independent publishers and operators
such as Bucks Music Group, Chelsea Music Publishing, Mojo Music & Media,
Notting Hill Music and Silva Screen Records;
*
“Medium-scale” competitors including DownTown Music Publishing, Music
Sales Group and Hipgnosis; and
*
“Large-scale” competitors including BMG, Concord Bicycle Music, Kobalt
Capital, Round Hill, Sony Music, Universal Music Group and Warner Music Group.
Use of proceeds
OMIP intends that the net proceeds from the Placing, the Subscription and the
issue of the Loan Notes will be used to acquire music publishing rights,
artist recordings and songwriters’ rights. The Company may look to raise
further equity capital in the future in order to enable it to undertake
additional acquisitions once the proceeds of this fundraise have been
deployed.
The acquisition pipeline
The Company is considering a number of potential music IP rights acquisitions,
including those that have been introduced by Ninelives. The Directors will
adopt a strict criteria in considering acquisitions, in particular that
acquisitions will be of music rights with an established historical revenue
stream and typically not music written in the last five years. The Directors
will, where appropriate, look to acquire music rights that have opportunities
to further enhance revenues from exploitation of the rights and/or
opportunities from synchronisation usage.
With effect from Admission, the Company is expected to be in a position to
make offers to acquire music publishing rights and/or songwriters’ rights
and the focus of the management team will be on completing a number of
acquisitions in the coming year subject to satisfactory due diligence. It
should be noted that acquisitions are expected to be made in the US as well as
the UK and that this would give rise to additional US Dollar income streams in
the future.
Whilst the Company is in discussions regarding a number of potential
acquisitions, there is no guarantee that any of these potential acquisitions
will be successfully concluded by the Company.
Current trading and prospects
The Company announced its interim results for the period ended 30 April 2018
on 26 July 2018 which provides an update on trading for that period.
The Placing and Subscription
The Company proposes to raise a minimum of £1.9 million by way of a
non-pre-emptive equity Placing and Subscription, and up to £6 million through
the issue of Loan Notes, to purchase music rights. The placing price of 6
pence per New Ordinary Share represents a premium of 140 per cent. to 2.5
pence per Ordinary Share, being the price at which Lord Michael Grade and Ivan
Dunleavy first invested in the Company in December 2017, and a discount of
approximately 42.2 per cent. to the closing price of 10.375 pence on 30 August
2018, being the last practicable trading day prior to the release of this
announcement.
As part of the Company’s market sounding exercise, the Company received an
indication of interest from BGF that they would invest £600,000 (gross) as
part of the Subscription. The Company has also conditionally agreed to grant
options to BGF and details of these options are described below. An offer to
grant options with the same conditions for exercise, downround protection and
adjustment criteria as the options to be granted to BGF has been made by the
Company in respect of an indication of interest received from a cornerstone
investor. It is intended that the options will be granted to the cornerstone
investor at Admission if the indication is confirmed.
Lord Michael Grade and Ivan Dunleavy have each indicated an intention to
invest £37,500 in the Subscription.
Placing
The Placing Shares will be placed with existing and new investors by Panmure
Gordon, acting as agent for the Company, in accordance with the terms of the
Placing Agreement. The exact number of Placing Shares to be placed will be
determined by the Company and Panmure Gordon at the close of the Bookbuild and
announced by the Company shortly thereafter.
The Placing Agreement contains warranties from the Company in favour of
Panmure Gordon in relation to (amongst other things) the Company and its
business. In addition, the Company has agreed to indemnify Panmure Gordon in
relation to certain liabilities they may incur in undertaking the Placing.
Panmure Gordon has the right to terminate the Placing Agreement in certain
circumstances prior to Admission. In particular, Panmure Gordon may terminate
in the event that there has been a breach of any of the warranties or for
force majeure. The Placing will not be underwritten.
The Placing is conditional upon, amongst other things, the Placing Agreement
having become unconditional in all respects, shareholder approval to issue the
Placing Shares being granted at the EGM and Admission. Pursuant to the terms
of the Placing Agreement, Panmure Gordon has agreed to use reasonable
endeavours to procure Placees for the Placing Shares.
The Placing will be effected by way of the Bookbuild to be managed by Panmure
Gordon and will be conducted in accordance with the terms and conditions set
out in Appendix II of this announcement. The Bookbuild will commence with
immediate effect and the book is expected to close no later than 4.30 p.m. BST
today, 31 August 2018, but Panmure Gordon reserves the right to close the book
earlier or later, without further notice. The Company has received non-binding
indications of interest from potential institutional investors for the Placing
during a pre-marketing process.
Subscription
The Subscription Shares will be issued to the Subscribers, at the Subscription
Price, by the Company pursuant to the Subscription Agreements. The
Subscription is conditional upon shareholder approval to issue the
Subscription Shares being granted at the EGM and Admission. The exact number
of Subscription Shares to be placed will be determined by the Company and
Panmure Gordon at the close of the Bookbuild and announced by the Company
shortly thereafter.
New debt facilities
On 30 August 2018, BGF entered into the BGF Subscription Agreement in relation
to the Loan Notes. Under the terms of the BGF Subscription Agreement BGF has
conditionally agreed to subscribe for an initial tranche of £1.9 million Loan
Notes (“Tranche 1”), before costs. Tranche 1 is conditional on, amongst
other things, Admission and will be draw down immediately on satisfaction of
these conditions. The same day, the Company executed the Loan Note Instrument
creating up to £1,900,000 in unsecured fixed rate loan notes.
Pursuant to the terms of the BGF Subscription Agreement, for a period of 24
months from 30 August 2018 the Company shall have the option to draw down an
additional two tranches of Loan Notes – a second tranche of £2.325 million
(“Tranche 2”) and a final tranche of £1.775 million (“Tranche 3”),
before costs – subject to certain conditions being satisfied, including the
granting of approval to the draw down by BGF’s internal investment committee
and the repetition of warranties by the Company. Transaction fees will be
payable on the drawdown of each of the Tranches. The funds raised through the
issue of the Loan Notes will be used to part fund the Company’s music rights
acquisitions.
The Loan Notes will accrue interest at a fixed rate of 7 per cent. per annum
from the date of issue, which in relation to Tranche 1 shall be paid in cash
quarterly commencing on 2 September 2019. The relevant dates for Tranche 2 and
Tranche 3 will be confirmed if and when the relevant Loan Notes are issued.
The Loan Notes issued in Tranche 1 shall be redeemed in four equal tranches
that will be due bi-annually from 31 December 2023. The Loan Notes issued in
Tranches 2 and 3 shall also be redeemed in four equal tranches which will be
due bi-annually commencing on the fifth anniversary of the date of issue. The
Company has the option for early redemption of the Loan Notes, subject to a
minimum redemption payment. The Loan Notes issued in Tranche 1 will become
repayable, along with an early repayment fee, in the event that the Company
has not acquired a music catalogue within 12 months of Admission.
Under the terms of the BGF Subscription Agreement, BGF shall have the right to
appoint an independent non-executive director to the Board for so long it
holds either Loan Notes or 15 per cent. or more of the issued share capital of
the Company. In addition, BGF has certain consent rights in relation to
actions taken by the Company. Customary representations, undertaking and
events of default are set out in the BGF Subscription Agreement.
Pursuant to the terms of the BGF Subscription Agreement, upon the subscription
by BGF to each of Tranches 1, 2 and 3 the Company has agreed to simultaneously
grant options over Ordinary Shares to BGF. The Company shall enter into the
BGF Option Agreement immediately following Admission, at which time the BGF
Options shall be granted. Further details of the BGF Option Agreement are set
out below. Similar option agreements will be entered upon the drawdown of
Tranches 2 and 3.
Option Agreements
BGF Option Agreement
The Company shall enter into the BGF Option Agreement with BGF immediately
following Admission. Pursuant to the BGF Option Agreement, BGF shall have the
right to subscribe for up to £1,250,000 of Ordinary Shares exercisable in
whole or in part at a subscription price equal to the Placing Price per
Ordinary Share. The BGF Options can be exercised at any time from Admission
until the seventh anniversary of the creation of the BGF Options.
The BGF Options have downround protection and in the event that the Company
issues Ordinary Shares at a price less than 6 pence within 24 months of
Admission, the exercise price of the BGF Options shall be adjusted in
accordance with the terms of the BGF Option Agreement. In addition, the option
will be adjusted in certain circumstances, including where the company
conducts a share split or share consolidation. Upon the exercise of the BGF
Options in accordance with the BGF Option Agreement, BGF shall be issued with
Ordinary Shares.
The options to be granted to BGF on the subscription for Tranches 2 and 3,
pursuant to the BGF Subscription Agreement, shall be on identical terms to the
BGF Option Agreement, subject to any necessary adjustments due to the later
date of issue of those options.
