REG-Superdry plc Superdry plc: Posting of Circular and Notice of General Meeting
21/05/2024 15:15
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Superdry plc (SDRY)
Superdry plc: Posting of Circular and Notice of General Meeting
21-May-2024 / 15:05 GMT/BST
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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION.
NOTHING IN THIS ANNOUNCEMENT SHALL CONSTITUTE OR FORM A PART OF ANY OFFER,
INVITATION OR RECOMMENDATION TO PURCHASE, SELL OR SUBSCRIBE FOR ANY
SECURITIES IN ANY JURISDICTION. NOTHING IN THIS ANNOUNCEMENT SHOULD BE
INTERPRETED AS A TERM OR CONDITION OF THE EQUITY RAISE. NOTHING CONTAINED
IN THIS ANNOUNCEMENT SHALL FORM THE BASIS OF, OR BE RELIED UPON IN
CONNECTION WITH, OR ACT AS AN INDUCEMENT TO ENTER INTO, ANY INVESTMENT
ACTIVITY. ANY DECISION TO PURCHASE, SUBSCRIBE FOR OR OTHERWISE ACQUIRE, OR
TO SELL OR OTHERWISE DISPOSE OF, ANY SECURITIES MENTIONED IN THIS
ANNOUNCEMENT MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED
IN AND INCORPORATED BY REFERENCE INTO THE CIRCULAR. PLEASE SEE THE
IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.
Unless otherwise stated, defined terms used in this announcement have the
meanings given to them in the Circular published by the Company today.
21 May 2024
Superdry plc
(“Superdry” or the “Company”)
Posting of Circular and Notice of General Meeting
Further to the Company’s announcement on 16 April 2024, Superdry announces
today that the shareholder circular (the “Circular”) providing further
details of the proposed Equity Raise (either in the form of the Open Offer
or the Placing) and Delisting and a notice of General Meeting has been
published today, having been approved by the Financial Conduct Authority
(“FCA”). The Circular will be sent to the Company’s Shareholders (other
than those who have elected for website notification only) shortly.
Details in respect of the Restructuring Plan have separately been made
available to impacted creditors.
Together, the Restructuring Plan, the Equity Raise and the Delisting
(together, the “Capital and Restructuring Measures”) constitute a key
package of measures that are needed to avoid the Company entering into
insolvency, allow Superdry to return to a more stable footing, accelerate
its turnaround plan and drive it towards a viable and sustainable future.
Therefore, each element of this package will be inter-conditional upon the
others, such that the package as a whole requires each of the
Restructuring Plan, the Equity Raise and the Delisting to be approved.
The Circular contains a notice of a General Meeting to be held at Unit 60
The Runnings, Cheltenham, Gloucestershire, GL51 9NW on 14 June 2024 at
9.00 a.m., at which Shareholders will be asked to approve the Equity
Raise, the Delisting, certain articles and share capital changes and the
Rule 9 Waiver and Related Party Transaction (collectively the
“Resolutions”) in relation to Mr. Julian Dunkerton’s (Chief Executive
Officer, co-founder and largest Superdry Shareholder) participation in the
Equity Raise.
The Board considers that the Capital and Restructuring Measures and the
passing of each of the Resolutions are in the best interests of
Shareholders as a whole. Accordingly, the Board unanimously recommends
that Shareholders vote in favour of all the Resolutions to be proposed at
the General Meeting.
If Shareholders approve neither all of the Open Offer Resolutions and the
Delisting Resolution nor all of the Placing Resolutions and the Delisting
Resolution, the Capital and Restructuring Measures will not proceed, with
the following consequences:
• the Group will be unable to fund its short-term working capital needs;
and
• the Directors believe that, in such circumstances, the Plan Company,
the Company and certain other companies in the Group will need to
enter into administration or an equivalent insolvency process
immediately. Such a process is highly likely to result in the loss by
Shareholders of all of their investment in the Company.
The Board recommends that Shareholders vote in favour of both the Open
Offer Resolutions and the Placing Resolutions (in addition to the
Delisting Resolution) even if they have a strong preference for one option
over the other as, if there is a split in voting among Shareholders, that
could result in neither the Open Offer Resolutions nor the Placing
Resolutions passing, with the consequences set out above.
Mr. Dunkerton, who held approximately 26.34 per cent. of the Company’s
issued share capital as at the Latest Practicable Date, has irrevocably
undertaken to vote in favour of all of the Resolutions (other than the
Rule 9 Waiver Resolutions and the Related Party Transaction Resolution, on
which he is not entitled to vote and which must be approved by independent
shareholders).
The Independent Directors, who in aggregate held approximately 0.23 per
cent. of the Company’s issued share capital as at the Latest Practicable
Date, have irrevocably undertaken to vote in favour of all of the
Resolutions.
Enquiries
Superdry
Peter Sjӧlander, Chairman +44 (0) 1242 586747
Peel Hunt LLP (Sole Sponsor and Financial Adviser to
Superdry)
George Sellar +44 (0) 207 418 8900
Michael Nicholson
Andrew Clark
Brunswick Group LLP (Financial PR to Superdry)
+44 (0) 207 404 5959
Tim Danaher
N. M. Rothschild & Sons Limited (Financial Adviser to +44 (0) 121 600 5252
Julian Dunkerton)
John Byrne
Charles Fenwick
Background to, and reasons for, the Capital and Restructuring Measures
Superdry previously announced that it has been exploring various material
cost saving options as part of a broader turnaround plan that positions
the Company for long-term success.
