REG - XLMedia PLC - Acquisition, Proposed Placing and Open Offer
Acquisition and Proposed Placing, Subscription and Open Offer
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.
This announcement contains inside information for the purposes of the UK version of Article 7 of Regulation (EU) 596/2014 ("MAR"). In addition, market soundings (as defined in MAR) were taken in respect of the Placing with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.
18 March 2021
XLMedia PLC
("XLMedia" or the "Group" or the "Company")
Acquisition of business and assets of Sports Betting Dime
Proposed Placing and Subscription to raise minimum £20 million by way of accelerated bookbuild
Proposed Open Offer to raise up to £3 million
XLMedia (AIM: XLM), a leading global digital performance publisher, announces that it has entered into an agreement to acquire the business and assets of Sports Betting Dime ("SBD") for a total approximate consideration of US$26.0 million (c.£18.5 million) (the "Acquisition"). In addition XLMedia announces its intention to raise gross proceeds of £23 million by means of a placing, a direct subscription with the Company and an Open Offer.
Acquisition highlights:
· Founded in 2012 as a sports book review site, SBD has developed into a multichannel sports betting digital media platform, including two mobile apps
· The Acquisition provides XLMedia with a leading US affiliate sports betting brand delivering national traffic through its website, sportsbettingdime.com
· The Acquisition cements XLM's market position in the rapidly growing regulated US sports betting market and, together with XLMedia's existing US sports betting asset (CBWG), provides scale at local and national level
· SBD also brings to XLMedia a talented team with a range of skills, including marketing, search optimisation, content production and technology development. This provides a solid base from which XLMedia can accelerate growth in North American sports betting and its existing personal finance offering
· The Acquisition is expected to complete on or around 22 March 2021 upon payment of the initial consideration
Fundraising highlights:
· Proposed Placing and Subscription to raise minimum gross proceeds of £20 million by way of accelerated bookbuild through the issue of minimum 50,000,000 new ordinary shares of US $0.000001 each (the "Ordinary Shares") at 40 pence per share (the "Issue Price"), representing 25.6% of the Company's existing share capital
· The Issue Price of 40 pence per Placing Share and Subscription Share represents a 6.5 per cent. discount to the 20 day volume weighted average price (VWAP) of 42.8 pence prior to 18 March 2021
· Cenkos Securities plc ("Cenkos") and Joh. Berenberg, Gossler & Co. KG, London Branch ("Berenberg") (together, the "Joint Bookrunners") are acting as joint bookrunners in connection with the Placing and Berenberg has underwritten the first £7.29 million raised
· Proposed Open Offer to raise up to approximately £3 million from Qualifying Shareholders
· Certain directors and employees of the Company have indicated their intention to subscribe for, in aggregate, new Ordinary Shares representing approximately £670,000 at the Issue Price pursuant to the Placing and Subscription
· Premier Investissement SAS, the Company's largest shareholder, has indicated its intention to subscribe for, in aggregate, new Ordinary Shares representing approximately £11.82 million at the Issue Price pursuant to the Placing
Stuart Simms, Chief Executive of XLMedia plc, said:
"We set out a clear strategy to develop and monetise a balanced portfolio of content-rich and engaging consumer-centric websites, with a greater exposure to regulated markets and a particular focus on rapidly developing and scaling our presence in US sports. We are delighted with the progress of the CBWG business in North America in the short period since we acquired it in December, and we are excited by the potential synergy value from leveraging the scale, footprint and skills of SBD.
"We believe the combination of Sports Betting Dime and CBWG provides the Group with immediate scale and broad market reach at a time when US sports betting is experiencing significant growth momentum as additional states regulate and open up to legalised sports betting."
Information on Sports Betting Dime
SBD is a leading US affiliate sports betting brand with a national footprint website, sportsbettingdime.com. The website provides a content rich resource for sport bettors with data and tools for novices and experts, including the latest betting odds, trends, reports, futures trackers, and analysis, and how-to betting guides. The site had over 1.2m visitors in January 2021. SBD covers the core US sports of football, basketball, baseball and ice hockey as well as MMA, golf and college football.
Founded in 2012 as a sports book affiliate site, SBD has developed into a sophisticated multichannel offshore sports betting digital media platform, including two mobile apps. Prior to the Acquisition SBD has been preparing the site to fully meet US regulatory standards and, following the Acquisition, SBD will leverage XLMedia's regulatory licences and deals with regulated operators to rapidly monetise its traffic in the nine regulated US states where XLMedia currently operates. In due course, revenue is expected to grow as the wider US market regulates state by state and enables the remaining traffic to be monetised.
The aggregate approximate consideration will be US$26 million (c.£18.5 million) made up of:
· US$11 million initial cash consideration payable upon completion together with up to US$500,000 as reimbursement of SBD's operating expenses per month since the beginning of the year;
· US$10 million deferred consideration payable on the first anniversary; and
· US$3.7 million deferred consideration payable after 18 months.
Rationale
The Acquisition of SBD follows the acquisition by the Company in December 2020 of the sports gaming and sports betting business of CBWG Sports ("CBWG") and strengthens XL Media's position in the fast-growing US market for sports gaming. CBWG has performed strongly since its acquisition and its complementary offering provides a strong platform from which to grow the two businesses.
The Acquisition is in line with XLMedia's strategy to create a balanced portfolio of deep content websites covering a range of attractive geographies, both stable and high-growth verticals and with greater exposure to regulated markets. The Acquisition is expected to be earnings accretive to the Company.
The Acquisition is expected to deliver the following key benefits for the Company:
• Cements the Company's position in US Sports betting, a high growth market
• Advances the Company's strategy to increase its exposure to high growth regulated markets, particularly the US
• Greatly enhances value of the recent acquisition of CBWG
• Adds a strong team and new and complementary capabilities
• Provides innovative technology to monetise third party traffic (agency business)
The Acquisition is expected, subject to regulatory consent, to bring a highly talented team of approximately 29 full time employees and contractors, providing additional skills and capabilities in marketing, content production, search engine optimisation and technology development.
Ken Dorward, XLMedia Head of North America, said:
"With sports betting going mainstream in the US, we are delighted to welcome Sports Betting Dime to the XLMedia portfolio. We are better positioned than ever to deliver on our ambition to be a significant player in US sports content and betting, through growth in our owned and operated sites and expansion of our agency partnerships."
Proposed Placing and Subscription
The Group also announces a proposed conditional placing to raise minimum gross proceeds of £19.5 million through the issue of a minimum 48,727,398 new Ordinary Shares (the "Placing Shares") at 40 pence per Ordinary Share to certain new and existing investors (the "Placing").
The Placing will be conducted by way of an accelerated bookbuild process which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in Appendix II to this Announcement. Cenkos and Berenberg are acting as joint bookrunners in connection with the Placing.