Cornerstone Investor
An offer to grant options with the same conditions for exercise, downround
protection and adjustment criteria as the options to be granted to BGF has
been made by the Company in respect of an indication of interest received from
a cornerstone investor. It is intended that the options will be granted to the
cornerstone investor at Admission if the indication is confirmed.
Risks and uncertainties
Investors should consider carefully the following potential risks and
uncertainties and other information in this Announcement before they decide to
invest. An investment in the Ordinary Shares involves risk and investors may
lose part or all of their investment. All the information contained in this
Announcement should be considered in the light of the risk factors set out
below. This list is not comprehensive, but will provide investors with the
main risks involved in investing.
The main risk factors considered by the Directors to be relevant when
considering an investment in the Company are shown below.
Risks relating to operating history, past performance and future performance
Past performance and historical information is not an indication of future
performance. The Company’s actual performance could differ materially from
projections. The Company is operating in a competitive industry where the
commercial risks are high. The Company is looking to expand significantly
through acquisition. Consequently, evaluation of the Company’s prospects
must be considered in the light of the risks, expenses and difficulties
frequently encountered by companies pursuing an acquisition strategy.
Risk relating to income
As a result of the move from download to streaming, the existing business
suffered a fall in revenues and profits in 2016. It experienced a recovery in
2017. The Company remains a small entity within the global music market and
its revenues may be disproportionately affected by any adverse market or wider
economic conditions. Acquisitions will be made based on historical reported
income for the assets that are being purchased. However, there is no guarantee
that this income stream will continue in the future at the same level, or at
all.
Risks relating to the music industry
The music industry experienced a sharp decline in revenues and profitability
over a number of years and has recently seen a recovery. Although the
Directors believe that the recovery will continue, driven by the increasing
popularity of streaming, there is no guarantee that this will continue.
Future funding requirements
Once the proceeds of the Placing and Subscription have been deployed, the
Company will likely look to raise further equity capital to make acquisitions
of additional music rights.
There is no certainty that it will be possible for the Company to raise
addition equity capital at all or on acceptable terms. In addition, the terms
of any such financing may be dilutive to, or otherwise adversely affect,
Shareholders.
Currency risk
Some of the Company’s revenues are generated in jurisdictions outside of the
UK in currencies other than Pounds Sterling. The Company reports its financial
information in Pounds Sterling, with any revenues generated in other
currencies being subject to foreign currency exchange risks due to exchange
rate movements, which may affect the Company’s transaction costs and the
translation of its results.
Brexit risk
On 23 June 2016, the UK held a referendum on its continued membership of the
European Union, which resulted in a vote for the UK to exit the European
Union. There are significant uncertainties as to the terms of such an exit and
the timeframe for doing so in the case that a transition period is agreed with
the other members of the European Union. There are also significant
uncertainties as to the current and future fiscal, monetary and regulatory
landscape in the UK, including but not limited to the regulation of the
financial services industry and questions over how, when and to what extent
the exit will have an impact more generally on the economy of the UK and the
growth of various industries, levels of investor activity and confidence in
market performance.
General risks
An investment in the Company is only suitable for investors capable of
evaluating the risks and merits of such investment and who have sufficient
resources to bear any loss which may result from the investment. A prospective
investor should consider with care whether an investment in the Company is
suitable for them in the light of their personal circumstances and the
financial resources available to the potential investor.
Investment in the Company should not be regarded as short-term in nature.
There can be no guarantee that there will be any appreciation in any
investment in the Company. Investors may not get back the full amount
initially invested.
The price of the Ordinary Shares and the income derived from them can go down
as well as up. Past performance is not necessarily a guide to the future.
Changes in economic conditions including, for example, interest rates, rates
of inflation, industry conditions, competition, political and diplomatic
events and trends, tax laws and other factors can substantially and adversely
affect equity investments and the Group’s prospects. Before making any
investment decision, prospective investors are strongly advised to consult an
independent adviser authorised under FSMA who specialises in advising upon
investments.
Market Abuse Regulation
This Announcement contains inside information for the purposes of Article 7 of
EU Regulation 596 of 2014 (“MAR”). In addition, market soundings (as
defined in MAR) were taken in respect of the Placing with the result that
certain persons became aware of inside information (as defined in MAR), as
permitted by MAR. This inside information is set out in this Announcement.
Therefore, those persons that received inside information in a market sounding
are no longer in possession of such inside information relating to the Company
and its securities.
Circular and Notice of Extraordinary General Meeting
The Company expects to publish a Circular in connection with the Placing and
Subscription, which will contain a notice convening an EGM in order to approve
the matters necessary to implement these actions, in due course. A copy of the
Circular will be made available on the Company’s website at
http://omip.co.uk/investor-relations/.
The EGM is expected to be convened for 11.00 a.m. on 19 September 2018 and
will take place at the offices of the Company’s solicitors, Reed Smith LLP
at The Broadgate Tower, 20 Primrose Street, London EC2A 2RS. The actions that
Shareholders should take to vote on the Resolutions will be set out in the
Circular, along with the recommendation of the Board of Directors of the
Company.
Expected timetable
Anticipated date of posting the Circular 3 September 2018
Last time and date for receipt of Forms of Proxy and CREST Proxy Instructions 11.00 a.m. on 17 September 2018
EGM 11.00 a.m. on 19 September 2018
Admission and dealings in the New Ordinary Shares expected to commence on AIM 8.00 a.m. on 25 September 2018
Where applicable, expected date for CREST accounts to be credited for New Ordinary Shares in uncertificated form 25 September 2018
Where applicable, expected date for despatch of definitive share certificates in respect of New Ordinary Shares in certificated form By 2 October 2018
Settlement and dealings
Application has been made to the London Stock Exchange for the New Ordinary
Shares to be admitted to trading on AIM.
Settlement for the New Ordinary Shares and Admission is expected to take place
on or before 8.00 a.m. on 25 September 2018. The Placing and Subscription are
conditional upon, amongst other things, Admission becoming effective and the
Placing Agreement not being terminated in accordance with its terms.
Definitions
The following definitions apply in this Appendix to this Announcement, and as
the context shall admit, in the Announcement:
Admission admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules
AIM AIM, a market operated by the London Stock Exchange
AIM Rules the AIM Rules for Companies published by the London Stock Exchange
Announcement this announcement, including this appendix and the terms and conditions set out herein
B2B business-to-business
B2C business-to-consumer
BGF BGF Investments LP or BGF Investment Management Limited as the case may be
BGF Option Agreement an option agreement to be entered into between the Company and BGF immediately following Admission, pursuant to which BGF will be granted options to subscribe for up to £1,250,000 Ordinary Shares
BGF Options options granted to BGF pursuant to the terms of the BGF Option Agreement
BGF Subscription Agreement the subscription agreement entered into by the Company and BGF on 30 August 2018, pursuant to which BGF conditionally agrees to subscribe for the Loan Notes
Board the board of directors of the Company
Bookbuild the bookbuild process to be conducted by Panmure Gordon to arrange participation by Placees in the Placing
BST British Summer Time
Cairn Cairn Financial Advisers LLP, a limited liability partnership registered in England and Wales under number OC351689 whose registered office is at Cheyne House Crown Court, 62-63 Cheapside, London, England, EC2V 6AX and who, at the date of this Announcement is appointed as the nominated adviser to the Company
Company One Media IP Group plc, a company registered in England and Wales under number 05799897 whose registered office is at 623 East Props Building, Pinewood Studios Pinewood Road, Iver Heath, Bucks, SL0 0NH
CRB the US Copyright Royalty Board
CREST the computerised settlement system to facilitate transfer of the title to an interest in securities in uncertificated form operated by Euroclear UK & Ireland
Directors the directors of the Company
EEA European Economic Area
EGM the extraordinary general meeting of the Company’s shareholders at 11.00 a.m. on 19 September 2018
Euroclear UK & Ireland Euroclear UK & Ireland Limited
FCA the Financial Conduct Authority
Form of Confirmation the form of confirmation or contract note made between Panmure Gordon and the Placees which incorporate by reference the terms and conditions of the Placing contained in this Announcement
FSMA the Financial Services and Markets Act 2000
Group the Company and its subsidiary undertakings (and “Group” shall be construed accordingly)
Loan Note Instrument the loan note instrument to be executed by the Company creating Tranche 1
Loan Notes the up to £6 million unsecured fixed rate loan notes to be created by the Company
London Stock Exchange London Stock Exchange plc
MAR the EU Market Abuse Regulation (2014/596/EU)
New Ordinary Shares the Placing Shares and the Subscription Shares
Ninelives Ninelives Capital Limited, a company incorporated in England with company number 10146294 and having its registered office at C/O Ojk Ltd, 180 Great Portland Street, London, England, W1W 5QZ
NPS Net Publisher’s Share of revenue
Ordinary Shares ordinary shares of 0.5 pence each in the capital of the Company
Panmure Panmure Gordon (UK) Limited, a company registered in England and Wales under number 04915201 whose registered office is at One New Change, London, EC4M 9AF and who at the date of this Announcement is appointed as broker to the Company
Placees persons who agree, by making an oral and legally binding offer, to subscribe for Placing Shares at the Placing Price
Placing the conditional placing of the Placing Shares by Panmure Gordon on behalf of the Company at the Placing Price, in accordance with the Placing Agreement
Placing Agreement the agreement between the Company and Panmure Gordon relating to the Placing
Placing Price 6 pence per Placing Share
Placing Shares the new Ordinary Shares which are to be issued pursuant to the Placing, conditional, inter alia, on the passing of the Resolutions
Resolutions the resolutions required to be passed by the Shareholders at the EGM to grant authority to, among other things, issue the New Ordinary Shares and the Ordinary Shares underlying the Loan Notes and the Options
Shareholders holders of the Company’s shares from time to time
Subscribers persons who agree, by entering into a Subscription Agreement, to subscribe for Subscription Shares at the Subscription Price
Subscription the conditional subscription for the Subscription Shares, to be issued at the Subscription Price, in accordance with the Subscription Agreements
Subscription Agreement the agreements between the Company and each of the Subscribers relating to the Subscription
Subscription Price means 6 pence per Subscription Share
Subscription Shares the new Ordinary Shares which are to be issued pursuant to the Subscription, conditional, inter alia, on the passing of the Resolutions
TCAT Technical Copyright Analysis Tool
Tranche each of Tranche 1, Tranche 2 and Tranche 3 or any of them, as the context requires
Tranche 1 the initial tranche of £1,900,000 of Loan Notes being subscribed for by BGF at Admission, subject to certain conditions, pursuant to the BGF Subscription Agreement
Tranche 2 the second tranche of £2,325,000 of Loan Notes conditionally subscribed for by BGF
Tranche 3 the final tranche of £1,775,000 of the Loan Notes conditionally subscribed for by BGF
UK or United Kingdom the United Kingdom of Great Britain and Northern Ireland
US or United States the United States of America
No statement in this Announcement is intended to be a profit forecast or
estimate, and no statement in this Announcement should be interpreted to mean
that earnings per Ordinary Share for the current or future financial years
would necessarily match or exceed the historical published earnings per
Ordinary Share.