On 16 April 2024, in support of that objective, the Company announced that
C-Retail Limited (the “Plan Company”), a wholly-owned subsidiary of the
Company which owns the leasehold portfolio of the Group from which its UK
store retail business trades, is launching the Restructuring Plan, which
will principally involve a restructuring of its UK property estate and
retail cost base. The Restructuring Plan is a key element of the Company’s
turnaround plan that is intended to help the Company deliver its
financially sustainable operating model.
The Company believes that, unless the Restructuring Plan comes into
effect, it will need to enter into administration or an equivalent
insolvency process immediately. This outcome would leave creditors,
including the creditors whose claims would otherwise be compromised by the
Restructuring Plan, materially worse off than they would be under the
Restructuring Plan.
The Restructuring Plan is an important element of the Company’s efforts to
overhaul its operations to make them financially sustainable. The
Company’s efforts also incorporate other measures including, among others:
• returning the underlying retail channel to positive like-for-like
revenue growth through internal initiatives with improved, targeted,
customer-focused product ranges that demonstrate clear value to the
customer and a reallocation of marketing spend that focuses on
targeted content through relevant channels;
• a data-led approach to range construction; testing new product ranges
on the improved e-commerce platform which will provide enhanced
analysis of product performance;
• a separate design team focused on short lead time product, identifying
trends in real time;
• a continued focus on store environment, with a new disciplined
approach to store densities and option fill;
• an improvement in gross margins derived through initiatives such as a
refreshed pricing strategy that demonstrates value at full price,
removing prolonged promotional windows that erode the Brand; and
• a more efficient and focused operating cost base appropriate for the
Group’s target revenue base, benefitting from initiatives including
the Delisting and cross-functional process improvements.
The restructuring efforts are designed to deliver a viable and sustainable
future for the Company, whereby rightsizing the cost base provides a
platform for future growth. In the UK, the Company will focus on its core
profitable store estate alongside a refreshed e-commerce approach that
delivers a more personalised, customer centric experience, with a product
portfolio that emphasises fresh, new designs under a ‘buy now – wear now’
approach; moving away from traditionally segmented seasonal ranges that
prove to be commercially challenging. The Company intends to implement a
pricing strategy that moves away from being ‘discount led’ to help deliver
improved margins. Internationally, the Company intends to significantly
reduce its cost-onerous store footprint over the next three years, whilst
adopting an e-commerce trading strategy similar to the one it will
implement in the UK to help grow internationally in this channel. The
Company also intends to devise and deploy a ‘Go to Market’ strategy by
territory that ensures the right blend of profitable sales channels are
deployed by market, leveraging ‘expert in-market’ partnering arrangements.
This will result in a simplified wholesale business that focusses on key
partners of scale that can deliver cost-effective routes to market.
In implementing these measures, the Company expects among others:
• the closure of certain stores in the United Kingdom as a consequence
of the implementation of the Restructuring Plan, namely the possible
termination of certain leases by landlords, as well as the reduction
in the number of personnel associated with these store closures;
• the reduction in number of administrative and other personnel as a
result of the Delisting as well as the streamlining of management
functions and reporting lines;
• internationally, the reduction of its cost-onerous store footprint
over the next 24 to 36 months, including approximately 25 to 30
European-based stores already identified for closure over the next 12
months (including a small number which have already closed) and a
detailed review of its international footprint to identify additional
stores for closure, or a sale of stores to franchisees or other third
parties, coupled with headcount reduction associated with these store
closures or dispositions;
• the implementation of a new third party e-commerce platform to replace
its existing proprietary system, which will enable a revitalised and
more efficient e-commerce strategy in the UK and internationally; and
• the pursuit of potential deals relating to its Brand and intellectual
property in non-core countries, principally to raise additional
capital to address its working capital needs.
On a medium-to-long term view, whilst recognising that there is a complex
pathway in the interim to navigate in order to deliver this, the Company
is targeting Group revenue of between £350 million and £400 million, a
gross margin slightly ahead of current levels, and mid to high-single
digit EBITDA margin (on a pre-IFRS 16 basis).
The Company continues to face challenging trading conditions and, as
announced on 29 March 2024, recently extended and increased its secondary
lending facilities with Hilco to provide improved liquidity headroom as it
implements its turnaround plan. To further bolster that liquidity and
provide the Company with the appropriate degree of funding certainty to
enter into the Restructuring Plan, the Company has announced the Equity
Raise (which is fully supported and underwritten by Mr. Dunkerton).
In preparing for the Equity Raise, which the Board believes is necessary
for the continued solvency of the Group, the Board has endeavoured to
achieve an outcome which is in the best interests of all Shareholders and
provides the greatest certainty of funds for the Company. The Independent
Directors have engaged extensively with Mr. Dunkerton, as they believe
that his support for the Equity Raise is crucial in order to achieve the
necessary certainty of funds and to pass the Resolutions. Mr. Dunkerton
has been clear with the rest of the Board throughout the process that he
remains deeply committed to Superdry and is highly supportive of the
refreshed strategy and the Capital and Restructuring Measures.
Superdry has also been exploring raising funds through further potential
deals relating to its Brand and intellectual property in non-core
territories. However, discussions in relation to such deals are at an
early stage and Superdry does not have any firm indication of expected
deal value or timetable (and therefore effect on liquidity). As such, the
Board considers it unlikely that any such deals could be negotiated and
completed in the requisite timeframes.