In addition, certain directors and employees of the Company intend to subscribe for, in aggregate, a total of £509,040.80 for 1,272,602 new Ordinary Shares in the Subscription at the Issue Price (the "Subscription Shares").
In addition, in order to provide Qualifying Shareholders with an opportunity to participate in the proposed fundraising, the Company proposes to issue up to 7,503,200 new Ordinary Shares via an Open Offer to raise gross proceeds of up to £3.0 million.
To ensure timely completion of the Acquisition, the Placing and Subscription will be structured in two tranches, with the first tranche issuing 18,712,866 Ordinary Shares under the Company's general authorities granted at the 2020 Annual General Meeting, raising gross proceeds of approximately £7.49 million. The first tranche of the Placing is underwritten by Berenberg. Admission of the first tranche, being the First Placing Shares and the First Subscription Shares is expected to occur on 22 March 2021, subject to customary conditions (including as to admission). The balance, being the Second Placing Shares and the Second Subscription Shares together with the Open Offer Shares, raising minimum gross proceeds of approximately £12.5 million, are expected to be admitted following the satisfaction of certain conditions including passing of the Resolutions which are required to be passed in order to allow the Second Placing Shares, the Second Subscription Shares and the Open Offer Shares to be issued, which will be proposed at the General Meeting which is being convened for 11:00 a.m. on 6 April 2021. The Second Placing Shares, the Subscription Shares and the Open Offer Shares are not being underwritten.
The Open Offer
The Company considers it important that Shareholders have an opportunity (where it is practicable for them to do so) to participate in the fundraising and accordingly the Company is making the Open Offer to Qualifying Shareholders. The Company is proposing to raise up to £3 million (before expenses) (assuming full take up of the Open Offer) through the issue of up to 7,503,200 Open Offer Shares.
The Open Offer Shares are available to Qualifying Shareholders pursuant to the Open Offer at the Issue Price of 40 pence per Open Offer Share, payable in full on acceptance. Any Open Offer Shares not subscribed for by Qualifying Shareholders will be available for subscription under the Excess Application Facility.
A Qualifying Shareholder may apply for Open Offer Shares under the Open Offer at the Issue Price on the following basis:
1 Open Offer Share for every 26 Existing Ordinary Shares
held by the Qualifying Shareholder on the Record Date
The Excess Application Facility enables Qualifying Shareholders to apply for Ordinary Shares in excess of their Open Offer Entitlement.
Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements. Applicants can apply for less or more than their entitlements under the Open Offer but the Company cannot guarantee that any application for Excess Shares under the Excess Application Facility will be satisfied as this will depend in part on the extent to which other Qualifying Shareholders apply for less than or more than their own Open Offer Entitlements. Applications made under the Excess Application Facility will be scaled back at the Company's discretion if applications are received from Qualifying Shareholders for more than the available number of Excess Shares.
Application has been made for the Open Offer Entitlements of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements will be credited to CREST on 19 March 2021. The Open Offer Entitlements will be enabled for settlement in CREST until 11:00 a.m. on 1 April 2021.
The latest time and date for receipt of completed Open Offer Application Forms or CREST applications and payment in respect of the Open Offer is 11:00 a.m. on 1 April 2021. The Open Offer is not being made to Overseas Shareholders.
Qualifying Shareholders should note that the Open Offer is not a rights issue and therefore the Open Offer Shares which are not applied for by Qualifying Shareholders will not be sold in the market for the benefit of the Qualifying Shareholders who do not apply under the Open Offer. The Open Offer Application Form is not a document of title and cannot be traded or otherwise transferred.
The Open Offer will be conditional upon the Resolutions being duly passed at the General Meeting. The Open Offer is also conditional on the Placing Agreement becoming or being declared unconditional in all respects and not being terminated before Second Admission. Accordingly, if the conditions as set out in the Placing Agreement (which include the passing of the Resolutions) are not satisfied or waived (where capable of waiver) or if the Brokers otherwise exercises its right to terminate the Placing Agreement, the Open Offer will not proceed and the Open Offer Shares will not be issued and all monies received by the Receiving Agent will be returned to the applicants (at the applicant's risk and without interest) as soon as possible thereafter. Any Open Offer Entitlements admitted to CREST will thereafter be disabled.
Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in certain overseas jurisdictions will not qualify to participate in the Open Offer. The attention of Shareholders who do not have a registered address in the UK is drawn to paragraph 6 of Part 3 of the Shareholder Circular.
A Circular which will provide further details of the Placing, Subscription, Open Offer and the Acquisition and include a notice convening the General Meeting is expected to be sent to Shareholders and be available on the Company's website www.xlmedia.com on or around 19 March 2021.
Set out below in Appendix I is an adapted extract from the draft Circular that is proposed to be sent to Shareholders after the closure of the Bookbuild. The final Circular, containing the terms and conditions of the Open Offer and Notice of General Meeting is expected to be sent to Shareholders and published on the Company's website on or around 19 March 2021.
For further information, please contact:
XLMedia plc
Stuart Simms, Chief Executive Officer
Iain Balchin, Chief Financial Officer
Kieran McKinney, Investor Relations
ir@xlmedia.com
Cenkos Securities plc (Nomad and Joint Broker)
Giles Balleny / Max Gould
Tel: 020 7397 8900
Berenberg (Joint Broker)
Mark Whitmore / James White / Tejas Padalkar
Tel: 020 3207 7800
Vigo Communications
Jeremy Garcia
Tel: 020 7390 0233
Important Notices
Terms defined at the end of this announcement have the meaning given thereto when used in this announcement.
This announcement is not an offer to sell or a solicitation of any offer to buy the New Shares in the United States, Australia, Canada, New Zealand or the Republic of South Africa, Japan, or in any other jurisdiction where such offer or sale would be unlawful.
This Announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.
This communication is only addressed to, and directed at, persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation ("Qualified Investors"). For the purposes of this provision, the expression "Prospectus Regulation" means Regulation (EU) 2017/1129. In the United Kingdom, this communication is being distributed only to, and is directed only at, "qualified investors" (as defined in the UK version of the Prospectus Regulation, which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 (as amended from time to time)): (i) who have professional experience in matters relating to investments who fall within the definition of "investment professional" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (ii) who are high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order, and (iii) other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). Any investment or investment activity to which this communication relates is available only to and will only be engaged in with such persons. This communication must not be acted on or relied on in any member state of the European Economic Area who are not Qualified Investors or in the United Kingdom by persons who are not relevant persons.
The merits or suitability of any securities must be independently determined by the recipient on the basis of its own investigation and evaluation of the proposed investment trust. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities.