The price of Ordinary Shares and any income expected from them may go down as
well as up and investors may not get back the full amount invested upon
disposal of the Placing and Subscription Shares. Past performance is no guide
to future performance, and persons needing advice should consult an
independent financial adviser.
The New Ordinary Shares to be issued pursuant to the Placing and Subscription
will not be admitted to trading on any stock exchange other than the AIM
market of the London Stock Exchange.
Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.
By participating in the Placing, each person who is invited to and who chooses
to participate in the Placing (a "Placee") by making an oral and legally
binding offer to acquire Placing Shares will be deemed to have read and
understood this Announcement in its entirety, to be participating, making an
offer and acquiring Placing Shares on the terms and conditions contained
herein and to be providing the representations, warranties, indemnities,
acknowledgements and undertakings contained in the Appendix.
Panmure Gordon, which is authorised and regulated in the UK by the FCA, is
acting solely as broker exclusively for the Company and no one else in
connection with the matters set out in this Announcement. In connection with
such matters, Panmure Gordon will not regard any other person (including any
Placee) as its client, nor will it be responsible to any other person for
providing the protections afforded to clients of Panmure Gordon or for
providing advice in relation any matter referred to herein. Panmure Gordon
does not accept any responsibility whatsoever to any person other than the
Company for the contents of this Announcement or for any statement made, or
purported to be made, by it or on its behalf in connection with the Placing.
Panmure Gordon accordingly disclaims all and any liability whether arising in
tort, contract or otherwise which it might otherwise have in respect of this
Announcement or any such statement. No representation or warranty, express or
implied, is or will be made as to, or in relation to, and no responsibility or
liability is or will be accepted by Panmure Gordon or by any of its affiliates
or agents as to, or in relation to, the accuracy or completeness of this
Announcement or any other written or oral information made available to or
publicly available to any interested party or its advisers, and any liability
therefor is expressly disclaimed.
Cairn is authorised and regulated by the FCA in the United Kingdom. Cairn is
acting solely as nominated adviser exclusively for the Company and no one else
in connection with the matters set out in this Announcement and will not
regard any other person (whether or not a recipient of this Announcement) as
its client nor will it be responsible to anyone other than the Company for
providing the protections afforded to its clients or for providing advice in
relation to the contents of this Announcement. Apart from the responsibilities
and liabilities, if any, which may be imposed on Cairn by FSMA or the
regulatory regime established thereunder, Cairn accepts no responsibility
whatsoever, and makes no representation or warranty, express or implied, for
the contents of this Announcement including its accuracy, completeness or
verification or for any other statement made or purported to be made by it, or
on behalf of it, the Company or any other person, in connection with the
Company and the contents of this Announcement, whether as to the past or the
future. Cairn accordingly disclaims all and any liability whatsoever, whether
arising in tort, contract or otherwise (save as referred to above), which it
might otherwise have in respect of the contents of this Announcement or any
such statement.
Appendix
FORWARD LOOKING STATEMENTS
To the extent that this Announcement contains certain forward-looking
statements with respect to certain of the Company's plans and its current
goals and expectations relating to its future financial condition and
performance, a number of risks and uncertainties exist. The Company cautions
readers that any forward-looking statement is no guarantee of future
performance and that actual results could differ materially from those
contained in the forward-looking statements.
A forward-looking statement can be identified by the fact that it does not
relate only to historical or current facts. Forward-looking statements
sometimes use words such as "aim", "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "predict" or other words of
similar meaning. Examples of forward-looking statements include, amongst
others, statements regarding or which make assumptions in respect of the
planned use of the proceeds of the Placing, the liquidity position of the
Company, the future performance of the Company, future foreign exchange rates,
interest rates and currency controls, the future political and fiscal regimes
in the overseas markets in which the Company operates, the Company's future
financial position, plans and objectives for future operations and any other
statements that are not historical fact.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances, including, but not
limited to, economic and business conditions, the effects of continued
volatility in credit markets, market related risks such as changes in interest
rates and foreign exchange rates, the policies and actions of governmental and
regulatory authorities, changes in legislation, the further development of
standards and interpretations under International Financial Reporting
Standards ("IFRS") applicable to past, current and future periods, evolving
practices with regard to the interpretation and application of standards under
IFRS, the outcome of pending and future litigation or regulatory
investigations, the success of future acquisitions and other strategic
transactions and the impact of competition. A number of these factors are
beyond the Company's control. As a result, the Company's actual future results
may differ materially from the plans, goals, and expectations set forth in the
Company's forward-looking statements.
Any forward-looking statements made in this Announcement by or on behalf of
the Company speak only as of the date they are made. These forward-looking
statements reflect the Company's judgement at the date of this Announcement
and are not intended to give any assurance as to future results. Except as
required by the FCA, the London Stock Exchange, the AIM Rules or applicable
law, the Company expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward looking statements contained
in this Announcement to reflect any changes in the Company's expectations with
regard thereto or any changes in events, conditions or circumstances on which
any such statement is based.
IMPORTANT NOTICES
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT
HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE
ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING
OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND
WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE:
(1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED
INVESTORS AS DEFINED IN ARTICLE 2.1(e) OF DIRECTIVE 2003/71/EC AS AMENDED,
("QUALIFIED INVESTORS"), INCLUDING BY THE 2010 PROSPECTUS DIRECTIVE AMENDING
DIRECTIVE (DIRECTIVE 2010/73/EC) AND TO THE EXTENT IMPLEMENTED IN THE RELEVANT
MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); (2) IF IN THE UNITED KINGDOM,
QUALIFIED INVESTORS AND: (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED
(THE "ORDER") (INVESTMENT PROFESSIONALS); OR (B) ARE PERSONS WHO FALL WITHIN
ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED
ASSOCIATIONS, ETC.) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO
AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON
BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS
ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED ONLY WITH RELEVANT
PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN ONE MEDIA IP GROUP PLC.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY
SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED
STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY,
IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND
SOLD ONLY OUTSIDE OF THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE
MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT. NO
PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR
ELSEWHERE.
THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED
HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED
STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR
ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL.
The distribution of this Announcement and/or the Placing and/or issue of the
Placing Shares in certain jurisdictions may be restricted by law. No action
has been taken by the Company, Cairn, Panmure Gordon or any of their
respective affiliates, agents, directors, officers or employees that would
permit an offer of the Placing Shares or possession or distribution of this
Announcement or any other offering or publicity material relating to such
Placing Shares in any jurisdiction where action for that purpose is
required. Persons into whose possession this Announcement comes are required
by the Company, Cairn and Panmure Gordon to inform themselves about and to
observe any such restrictions.
