REG - Tertre Rouge Assets - Proposed Acquisition

Tertre Rouge AssetsAnnouncement

27/07/2023 15:45

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230727:nRSa4659Ha&default-theme=true

RNS Number : 4659H  Tertre Rouge Assets PLC  27 July 2023

This announcement contains inside information as stipulated under the UK
version of the Market Abuse Regulation No 596/2014 which is part of English
law by virtue of the European (Withdrawal) Act 2018, as amended. On
publication of this announcement via a Regulatory Information Service, this
information is considered to be in the public domain.

 

27 July 2023

Tertre Rouge Assets PLC (the "Company" or "TRA")

Heads of Terms signed

Proposed Reverse Takeover

Suspension of Listing

The Company is pleased to announce that it today entered non-binding heads of
terms with several parties, to acquire:

(a)     100% of the issued share capital of The Run To Group Limited ("Run
To") for a cash consideration of £4.6 million;

(b)     a 1952 Ferrari Formula 2 for a cash consideration of £5.2
million;

(c)     a 1963 Jaguar E-Type Lightweight for a cash consideration amount
of $US7.5 million (approximately £5.7 million);

(d)     a 1971 Formula One Ferrari for a cash consideration of €10.6
million (approximately £9.1 million);

(e)     a 1969 Lamborghini Miura P400 SV for a cash consideration of
€3.25 million (approximately £2.8 million);

(f)      a 1961 Ferrari 250 GT for a cash consideration of $US8 million
(approximately £6.1 million); and

(g)     a 1958 Mercedes-Benz 300 SL Roadster for a cash consideration of
€1.5 million (approximately £1.3 million),

((b) through (g), the "Car Assets");

subject to legal, financial and other due diligence and entry into, in the
case of Run To, a legally binding share purchase agreement (the "SPA") and, in
the case of the Car Assets, several legally binding asset purchase agreements
(each an "APA"), (collectively, the "Proposed Acquisition"). As no binding
agreements have yet been reached, either in relation to Run To or the Car
Assets (or any one of them), the Company cannot guarantee that the Proposed
Acquisition (or any part of it) will complete.

About Run To

Run To is an events company incorporated in England and Wales, established to
create the finest supercar adventures in the world. Run To creates handpicked
driving routes across the globe for its clients, who drive their prestige
supercars along the way.

En route, Run To's clients get to enjoy some of the finest accommodation,
staying at outstanding handpicked hotels, chosen for their character and
personality. Coupled with the driving and hotel experiences, Run To also hosts
incredible events and parties in spectacular locations, which includes a host
of performers, musicians and artistes from around the world.

Each year, Run To's signature adventure is a handpicked route to the Monaco
Grand Prix, which earlier this year involved 58 supercars. Photographs from
this event can be seen on Run To's website at the following link:
https://therunto.com/monaco/ (https://therunto.com/monaco/) .

About the Car Assets

As a broad group, the investment-grade collectible motorcar sector has
performed consistently well going back to 1993. Within this group, certain
assets have outperformed the market and the Car Assets meet the Company's
investment criteria for assets that ought to continue to outperform the market
- namely, that exceptional value comes from a combination of rarity and
exceptional provenance. The Car Assets have been chosen based on their
importance and significance within the global classic motorcar market, which
presents the Company with a rare opportunity to acquire these capital
appreciating assets.

Background to the Proposed Acquisition

TRA was formed as a 'special purpose acquisition company' with a specific
focus on acquisitions of a target company, business or asset(s) that are in or
otherwise focused on or ancillary to the collectible automobile sector, which
could include physical automobile assets and/or companies, businesses or
assets with technology and/or services relevant to the collectible automobile
sector, as outlined in the Company's prospectus published on 13 July 2022 (the
"Prospectus"). A copy of the Prospectus can be found on the Company's website
at the following link:

https://tertrerougeassets.com/publications/
(https://tertrerougeassets.com/publications/)

The Proposed Acquisition is in line with the Company's acquisition strategy.