This announcement may not be used in making any investment decision. This announcement does not contain sufficient information to support an investment decision and investors should ensure that they obtain all available relevant information before making any investment. This announcement does not constitute and may not be construed as an offer to sell, or an invitation to purchase or otherwise acquire, investments of any description, nor as a recommendation regarding the possible offering or the provision of investment advice by any party. No information in this announcement should be construed as providing financial, investment or other professional advice and each prospective investor should consult its own legal, business, tax and other advisers in evaluating the investment opportunity. No reliance may be placed for any purposes whatsoever on this announcement or its completeness.
Nothing in this announcement constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient.
The information and opinions contained in this announcement are provided as at the date of the document and are subject to change and no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information contained herein and no responsibility, obligation or liability or duty (whether direct or indirect, in contract, tort or otherwise) is or will be accepted by the Company, Cenkos, Berenberg or any of their affiliates or by any of their respective officers, employees or agents in relation to it. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this announcement or on its completeness, accuracy or fairness. The document has not been approved by any competent regulatory or supervisory authority.
Potential investors should be aware that any investment in the Company is speculative, involves a high degree of risk, and could result in the loss of all or substantially all of their investment. Results can be positively or negatively affected by market conditions beyond the control of the Company or any other person. The returns set out in this document are targets only. There is no guarantee that any returns set out in this document can be achieved or can be continued if achieved, nor that the Company will make any distributions whatsoever. There may be other additional risks, uncertainties and factors that could cause the returns generated by the Company to be materially lower than the returns set out in this announcement. Past performance cannot be relied on as a guide to future performance.
The information in this announcement may include forward-looking statements, which are based on the current expectations and projections about future events and in certain cases can be identified by the use of terms such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target", "believe" (or the negatives thereon) or other variations thereon or comparable terminology. These forward-looking statements, as well as those included in any related materials, are subject to risks, uncertainties and assumptions about the Company, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur.
Each of the Company, Cenkos, Berenberg and their affiliates and their respective officers, employees and agents expressly disclaim any and all liability which may be based on this announcement and any errors therein or omissions therefrom.
No representation or warranty is given to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any. Any views contained herein are based on financial, economic, market and other conditions prevailing as at the date of this announcement. The information contained in this announcement will not be updated.
This announcement does not constitute or form part of, and should not be construed as, any offer or invitation or inducement for sale, transfer or subscription of, or any solicitation of any offer or invitation to buy or subscribe for or to underwrite, any share in the Company or to engage in investment activity (as defined by the Financial Services and Markets Act 2000) in any jurisdiction nor shall it, or any part of it, or the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction. This announcement does not constitute a recommendation regarding any securities.
Cenkos Securities plc ("Cenkos") which is authorised and regulated in the United Kingdom by the FCA, is acting as nominated adviser and joint broker to XLMedia PLC and for no one else, including any recipient of this announcement, in connection with the Fundraising and other matters referred to in this announcement and will not be responsible to anyone other than XLMedia PLC for providing the protections afforded to clients of Cenkos or for affording advice in relation to the Fundraising or any other matter referred to in this announcement. Cenkos has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Cenkos nor does it make any representation or warranty, express or implied, for the accuracy of any information or opinions contained in this announcement or for the omission of any information. Cenkos expressly disclaims all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement. The responsibilities of Cenkos as the Company's nominated adviser and joint broker under the AIM Rules and the AIM Rules for Nominated Advisers are owed to the London Stock Exchange solely and are not owed to XLMedia PLC or to any Director, Shareholder or any other person in respect of such Shareholder's decision to acquire Ordinary Shares in reliance on any part of this announcement or otherwise.
Joh. Berenberg, Gossler & Co. KG, London Branch ("Berenberg"), which is authorised and regulated in Germany by the German Federal Financial Supervisory Authority (BaFin) and subject to limited regulation by the FCA, is acting solely in its capacity as joint broker to XLMedia PLC and for no one else, including any recipient of this announcement, in connection with the Fundraising and other matters referred to in this announcement and will not be responsible to anyone other than XLMedia PLC for providing the protections afforded to clients of Berenberg or for affording advice in relation to the Fundraising or any other matter referred to in this announcement. Berenberg has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Berenberg nor does it make any representation or warranty, express or implied, for the accuracy of any information or opinions contained in this announcement or for the omission of any information. Berenberg expressly disclaims all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement.
Information for Distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail and professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors should note that: the price of the Ordinary Shares may decline and investors could lose all or part of their investment; the Ordinary Shares offer no guaranteed income and no capital protection; and an investment in Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Cenkos and Berenberg will only procure investors who meet the criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary Shares pursuant to the Placing, Subscription and/or Open Offer.
Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Ordinary Shares and determining appropriate distribution channels.
APPENDIX I - EXTRACTS FROM THE CIRCULAR
1. Background on XLMedia
The Company announced on 18 March 2021 that it has entered into an asset purchase agreement to acquire the business and assets of Sports Betting Dime and conditionally raised minimum gross proceeds of approximately £20 million (US$27.8 million) (before expenses) pursuant to the Placing and Subscription to part-fund the Acquisition. The Placing has been undertaken by each of Cenkos and Berenberg.
Concurrently with completing the Acquisition, the Company will issue 18,236,585 Placing Shares raising c.£7.3 million (c.US$10.1 million) gross at the Issue Price conditional only upon First Admission. The Company will issue a further minimum 30,490,813 Placing Shares raising approximately a further £ 12.2 million (US$16.9 million) gross conditional on, inter alia, the passing (without amendment) of Resolutions 1 and 2 by Shareholders at the General Meeting, notice of which is set out in Part 6 of this document.
In addition, certain directors and employees of the Company have conditionally agreed to subscribe for, in aggregate, a total of £509,040.80 for 1,272,602 Subscription Shares at the Issue Price pursuant to the Subscription.
In addition, in order to provide Qualifying Shareholders with an opportunity to participate in the proposed Fundraising, the Company proposes to issue up to 7,503,200 Open Offer Shares on a pre-emptive basis to raise up to £3 million (c.US$4.2 million) (before fees and expenses), on the basis of 1 new Ordinary Share for every 26 Existing Ordinary Shares held on the Record Date, at the Issue Price, payable in full on acceptance.
The Placing Shares are not subject to clawback and are not part of the Open Offer.
This letter sets out the background to, and reasons for, the Acquisition and the Fundraising and the Board's recommendation to Shareholders to vote in favour of the Resolutions at the General Meeting.
Please see the important notice set out in paragraph 11 of this Part 1 concerning the implications that the COVID-19 pandemic will have on attendance at the General Meeting and the measures that the Company is putting in place in respect of the same.
2. Background on XLMedia
XLMedia is an online performance-based digital publishing business operating across multiple territories, focused on audience segmentation, engagement and activation. It seeks to deliver high quality consumer engagement through its core branded sites in personal finance, sports and gaming, enabling it to direct paying customers to its partners for an agreed fee, structured either as a one-off payment or a share of ongoing revenues associated with these activities. Depending on the nature of the site, XLMedia seeks to educate and engage its consumers with strong editorial content, videos and guides, comparison tables, widgets and calculators and tips.