Neither this Announcement nor any part of it constitutes or forms part of any
offer to issue or sell, or the solicitation of an offer to acquire, purchase
or subscribe for, any securities in the United States (including its
territories and possessions, any state of the United States and the District
of Columbia (the "United States" or the "US")), Australia, Canada, Japan,
New Zealand or the Republic of South Africa or any other jurisdiction in which
the same would be unlawful. No public offering of the Placing Shares is
being made in any such jurisdiction.
All offers of the Placing Shares will be made pursuant to an exemption under
the Prospectus Directive from the requirement to produce a prospectus. In
the United Kingdom, this Announcement is being directed solely at persons in
circumstances in which section 21(1) of FSMA does not apply.
The Placing Shares have not been approved or disapproved by the US Securities
and Exchange Commission, any state securities commission or other regulatory
authority in the United States, nor have any of the foregoing authorities
passed upon or endorsed the merits of the Placing or the accuracy or adequacy
of this Announcement. Any representation to the contrary is a criminal
offence in the United States. The relevant clearances have not been, nor
will they be, obtained from the securities commission of any province or
territory of Canada, no prospectus has been lodged with, or registered by, the
Australian Securities and Investments Commission or the Japanese Ministry of
Finance; the relevant clearances have not been, and will not be, obtained for
the South Africa Reserve Bank or any other applicable body in the Republic of
South Africa in relation to the Placing Shares and the Placing Shares have not
been, nor will they be, registered under or offered in compliance with the
securities laws of any state, province or territory of Australia, Canada,
Japan, New Zealand or the Republic of South Africa. Accordingly, the Placing
Shares may not (unless an exemption under the relevant securities laws is
applicable) be offered, sold, resold or delivered, directly or indirectly, in
or into Australia, Canada, Japan, New Zealand or the Republic of South Africa
or any other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees) who have a
contractual right or other legal obligation to forward a copy of this
Announcement should seek appropriate advice before taking any action.
By participating in the Bookbuild and the Placing, each Placee will be deemed
to have read and understood this Announcement in its entirety, to be
participating, making an offer and acquiring Placing Shares on the terms and
conditions contained herein and to be providing the representations,
warranties, indemnities, acknowledgements and undertakings contained in this
Appendix.
In particular, each such Placee represents, warrants, undertakes, agrees and
acknowledges (amongst other things) to Panmure Gordon and the Company that:
1. it is a Relevant Person and undertakes that it will acquire,
hold, manage or dispose of any Placing Shares that are allocated to it for the
purposes of its business;
2. in the case of a Relevant Person in a member state of the
EEA which has implemented the Prospectus Directive (each, a "Relevant Member
State") who acquires any Placing Shares pursuant to the Placing:
(a) it is a Qualified Investor within the meaning of Article 2(1)(e) of the
Prospectus Directive; and
(b) in the case of any Placing Shares acquired by it as a financial
intermediary, as that term is used in Article 3(2) of the Prospectus
Directive:
(i) the Placing Shares acquired by it in the Placing have not been acquired on
behalf of, nor have they been acquired with a view to their offer or resale
to, persons in any Relevant Member State other than Qualified Investors or in
circumstances in which the prior consent of Panmure Gordon has been given to
the offer or resale; or
(ii) where Placing Shares have been acquired by it on behalf of persons in any
Relevant Member State other than Qualified Investors, the offer of those
Placing Shares to it is not treated under the Prospectus Directive as having
been made to such persons;
3. it is acquiring the Placing Shares for its own account or is
acquiring the Placing Shares for an account with respect to which it exercises
sole investment discretion and has the authority to make and does make the
representations, warranties, indemnities, acknowledgements, undertakings and
agreements contained in this Announcement;
4. it understands (or if acting for the account of another
person, such person has confirmed that such person understands) the resale and
transfer restrictions set out in this Appendix;
5. except as otherwise permitted by the Company and subject to
any available exemptions from applicable securities laws, it (and any person
on whose account it is acting, as referred to in paragraph 4 above) is not a
US Person (as defined in Regulation S) and is located outside the United
States and is acquiring the Placing Shares in an "offshore transaction" as
defined in, and in accordance with, Regulation S;
6. it is aware that Rule 904 of Regulation S regarding
"Offshore Resales" is not applicable to "affiliates" (as defined in Rule 405
of the Securities Act) of the Company; and
7. it has not offered, sold or delivered and will not offer to
sell or deliver any of the Placing Shares to persons within the United States,
directly or indirectly, or to, or for the account or benefit of, US Persons;
neither it, its affiliates, nor any persons acting on its behalf, have engaged
or will engage in any directed selling efforts (as defined in Regulation S)
with respect to the Placing Shares; and it is not taking up the Placing Shares
for resale in or into the United States.
No prospectus
The Placing Shares are being offered to a limited number of specifically
invited persons only and will not be offered in such a way as to require any
prospectus or other offering document to be published. No prospectus or other
offering document has been or will be submitted to be approved by the FCA in
relation to the Placing or the Placing Shares and Placees' commitments will be
made solely on the basis of the information contained in this Announcement,
the announcement of the results of the Placing (the "Result of Placing
Announcement"), and any other announcement made through a regulatory
information service ("RIS") relating to the Placing (together, the "Placing
Announcements") and any information publicly announced through a RIS by or on
behalf of the Company on or prior to the date of this Announcement (the
"Publicly Available Information") and subject to any further terms set forth
in the Form of Confirmation sent to Placees by Panmure Gordon to confirm their
subscription for Placing Shares.
Each Placee, by participating in the Placing, agrees that the content of the
Placing Announcements is exclusively the responsibility of the Company and
confirms that it has neither received nor relied on any information (other
than the Publicly Available Information), representation, warranty or
statement made by or on behalf of Panmure Gordon, Cairn or the Company or any
other person and none of Panmure Gordon, Cairn, the Company nor any other
person acting on such person's behalf nor any of their respective affiliates
has or shall have any liability for any Placee's decision to participate in
the Placing based on any other information, representation, warranty or
statement. Each Placee acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of the Company in
accepting a participation in the Placing. No Placee should consider any
information in this Announcement to be legal, tax or business advice. Nothing
in this paragraph shall exclude the liability of any person for fraudulent
misrepresentation.
Details of the Placing Agreement and the Placing Shares
Panmure Gordon is acting as sole bookrunner in connection with the Placing and
has today entered into the Placing Agreement with the Company under which, on
the terms and subject to the conditions set out in the Placing Agreement,
Panmure Gordon, as agent for and on behalf of the Company, has agreed to use
its reasonable endeavours to procure Placees for the Placing Shares.
The final number of Placing Shares at the Placing Price (as defined below)
will be set out in a share placing supplement agreed between Panmure Gordon
and the Company following the Bookbuild (the "Placing Supplement"). The
Placing is not underwritten by Panmure Gordon or any other party.
The Placing Shares will, when issued, be credited as fully paid up and will
rank pari passu in all respects with the existing Ordinary Shares, including
the right to receive all dividends and other distributions declared, made or
paid on or in respect of the Ordinary Shares after the date of issue of the
Placing Shares, and will on issue be free of all claims, liens, charges,
encumbrances and equities.
Application for listing and admission to trading
Application will be made to the London Stock Exchange (the "Application") for
admission to trading of the Placing Shares on AIM.
It is expected that Admission of the Placing Shares will occur at or before
8.00 a.m. BST on 25 September 2018 (or such later time and/or date, being not
later than 8.00 a.m. BST on 1 October 2018, as the Company and Panmure Gordon
may agree) and that dealings in the Placing Shares will commence at that time.
Bookbuild
Panmure Gordon will today commence the accelerated bookbuilding process to
determine demand for participation in the Placing by Placees. This
Announcement gives details of the terms and conditions of, and the mechanics
of participation in, the Placing. No commissions will be paid to Placees or by
Placees in respect of any Placing Shares.
Participation in, and principal terms of, the Placing
1.
Panmure Gordon is arranging the Placing as bookrunner and placing agent of the
Company.
2.
Participation in the Placing will only be available to persons who may
lawfully be, and are, invited to participate by Panmure Gordon. Panmure Gordon
may itself agree to be a Placee in respect of all or some of the Placing
Shares or may nominate any member of its Company to do so.
3.
The number of Placing Shares will be agreed by Panmure Gordon (in consultation
with the Company) following completion of the Bookbuild. Subject to the
execution of the Placing Supplement, the Placing Price and the number of
Placing Shares to be issued will be announced on an RIS following the
completion of the Bookbuild by way of the Result of Placing Announcement.
4.
To bid in the Bookbuild, prospective Placees should communicate their bid by
telephone to their usual sales contact at Panmure Gordon. Each bid should
state the number of Placing Shares which the prospective Placee wishes to
subscribe for and specify the amount that they are prepared to pay per Placing
Share.
