REG - Safestay PLC - Conclusion of Strategic Review

SafestayAnnouncement

02/03/2022 07:00

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RNS Number : 2527D  Safestay PLC  02 March 2022

 

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

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

2 March 2022

 

Safestay plc

("Safestay" or the "Company")

 

Conclusion of Strategic Review and Formal Sale Process

 

On 17 September 2021, the Board of Safestay plc (the "Board") announced that
it had been considering options for the Company with its advisers. The Board
determined to undertake a review of the Company's strategic options (the
"Strategic Review"). These options included, but were not limited to, a sale
of the Company under the framework of a "Formal Sale Process" in accordance
with the City Code on Takeovers and Mergers (the "Takeover Code").

 

During the course of the Strategic Review, a number of constructive
discussions were held with interested parties and several indicative proposals
were received. Further discussions resulted in a non-binding conditional
expression of interest being received from a bona fide third party (the
"Expression of Interest") in cash at a significant premium to the current
share price (the "Expression of Interest Price").

 

Having considered the Expression of Interest, the majority of the Board
concluded that they would have recommended Shareholders accept an offer made
at the Expression of Interest Price. However, following discussions with
certain shareholders of the Company, whilst a number indicated that they would
be prepared to commit to accepting such an offer at the Expression of Interest
Price, it became clear that there was not sufficient shareholder support to
satisfy the third party making an announcement of a firm intention to make an
offer for the Company under Rule 2.7 of the Takeover Code (and the Board has
notified the third party that their Expression of Interest has been rejected).
All discussions with interested parties have now ceased and there are no
ongoing discussions.  As a result, the Board has decided to terminate the
Formal Sale Process with immediate effect.

 

The Board has also decided to end the Strategic Review. The Board believes
strongly in the appeal of the Safestay brand and will continue to explore all
avenues of alternatives and opportunities in what remains a challenging and
unclear post covid environment. In total, trading has been in line with the
Board's expectations since the Company's last guidance issued on 28 September
2021.

 

Safestay's hostels only fully re-opened in July 2021, but the Board's belief
in the brand strength is reinforced by the trading performance of the hostels
post re-opening, delivering significantly more hostel revenues than 2020, and
hostel EBITDA returning to a positive position in the latter months of the
year before trade was impacted once again by travel restrictions and lockdowns
because of the Omicron variant.

 

The Board believes that as travel restrictions are lifted across Europe, the
desire for travel will return, and the key locations and appeal of Safestay
will see a strengthening of occupancy levels across our sites.  Seasonally
the Company is in a quieter period, where historically management has reduced
the operating cost base to align costs to the revenues coming in, and even
more so through the pandemic hangover. Despite the pandemic, revenues for the
first quarter appear to be ahead of the management's prudent expectations and
there are indications that this will continue into the early Spring, but as
the past 23 months have repeatedly demonstrated nothing can be taken for
granted with the global pandemic. A further update on outlook will be provided
when we publish our 2021 results.

 

As the Company has ceased to be in an offer period for the purposes of the
Takeover Code, the disclosure requirements pursuant to Rule 8 of the Takeover
Code are no longer applicable as from the time this announcement is released.

 

Enquiries

Safestay
                                                                                              +44
(0) 20 8815 1600

Larry Lipman, Chairman

 

PricewaterhouseCoopers LLP (Financial and Rule 3 Advisor)      +44 (0) 20
7583 5000

Simon Hampton

Samantha Ward

Jon Raggett

 

Liberum Capital Limited (Nominated Advisor and Broker)
+44 (0) 20 3100 2000

Andrew Godber

Edward Thomas

 

Novella
+44 (0) 20 3151 7008

Tim Robertson

Fergus Young

 

PwC is authorised and regulated in the United Kingdom by the Financial Conduct
Authority ("FCA") and is acting exclusively for the Company and no one else in
connection with the matters referred to in this announcement and will not be
responsible to anyone other than the Company for providing the protections
afforded to the customers of PwC or for providing advice in relation to the
matters described in this announcement.

 

Liberum Capital Limited which is authorised and regulated in the United
Kingdom by the FCA, is acting as nominated adviser and broker to Safestay and
for no one else in connection with any matter referred to in this announcement
and will not be responsible to anyone other than Safestay for providing the
protections afforded to its clients nor for providing advice in relation to
any matters set out in this Announcement.

 

MAR

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014, as implemented into English law
("MAR"). Upon the publication of this announcement via a Regulatory
Information Service, this inside information will be considered to be in the
public domain.

 

Forward-looking Statements

 

This announcement contains statements which are, or may be deemed to be,
"forward-looking statements" which are prospective in nature. All statements
other than statements of historical fact are forward-looking statements. They
are based on current expectations and projections about future events and are
therefore subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied by the
forward-looking statements. Often, but not always, forward-looking statements
can be identified by the use of a date in the future or forward-looking words
such as "plans", "expects", "is expected", "is subject to", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", "believes",
"targets", "aims", "projects" or words or terms of similar substance or the
negative of those terms, as well as variations of such words and phrases or
statements that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. Such statements are
qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations or events that are beyond the Company's
control.

 

Forward-looking statements include statements regarding the intentions,
beliefs or current expectations of the Company concerning, without limitation,
future revenues, economic performance, financial condition, and future
prospects.

 

Such forward-looking statements involve known and unknown risks and
uncertainties that could significantly affect expected results and are based
on certain key assumptions. Many factors may cause the actual results,
performance or achievements of Safestay to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements.

 

Neither Safestay nor any of its Directors, officers or advisers provides any
representation, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this document will
actually occur. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this document.

 

Other than in accordance with its legal or regulatory obligations (including
under the AIM Rules and the Disclosure Guidance and Transparency Rules),
Safestay is not under any obligation and Safestay expressly disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

 

No Offer or Solicitation

 

This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or solicitation of any offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of any securities or the
solicitation of any vote or approval in any jurisdiction. Any offer (if made)
will be made solely by certain offer documentation which will contain the full
terms and conditions of any offer (if made), including details of how such
offer may be accepted. This announcement has been prepared in accordance with
English law and the Code, and information disclosed may not be the same as
that which would have been prepared in accordance with laws outside of the
United Kingdom. The release, distribution or publication of this announcement
in jurisdictions outside of the United Kingdom may be restricted by laws of
the relevant jurisdictions, and therefore persons into whose possession this
announcement comes should inform themselves about, and observe, any such
restrictions. Any failure to comply with the restrictions may constitute a
violation of the securities law of any such jurisdiction.

 

Nothing in this announcement is or should be relied on as a promise or
representation to the future. This announcement includes certain statements,
estimates and projections provided by the Company in relation to the Company's
anticipated future performance. Such statements, estimates and projections are
based on various assumptions made by the Company concerning anticipated
results which may or may not prove to be correct. No representations or
warranties are made by any person as to the accuracy of such statements,
estimates or projections.

 

 

END

 

 

 

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