The Company has been an affiliate marketer to the gambling sector since 2008 and has been active in personal finance since August 2017, giving it a strong understanding of operating in regulated markets and a significant historical proprietary databank providing insight into consumer trends. It has developed strong commercial relationships, working with its international casino, sports betting and personal finance partners, with over 300 partners and brands. Its strategy is to build a balanced portfolio of assets in diverse geographies, verticals and stage of maturity, that are capable of delivering sustainable growth opportunities with the balance moving towards more regulated markets, specifically the US and sports. It is seeking to hold premium banded assets, that are content-rich and consumer-centric.
Current Trading
XLM expects to deliver revenue of at least $54.5m and an adjusted EDITDA of approximately $11.5m for FY2020. The revenues in the second half of 2020 saw a recovery following lockdown easing and the return of professional sports. As previously announced, Company continues to pursue a multi-track approach to recovering the Casino vertical, where a number of sites were penalised by Google in early 2020. Following the addition of CBWG to the Group in December 2020, 2021 has started strongly with unaudited January 2021 revenue for the Group of $5.8 million and EBITDA of $1.4 million.
The Company will provide a further update on current trading with the Financial Results for the Year Ended 31 December 2020, currently expected on 27 April 2021.
3. Background to and reasons for the Acquisition and the Fundraising
Following the appointment of Stuart Simms as CEO in October 2019, the Company sought to increase its focus on North America, with a key goal of making acquisitions and generating revenue growth in the US sports betting market. In June 2020, the Group appointed Ken Dorward to head up XLMedia's US Business and in December 2020 the Company acquired CBWG, a highly successful and fast-growing digital media publishing group with a focus on professional and college sports, sports gambling and sports betting in the USA North East. In addition to its own sites, CBWG has an agency capability, which enables popular sports sites to monetise their consumer traffic, using CBWG's customer relationships, for which it charges a revenue split.
CBWG's sites generated unaudited revenue and EBITDA (before founders' compensation) of approximately US$4.6m and approximately US$2.7m respectively over the 12 months to October 2020. These sites have outperformed their acquisition case, with unaudited revenues in the first two months of 2021 of US$2.67m vs. US$1.11m in the acquisition case, capitalising on market growth trends and the strong Q1 seasonality in the US that results from the timing of certain major sporting events. Whilst traffic data for January 2021 indicates that the majority of CBWG's sites focus on the sporting activity in specific states of the US where sports betting is legal, it also indicate that it receives approximately 41% of its traffic from currently unregulated states. It does not attempt to monetise this traffic at present, but this provides a significant opportunity as the regulatory roll out continues. A strong example of this would be the potential opportunity for its New York focussed site www.elitesportsny.com in the event that New York state becomes regulated for online sports betting.
Background to US Sport Betting Regulation
In 1992, the Professional and Amateur Sports Protection Act (PASPA) was enacted in the US, a federal law that made the business of bookmaking illegal in all but a handful of states. The increasing uptake of the internet by the early 2000s meant that much of the illegal sports gaming in the US was happening online with operators outside of the US (offshore). In 2018 The American Gaming Association (AGA) estimated that close to US$150 billion worth of bets were placed with these offshore operators annually.
In June 2017, the Supreme Court of the US agreed to hear an appeal by the state of New Jersey against the prohibition on sports betting and in May 2018 ruled that PASPA was unconstitutional. This opened up the market, allowing each state to determine its own regulatory approach.
State regulation has taken a number of different forms including permitting only state monopolies, physical sports betting only or allowing full online/mobile access. To date, approximately 26 US states have opened up to some form of sports betting, with a number of states actively pursuing bills through their state legislatures to allow regulated betting to occur. Eilers & Krejcik Analysts, a research and consulting firm focused on the gaming industry, has predicted that by the end of 2022, 34 states will have some form of legalised sports betting, giving access to 57% of US population.
While in the main, state regulation (like PASPA before it) is focussed on the operators, affiliate marketers are also subject to regulatory constraints and are not permitted to seek to monetise traffic from unregulated states. Prior to the creation of an effective legal market for sports betting, a number of affiliates operated offshore, directing US traffic to offshore operators.
Recent examples demonstrate that state regulators appear keen to bring offshore assets under their regulatory control, providing greater consumer protection and allowing them to access the tax revenues from the activity. In the affiliate market, Vegasinsider.com, a national provider of sports betting odds, was originally an offshore asset before being acquired and brought into the regulated market. In the move onshore, regulators have focussed on excluding previous owners, senior management and the entities themselves, making it difficult for these businesses to come onshore other than through acquisition. However, the websites themselves, when acquired as an asset by regulated businesses and meeting all regulatory standards, have not been subject to sanction, limiting regulatory risk for acquirers.
XLMedia is currently active in 9 states (Colorado, Illinois, Indiana, Iowa, Michigan, New Jersey, Pennsylvania, Tennessee and Virginia) and ongoing state level regulation is expected to result in a growing addressable market of new customers.
The Acquisition of Sports Betting Dime
On 18 March 2021, the Board announced that it had entered into an asset purchase agreement with Lucky Panda Marketing Inc. and Nelson Media S.A. as the vendors of the business and assets of Sports Betting Dime ("SBD"), a US sports betting affiliate site (www.sportsbettingdime.com).
As far back as June 2018, only a month after the Supreme Court had struck down PASPA, the board had identified the US sports betting market as a significant growth opportunity, but there were limited acquisition opportunities while owners waited to see how the market developed. While there was some M&A activity in the wider market later in the following year (such as the sales of scoresandodds.com and VegasInsider.com) the market was still limited by the low number of regulated states. By Autumn 2020, with the landscape for the acquisition of assets with strong brand and traffic becoming increasingly competitive and asset prices rising with the market, the board identified and approached two of the small number of available US sports betting assets - CBWG and SBD. The Board believes that now is the optimum timing for a second acquisition, with the market having developed sufficiently to be able to monetise traffic but before development of the market drives the prices of assets to higher levels.
The Board considers these two assets, CBWG and SBD, to be highly complementary, with CBWG focussed on geographically relevant sports content and SBD a national sports betting brand. Following the successful acquisition of CBWG in December 2020, the Directors considered XLMedia to be well positioned with a quality on-shore US sports betting operation that would act as a stable platform to bring on a formerly offshore asset. XLMedia worked with SBD to prepare the business to come onshore, including turning off all revenue from the United States and holding discussions with the regulator, while maintaining levels of marketing and continuing to generate strong traffic. On acquisition, XLM will be able to leverage the Company's existing deals with operators and start to monetise the traffic in regulated states in which XLM is registered or licensed using XLMedia's existing operator agreements.