Given the material changes to the Company’s business envisioned by the
measures described above the Company considers it best to implement these
changes away from the heightened exposure of public markets. In addition,
the Company believes that it can achieve significant annual cost savings
from the Delisting that will contribute to delivering its operating model.
Interaction between Restructuring Plan, the Equity Raise and the Delisting
Each of the Restructuring Plan, Equity Raise and Delisting is
inter-conditional upon the others, such that the package as a whole
requires each of the Restructuring Plan, Equity Raise and Delisting to be
approved. Should these measures therefore not be approved and complete in
the timeframe as anticipated, the Directors believe that the Plan Company,
the Company and certain other companies in the Group will need to enter
into administration or an equivalent insolvency process immediately. Such
a process is highly likely to result in the loss by Shareholders of all of
their investment in the Company.
If Shareholders approve either all of the Open Offer Resolutions and the
Delisting Resolution or all of the Placing Resolutions and the Delisting
Resolution (or if Shareholders approve all of the Open Offer Resolutions,
all of the Placing Resolutions and the Delisting Resolution and the Board
has determined which of the Open Offer or the Placing to implement), and
if the Group’s creditors approve the Restructuring Plan, the Company will
apply to the Court for the sanctioning of the Restructuring Plan pursuant
to section 901F of the Companies Act.
Following the sanctioning of the Restructuring Plan by the Court, the
Company will take the steps necessary for the Restructuring Plan to become
effective in accordance with its terms.
Shareholders should note that if any of the above steps do not occur (in
particular, if Shareholders do not approve either all of the Open Offer
Resolutions and the Delisting Resolution or all of the Placing Resolutions
and the Delisting Resolution), the Restructuring Plan will not become
effective and the Directors believe that, in such circumstances, the Plan
Company, the Company and certain other companies in the Group will need to
enter into administration or an equivalent insolvency process immediately.
Such a process is highly likely to result in the loss by Shareholders of
all of their investment in the Company.
Summary of the Restructuring Plan
The Restructuring Plan will principally involve and facilitate the
compromise and amendment of the Plan Company’s UK leasehold obligations to
reduce losses and property-related (including rent) liabilities. The
Restructuring Plan will also involve the compromise of the Plan Company’s
business rates liabilities owed to local authorities and amendments to the
Group’s debt facility agreements with BB Funding (GBP) S.à r.l. (“Bantry
Bay”) and HUK 128 Limited (“Hilco”).
A restructuring plan is a formal procedure under Part 26A of the Companies
Act 2006 for a company in financial difficulties, that are affecting its
ability to carry on as a going concern, to agree with its creditors a
compromise or arrangement in respect of its debts owed to those creditors.
On 28 March 2024, the Group’s debt facility agreement with Hilco was
amended to provide for two incremental facilities for an aggregate amount
of £20 million, including a seasonal incremental facility of up to £10
million (the “Seasonal Hilco Incremental Facility”). This seasonal
facility is conditional upon Hilco being satisfied that sufficient
progress has been made by the Plan Company in relation to the
implementation of cost saving measures, including the Restructuring Plan
(the “Seasonal Hilco Drawdown Condition”).
The Restructuring Plan, once completed, is expected to result in:
• rent reductions on 39 UK sites;
• the extension of the maturity date of loans made under the Group’s
debt facility agreements with Bantry Bay and Hilco;
• confirmation from Hilco that the Seasonal Hilco Drawdown Condition to
making the seasonal incremental facility described above have been
satisfied; and
• material cash savings from rent and business rates compromises over
the three-year period of the Restructuring Plan.
The Company, however, does expect that its UK retail footprint will be
reduced as a result of landlords terminating certain leases under which
the Group, following the implementation of the Restructuring Plan, is no
longer required to pay rent or is able to pay significantly reduced rent.
The Restructuring Plan is conditional on the Company receiving the
proceeds of the Equity Raise to help ensure that the Company has the
necessary liquidity headroom to deliver its turnaround plan. The Company
has consulted with Bantry Bay and Hilco, who have consented to the launch
of the Restructuring Plan and remain supportive of the Company.
The launch of the Restructuring Plan is not expected to affect the
ordinary course operations of Superdry and in particular:
• the Group’s suppliers, employees and landlords of sites outside of the
UK will not be affected. Separately, the Company does expect to
separately reduce in its international store footprint, together with
headcount reduction associated with such store closures or
dispositions; and
• except for the creditors compromised by the Restructuring Plan (which
principally comprise landlords of UK sites, rating authorities, Bantry
Bay and Hilco), no other creditors’ claims (including suppliers to the
Group) will be affected.
The process to implement the Restructuring Plan is expected to complete in
June 2024 with the sanction hearing for the Restructuring Plan expected to
be held on 17 and 18 June 2024.
Equity Raise
As set out in the Company’s announcement on 16 April 2024, the Equity
Raise will comprise either an Open Offer raising gross proceeds of
£6,864,595.85 or a Placing raising gross proceeds of £10,000,000. The
Company will implement only one of the Open Offer or Placing, but not both
(even if all of the Resolutions are passed by Shareholders).
If all of the Resolutions are passed, the Board will, in consultation with
the Sponsor and Mr. Dunkerton, determine, by way of Board resolution,
which of the Open Offer or the Placing to implement (having due regard to
their statutory and fiduciary duties as Directors) and an announcement of
that determination will be made through an RIS. Such announcement is
expected to be made at the same time as the announcement of the results of
the General Meeting. In making such determination, the factors that the
Board will take into account include the level of support for the relevant
Resolutions, Qualifying Shareholder participation in the Open Offer and
the Company’s need for capital.
