REG - Quarto Group Inc - Circ re Proposed Cancellation: Admission of Shares

QuartoAnnouncement

30/11/2023 10:30

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231130:nRSd2237Va&default-theme=true

RNS Number : 2237V  Quarto Group Inc  30 November 2023

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

FOR IMMEDIATE RELEASE

30 November 2023

 

 

 

THE QUARTO GROUP INC.

 

PROPOSED CANCELLATION OF ADMISSION OF THE COMPANY'S COMMON SHARES TO THE PREMIUM SEGMENT OF THE OFFICIAL LIST AND TO TRADING ON THE MAIN MARKET FOR LISTED SECURITIES OF THE LONDON STOCK EXCHANGE

 

The Quarto Group Inc. ("Quarto" or the "Company") today announces:

 

·    the Company's intention to cancel the admission of the Company's
common shares of US$0.10 each to the premium segment of the Official List and
to trading on the Main Market for listed securities of the London Stock
Exchange ("De-listing"), subject to Shareholder Approval, with effect from 18
January 2024; and

 

·    the posting of a circular to Shareholders (the "Circular"), which
contains further information on the De-listing and the effect of the
De-listing on Shareholders and holders of Depository Interests and notice of a
special meeting (the "Special Meeting"), which is to be held at 1 Triptych
Place, Second Floor, London, SE1 9SH, United Kingdom on 14 December 2023 at
12.00 p.m. at which shareholder approval will be sought for the De-listing.

 

The Listing Rules require that, if a company wishes to cancel its listing on
the Official List, it must seek the approval of (i) a majority of not less
than 75 per cent of votes attaching to shares voted on a resolution of
Shareholders (the "Resolution") and (ii) a majority of the votes attaching to
the shares of Independent Shareholders who votes on the Resolution, in each
case voting in person or by proxy. If approved, it is anticipated that the
effective date of the De-listing will be 18 January 2024, being not less than
20 business days from the passing of the Resolution.

 

The Board considers that the De-listing is in the best interests of the
Company and its Shareholders as a whole. Accordingly, the Board unanimously
recommend Shareholders vote in favour of the Resolution.

 

The Company has received irrevocable undertakings to vote in favour of (or
recommend to the registered holder that they vote in favour of) the Resolution
at the Special Meeting and not to accept the Tender Offer in the event that
the Company implements the Tender Offer from certain Shareholders representing
in aggregate 29,612,326 Common Shares, representing in aggregate approximately
72.4% of the Company's issued share capital as at close of business on 28
November 2023.

 

The Board recognises that the effects of the De-listing are significant for
Shareholders and holders of Depository Interests, in particular the loss of
protections afforded by the Listing Rules and the loss of liquidity provided
by the existing listing arrangements. The Board therefore intends to make the
Tender Offer to provide Qualifying Shareholders and holders of Depository
Interests with a means to realise their investment in the Company for cash
after the De-listing has occurred. Further details of the proposed Tender
Offer are set out in the Circular. Shareholders and holders of Depository
Interests should be aware that although as at the date of this announcement it
is the intention of the Board to proceed with the Tender Offer, there can be
no guarantee that the Company will actually make the Tender Offer.

 

Unless otherwise defined herein, capitalised terms have the same meaning as
those defined in the Circular.

 

 

BACKGROUND TO AND REASONS FOR THE DE-LISTING

 

The Directors have conducted a review of the benefits and drawbacks to the
Company, its Shareholders and holders of Depository Interests in relation to
its listing on the Main Market. As part of their review, the Directors
considered the following matters, amongst others:

 

a)   the effects of the De-listing being significant for Shareholders and
holders of Depository Interests, in particular in terms of the loss of the
protections afforded to Shareholders and holders of Depository Interests by
the Listing Rules;

 

b)   the loss of protections given by the Disclosure Guidance and
Transparency Rules ("DTR"); and

 

c)   the loss of liquidity provided by the existing listing arrangements.

 

The Board explored the possibility of transferring the Company's listing to
AIM in the past few years. However, the Board concluded that the benefits of
becoming an unlisted private company at this stage of the Company's
development outweigh the potential benefits of seeking admission to another
market in London.