The business of SBD is centered on its website SportsBettingDime.com which has been one of the largest US offshore affiliate websites in the marketplace, competing with "national" brands such as oddsshark, actionnetwork, vegasinsider and covers.com. The website provides a content rich resource for sport bettors with the data and tools for novices and experts, including the latest betting odds, trends, reports, futures trackers, and analysis, and how-to betting guides. It covers the core US sports of football, basketball, baseball and ice hockey as well as MMA, golf and college football.
With over 1.2m sessions, during January 2021, SBD received more website traffic than CBWG's top 3 sites in aggregate, even with CBWG growing rapidly in recent months. The Acquisition provides access to all currently regulated states as well as to-be-regulated states for the future with management estimating that approximately 31% of the traffic comes from currently regulated states. The focus of the site on sports betting and its rich, informative content means it is targeted at high intent user which management expects to result in strong conversion rates.
SBD offers technology expertise, with a fully integrated platform housing its holistic product suite and recognised apps and widgets, enhancing the business' marketing capabilities. The Board expects that SBD's marketing capabilities and technology will complement XLMedia's current SEO expertise, and bolster the function of XLMedia's existing successful personal finance websites in North America. SBD generated revenue of approximately $13.6m and EBITDA of approximately $7.0m in the 12 months to September 2020 but this relates to a period of time when the business was operating offshore and its business model was focussed serving the unregulated US market. The Directors do not consider this to be indicative of the revenues achievable by targeting regulated states in the US market leveraging XLM's relationships with regulated operators.
The Acquisition includes, subject to regulatory consent, the transfer to XLMedia of a highly talented team of full time employees and contractors of c.29 focussed on content, marketing, SEO and technology development, adding key skills to the broader Group.
The Acquisition is expected to deliver on the following key benefits for the Company:
· Cements the Company's position in US Sports betting, a high growth market
· Advances the Company's strategy to move to regulated markets and increases exposure to the US
· Greatly enhances value of recent acquisition of CBWG
· Adds a strong team and new capabilities
· Provides strong technology to leverage unmonetised third party traffic (Agency Business).
4. Terms of the Acquisition
Pursuant to the terms of the Acquisition Agreement, XLMedia shall pay the SBD vendors an initial cash payment of US $11 million upon completion of the Acquisition, with an additional up front amount of $500,000 per month as a reimbursement for operating expenses from 31 December 2020 to completion of the Acquisition. An additional US$10 million cash payment is to be paid to the SBD vendors on the first anniversary of the Acquisition and a further US$3.7 million cash payment 18 months after completion of the Acquisition. This brings the total consideration to approximately US$26 million.
5. Use of Proceeds
The Directors intend that the net proceeds of the Fundraising will be used mainly to finance the consideration under the Acquisition Agreement. The net proceeds from the First Placing and the issue of the First Subscription Shares will be applied to the initial purchase consideration of US$11 million to be paid on completion of the Acquisition, which is expected to occur on or around 22 March 2021. Any proceeds of the Fundraising which are not used to fund the initial purchase consideration due under the Acquisition Agreement will be used for the Group's general corporate purposes and to provide certainty of funding of the remaining consideration due.
6. Details of the Placing
Placing
The Company proposes to raise minimum gross proceeds of approximately £20 million through the issue of the Placing Shares and Subscription Shares at the Issue Price. The First Placing is being underwritten by Berenberg at a price of 40 pence per First Placing Share. The Second Placing, the Subscription and the Open Offer are not being underwritten.
The Company's existing share allotment authorities and existing disapplication of statutory pre-emption rights authority are sufficient to satisfy the allotment of the First Placing Shares and First Subscription Shares but not in respect of the Second Placing Shares, Second Subscription Shares and the Open Offer Shares. Accordingly, the Company is seeking to increase its share allotment authorities at the General Meeting to allow for the allotment of the Second Placing Shares and the Open Offer Shares.
At the General Meeting, the Company is also seeking to extend its existing disapplication of pre-emption rights authority in connection with: (i) the allotment of the Second Placing Shares, the Second Subscription Shares and the Open Offer Shares and (ii) the allotment of an additional 10 per cent. of the Enlarged Share Capital as at the date of Second Admission.
Therefore the issue of the Second Placing Shares, Second Subscription Shares and Open Offer Shares is conditional on the passing of Resolutions 1 and 2.
If Resolutions 1 and 2 are not passed at the General Meeting, the Second Placing Shares, the Subscription Shares and Open Offer Shares will not be issued, the proceeds of the Placing of the Second Placing Shares, the Second Subscription Shares and the Open Offer will not be available to the Company and this would lead to the Company having to seek other means of satisfying the remaining future consideration and limit further investment in growth.
The Issue Price of 40 pence per Placing Share and Subscription Share represents a 6.5 per cent. discount to the 20 day volume weighted average price (VWAP) of 42.8 pence prior to 18 March 2021. Following First Admission, the First Placing Shares and First Subscription Shares will represent approximately 8.8 per cent. of the minimum Enlarged Share Capital. Following Second Admission, the Fundraising Shares will represent approximately 22.8 per cent. in aggregate of the then minimum Enlarged Share Capital (assuming full take up of Open Offer Shares under the Open Offer).
The First Placing is conditional on, among other things, First Admission and is expected to complete at 8.00 a.m. on 22 March 2021, being the expected date of First Admission.
The Second Placing is conditional on, among other things, the passing of Resolutions 1 and 2 at the General Meeting, and is expected to complete at 8.00 a.m. on 7 April 2021, being the expected date of Second Admission. If any of the conditions are not satisfied, the Second Placing Shares will not be issued and all monies received from placees will be returned to them (at such placees' risk and without interest). A summary of the Placing Agreement is set out in paragraph 8 of Part 1 of this document.
The Placing Shares are not subject to clawback and are not part of or subject to any condition related to the Open Offer.
The First Placing Shares and Second Placing Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of First Admission, in the case of the First Placing Shares and after the date of Second Admission, in the case of the Second Placing Shares.
Participation by the Directors in the Fundraising
The Directors Chris Bell, Stuart Simms and Iain Balchin are participating in the Placing and have agreed to subscribe for 400,625 Placing Shares in aggregate with a value of £160,250 at the Issue Price; and Ory Weihs and Richard Rosenberg are participating in the Subscription and have agreed to subscribe for 463,250 Subscription Shares in aggregate with a value of £185,300 at the Issue Price. These Directors have agreed not to take up any entitlements they have under the Open Offer.
Following Second Admission (and assuming that the maximum number of Open Offer Shares are taken up under the Open Offer), the Directors' interests in Shares will be as follows:
On the date of this document
On Second Admission
Director
Number of Existing Shares
Percentage of Existing Shares
Number of Placing/Subscription Shares
Number of Shares (1)
Percentage of Shares on Second Admission (1)
Christopher Bell
357,000
0.2%
250,000
607,000
0.2%
Ory Weihs
7,687,444
3.9%
450,000
8,137,444
3.2%
Stuart Simms
879,973
0.5%
125,000
1,004,973
0.4%
Iain Balchin
100,000
0.1%
25,625
125,625
0.0%
Richard Rosenberg
51,000
0.0%
13,250
64,250
0.0%
Jonas Martensson
Nil
0.0%
-
-
-
(1) Assuming full take up of all Open Offer Shares available under the Open Offer.