The Open Offer would comprise the issue of 686,459,585 New Open Offer
Shares at £0.01 each (the “Open Offer Issue Price”) and be open to
Qualifying Shareholders, whilst the Placing would comprise the issue of
200,000,000 New Placing Shares at £0.05 each (the “Placing Issue Price”)
exclusively to Mr. Dunkerton. The Open Offer Issue Price represents a
discount of 87.5 per cent. to the Closing Price. The Placing Issue Price
represents a discount of 37.5 per cent. to the Closing Price.
Under the Open Offer, Qualifying Shareholders have the opportunity to
subscribe for New Open Offer Shares at the Open Offer Issue Price, payable
in full on application and free of expenses, pro rata to their existing
shareholdings, on the following basis:
6.92146705 New Open Offer Shares for every one Existing Ordinary Share
held by them and registered in their names at the Record Date. Fractions
of Ordinary Shares will not be allotted and issued and each Qualifying
Shareholder’s entitlement under the Open Offer will be rounded down to the
nearest whole number. Fractional entitlements to New Open Offer Shares
will be rounded down to the nearest number of New Open Offer Shares.
If the Company implements the Open Offer, Mr. Dunkerton has, subject to
certain conditions, irrevocably agreed to subscribe for all of the New
Open Offer Shares (subject to clawback to satisfy valid applications made
by Qualifying Shareholders under the Open Offer). Therefore, all New Open
Offer Shares not taken up by Qualifying Shareholders under the Open Offer
will be taken up by Mr. Dunkerton.
If the Company implements the Placing, Mr. Dunkerton has, subject to
certain conditions, irrevocably agreed to subscribe for all of the New
Placing Shares.
Each of the Open Offer and the Placing are conditional on, inter alia, the
Restructuring Plan having been sanctioned by the Court, the passing of the
relevant Resolutions (in each case without amendment) and the Delisting
having occurred.
Upon completion of the Open Offer, the Company’s Enlarged Share Capital
would comprise approximately 785,637,921 New Ordinary Shares, each
carrying voting rights. Alternatively, upon completion of the Placing, the
Company’s Enlarged Share Capital would comprise approximately 299,178,336
Ordinary Shares, each carrying voting rights.
Further information on the Placing and Open Offer and the terms and
conditions on which they are made (as applicable), including the procedure
for application and payment relating to the Open Offer, are set out in the
Circular.
Use of proceeds of the Equity Raise
On completion of the Equity Raise, the Company expects to receive gross
proceeds of £6,864,595.85 (in the case of the Open Offer) or £10,000,000
(in the case of the Placing).
The net proceeds from the Equity Raise, which are expected to be
£4,914,595.85 in the case of the Open Offer or £8,050,000 in the case of
the Placing, will be used for general working capital purposes.
Delisting
Pursuant to the Delisting, the Company is seeking the proposed
cancellation of the listing of the Company’s Existing Ordinary Shares on
the premium listing segment of the Official List and their trading on the
London Stock Exchange’s Main Market.
As a condition to either the Open Offer or the Placing (as the case may
be) completing, the Delisting must have occurred. Furthermore, the Company
will not be making an application for Admission in respect of either the
New Open Offer Shares (which would be issued if the Open Offer completes)
or the New Placing Shares (which would be issued if the Placing
completes). As a result, any New Open Offer Shares or New Placing Shares
issued by the Company will be issued at a time when the Company’s shares
are no longer publicly traded, which may affect the ability of certain
Shareholders to continue holding their shares in the Company.
Shareholder protections following the Delisting
Following Delisting, the following key Shareholder protections will apply:
• the Board commits itself to keep Shareholders informed by updating the
Company website with audited annual results and, for at least the
first 12 months following the Delisting, consolidated unaudited half
yearly results and otherwise by complying with the reporting framework
under the Companies Act;
• the Board currently intends to continue to maintain the Company’s
status as a public company following Delisting, which will afford
Shareholders greater protections following the Delisting than if the
Board proposed to re-register the Company as a private company;
• following the Delisting, Shareholders will continue to be afforded the
protections of the Takeover Code; and
• to facilitate future Shareholder transactions in the Company’s
Ordinary Shares (or New Ordinary Shares, if applicable), the Company
has appointed JP Jenkins to provide a matched bargain facility, which
will be available upon the date of Delisting.
Further details are set out in the Circular.
Corporate Governance
Following the Delisting, the Company will no longer be subject to the
Financial Reporting Council’s UK Corporate Governance Code.
The current Non-Executive Directors propose to resign upon the Delisting.
However, it is proposed that changes to the Board will be made such that,
as soon as reasonably practicable following Delisting and, in any event,
within three months of Delisting, the Board will comprise Mr. Dunkerton as
Chief Executive Officer, a Chief Financial Officer with relevant
experience (including turnaround situations), an independent chair and two
further independent non-executive directors. Between the independent
directors and the chair, at least one will have retail and brand expertise
and another will have relevant and recent financial experience.
Working capital
While, taking into account the effect of and the net proceeds from the
Capital and Restructuring Measures and the bank facilities available to
the Group, in the opinion of the Company, on the basis of a reasonable
worst-case scenario, the working capital available to the Group is not
sufficient for the Group’s present requirements, that is for at least the
next 12 months from the date of the Circular, the Directors consider there
are actions available to them to seek to mitigate the liquidity shortfall.