 

The Directors have considered the strategy for the Company to ensure that it
is in the best position to be able to raise funds and enter into strategic
transactions to develop the business whilst also ensuring the Company
continues to meet its financial commitments and yields a return for
Shareholders and holders of Depository Interests.

 

The Directors unanimously believe that the De-listing is in the best interests
of the Company and its Shareholders (and holders of Depository Interests) as a
whole. In reaching their decision, the Directors have considered the following
key factors, amongst others:

 

1)   the De-listing will result in certain costs savings, plus
administrative and transactional efficiencies for the Company;

 

2)   the Company will gain the flexibility to close future acquisitions more
quickly without having to comply with the Listing Rules;

 

3)   that the Company's Common Shares historically have a low average daily
trading volume, which makes the Company's share price susceptible to
significant fluctuations after trades involving small numbers of shares; and

 

4)   that the Company's Common Shares suffer from limited liquidity and a
low free float of approximately 17%, which limits the benefits that the
Company can gain from accessing capital through the London Stock Exchange.

 

Further details of the factors considered by the Board in reaching its
decision are set out in the Circular.

 

 

PRINCIPAL EFFECTS OF THE DE-LISTING

 

(1)        Trading and liquidity

 

Following the De-listing, the Common Shares will no longer be traded on a
public market or trading facility on any recognised investment exchange. As a
result, Shareholders and holders of Depository Interests will not be able to
trade their Common Shares on the London Stock Exchange and, consequently, the
opportunity for Shareholders and holders of Depository Interests to realise
their investment in the Company will be limited.

 

Following the De-listing, the liquidity and marketability of the Common Shares
may be significantly reduced, and the value of such shares may be adversely
affected as a consequence. It may also be more difficult for Shareholders and
holders of Depository Interests to determine the market value of their
investment in the Company at any given time.

 

As described above, however, if there is sufficient interest from Shareholders
and holders of Depository Interests, it is the current intention of the Board
to make the Tender Offer following the De-listing, which will enable
Shareholders to sell some or all of their shares if they would like to do so.
Furthermore, the Board will consider making arrangements for a matched bargain
facility to be put in place in order to give Shareholders and holders of
Depository Interests the opportunity to trade in the Common Shares after the
De-listing and Tender Offer have completed. However, there are no guarantees
that the Company will proceed with the Tender Offer and/or put in place a
matched bargain facility.

 

(2)        Disclosure and Reporting

 

The Company will no longer be subject to the regulatory and financial
reporting regime applicable to companies whose shares are admitted to the
Official List and to trading on the Main Market including the Listing Rules,
the Disclosure and Transparency Rules, Market Abuse Regulations and the
Corporate Governance Code.

 

To mitigate the loss of protections set out above, after the De-listing has
become effective, the Company will implement certain corporate governance and
disclosure measures as set out below:

 

·    The Board is committed to keeping Shareholders and holders of
Depository Interests informed of key developments in the business, which it
will do by sending the Company's annual report to Shareholders and holders of
Depository Interests by post. Shareholders and holders of Depository Interests
should be aware that there will be no obligation on the Company to include all
of the information required by, or to update the website as required by, the
Listing Rules.

 

·    1010 Printing Limited of the Lion Rock Group is a controlling
shareholder of the Company. The Company and the controlling shareholder shall
enter into a relationship agreement to ensure that the controlling shareholder
does not exert improper influence over the Company and all transactions
between the Company and the controlling shareholder shall be conducted at
arm's length and on market terms and conditions.

 

·    As part of the Lion Rock Group, which is listed on the Hong Kong
Stock Exchange, the Company will provide updates in accordance with the
applicable disclosure requirements of Appendix 16 of the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited and with Hong
Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong
Kong Institute of Certified Public Accountants.