As a Director is a related party of the Company pursuant to the AIM Rules, the participation by the Directors in the Placing is a related party transaction for the purposes of AIM Rule 13. Chris Bell, Stuart Simms, Iain Balchin, Ory Weihs and Richard Rosenberg are participating in the Placing and/or Subscription and therefore would not be considered independent in this respect. Jonas Mårtensson as the sole independent director, having consulted with Cenkos in its capacity as Nominated Adviser to the Company for the purposes of the AIM Rules considers that the participation by Chris Bell, Stuart Simms, Iain Balchin, Ory Weihs and Richard Rosenberg in the Placing and/or Subscription is fair and reasonable insofar as Shareholders are concerned.
Settlement and Dealings
Application has been made to the London Stock Exchange for the First Placing Shares and First Subscription Shares to be admitted to trading on AIM. First Admission is expected to take place and trading will commence on AIM at 8.00 a.m. on 22 March 2021.
Application will be made to the London Stock Exchange for the Second Placing Shares, the Second Subscription Shares and the Open Offer Shares to be admitted to trading on AIM. Second Admission is expected to take place and trading will commence on AIM at 8.00 a.m. on 7 April 2021.
Following the issue of the New Shares, it is expected that the Company will have minimum 252,586,405 Shares in issue, assuming take-up in full of the Open Offer by Qualifying Shareholders.
7. Details of the Subscriptions
Ory Weihs and Richard Rosenberg, current Directors of the Company, have agreed to invest £185,300 in the Fundraising by subscribing for 463,250 Subscription Shares each in the Subscription.
Jason Ziernicki and Kyle Laskowski, the former founders of the CBWG business, have agreed to invest US$200,000 each in the Fundraising by subscribing for 359,712 Subscription Shares each in the Subscription through Warwick Gaming LLC and CB Sports LLC, entities controlled by them.
In addition, Ken Dorward, President of XLM's US business, has agreed to invest US$50,000 in the Fundraising by subscribing for 89,928 Subscription Shares.
8. Details of the Open Offer
The Company is proposing to raise up to a further approximately £3 million (before expenses) by the issue of up to 7,503,200 Open Offer Shares under the Open Offer at the Issue Price, payable in full on acceptance. Any entitlements to Open Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility. The balance of any Open Offer Shares not subscribed for under the Excess Application Facility will not be available to placees under the Placing.
Qualifying Shareholders should note that the Open Offer is not a rights issue and therefore the Open Offer Shares which Qualifying Shareholders do not apply for will not be sold in the market for the benefit of Qualifying Shareholders who do not apply for Open Offer Shares. The Application Form is not a document of title and cannot be traded or otherwise transferred.
Qualifying Shareholders may apply for Open Offer Shares under the Open Offer at the Issue Price pro rata to their holdings of Existing Shares on the Record Date on the basis of:
1 Open Offer Shares for every 26 Existing Share
Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to the Qualifying Shareholders but will be made available under the Excess Application Facility. Not all Shareholders will be Qualifying Shareholders. Neither Shareholders who are located in, or are citizens of, or have a registered office in a Restricted Jurisdiction will qualify to participate in the Open Offer. The attention of Overseas Shareholders is drawn to paragraph 6 of Part 3 of this document.
Qualifying Shareholders may also make applications in excess of their Open Offer Entitlements. To the extent that Open Offer Entitlements are not subscribed by Qualifying Shareholders, such Excess Shares will be available to satisfy such excess applications, subject to the maximum number of Open Offer Shares in aggregate. To the extent that applications are received in respect of an aggregate of more than the number of Open Offer Shares available, excess applications will be scaled back accordingly. Any qualifying shareholder with no basic entitlement cannot apply under the excess facility.
Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements. Applicants can apply for less or more than their entitlements under the Open Offer, but the Company cannot guarantee that any application for Excess Shares under the Excess Application Facility will be satisfied, as this will depend, in part, on the extent to which other Qualifying Shareholders apply for less than or more than their own Open Offer Entitlements. The Company may satisfy valid applications for Excess Shares in whole or in part but reserves the right not to satisfy any excess application above any Open Offer Entitlement.
The Board (having consulted with Berenberg and Cenkos) may scale back applications made in excess of Open Offer Entitlements on such basis as it reasonably considers to be appropriate.
The Open Offer Shares must be paid for in full on application. If you have received an Application Form with this document, please refer to Part 3 of this document. If you hold your Shares in CREST and have received a credit of Open Offer Entitlements to your CREST Stock Account, please refer to Part 3 of this document and also to the CREST Manual for further information on the CREST procedures referred to below.
Further details of the Open Offer and the terms and conditions on which it is being made, including the procedure for application and payment, are contained in Part 3 of this document and, where relevant, on the accompanying Application Form.
The Open Offer is conditional on the Placing becoming or being declared unconditional in all respects and not being terminated before Second Admission. The other principal conditions to the Open Offer are:
(a) the passing (without amendment) of Resolutions 1 and 2 at the General Meeting;
(b) the Placing Agreement becoming or being declared unconditional in all respects and not terminated in accordance with its terms prior to Admission; and
(c) Second Admission becoming effective by no later than 8.00 a.m. on 7 April 2021 or such later time and/or date (being no later than 30 April 2021) as the Banks and the Company may agree.
Accordingly, if these conditions are not satisfied or waived (where capable of waiver), the Open Offer will not proceed and the Open Offer Shares will not be issued and all monies received by Link Group will be returned to the applicants (at the applicants' risk and without interest) as soon as possible thereafter.
The Open Offer Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Shares and the Placing Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.
9. Details of the Placing Agreement
On 18 March 2021, the Company, Cenkos and Berenberg entered into the Placing Agreement pursuant to which each of the Banks agreed, subject to certain conditions, to use their respective reasonable endeavours (as agents for the Company) to procure subscribers for the Placing Shares at the Issue Price. The First Placing is conditional, inter alia, on First Admission occurring not later than 8.00 a.m. on 22 March 2021 (or such later time or date as the Banks may agree with the Company, in any event being no later than 8.30 a.m. on 31 March 2021). The Second Placing is conditional, inter alia, on the passing of the Resolutions and Second Admission occurring not later than 8.00 a.m. on 7 April 2021 (or such later time or date as the Banks may agree with the Company, in any event being no later than 8.30 a.m. on 30 April 2021).
The First Placing is being underwritten by Berenberg at a price of 40 pence per First Placing Share. The Second Placing is not being underwritten.