In light of, and subject to, those mitigating actions, the Directors have
a reasonable expectation that the Group will have sufficient working
capital for at least the next 12 months. Further details are set out in
the Circular.
Other matters
The Equity Raise and Mr. Dunkerton’s participation in it will require
Shareholders to consider and, if thought fit, approve a number of other
matters, including approving Mr. Dunkerton’s participation in the Equity
Raise for the purposes of Rule 9 of the Takeover Code and (in respect of
the Placing only) Chapter 11 of the Listing Rules.
Rule 9 Waiver
Mr. Dunkerton and persons acting in concert with him were, in aggregate,
interested in 26,160,378 Existing Ordinary Shares, representing
approximately 26.4 per cent. of the Company’s issued share capital, as at
the Latest Practicable Date.
As a result of his participation in the Open Offer or the Placing (as
applicable), the aggregate interest of Mr. Dunkerton and his Concert Party
in the Company’s voting rights could increase to approximately 90.7 per
cent. (in the case of the Open Offer if none of the other Qualifying
Shareholders participate in the Open Offer) or to approximately 75.8 per
cent. (in the case of the Placing), based on certain assumptions set out
in the Circular. Those assumptions include, among others, that: (i) in
relation to the Open Offer, Mr. Dunkerton subscribes for 686,459,585 New
Open Offer Shares; and (ii) in relation to the Placing, Mr. Dunkerton
subscribes for 200,000,000 New Placing Shares.
Ordinarily, under Rule 9 of the Takeover Code, this would result in Mr.
Dunkerton being obliged to make a mandatory offer to acquire all of the
issued Ordinary Shares not already owned by him and any persons acting in
concert with him in cash. However, the Takeover Panel has agreed to waive
this obligation, subject to approval by the Independent Rule 9
Shareholders of the relevant Rule 9 Waiver Resolution on a poll (the “Rule
9 Waiver”). Accordingly, the Rule 9 Waiver Resolutions will be proposed
at the General Meeting. As required by the Takeover Code, Mr. Dunkerton
will not vote on the Rule 9 Waiver Resolutions and he has undertaken to
procure that any persons acting in concert with him will not vote on the
Rule 9 Waiver Resolutions.
If Qualifying Shareholders (including Mr. Dunkerton) take up 75 per cent.
of their Open Offer Entitlement, Mr. Dunkerton and persons acting in
concert with him would, in aggregate, be interested in 334,131,357 New
Ordinary Shares representing approximately 42.5 per cent. of the voting
rights of the Enlarged Share Capital based on the assumptions set out
above (other than as to the number of New Open Offer Shares for which Mr.
Dunkerton will subscribe).
If all Qualifying Shareholders (including Mr. Dunkerton) take up all of
their Open Offer Entitlements (based on the assumptions set out above
(other than as to the number of New Open Offer Shares for which Mr
Dunkerton will subscribe)), Mr. Dunkerton and persons acting in concert
with him would, in aggregate, be interested in 207,783,509 New Ordinary
Shares representing approximately 26.4 per cent. of the voting rights of
the Enlarged Share Capital.
If the Open Offer or the Placing (as applicable) completes, and if the
Restructuring Plan becomes effective in accordance with its terms:
• Mr. Dunkerton and persons acting in concert with him will hold shares
carrying 90.7 per cent. (in the case of the Open Offer assuming none
of the other Qualifying Shareholders take up their Open Offer
Entitlement) or 75.8 per cent. (in the case of the Placing) of the
voting rights of the Company (in each case, based on certain
assumptions set out above); and
• (for so long as they continue to be acting in concert) Mr. Dunkerton
and persons acting in concert with him will accordingly increase their
aggregate interests in shares in the Company without incurring any
obligation to make an offer under Rule 9 of the Takeover Code.
This means that, in those circumstances, the Company would be controlled
by Mr. Dunkerton and persons acting in concert with him.
Related Party Transaction
As noted above, Mr. Dunkerton is the Company’s Chief Executive Officer and
is a substantial shareholder for the purposes of Chapter 11 of the Listing
Rules. Mr. Dunkerton is therefore a related party of the Company. As a
result, his participation in the Placing constitutes a ‘related party
transaction’ for the purposes of Chapter 11 of the Listing Rules (the
“Related Party Transaction”) and requires approval by Independent RPT
Shareholders.
Accordingly, the Related Party Transaction Resolution will be proposed at
the General Meeting to approve the Related Party Transaction. As required
by the Listing Rules, Mr. Dunkerton has undertaken that he will not vote
on the Related Party Transaction Resolution and has undertaken to take all
reasonable steps to ensure that his associates will not vote on the
Related Party Transaction Resolution.
Capital Reorganisation
The Open Offer Issue Price (being £0.01 per New Open Offer Share) is lower
than the nominal value of the Existing Ordinary Shares (being £0.05 per
Existing Ordinary Share). However, the Company is not permitted by law to
issue shares at an issue price which is below their nominal value, so
Shareholder approval is being sought in connection with the Open Offer
(but not the Placing) to complete a sub-division of the ordinary share
capital of the Company so that each Existing Ordinary Share will be
sub-divided into one New Ordinary Share of £0.01 in the capital of the
Company and one (effectively valueless) Deferred Share of £0.04 in the
capital of the Company.