 

(3)        Corporate Governance

 

The Company will no longer be required to comply with the FRC's Corporate
Governance Code or any of the additional corporate governance requirements
applicable to companies admitted to the premium segment of the Official List
of the FCA and to trading on the Main Market for listed securities of the
London Stock Exchange. However, the Directors intend to continue to operate
the Company for the benefit of all Shareholders and holders of Depository
Interests. They also intend to continue to keep Shareholders and holders of
Depository Interests informed of progress and remain committed to high
standards of corporate governance. As such, the Company will hold shareholder
meetings in accordance with statutory requirements and the Company's by-laws.

 

The Company does not currently envisage making any changes to its Board
composition as a consequence of the De-listing.

 

(4)        Taxation

 

The De-listing might have personal taxation consequences for Shareholders and
holders of Depository Interests. Shareholders and holders of Depository
Interests who are in any doubt about their tax position should consult their
own professional independent adviser immediately.

 

(5)        Depository Interests

 

Following the De-listing, those interests in Common Shares held as Depository
Interests will remain in place until further notice.

 

The above considerations are not exhaustive, and Shareholders and holders of
Depository Interests should seek their own independent advice when assessing
the likely impact of De-listing on them.

 

 

SHAREHOLDER CIRCULAR

 

Shareholders are urged to read the Circular as a whole and in its entirety.
The Circular contains further information on the De-Listing and a notice of
Special Meeting.

 

The Circular will be submitted to the National Storage Mechanism and available
shortly at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

 

A copy of this announcement and the Circular will also be available at the
Company's website: https://www.quarto.com/aboutus/investornews.aspx.

 

 

DISCLAIMER

 

Forward-looking statements

 

This announcement contains statements about the Company that are or may be
"forward-looking statements". All statements, other than statements of
historical facts, included in this announcement may be forward-looking
statements. Without limitation, any statements preceded or followed by, or
that include, the words "targets", "plans", "believes", "expects", "aims",
"intends", "will", "may", "should", "anticipates", "estimates", "projects" or
words or terms of similar substance, or the negative thereof, are
forward-looking statements. These forward-looking statements are not
guarantees of future performance and have not been reviewed by the auditors of
the Company. They appear in a number of places throughout this announcement
and include statements regarding the intentions, beliefs and current
expectations of the Company or the Directors concerning, amongst other things,
the results of operations, financial condition, liquidity, prospects, growth
and strategies of the Company and the industry in which the Group operates.

 

These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any
results, performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are based on
numerous assumptions regarding the present and future business strategies of
the Company and the environment in which it will operate in the future.

 

Past performance is not a guarantee of future performance. Investors should
not place undue reliance on such forward-looking statements and, save as is
required by law or regulation, the Company does not undertake any obligation
to update publicly or revise any forward-looking statements (including to
reflect any change in expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based). All
subsequent forward-looking statements attributed to the Company or any persons
acting on its behalf are expressly qualified in their entirety by the
cautionary statement above. All forward-looking statements contained in this
announcement are based on information available to the Directors of the
Company at the date of this announcement, unless some other time is specified
in relation to them, and the posting or receipt of this announcement shall not
give rise to any implication that there has been no change in the facts set
forth herein since such date.

 

Inside information

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(596/2014) ("MAR"). Upon the publication of this announcement via Regulatory
Information Service, this inside information is now considered to be in the
public domain.

 

General

 

This announcement shall not constitute an offer to sell or the solicitation of
an offer to buy the Common Shares or Depository Interests, nor shall there be
any sale of the Common Shares or Depository Interests in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction.

 

 

ENQUIRIES

 

The Quarto Group Inc.

 

Daniel Logan, Group Finance
Director
+44 (0)20 7700 6700

 

Michael Clarke, Company Secretary

 

 

ABOUT QUARTO

 

Quarto creates a wide variety of books and intellectual property products,
with a mission to inspire life's experiences. Produced in many formats for
adults, children and the whole family, our products are visually appealing,
information rich and stimulating.

 

Quarto encompasses a diverse portfolio of imprints and businesses that are
creatively independent and expert in developing long-lasting content across
specific niches of interest.

 

Quarto sells and distributes its products globally in over 50 countries and 40
languages, through a variety of sales channels, partnerships and routes to
market. The group was founded in London in 1976. It is domiciled in the US and
listed on the London Stock Exchange.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  CIRBGBDBXDXDGXG