The Placing Agreement contains customary warranties given by the Company to the Banks in respect of the Placing as well as other matters relating, inter alia, the accuracy of the information in this document, the Group and its business. In addition, the Company has provided a customary indemnity to the Banks in respect of liabilities arising out of or in connection with the Placing and Open Offer. The Placing Agreement also contains provisions entitling the Banks to terminate the Placing Agreement at any time prior to First Admission and at any time between First Admission and Second Admission respectively, in certain circumstances, including but not limited to, in the event that warranty is or has ceased to be, true and accurate and not misleading, the failure of the Company to comply in any material respect with any of its obligations under the Placing Agreement, the occurrence of certain force majeure events or a material adverse change affecting the condition, or the earnings or business affairs or prospects of the Group as a whole, whether or not arising in the ordinary course of business. In particular, if the Acquisition Agreement is terminated at any time prior to First Admission, the Banks shall have a right to terminate the Placing Agreement.
The Company has agreed to pay the Banks, in aggregate, a corporate finance fee of £50,000 together with a commission of 4 per cent. of the aggregate value at the Issue Price of the Placing Shares, other than those Placing Shares subscribed for by the Company's largest shareholder, Premier Investissement SAS and its associates, in respect of which the commission rate shall be 3 per cent.. In addition, Berenberg will receive an additional commission of 1 per cent. of the aggregate value at the Issue Price of the First Placing Shares in consideration for underwriting the First Placing.
Subject to certain conditions being satisfied, it is anticipated that First Admission will become effective and that dealings in the First Placing Shares will commence on AIM at 8.00 a.m. on 22 March 2021. Subject to certain conditions being satisfied, including the passing of the Resolutions at the General Meeting and, in relation to the Open Offer Shares only, completion of the Open Offer, it is anticipated that Second Admission will become effective and that dealings in the Second Placing Shares and Open Offer Shares will commence on AIM at 8.00 a.m. on 7 April 2021.
10. Overseas Shareholders
The making of the Open Offer to persons outside the United Kingdom may be prohibited or affected by the relevant laws of the overseas jurisdiction. Shareholders with registered or mailing addresses outside the United Kingdom or who are citizens or nationals of, or resident in, a jurisdiction other than the United Kingdom should read paragraph 6 of Part 3 of this document. It is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of any legal requirements in their jurisdiction.
11. General Meeting
You will find set out in the Circular to be posted to Shareholders, a notice convening the General Meeting to be held at 11:00 a.m. on 6 April 2021 at The Courtyard Suite, 21-25 Hart Street, Henley-on-Thames, RG9 2AR, United Kingdom. The issue of the Placing Shares, the Subscription Shares and the Open Offer Shares is conditional upon the passing of Resolutions 1 and 2 at the General Meeting.
12. Action to be Taken
In respect of the General Meeting
IMPORTANT NOTICE REGARDING COVID-19 GENERAL MEETING ARRANGEMENTS
It is noted that the Government's measures to restrict travel and public gatherings currently in force include a prohibition against public gatherings. Accordingly, the General Meeting will be restricted to two attendees (including the chairman of the General Meeting), both of whom will be Shareholders or a proxy for a Shareholder or Shareholder for the purposes of forming a quorum. I, or anyone else acting as chairman of the General Meeting, have the power in law and under the Articles to secure the safety of the people attending the General Meeting. Therefore, any Shareholders who seeks to attend the General Meeting may be refused entry and I, or anyone else acting as chairman of the General Meeting, may adjourn the General Meeting because the attendance of any additional Shareholder above the number necessary to form a quorum would be unlawful under the Government's measures. Equally, even if the Government restrictions are relaxed, the safety of persons attending the General Meeting is paramount and, if necessary, the Company may restrict attendance to safeguard the health of attendees.
Please note that the General Meeting will be restricted to its formal business only. We will continue to monitor the fast-changing government guidance and provide any appropriate updates via a Regulatory Information Service and our website www.xlmedia.com.
Shareholders are strongly encouraged to exercise their vote on the Resolutions by submitting a proxy appointment and giving voting instructions. At the General Meeting, the Resolutions will be put to a vote on a poll, rather than on a show of hands. This will result in a more accurate reflection of the views of Shareholders and to ensure that your proxy votes are recognised.
Shareholders are invited to submit to me or the Company Secretary any questions they would otherwise have asked at the General Meeting through a facility on our website www.xlmedia.com. Such questions will be considered by the Board. The Company will respond to any relevant questions that are received, and may also, if the Board so determines, and subject to any regulatory restrictions, public on our website a summary of responses to questions received.
You can submit your proxy vote electronically by accessing the Shareholder portal at www.signalshares.com The proxy vote must be received by Link Group, Central Square, 29 Wellington Street, Leeds, LS1 4DL, in each case no later than 11:00 a.m. on 1 April 2021 (or, if the meeting is adjourned, not less than 48 hours (excluding non-working days) before the time fixed for the adjourned meeting).
If you hold your Shares in uncertificated form in CREST, you may vote using the CREST electronic proxy appointment service in accordance with the procedures set out in the CREST Manual using CREST ID: RA10. The latest time by which an instruction must be validly entered through the CREST electronic proxy appointment service is 11:00 a.m. on 1 April 2021 (or, if the meeting is adjourned, not less than 48 hours (excluding non-working days) before the time fixed for the adjourned meeting).
Alternatively, You may request a hard copy form of proxy directly from the registrars, Link Group on 0371 664 0300. Calls cost 12p per minute plus your phone company's access charge. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9:00 a.m. - 5:30 p.m., Monday to Friday excluding public holidays in England and Wales.
In respect of the Open Offer
Qualifying Non-CREST Shareholder
If you are a Qualifying Non-CREST Shareholder, you will have received an Application Form which gives details of your entitlements under the Open Offer (as shown by the number of Open Offer Entitlements allocated to you). If you wish to apply for the number of Open Offer Shares you are entitled to under the Open Offer (as shown by the number of Open Offer Entitlements allocated to you) or more or less Open Offer Shares than you are entitled to under the Open Offer, you should complete the enclosed Application Form in accordance with the procedure for application set out in Part 3 of this document and on the Application Form itself.
Qualifying CREST Shareholder
If you are a Qualifying CREST Shareholder, no Application Form is enclosed and you will receive a credit to your appropriate CREST Stock Account in respect of the Open Offer Entitlements representing your entitlement under the Open Offer. You should refer to the procedure for application set out in Part 3 of this document.
13. Risk Factors and Additional Information
The attention of Shareholders is drawn to the risk factors set out in Part 2 of this document and the information contained in Parts 3 and 4, which provide additional information on the Open Offer.
14. Documents Available for Inspection
As at the date of this document, the Company's registered office is not open to members of the general public in accordance with the latest measures imposed by the UK Government in response to the COVID-19 pandemic. Copies of this document and the consent letters from each of Cenkos and Berenberg are available from the Company on request by email to ir@xlmedia.com from the date of this document up to and including the date of the General Meeting.