5.
Allocations of the Placing Shares will be determined by Panmure Gordon after
consultation with the Company (the proposed allocations having been supplied
by Panmure Gordon to the Company in advance of such consultation). Subject to
the execution of the Placing Supplement, allocations will be confirmed orally
by Panmure Gordon and a Form of Confirmation will be despatched as soon as
possible thereafter. Panmure Gordon's oral confirmation to such Placee
constitutes an irrevocable legally binding commitment upon such person (who
will at that point become a Placee), in favour of Panmure Gordon and the
Company, to acquire the number of Placing Shares allocated to it and to pay
the Placing Price in respect of such shares on the terms and conditions set
out in this Appendix and in accordance with the Company's articles of
association. Except with Panmure Gordon's consent, such commitment will not be
capable of variation or revocation after the time at which it is submitted.
6.
Each Placee's allocation and commitment will be evidenced by a Form of
Confirmation issued to such Placee by Panmure Gordon. The terms of this
Appendix will be deemed incorporated in that Form of Confirmation.
7.
Irrespective of the time at which a Placee's allocation pursuant to the
Placing is confirmed, settlement for all Placing Shares to be subscribed for
pursuant to the Placing will be required to be made at the same time, on the
basis explained below under "Registration and Settlement".
8.
All obligations under the Bookbuild and the Placing will be subject to
fulfilment or (where applicable) waiver of the conditions referred to below
under "Conditions of the Placing" and to the Placing not having being
terminated on the basis referred to below under "Right to terminate under the
Placing Agreement".
9.
By participating in the Placing, each Placee agrees that its rights and
obligations in respect of the Placing will terminate only in the circumstances
described below and will not be capable of rescission or termination by the
Placee.
10.
To the fullest extent permissible by law, neither Panmure Gordon, nor the
Company, nor any of its affiliates, agents, directors, officers or employees
shall have any responsibility or liability to Placees (or to any other person
whether acting on behalf of a Placee or otherwise). In addition, none of
Panmure Gordon, nor the Company, nor any of their respective affiliates,
agents, directors, officers or employees shall have any responsibility or
liability (including to the extent permissible by law, any fiduciary duties)
in respect of Panmure Gordon’s conduct of the Placing.
11.
The Placing Shares will be issued subject to the terms and conditions of this
Announcement and each Placee's commitment to subscribe for Placing Shares on
the terms set out herein will continue notwithstanding any amendment that may
in future be made to the terms and conditions of the Placing and Placees will
have no right to be consulted or require that their consent be obtained with
respect to the Company's or Panmure Gordon’s conduct of the Placing.
12.
All times and dates in this Announcement may be subject to amendment. Panmure
Gordon shall notify the Placees and any person acting on behalf of the Placees
of any changes.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional
and not having been terminated in accordance with its terms. Panmure
Gordon’s obligations under the Placing Agreement are conditional on
customary conditions, including (amongst others) (the "Conditions"):
1.
the execution and delivery of the Placing Supplement by no later than 6.00
p.m. BST on the date of this Announcement (or such later time and/or date as
Panmure Gordon may otherwise agree with the Company);
2.
publication of the Result of Placing Announcement through an RIS by no later
than 8.00 a.m. BST on the date following this Announcement (or such later time
and/or date as Panmure Gordon may otherwise agree with the Company); and
3.
Admission occurring no later than 8.00 a.m. BST on 25 September 2018 (or such
later time and/or date, not being later than 8.00 a.m. BST on 1 October 2018,
as Panmure Gordon may otherwise agree with the Company) (the "Closing Date").
Panmure Gordon may, at their absolute discretion and upon such terms as they
think fit, waive compliance by the Company with the whole or any part of any
of the Company's obligations in relation to the Conditions or extend the time
or date provided for fulfilment of any such Conditions in respect of all or
any part of the performance thereof. The condition in the Placing Agreement
relating to Admission taking place may not be waived. Any such extension or
waiver will not affect Placees' commitments as set out in this Announcement.
If: (i) any of the Conditions are not fulfilled or (where permitted) waived by
Panmure Gordon in accordance with the Placing Agreement by the relevant time
or date specified (or such later time or date as the Company and Panmure
Gordon may agree); or (ii) the Placing Agreement is terminated in the
circumstances specified below under "Right to terminate under the Placing
Agreement", the Placing will not proceed and the Placees' rights and
obligations hereunder in relation to the Placing Shares shall cease and
terminate at such time and each Placee agrees that no claim can be made by it
or on its behalf (or any person on whose behalf the Placee is acting) in
respect thereof.
By participating in the Placing, each Placee agrees that its rights and
obligations shall cease and terminate only in the circumstances described
above and under “Right to terminate under the Placing Agreement” below and
will not be capable of rescission or termination by it.
Neither Panmure Gordon nor the Company, nor any of their respective
affiliates, agents, directors, officers or employees shall have any liability
to any Placee (or to any other person whether acting on behalf of a Placee or
otherwise) in respect of any decision they may make as to whether or not to
waive or to extend the time and/or date for the satisfaction of any Condition
to the Placing, nor for any decision they may make as to the satisfaction of
any Condition or in respect of the Placing generally, and by participating in
the Placing each Placee agrees that any such decision is within the absolute
discretion of Panmure Gordon.
Right to terminate under the Placing Agreement
Panmure Gordon is entitled, at any time before Admission, to terminate the
Placing Agreement in accordance with its terms in certain circumstances,
including (amongst other things):
1.
where there has been a breach by the Company of any of the warranties
contained in the Placing Agreement or the Company has not complied with its
obligations under the Placing Agreement and has failed to remedy such a breach
(if it is capable of remedy);
2.
if any of the Conditions have: (i) become incapable of satisfaction; or (ii)
not been satisfied before the latest time provided in the Placing Agreement
and have not been waived if capable of being waived by Panmure Gordon; or
3.
the occurrence of a material adverse change or certain force majeure events.
Upon termination, the parties to the Placing Agreement shall be released and
discharged (except for any liability incurred or arising before or in relation
to such termination) from their respective obligations under or pursuant to
the Placing Agreement, subject to certain exceptions.
By participating in the Placing, each Placee agrees that: (i) the exercise by
Panmure Gordon of any right of termination or of any other discretion under
the Placing Agreement shall be within the absolute discretion of Panmure
Gordon and that it need not make any reference to, or consult with, Placees
and that it shall have no liability to Placees whatsoever in connection with
any such exercise or failure to so exercise; and (ii) such Placee’s rights
and obligations terminate only in the circumstances described above under
"Right to terminate under the Placing Agreement" and "Conditions of the
Placing", and its participation will not be capable of rescission or
termination by it after oral confirmation by Panmure Gordon of the
allocation and commitments following the close of the Bookbuild.
Restriction on Further Issue of Shares
The Company has undertaken to Panmure Gordon that it will not, and will
procure that no other member of the Company will, at any time during the
Restricted Period enter into any commitment or agreement, or put itself in a
position where it is obliged to announce that any commitment or agreement may
be entered into, which is or may be material in relation to the issue of the
Placing Shares or of the Placing, or issue any shares or options over shares
or securities convertible or exchangeable into shares or enter into any
agreement or undertaking to do the same without the prior written consent of
Panmure Gordon provided that the foregoing restrictions shall not restrict the
ability of the Company during the Restricted Period to: (a) issue shares where
any person (whether employee, director or neither of the foregoing) exercises
rights over such shares granted to him prior to the date of the Placing
Agreement; or (b) grant options over shares provided that the number of
options outstanding at any given point in time cannot exceed 10 per cent. of
the number of shares then in issue, where such options are granted under an
existing employee share scheme (as such expression is defined in section 1166
Companies Act). For these purposes the "Restricted Period" shall mean the
180 day period commencing on the date of the Placing Agreement.
By participating in the Placing, Placees agree that the exercise by Panmure
Gordon of any power to grant consent to the undertaking by the Company of a
transaction which would otherwise be subject to the restrictive provisions on
further issuance under the Placing Agreement shall be within the absolute
discretion of Panmure Gordon and that it need not make any reference to, or
consult with, Placees and that it shall have no liability to Placees
whatsoever in connection with any such exercise of the power to grant consent.
Registration and Settlement
Settlement of transactions in the Placing Shares (ISIN: GB00B1DRDZ07)
following Admission will take place within the CREST system administered by
Euroclear UK & Ireland Limited, subject to certain exceptions. Panmure Gordon
reserves the right to require settlement for, and delivery of, the Placing
Shares (or any part thereof) to Placees by such other means that they may deem
necessary if delivery or settlement is not possible or practicable within the
CREST system or would not be consistent with the regulatory requirements in
the Placee's jurisdiction.