The Proposed Acquisition

The Company today entered non-binding heads of terms with three selling
shareholders, comprised of one corporate entity and two individuals (the
individuals, the "Founders"), for the acquisition of 100% of the issued share
capital of Run To for a cash consideration of £4.6 million (the "Run To
Purchase Price"). In addition to the Run To Purchase Price, the Founders will
participate in an EBIT performance bonus of up to an aggregate £3 million,
payable by the Company over three financial years (2024, 2025 and 2026) which
is structured to reward them if the Target's operating company, being The Run
To Global Limited (the "OpCo"), achieves forecast earnings before interest and
tax ("EBIT") of £900k (in 2024), £1.1 million (in 2025) and £1.3 million
(in 2026) (the "EBIT Performance Bonus"). The EBIT Performance Bonus is
payable in equal amounts to each Founder and is payable, subject to the
relevant performance milestones being satisfied, in addition to the Run To
Purchase Price.

In addition to the Run To Purchase Price and the EBIT Performance Bonus, on
completion of the Proposed Acquisition ("Completion"), the Company intends to
allot and issue to each of the Founders 150,000 ordinary shares in the capital
of TRA ("TRA Shares") and further intends to allot and issue to each of two
staff members of the OpCo 50,000 TRA Shares. The Founders will remain employed
by the OpCo following Completion and it is intended that the two staff members
remain employed by the OpCo following Completion.

Also today, the Company entered non-binding heads of terms with several
vendors in relation to the Car Assets, for a total cash consideration of
approximately £30.2 million (the "Car Assets Purchase Price").

In conjunction with the Proposed Acquisition, the Company will undertake an
equity financing to raise up to £50 million (the "Placing") to pay the cash
consideration of the Proposed Acquisition, comprised of the Run To Purchase
Price and the Car Assets Purchase Price, and to fund the working capital
requirements of the enlarged group.

On Completion, it is the Company's intention to seek admission of its ordinary
share capital, as enlarged following Completion and pursuant to the Placing,
to the Standard Segment of the Official List of the Financial Conduct
Authority (the "FCA") and to trading on the Main Market of the London Stock
Exchange (together, "Admission").

Following Completion, the current directors of the board of the Company will
remain in place.

The Proposed Acquisition is conditional on, amongst other things:

•        obtaining the necessary regulatory approvals of the FCA;

•        the satisfactory completion, by each of the parties, of
legal, financial and commercial due diligence;

•        in the case of Run To, the parties agreeing, signing and
exchanging a legally binding SPA;

•        in the case of the Car Assets, the parties agreeing, signing
and exchanging legally binding APAs;

•        Admission; and

•        the Placing.

It is currently expected that should the Proposed Acquisition proceed, the
prospectus will be published, and the Proposed Acquisition will complete,
during Q4 2023.

The Company has engaged certain advisers, and will engage other professionals,
to rapidly progress the requisite due diligence and the preparation of
transaction documentation including the SPA, the APAs and the prospectus.

At this stage, there can be no guarantee that the Proposed Acquisition will
complete nor as to the final terms of the Proposed Acquisition. Further
announcements and updates will be made in due course.

Suspension of Listing

The Proposed Acquisition, if completed, would constitute a reverse takeover
under the Listing Rules. As the Company is currently unable to provide full
disclosure under Listing Rule 5.6.15, it has requested from the FCA, and been
granted, a suspension of listing in its shares with immediate effect pending
either the issue of an announcement providing further details on the Proposed
Acquisition, the publication of a prospectus, or an announcement that the
Proposed Acquisition is not proceeding. Any restoration of the listing is
subject to the approval of the FCA.

There can be no certainty that the Proposed Acquisition will take place and it
remains subject, amongst other things, to final terms being agreed.

Further announcements and updates will be made in due course.

Steven Schapera, Chairman of TRA, commented:

"We are delighted to have agreed heads of terms relating to the Proposed
Acquisition. In the past year, we have reviewed a number of opportunities
spanning businesses operating in the collectible motorcar sector, as well
as physical assets comprised of investment-grade collectible motorcars. Our
review has confirmed the Board's belief that this sector is a robust preserver
of value and presents several compelling acquisition opportunities.
Importantly, the Company is now in an enviable position to exploit these
opportunities to the benefit of its shareholders. The Proposed Acquisition
meets our stated objective of identifying what can potentially be an extremely
valuable investment opportunity in this sector. A tremendous amount of
work has been expended to identify this high-quality portfolio
of acquisition targets and we look forward to completing this
transformative transaction and returning to the market as soon as possible."

 

For further information, please contact:

 

Steven Schapera

Non-Executive Chairman & Co-Founder

T:  +44 (0)7917 715533

E:  steven@tertrerougeassets.com

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  SUSRRMITMTJTBLJ