REG - Ricardo PLC Science Group PLC - Response to Science Group plc

RicardoAnnouncement

14/03/2025 15:30

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RNS Number : 7979A  Ricardo PLC  14 March 2025

 

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

Ricardo plc ("Ricardo" or the "Company")

 

Response to Science Group plc ("Science Group")

 

The Board of Ricardo (the "Board") notes the announcement made by Science
Group on 14 March 2025 confirming it holds shares representing approximately
15.2% of Ricardo's entire issued share capital.

The Board announces that it has previously received a written proposal from
Science Group, demanding the following changes to the Board of Ricardo:

·      Replacement of the Company's chairman with an executive chairman
nominated by Science Group;

·      Replacement of the current Chair of the Audit Committee with a
non-executive director also nominated by Science Group; and

·      Resignation of a further (unspecified) non-executive director
from the Board, either in the near term or at the Company's next annual
general meeting.

Science Group has also made clear that, if its demands are not met, it intends
to requisition a general meeting of the Company to seek shareholder support
for the above changes.

Science Group has acquired its shareholding in Ricardo over the last four
weeks at a time when the share price has been at around a 15 year low. The
Board believes that Science Group is opportunistically seeking to take
advantage of the Company's currently low valuation and that its demands to
replace identified Board directors is an attempt to gain control of the
Company without paying a takeover premium.

This unwelcome intervention by Science Group comes at a time when Ricardo is
hard at work on implementing its strategy to simplify its operations and
accelerate its transition to focus on environmental and energy transition
solutions.  The recent acquisition of E3 Advisory and the disposal of Ricardo
Defense demonstrate clear execution against this strategy and we continue to
work on accelerating the next phase of this transformation.  In parallel, the
Company continues to explore all options to improve efficiency and reduce
costs to increase the Company's profitability, building on the progress made
in H1 2024/25. The Board is therefore concerned that Science Group's actions
will inevitably provide an unnecessary distraction from these efforts.

Furthermore, the Board notes that if Science Group's demands were to be met,
the Board of Ricardo may become non-compliant with both provision 11 of the UK
Corporate Governance Code, which requires at least half the Board excluding
the chairman to comprise independent directors, and with provision 9, which
requires that a chairman is independent on appointment.

The Board therefore considers that, for a range of reasons, Science Group's
proposal is contrary to the interests of Ricardo's other shareholders and,
accordingly, unanimously rejects Science Group's demands.

The Board also notes that Science Group adopted similarly aggressive tactics
in connection with its takeover of TP Group plc which completed in 2023. In
that case, Science Group built an initial stake in the target company's
shares, requisitioned a hostile general meeting to replace two directors and,
having taken control, then oversaw a collapse in the company's share price
prior to pursuing a takeover at a price which was approximately 40% lower than
the prevailing share price had been when Science Group announced the
acquisition of its initial stake. In 2019, Science Group also employed similar
tactics at Frontier Smart Technologies Group Limited when it replaced a number
of board directors with its own nominees prior to its subsequent takeover of
the company.

Ricardo shareholders are advised to take no action at this time. A further
announcement will be made in due course, as appropriate.

Mark Clare, Chairman of Ricardo, said:

"The Board considers Science Group's demands to replace 3 directors on the
Board of Ricardo with 2 Science Group appointees to be entirely self-serving
and a backdoor attempt to gain control of the Company without paying a
takeover premium.

"The Board has strong confidence in Ricardo's plan, with record H1 order
intake underpinning the prospects for our Energy and Environment business. The
Board looks forward to realising the value of all the actions we have taken to
focus and grow the Company for the benefit of all Ricardo shareholders.

"The Ricardo Board sees absolutely no merit in the demands made by Science
Group and unanimously urges Ricardo shareholders to join the Board in
rejecting them."

 

 Investor and media relations
 Ricardo plc  Graham Ritchie    Tel 01273 455 611

              Judith Cottrell
 SEC Newgate  Bob Huxford       Tel 020 7680 6882

              Ian Silvera       Ricardo@secnewgate.co.uk (mailto:Ricardo@secnewgate.co.uk)

 

This announcement has been issued by, and is the sole responsibility of
Ricardo plc. This announcement contains inside information as defined under
assimilated Regulation (EU) No. 596/2014 which is part of the laws of the
United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as
amended).

The person responsible for arranging the release of this announcement on
behalf of Ricardo is Harpreet Sagoo (Group General Counsel and Company
Secretary).

 

About Ricardo plc

Ricardo plc is a global strategic, environmental, and engineering consulting
company, listed on the London Stock Exchange. With over 100 years of
engineering excellence and close to 3,000 employees in more than 20 countries,
we provide exceptional levels of expertise in delivering innovative
cross-sector sustainable outcomes to support energy transition and scarce
resources, environmental services, together with safe and smart transport
solutions. Our global team of consultants, environmental specialists,
engineers, and scientists support our customers to solve the most complex and
dynamic challenges to help achieve a safe and sustainable world.
Visit https://www.ricardo.com/en (https://www.ricardo.com/en)

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