Following the close of the Bookbuild, each Placee to be allocated Placing
Shares in the Placing will be sent a Form of Confirmation in accordance with
the standing arrangements in place with Panmure Gordon stating the number of
Placing Shares allocated to them at the Placing Price, the aggregate amount
owed by such Placee to Panmure Gordon, relevant settlement information and
settlement instructions. Each Placee agrees that it will do all things
necessary to ensure that delivery and payment is completed in accordance with
the standing CREST or certificated settlement instructions in respect of the
Placing Shares that it has in place with Panmure Gordon.
The Company will deliver the Placing Shares to a CREST account operated by
Panmure Gordon, as agent for the Company, and Panmure Gordon will enter its
delivery instruction into the CREST system. The input to CREST by a Placee
of a matching or acceptance instruction will then allow delivery of the
relevant Placing Shares to that Placee against payment.
It is expected that settlement in respect of the Placing Shares will take
place on 25 September 2018, on a delivery versus payment basis.
A Placee's entitlement to receive any Placing Shares under the Placing will be
conditional on Panmure Gordon's receipt of payment in full for such Placing
Shares by the relevant time to be stated in the Form of Confirmation, or by
such later time and date as Panmure Gordon and the Company may in their
absolute discretion determine, and otherwise in accordance with the Form of
Confirmation's terms.
Interest is chargeable daily on payments not received from Placees on the due
date in accordance with the arrangements set out above, at the rate of two
percentage points above LIBOR as determined by Panmure Gordon.
Each Placee is deemed to agree that, if it does not comply with these
obligations, Panmure Gordon may sell any or all of the Placing Shares
allocated to that Placee on such Placee's behalf and retain from the proceeds,
for Panmure Gordon’s account and benefit, an amount equal to the aggregate
amount owed by the Placee plus any interest due. The relevant Placee will,
however, remain liable for any shortfall below the aggregate amount owed by it
and will be required to bear any stamp duty or stamp duty reserve tax or other
taxes or duties (together with any interest or penalties) imposed in any
jurisdiction which may arise upon the sale of such Placing Shares on such
Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees should ensure that the Form of Confirmation is copied and delivered
immediately to the relevant person within that organisation. Insofar as
Placing Shares are issued in a Placee's name or that of its nominee or in the
name of any person for whom a Placee is contracting as agent or that of a
nominee for such person, such Placing Shares should, subject as provided
below, be so registered free from any liability to UK stamp duty or stamp duty
reserve tax. If there are any circumstances in which any stamp duty or stamp
duty reserve tax or other similar taxes or duties (including any interest and
penalties relating thereto) is payable in respect of the allocation,
allotment, issue, sale, transfer or delivery of the Placing Shares (or, for
the avoidance of doubt, if any stamp duty or stamp duty reserve tax is payable
in connection with any subsequent transfer of or agreement to transfer Placing
Shares), none of Panmure Gordon nor the Company shall be responsible for
payment thereof.
Representations, warranties, undertakings and acknowledgements
By participating in the Placing each Placee (and any person acting on such
Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents,
warrants and agrees (as the case may be) with Panmure Gordon (in their
capacity as bookrunner and placing agent of the Company in respect of the
Placing) and the Company, in each case as a fundamental term of their
application for Placing Shares, the following:
1.
it has read and understood this Announcement in its entirety and its
subscription for Placing Shares is subject to and based upon all the terms,
conditions, representations, warranties, acknowledgements, agreements and
undertakings and other information contained herein and that it has not relied
on, and will not rely on, any information given or any representations,
warranties or statements made at any time by any person in connection with
Admission, the Placing, the Company, the Placing Shares or otherwise, other
than the information contained in this Announcement and the Publicly Available
Information;
2.
its rights and obligations in respect of the Placing will terminate only in
the circumstances referred to in this Announcement and will not be subject to
rescission or termination by the Placee in any circumstances;
3.
the Ordinary Shares are admitted to trading on AIM and that the Company is
therefore required to publish certain business and financial information in
accordance with the rules and practices of AIM, which includes a description
of the Company's business and the Company's financial information, including
balance sheets and income statements, and that it is able to obtain or has
access to such information without undue difficulty, and is able to obtain
access to such information or comparable information concerning any other
publicly traded companies, without undue difficulty;
4.
none of its rights or obligations in respect of the Placing is conditional on
any other person agreeing to subscribe for any Placing Shares under the
Placing and no failure by any other Placee to meet any of its obligations in
respect of the Placing will affect any of your obligations in respect of the
Placing;
5.
neither Panmure Gordon nor any of its affiliates, agents, directors, officers
and/or employees has or shall have any responsibility for any acts or
omissions of the Company or any of the directors of the Company or any other
person (other than Panmure Gordon) in connection with the Placing;
6.
time is of the essence as regards its obligations under this Announcement;
7.
any document that is to be sent to it in connection with the Placing will be
sent at its risk and may be sent to it at any address provided by it to
Panmure Gordon;
8.
no prospectus or other offering document is required under the Prospectus
Directive, nor will one be prepared in connection with the Bookbuild, the
Placing or the Placing Shares and it has not received and will not receive a
prospectus or other offering document in connection with the Bookbuild, the
Placing or the Placing Shares;
9.
in connection with the Placing, Panmure Gordon and any of its affiliates
acting as an investor for its own account may subscribe for Placing Shares in
the Company and in that capacity may retain, purchase or sell for its own
account such Placing Shares in the Company and any securities of the Company
or related investments and may offer or sell such securities or other
investments otherwise than in connection with the Placing. Accordingly,
references in this Announcement to the Placing Shares being issued, offered or
placed should be read as including any issue, offering or placement of such
shares in the Company to Panmure Gordon or any of its affiliates acting in
such capacity;
10.
Panmure Gordon and its affiliates may enter into financing arrangements and
swaps with investors in connection with which Panmure Gordon and any of its
affiliates may from time to time acquire, hold or dispose of such securities
of the Company, including the Placing Shares;
11.
Panmure Gordon does not intend to disclose the extent of any investment or
transactions referred to in paragraphs 9 and 10 above otherwise than in
accordance with any legal or regulatory obligation to do so;
12.
its participation in the Placing is on the basis that:
1.
it is not, and will not be, a client of Panmure Gordonin connection with its
participation in the Placing and that Panmure Gordon has no duties or
responsibilities to it for providing the protections afforded to its clients
or customers or for providing advice in relation to the Placing nor in respect
of any representations, warranties, undertakings or indemnities contained in
the Placing Agreement nor for the exercise or performance of any of its rights
and obligations thereunder including any rights to waive or vary any
conditions or exercise any termination right; and
2.
Panmure Gordon does not owe any fiduciary or other duties to it in respect of
any representations, warranties, undertakings or indemnities in the Placing
Agreement; and
3.
none of Panmure Gordon, nor any of its affiliates, nor any person acting on
behalf of them, is making any recommendations to it nor advising it regarding
the suitability of any transactions it may enter into in connection with the
Placing.
13.
the content of the Placing Announcements and the Publicly Available
Information has been prepared by and is exclusively the responsibility of the
Company and neither Panmure Gordon nor its affiliates, agents, directors,
officers or employees nor any person acting on behalf of any of them is
responsible for or has or shall have any liability for any information,
representation or statement contained in, or omission from, this Announcement,
the Publicly Available Information, the Placing Announcements or otherwise nor
will they be liable for any Placee's decision to participate in the Placing
based on any information, representation, warranty or statement contained in
this Announcement the Publicly Available Information, the Placing
Announcements or otherwise, provided that nothing in this paragraph excludes
the liability of any person for fraudulent misrepresentation made by such
person;
14.
the only information on which it is entitled to rely and on which such Placee
has relied in committing itself to subscribe for Placing Shares is contained
in the Placing Documents or any Publicly Available Information (save that in
the case of Publicly Available Information, a Placee's right to rely on that
information is limited to the right that such Placee would have as a matter of
law in the absence of this paragraph 15(a)), such information being all that
such Placee deems necessary or appropriate and sufficient to make an
investment decision in respect of the Placing Shares;
15. 1.
it has neither received nor relied on any other information given, or
representations, warranties or statements, express or implied, made, by
Panmure Gordon or the Company nor any of their respective affiliates, agents,
directors, officers or employees acting on behalf of any of them (including in
any management presentation delivered in respect of the Bookbuild) with
respect to the Company, the Placing or the Placing Shares or the accuracy,
completeness or adequacy of any information contained in the Placing
Announcements, or the Publicly Available Information or otherwise;
2.
none of Panmure Gordon, nor the Company, nor any of their respective
affiliates, agents, directors, officers or employees or any person acting on
behalf of any of them has provided, nor will provide, it with any material or
information regarding the Placing Shares or the Company or any other person
other than the information in the Placing Announcements or the Publicly
Available Information; nor has it requested Panmure Gordon, the Company, any
of their respective affiliates or any person acting on behalf of any of them
to provide it with any such material or information;
3.