Given that the Placing Issue Price is the same as the nominal value of the
Existing Ordinary Shares, there is no need to reorganise the Company’s
share capital if the Placing is implemented.
Articles changes
It is proposed that the Current Articles be amended to reflect the
Delisting by removing the provisions that relate to the Company’s listing
which will no longer be relevant. It is also proposed that the Current
Articles are amended to remove certain provisions relating to the
retirement of Directors. In addition, if the Company implements the Open
Offer, in order to give effect to the Capital Reorganisation, it is
proposed that the Current Articles be amended to make changes to set out
the rights attaching to the Deferred Shares.
Intentions of Mr. Dunkerton and views of the Independent Directors
Mr. Dunkerton is the co-founder of Superdry. As such, he is keen to ensure
the long-term viability of the Company and, accordingly, has agreed to
participate in the Open Offer or the Placing (as applicable) to ensure
that the Company can address its liquidity issues and achieve its stated
objectives.
Mr. Dunkerton confirms that, subject to the implementation of the
Restructuring Plan, he proposes to support the Company in the overhaul of
its operations, as more fully described in the section above “Background
to, and reasons for, the Capital and Restructuring Measures”.
In furtherance of the foregoing, Mr. Dunkerton intends that:
• internationally, the Company will significantly reduce its
cost-onerous store footprint over the next 24 to 36 months, including
approximately 25 to 30 European Stores already identified for closure
over the next 12 months (including a small number which have already
closed) and a detailed review will be undertaken of its international
footprint to identify additional stores for closure, or sale of stores
to franchisees or other third parties, coupled with headcount
reduction associated with these store closures or dispositions;
• the Company will implement a new third party e-commerce platform to
replace its existing proprietary system, which will enable a
revitalised and more efficient e-commerce strategy in the UK and
internationally;
• no changes will be made to the locations of the Company’s headquarters
and headquarter functions, save that a number of the Company’s
corporate and support functions will no longer be required as a result
of the Delisting, which is expected to lead to redundancies in these
functions;
• changes will be made to the Board such that, as soon as reasonably
practicable following Delisting and, in any event, within three months
of Delisting, the Board will comprise Mr. Dunkerton as Chief Executive
Officer, a Chief Financial Officer with relevant experience (including
turnaround situations), an independent chair and two further
independent non-executive directors. Between the independent directors
and the chair, at least one will have retail and brand expertise and
another will have relevant and recent financial experience;
• while no changes will be made to the conditions of employment or the
balance of the skills of the employees and management, head office
headcount of the Company will be substantially rationalised to reflect
the Delisting and the restructuring and rationalisation of the
Company’s operations, including the substantial streamlining of
management functions and reporting lines. Furthermore, the current
levels of turnover of employees in-store due to organic attrition are
expected to continue, which will result in a reduction in the number
of in-store employees;
• the Company will modify the terms of its long-term employee incentive
arrangements as a result of the Delisting, to devise an employee
incentive scheme that is more appropriate for a company whose shares
are not listed;
• no changes will be made to employer contributions into the Company’s
pension scheme(s), the accrual of benefits for existing members, and
the admission of new members; and
• no changes will be made to the deployment of the Company’s fixed
assets.
Further, Mr. Dunkerton expects that following the restructuring of the
Company’s UK property estate and retail cost base, there will be closures
of certain stores in the United Kingdom as a consequence of the
implementation of the Restructuring Plan, namely possible termination of
certain leases by landlords due to the Company being able to pay
significantly reduced rent or no longer being required to pay rent (which
the Company expects to be applicable in respect of approximately 10
stores), as well as in the number of personnel associated with these store
closures.
Mr. Dunkerton further confirms that if the Rule 9 Waiver Resolution is
passed, in order to raise additional capital for the Company to fund its
future working capital requirements and to reduce the amount of high-cost
debt the Company is currently servicing, he intends to explore:
• strategic options available to the Company, including potential
partnerships with new investors and/or strategic partners; and
• the possibility of raising funds principally to address the Company’s
working capital needs through further potential deals relating to the
Company’s Brand and intellectual property in non-core territories (to
be identified in due course), which could then alter the Company’s
international operations.
Mr. Dunkerton is supportive of the Company’s proposal for the Delisting,
which is a condition of the Equity Raise becoming effective.
No statements in this section constitute “post-offer undertakings” for the
purposes of the Takeover Code.
The Independent Directors approve of the above statements of intentions of
Mr. Dunkerton with respect to the future operations of the business.