none of Panmure Gordon or the Company will be liable for any Placee's decision
to participate in the Placing based on any other information, representation,
warranty or statement,
provided that nothing in this paragraph 15 excludes the liability of any
person for fraudulent misrepresentation made by that person;
1.
it may not rely, and has not relied, on any investigation that Panmure Gordon,
any of its affiliates or any person acting on their behalf, may have conducted
with respect to the Placing Shares, the terms of the Placing or the Company,
and none of such persons has made any representation, express or implied, with
respect to the Company, the Placing, the Placing Shares or the accuracy,
completeness or adequacy of the information in the Placing Announcements, the
Publicly Available Information or any other information;
2.
in making any decision to subscribe for Placing Shares it:
3.
has such knowledge and experience in financial and business matters to be
capable of evaluating the merits and risks of subscribing for the Placing
Shares;
4.
will not look to Panmure Gordon for all or part of any such loss it may
suffer;
5.
is experienced in investing in securities of this nature in this sector and is
aware that it may be required to bear, and is able to bear, the economic risk
of an investment in the Placing Shares;
6.
is able to sustain a complete loss of an investment in the Placing Shares;
7.
has no need for liquidity with respect to its investment in the Placing
Shares;
8.
has made its own assessment and has satisfied itself concerning the relevant
tax, legal, currency and other economic considerations relevant to its
investment in the Placing Shares; and
9.
has conducted its own due diligence, examination, investigation and assessment
of the Company, the Placing Shares and the terms of the Placing and has
satisfied itself that the information resulting from such investigation is
still current and relied on that investigation for the purposes of its
decision to participate in the Placing;
10.
it is acting as principal only in respect of the Placing or, if it is acting
for any other person, it is:
11.
duly authorised to do so and has full power to make the acknowledgments,
representations and agreements herein on behalf of each such person; and
12.
will remain liable to the Company and/or Panmure Gordon for the performance of
all its obligations as a Placee in respect of the Placing (regardless of the
fact that it is acting for another person);
13.
it and any person acting on its behalf is entitled to subscribe for the
Placing Shares under the laws and regulations of all relevant jurisdictions
that apply to it and that it has fully observed such laws and regulations, has
capacity and authority and is entitled to enter into and perform its
obligations as a subscriber of Placing Shares and will honour such
obligations, and has obtained all such governmental and other guarantees,
permits, authorisations, approvals and consents which may be required
thereunder and complied with all necessary formalities to enable it to commit
to this participation in the Placing and to perform its obligations in
relation thereto (including, without limitation, in the case of any person on
whose behalf it is acting, all necessary consents and authorities to agree to
the terms set out or referred to in this Announcement) and will honour such
obligations and that it has not taken any action or omitted to take any action
which will or may result in Panmure Gordon, the Company or any of their
respective directors, officers, agents, employees or advisers acting in breach
of the legal or regulatory requirements of any jurisdiction in connection with
the Placing;
14.
it irrevocably appoints any duly authorised officer of Panmure Gordon as its
agent for the purpose of executing and delivering to the Company and/or its
registrars any documents on its behalf necessary to enable it to be registered
as the holder of any of the Placing Shares for which it agrees to subscribe
for upon the terms of this Announcement;
15.
the Placing Shares:
1.
have not been and will not be registered or otherwise qualified and that a
prospectus will not be cleared in respect of any of the Placing Shares under
the securities laws or legislation of the United States, Australia, Canada,
Japan, New Zealand or the Republic of South Africa, or any state, province,
territory or jurisdiction thereof;
2.
may not be offered, sold, or delivered or transferred, directly or indirectly,
in or into the above jurisdictions or any jurisdiction (subject to certain
exceptions) in which it would be unlawful to do so and no action has been or
will be taken by any of the Company, Panmure Gordonor any person acting on
behalf of the Company or Panmure Gordon that would, or is intended to, permit
a public offer of the Placing Shares in the United States, Australia, Canada,
Japan, New Zealand or the Republic of South Africa or any country or
jurisdiction, or any state, province, territory or jurisdiction thereof, where
any such action for that purpose is required;
16.
unless otherwise specifically agreed with Panmure Gordon, it is not and at the
time the Placing Shares are subscribed for, neither it nor the beneficial
owner of the Placing Shares will be, a resident of, nor have an address in,
Australia, Japan, New Zealand, the Republic of South Africa or any province or
territory of Canada;
17.
it may be asked to disclose in writing or orally to Panmure Gordon:
18.
if he or she is an individual, his or her nationality; or
19.
if he or she is a discretionary fund manager, the jurisdiction in which the
funds are managed or owned;
20.
it, and any prospective beneficial owner for whose account or benefit it is
purchasing the Placing Shares: (i) is not a US Person (as defined in
Regulation S) and is, and at the time the Placing Shares are subscribed for
will be, located outside the United States and is acquiring the Placing Shares
in an "offshore transaction" as defined in, and in accordance with, Regulation
S; (ii) is aware of the restrictions on the offer and sale of the Placing
Shares pursuant to Regulation S, including that Rule 904 of Regulation S
regarding "Offshore Resales" is not applicable to "affiliates" (as defined in
Rule 405 under the Securities Act) of the Company; and (iii) has not been
offered to purchase or subscribe for Placing Shares by means of any "directed
selling efforts" as defined in Regulation S;
21.
it understands that the Placing Shares have not been, and will not be,
registered under the US Securities Act and may not be offered, sold or resold
in or into or from the United States or to, or for the account or benefit of,
US Persons (as defined in Regulation S) except pursuant to an effective
registration under the US Securities Act, or pursuant to an exemption from the
registration requirements of the US Securities Act and in accordance with
applicable state securities laws;
22.
it will not distribute, forward, transfer or otherwise transmit this
Announcement or any part of it, or any other presentational or other materials
concerning the Placing in or into or from the United States, Australia,
Canada, Japan, New Zealand or the Republic of South Africa (including
electronic copies thereof) to any person, and it has not distributed,
forwarded, transferred or otherwise transmitted any such materials to any such
person;
23.
if it is in:
1.
a member state of the EEA, unless otherwise specifically agreed with Panmure
Gordon in writing, it is a Qualified Investor (as defined in Article 2.1(e) of
the ; or;
2.
the United Kingdom, it is a Qualified Investor and is a person who falls
within (i) Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005, as amended (the "Order") (having
professional experience in matters relating to investments who falls within
the definition of "investment professionals") or (ii) Article 49(2)(a) to (d)
of the Order ("high net worth companies, unincorporated associations, etc.");
24.
it has not offered or sold, and will not offer or sell, any Placing Shares to
persons;
1.
in the EEA except to Qualified Investors or otherwise in circumstances which
have not resulted in and which will not result in an offer to the public in
any member state of the EEA within the meaning of the Prospectus Directive;
2.
in the United Kingdom, except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their business or otherwise in circumstances
which have not resulted and which will not result in an offer to the public in
the United Kingdom within the meaning of section 85(1) of the Financial
Services and Markets Act 2000, as amended ("FSMA");
25.
if a financial intermediary, as that term is used in Article 3(2) of the
Prospectus Directive,:
1.
the Placing Shares subscribed for by it in the Placing will not be acquired on
behalf of, nor have they been acquired with a view to their offer or resale
to, persons in any Relevant Member State other than Qualified Investors or in
circumstances in which the prior consent of Panmure Gordon has been given to
the offer or resale;
2.
where Placing Shares will be acquired by it on behalf of persons in any
Relevant Member State other than Qualified Investors, the offer of those
Placing Shares to it will not be treated under the Prospectus Directive as
having been made to such persons;
26.
it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage
in investment activity (within the meaning of section 21 of FSMA) relating to
the Placing Shares in circumstances in which section 21(1) of FSMA does not
require approval of the communication by an authorised person and it
acknowledges and agrees that the Placing Announcements have not and will not
have been approved by Panmure Gordonin its capacity as an authorised person
under section 21 of the FSMA and it may not therefore be subject to the
controls which would apply if it was made or approved as a financial promotion
by an authorised person;
27.
it has complied and will comply with all applicable laws with respect to
anything done y it or on its behalf in relation to the Placing Shares
(including all applicable provisions in FSMA and Regulation (EU) No. 596/2014
of the European Parliament and of the Council of 16 April 2014 on market abuse
("MAR")) in respect of anything done in, from or otherwise involving, the
United Kingdom). In particular, if it has received any 'inside information'
(for the purposes of MAR or the Criminal Justice Act 1993) in relation to the
Company and its securities in advance of the Placing, it confirms that it has
received such information within the market soundings regime provided for in
article 11 of MAR and associated delegated regulations and it has not:
28.
dealt with securities of the Company;
29.
encouraged or required another person to deal in the securities of the
Company; or
30.
disclosed such information to any person, prior to the information being made
publicly available;
31.
it has complied with its obligations in connection with money laundering and
terrorist financing under the Proceeds of Crime Act 2002 (as amended), the
Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering, Terrorist
Financing and Transfer of Funds (Information on the Payer) Regulations 2017
and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any government agency having jurisdiction in
respect thereof (the "Regulations") and the Money Laundering Sourcebook of the
FCA and, if making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the identity of the
third party as required by the Regulations;
32.
in order to ensure compliance with the Regulations, Panmure Gordon (for itself
and as agent on behalf of the Company) or the Company's registrars may, in
their absolute discretion, require verification of its identity. Pending the
provision to Panmure Gordon or the Company's registrars, as applicable, of
evidence of identity, definitive certificates in respect of the Placing Shares
may be retained at Panmure Gordon absolute discretion or, where appropriate,
delivery of the Placing Shares to it in uncertificated form may be delayed at
Panmure Gordon’s or the Company's registrars', as the case may be, absolute
discretion. If within a reasonable time after a request for verification of
identify Panmure Gordon (for itself and as agent on behalf of the Company) or
the Company's registrars have not received evidence satisfactory to them,
either Panmure Gordon and/or the Company may, at their absolute discretion,
terminate a Placee’s commitment in respect of the Placing, in which event
the monies payable on acceptance of allotment will, if already paid, be
returned without interest to the account of the drawee's bank from which they
were originally debited;
33.
(i) the allocation, allotment, issue and delivery to it, or the person
specified by it for registration as holder, of Placing Shares will not give
rise to a stamp duty or stamp duty reserve tax liability under (or at a rate
determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986
(depositary receipts and clearance services) and that the Placing Shares are
not being acquired in connection with arrangements to issue depositary
receipts or to issue or transfer Placing Shares into a clearance service; (ii)
the person whom it specifies for registration as holder of the Placing Shares
will be: (a) itself; or (b) its nominee, as the case may be; and (iii) it
agrees that none of Panmure Gordon nor the Company will be responsible for any
liability to stamp duty or stamp duty reserve tax or other similar taxes or
duties imposed in any jurisdiction (including interest and penalties relating
thereto) for its failure to comply with this provision ("Indemnified Taxes")
and each Placee and any person acting on behalf of such Placee agrees to
indemnify the Company and Panmure Gordon on an after-tax basis in respect of
any Indemnified Taxes;
34.
it (and any person acting on its behalf) has the funds available to pay for
the Placing Shares for which it has agreed to subscribe and acknowledges and
agrees that it will make payment in respect of the Placing Shares allocated to
it in accordance with this Announcement on the due time and date set out
herein, failing which the relevant Placing Shares may be placed with other
subscribers or sold as Panmure Gordonmay in its sole discretion determine and
without liability to such Placee, who will remain liable for any amount by
which the net proceeds of such sale falls short of the product of the relevant
Placing Price and the number of Placing Shares allocated to it and will be
required to bear any stamp duty, stamp duty reserve tax or other taxes or
duties (together with any interest, fines or penalties) imposed in any
jurisdiction which may arise upon the sale of such Placee's Placing Shares;
35.
any money held in an account with Panmure Gordon on behalf of the Placee
and/or any person acting on behalf of the Placee and/or any person acting on
behalf of the Placee will not be treated as client money within the meaning of
the relevant rules and regulations of the FCA made under the FSMA. Each Placee
acknowledges that the money will not be subject to the protections conferred
by the client money rules: as a consequence this money will not be segregated
from Panmure Gordon's money in accordance with the client money rules and will
be held by it under a banking relationship and not as trustee;
36.
the rights and remedies of the Company and Panmure Gordon under the terms and
conditions in this Announcement are in addition to any rights and remedies
which would otherwise be available to each of them and the exercise or partial
exercise of one will not prevent the exercise of others;
37.
these terms and conditions of the Placing and any agreements entered into by
it pursuant to the terms and conditions of the Placing, and all
non-contractual or other obligations arising out of or in connection with
them, shall be governed by and construed in accordance with the laws of
England and it submits (on behalf of itself and on behalf of any person on
whose behalf it is acting) to the exclusive jurisdiction of the English courts
as regards any claim, dispute or matter arising out of any such contract
(including any dispute regarding the existence, validity or termination of
such contract or relating to any non-contractual or other obligation arising
out of or in connection with such contract), except that enforcement
proceedings in respect of the obligation to make payment for the Placing
Shares (together with any interest chargeable thereon) may be taken by either
the Company or Panmure Gordonin any jurisdiction in which the relevant Placee
is incorporated or in which any of its securities have a quotation on a
recognised stock exchange; and
38.
it agrees to indemnify on an after tax basis and hold the Company, Panmure
Gordon and their respective affiliates, agents, directors, officers and
employees harmless from any and all costs, claims, liabilities and expenses
(including legal fees and expenses) arising out of or in connection with any
breach of the representations, warranties, acknowledgements, agreements and
undertakings given by the Placee (and any person acting on such Placee's
behalf) in this Announcement or incurred by Panmure Gordon, the Company or
each of their respective affiliates, agents, directors, officers or employees
arising from the performance of the Placees' obligations as set out in this
Announcement, and further agrees that the provisions of this Announcement
shall survive after completion of the Placing.
The foregoing representations, warranties, confirmations, acknowledgements,
agreements and undertakings are given for the benefit of the Company as well
as Panmure Gordon and are irrevocable. Panmure Gordon, the Company and their
respective affiliates and others will rely upon the truth and accuracy of the
foregoing representations, warranties, confirmations, acknowledgements,
agreements and undertakings. Each prospective Placee, and any person acting on
behalf of such Placee, irrevocably authorises the Company and Panmure Gordon
to produce this Announcement, pursuant to, in connection with, or as may be
required by any applicable law or regulation, administrative or legal
proceeding or official inquiry with respect to the matters set forth herein.
Taxation
The agreement to allot and issue Placing Shares to Placees (or the persons for
whom Placees are contracting as agent) free of stamp duty and stamp duty
reserve tax in the UK relates only to their allotment and issue to Placees, or
such persons as they nominate as their agents, directly by the Company. Such
agreement assumes that the Placing Shares are not being subscribed for in
connection with arrangements to issue depositary receipts or to transfer the
Placing Shares into a clearance service. If there were any such arrangements,
or the settlement related to other dealings in the Placing Shares, stamp duty
or stamp duty reserve tax may be payable, for which neither the Company nor
Panmure Gordon would be responsible. If this is the case, it would be sensible
for Placees to take their own advice and they should notify Panmure Gordon
accordingly. Places should note that the Company and Panmure Gordon are not
liable to bear any taxes that arise on a sale of Placing Shares subsequent to
their acquisition by Placees. In addition, Placees should also note that they
will be liable for any capital duty, stamp duty and all other stamp, issue,
securities, transfer, registration, documentary or other duties or taxes
(including any interest, fines or penalties relating thereto) payable outside
the UK by them or any other person on the acquisition by them of any Placing
Shares or the agreement by them to subscribe for any Placing Shares and each
Placee, or the Placee's nominee, in respect of whom (or in respect of the
person for whom it is participating in the Placing as an agent or nominee) the
allocation, allotment, issue or delivery of Placing Shares has given rise to
such non-UK stamp, registration, documentary, transfer or similar taxes or
duties undertakes to pay such taxes and duties, including any interest and
penalties (if applicable), forthwith and to indemnify on an after-tax basis
and to hold harmless the Company and Panmure Gordon in the event that either
the Company and/or Panmure Gordon have incurred any such liability to such
taxes or duties.
Information to Distributors
Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II; and (c) local implementing measures
(together, the "MiFID II Product Governance Requirements"), and disclaiming
all and any liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the Placing Shares have
been subject to a product approval process, which has determined that the
Placing Shares are: (i) compatible with an end target market of retail
investors and investors who meet the criteria of professional clients and
eligible counterparties, each as defined in MiFID II; and (ii) eligible for
distribution through all distribution channels as are permitted by MiFID II
(the "Target Market Assessment").
Notwithstanding the Target Market Assessment, Distributors should note that:
the price of the Placing Shares may decline and investors could lose all or
part of their investment; Placing Shares offer no guaranteed income and no
capital protection; and an investment in Placing Shares is compatible only
with investors who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or other
adviser) are capable of evaluating the merits and risks of such an investment
and who have sufficient resources to be able to bear any losses that may
result therefrom. The Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling restrictions in
relation to the Placing. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, Panmure Gordon will only procure investors who meet
the criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute:
(a) an assessment of suitability or appropriateness for the purposes of MiFID
II; or (b) a recommendation to any investor or Company of investors to invest
in, or purchase, or take any other action whatsoever with respect to Placing
Shares.
Each distributor is responsible for undertaking its own target market
assessment in respect of the Placing Shares and determining appropriate
distribution channels.
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