Risk Factors
The Company considers the risks disclosed below to be: (i) the material
risks relating to the Capital and Restructuring Measures; (ii) the
material new risks to the Group as a consequence of the Capital and
Restructuring Measures; and (iii) the material risks for the Group which
will be impacted by the Capital and Restructuring Measures:
• there can be no assurance that all conditions in relation to the
Capital and Restructuring Measures will be satisfied and, accordingly,
that the Capital and Restructuring Measures will take place. If the
Capital and Restructuring Measures do not take place:
◦ the Group will be unable to fund its short-term working capital
needs; and
◦ the Directors believe that, in such circumstances, the Plan
Company, the Company and certain other companies in the Group
will need to enter into administration or an insolvency process
immediately. Such a process is highly likely to result in the
loss by Shareholders of all of their investment in the Company;
• the Placing will be highly dilutive to Existing Shareholders (other
than Mr. Dunkerton). The Open Offer will be highly dilutive to
Existing Shareholders that do not take up their Open Offer
Entitlements;
• as a result of his participation in the Open Offer or the Placing, the
aggregate participation of Mr. Dunkerton and his Concert Party in the
Company’s voting rights may rise to a level where, Mr. Dunkerton is
able to exercise significant influence over the Company and the
Group’s operations, business strategy and those corporate actions
which require the approval of Shareholders;
• the net proceeds from the Equity Raise will be used to increase the
strength of the Company’s balance sheet, boost liquidity and fund its
ongoing working capital requirements, including the implementation of
a significant cost reduction programme. There is no guarantee that
these steps will be as successful as anticipated;
• as a result of the Delisting:
◦ Shareholders will hold unlisted securities, which are likely to
be less liquid than publicly traded securities;
◦ Without the market-driven price discovery mechanisms of a public
market, determining the fair value of an unlisted company’s
shares can be complex;
◦ the Company will be subject to fewer disclosure obligations and
regulatory requirements than a listed company, which may make it
challenging to assess the value of its shares, the investment
risk and potential returns;
◦ certain Shareholders may be ineligible to hold, or be prohibited
from holding, unlisted securities;
◦ neither the Existing Ordinary Shares nor any New Open Offer
Shares will be eligible to be held in an ISA;
• while the Capital and Restructuring Measures are being undertaken with
the intention of stabilising and improving the financial and
operational position of the Company, the Company needs to overhaul its
operations beyond the Capital and Restructuring Measures and no
assurance can be provided regarding the future success or viability of
the Company. Furthermore, the broad overhaul of the Company’s
operations will result in a different operating model. No assurance
can be provided that the Company can be successful in such a different
operating model;
• the Company is of the opinion that, taking into account the effect of
and net proceeds from the Capital and Restructuring Measures, the
working capital available to the Group is not sufficient for its
present requirements, that is for at least the next 12 months
following the date of the Circular. However, in light of, and subject
to, the mitigating actions set out in the Circular, the Directors have
a reasonable expectation that the Group will have sufficient working
capital for at least the next 12 months; and
• the announcement of the Capital and Restructuring Measures has
adversely affected the Group’s reputation, and the Group’s reputation
may suffer further if the Capital and Restructuring Measures do not
complete.
Further details of these risks are set out in the Circular.
Expected Timetable
2024
Announcement of the Restructuring Plan, 16 April
Equity Raise and Delisting
Record date for Open Offer Entitlements 6.00 p.m. on 16 May
Posting of this document, including the
Notice of General Meeting, the Forms of 21 May
Proxy and the Open Offer Application
Forms
Ex-Entitlements Date for the Open Offer 8.00 a.m. on 22 May
Open Offer Entitlements credited to stock 23 May
accounts of Qualifying CREST Shareholders
Latest recommended time and date for
requesting withdrawal of CREST Open Offer 4.30 p.m. on 9 June
Entitlements
Latest time and date for depositing CREST 3.00 p.m. on 10 June
Open Offer Entitlements
Latest time and date for splitting Open
Offer Application Forms to satisfy bona 3.00 p.m. on 11 June
fide market claims
Latest time and date for receipt of Forms
of Proxy, CREST Proxy Instructions and 9.00 a.m. on 12 June
electronic registration of proxy
appointments for the General Meeting
Record date for entitlement to vote at 6.00 p.m. on 12 June
the General Meeting
Deadline for returning completed Open
Offer Application Forms and payment in 11.00 a.m. on 13 June
full under the Open Offer
General Meeting 9.00 a.m. on 14 June
Announcement of results of General
Meeting (including whether the Company 14 June
will implement the Open Offer or the
Placing) through an RIS
Board meeting to approve allotment of New
Placing Shares or New Open Offer Shares 14 June
(as applicable)
Restructuring Plan sanction hearing 17 and 18 June
Effective Date of Restructuring Plan 18 June
Last day of dealings in Existing Ordinary 11 July
Shares on the Main Market
Record date for Capital Reorganisation 6.00 p.m. on 11 July
Cancellation of listing of the Existing
Ordinary Shares on the premium listing 8.00 a.m. on 12 July
segment of the Official List
Capital Reorganisation becomes effective 12 July (post-Delisting but
(if the Open Offer is implemented) prior to completion of the
Equity Raise)
Expected date of completion of the Equity 12 July
Raise
Unconditional allotment of New Placing
Shares or New Open Offer Shares (as 12 July
applicable)
CREST accounts credited with
uncertificated New Open Offer Shares and 12 July
New Ordinary Shares (if the Open Offer is
implemented)
Where applicable, despatch of share
certificates in respect of New Placing Within five Business Days of
Shares or New Open Offer Shares (as completion of the Equity Raise
applicable) and the New Ordinary Shares
(if applicable)
Notes:
1. All time references in this document are to London (UK) time.
2. These dates are provided by way of indicative guidance and are subject
to change. If any of the above times and/or dates change, the Company
will give adequate notice by issuing an announcement through an RIS.
3. The timing of Closing is dependent upon the passing of the Resolutions
and, if there is any delay in the passing of any such resolution, the
expected date of Closing may change. The date of Closing may also be
changed by agreement between the relevant parties to any relevant
agreement and, if so, an announcement will be made by the Company
through an RIS.
IMPORTANT NOTICES
This announcement has been issued by and is the sole responsibility of the
Company. The information contained in this announcement is for background
purposes only and does not purport to be full or complete. No reliance may
or should be placed by any person for any purpose whatsoever on the
information contained in this announcement or on its accuracy, fairness or
completeness. The information in this announcement is subject to change
without notice.
Neither this announcement nor anything contained in it shall form the
basis of, or be relied upon in conjunction with, any offer or commitment
whatsoever in any jurisdiction. Investors should not acquire any
securities to be offered pursuant to the Equity Raise (“New Securities”)
except on the basis of the information contained in the Circular and the
Open Offer Application Form.
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. The Circular provides further details of the New
Securities being offered pursuant to the Equity Raise.
This announcement is for information purposes only and is not intended to
and does not constitute or form part of any offer or invitation to
purchase or subscribe for, or any solicitation to purchase or subscribe
for, New Securities or to take up any entitlements to New Securities in
any jurisdiction. No offer or invitation to purchase or subscribe for, or
any solicitation to purchase or subscribe for, New Securities or to take
up any entitlements to New Securities will be made in any jurisdiction in
which such an offer or solicitation is unlawful. The information contained
in this announcement and the Circular is not for release, publication or
distribution to persons in any jurisdiction where the extension or
availability of the Equity Raise (and any other transaction contemplated
thereby) would breach any applicable law or regulation, and, subject to
certain exceptions, should not be distributed, forwarded to or transmitted
in or into any jurisdiction where to do so might constitute a violation of
local securities laws or regulations.
The distribution of this announcement, the Circular, the Open Offer
Application Form and the offering or transfer of New Securities into
jurisdictions other than the United Kingdom may be restricted by law, and,
therefore, persons into whose possession this announcement, the Circular,
the Open Offer Application Form and/or any accompanying documents comes
should inform themselves about and observe any such restrictions. Any
failure to comply with any such restrictions may constitute a violation of
the securities laws of such jurisdiction. In particular, subject to
certain exceptions, this announcement, the Circular and the Open Offer
Application Form should not be distributed, forwarded to or transmitted in
or into any jurisdiction where the extension or availability of the Equity
Raise (and any other transaction contemplated thereby) would breach any
applicable law or regulation.
Recipients of this announcement, the Circular and/or the Open Offer
Application Form should conduct their own investigation, evaluation and
analysis of the business, data and property described in this announcement
and/or the Circular. This announcement does not constitute a
recommendation concerning any investor's options with respect to the
Equity Raise. The price and value of securities can go down as well as up.
Past performance is not a guide to future performance. The contents of
this announcement are not to be construed as legal, business, financial or
tax advice. Each Shareholder or prospective investor should consult his,
her or its own legal adviser, business adviser, financial adviser or tax
adviser for legal, financial, business or tax advice.
Notice to all investors
Peel Hunt, which is authorised and regulated by the FCA in the UK, is
acting exclusively for Superdry and no one else in connection with the
matters described in this announcement and will not be responsible to
anyone other than Superdry for providing the protections afforded to
clients of Peel Hunt, nor for providing advice in connection with the
matters referred to herein. Neither Peel Hunt nor any of its subsidiaries,
branches or affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Peel Hunt in connection with this announcement, any statement
contained herein or otherwise.
Forward-looking statements
This announcement contains forward-looking statements, including with
respect to financial information, that are based on current expectations
or beliefs, as well as assumptions about future events. These
forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts. In some cases, forward-looking
statements use words such as “anticipate”, “target”, “expect”, “estimate”,
“intend”, “plan”, “goal”, “believe”, “will”, “may”, “should”, “would”,
“could”, “is confident”, or other words of similar meaning.
None of the Company, its officers, advisers or any other person gives any
representation, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this
announcement will actually occur, in part or in whole.
No undue reliance should be placed on any such statements, because they
speak only as at the date of this announcement and, by their very nature,
they are subject to known and unknown risks and uncertainties and can be
affected by other factors that could cause actual results, and the
Company's plans and objectives, to differ materially from those expressed
or implied in the forward-looking statements. No representation or
warranty is made that any forward-looking statement will come to pass.
Forward-looking statements are not fact and should not be relied upon as
being necessarily indicative of future results, and readers of this
announcement are cautioned not to place undue reliance on any
forward-looking statements, including those regarding prospective
financial information. You are advised to read the Circular and the
information incorporated by reference therein in their entirety.
No statement in this announcement is intended as a profit forecast or
estimate for any period, and no statement in this announcement should be
interpreted to mean that underlying operating profit for the current or
future financial years would necessarily be above a minimum level, or
match or exceed the historical published operating profit or set a minimum
level of operating profit, nor that earnings or earnings per share or
dividend per share for the Company for the current or future financial
years would necessarily match or exceed the historical published earnings
or earnings per share or dividend per share for the Company.
The Company is not under any obligation to update or revise publicly any
forward-looking statement contained within this announcement, whether as a
result of new information, future events or otherwise, other than in
accordance with its legal or regulatory obligations. Additionally,
statements of the intentions or beliefs of the Board of Directors of the
Company reflect the present intentions and beliefs of the Board of
Directors of the Company as at the date of this announcement and may be
subject to change as the composition of the Board of Directors of the
Company alters, or as circumstances require.
══════════════════════════════════════════════════════════════════════════
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
══════════════════════════════════════════════════════════════════════════
ISIN: GB00B60BD277
Category Code: CIR
TIDM: SDRY
LEI Code: 213800GAQMT2WL7BW361
OAM Categories: 3.1. Additional regulated information required to be
disclosed under the laws of a Member State
Sequence No.: 322944
EQS News ID: 1907977
End of Announcement EQS News Service
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