15. General
If you have any questions relating to this document, and the completion and return of the (if relevant) the Application Form, please telephone Link Group on 0371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m. - 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Link Group cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.
If you require such advice, you should consult your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the FSMA immediately or, if you are in a jurisdiction outside the United Kingdom, another appropriately authorised independent financial adviser.
16. Recommendation
The Directors believe that the Fundraising is in the best interests of the Company and the Shareholders, taken as a whole. The initial payment for the Acquisition will be funded by the net proceeds of the First Placing (which is not subject to shareholder approval) and the Group's existing resources. However, the Directors believe that the proceeds of the Second Placing are important to ensure as strong balance sheet for the payment of the deferred consideration on the Acquisition and potential earn outs payments on CBWG. Therefore, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions as they intend to do in respect of their own interests in 9,075,417 Shares in aggregate, representing approximately 4.7 per cent. of the Existing Shares.
If Shareholders do not vote in favour of the Resolutions, the Second Placing, Second Subscription and the Open Offer will not proceed and the Company may have to seek other sources of funding if it wants to fund the deferred portion of the consideration and maintain its expected levels of investment.
APPENDIX II
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING SHARES.
THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES.
THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION IN IT, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, NEW ZEALAND THE REPUBLIC OF SOUTH AFRICA, (SUBJECT TO CERTAIN LIMITED EXCEPTIONS) THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
THE DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY PART OF IT AND THE PLACING AND ISSUE OF THE PLACING SHARES IN CERTAIN JURISDICTIONS MAY BE RESTRICTED OR PROHIBITED BY LAW. NO ACTION HAS BEEN TAKEN BY THE COMPANY, CENKOS SECURITIES PLC ("CENKOS") AND JOH. BERENBERG, GOSSLER & CO. KG ("BERENBERG") OR ANY OF THEIR RESPECTIVE AFFILIATES, AGENTS, CONSULTANTS, DIRECTORS, EMPLOYEES OR OFFICERS THAT WOULD PERMIT AN OFFER OF THE PLACING SHARES OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY OTHER OFFERING OR PUBLICITY MATERIAL RELATING TO SUCH PLACING SHARES IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED, OTHER THAN THE UK. PERSONS TO WHOSE ATTENTION THIS ANNOUNCEMENT HAS BEEN DRAWN ARE REQUIRED BY THE COMPANY, CENKOS AND BERENBERG TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT (A) PERSONS IN MEMBER STATES OF THE EEA WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(E) OF THE EU PROSPECTUS REGULATION ("EU QUALIFIED INVESTORS"), AND (B) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(E) OF THE UK PROSPECTUS REGULATION ("UK QUALIFIED INVESTORS") WHO ALSO (I) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS); (II) FALL WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (C) ARE PERSONS TO WHOM IT IS OTHERWISE LAWFUL TO COMMUNICATE IT TO (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO THE LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.
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 THE SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR THE PLACING SHARES OR ANY OTHER SECURITY IN THE UNITED STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OR UNDER THE SECURITIES LAWS OF, OR WITH ANY SECURITIES REGULATORY AUTHORITY OF, ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the us Securities Act. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THE CONTENTS OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER OF ANY SECURITIES IN THE UNITED STATES.
THIS ANNOUNCEMENT OR ANY PART OF IT DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO ACQUIRE, PURCHASE OR SUBSCRIBE FOR PLACING SHARES IN AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS OR MAY BE RESTRICTED OR UNLAWFUL. THE RELEVANT CLEARANCES HAVE NOT BEEN, NOR WILL THEY BE, OBTAINED FROM THE SECURITIES COMMISSION OF ANY PROVINCE OR TERRITORY OF CANADA, NO PROSPECTUS HAS BEEN LODGED WITH, OR REGISTERED BY, THE AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION OR THE JAPANESE MINISTRY OF FINANCE; THE RELEVANT CLEARANCES HAVE NOT BEEN, AND WILL NOT BE, OBTAINED FOR THE SOUTH AFRICA RESERVE BANK OR ANY OTHER APPLICABLE BODY IN THE REPUBLIC OF SOUTH AFRICA IN RELATION TO THE PLACING SHARES AND THE PLACING SHARES HAVE NOT BEEN, NOR WILL THEY BE, REGISTERED UNDER OR OFFERED IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE, PROVINCE OR TERRITORY OF AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA. ACCORDINGLY, THE PLACING SHARES MAY NOT (UNLESS AN EXEMPTION UNDER THE RELEVANT SECURITIES LAWS IS APPLICABLE) BE OFFERED, SOLD, RESOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, OR ANY OTHER JURISDICTION OUTSIDE THE UNITED KINGDOM. PERSONS (INCLUDING, WITHOUT LIMITATION, NOMINEES AND TRUSTEES) WHO HAVE A CONTRACTUAL RIGHT OR OTHER LEGAL OBLIGATION TO FORWARD A COPY OF THIS ANNOUNCEMENT SHOULD SEEK APPROPRIATE ADVICE BEFORE TAKING ANY ACTION.
THIS ANNOUNCEMENT INCLUDES STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, "FORWARD-LOOKING STATEMENTS". THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE TERMS "BELIEVES", "ESTIMATES", "PLANS", "PROJECTS", "ANTICIPATES", "EXPECTS", "INTENDS", "MAY", "WILL" OR "SHOULD", OR, IN EACH CASE, THEIR NEGATIVE OR OTHER VARIATIONS OR COMPARABLE TERMINOLOGY. THESE FORWARD-LOOKING STATEMENTS INCLUDE MATTERS THAT ARE NOT HISTORICAL FACTS. THEY APPEAR IN A NUMBER OF PLACES THROUGHOUT THIS ANNOUNCEMENT AND INCLUDE STATEMENTS REGARDING THE DIRECTORS' CURRENT INTENTIONS, BELIEFS OR EXPECTATIONS CONCERNING, AMONG OTHER THINGS, THE COMPANY'S RESULTS OR OPERATIONS, FINANCIAL CONDITION, LIQUIDITY, PROSPECTS, GROWTH, STRATEGIES AND THE COMPANY'S MARKETS. FORWARD-LOOKING STATEMENTS IN THIS ANNOUNCEMENT ARE BASED ON CERTAIN FACTORS AND ASSUMPTIONS, INCLUDING THE DIRECTORS' CURRENT VIEW WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS RELATING TO FUTURE EVENTS AND OTHER RISKS, UNCERTAINTIES AND ASSUMPTIONS RELATING TO THE COMPANY'S OPERATIONS, GROWTH STRATEGY AND LIQUIDITY. WHILST THE DIRECTORS CONSIDER THESE ASSUMPTIONS TO BE REASONABLE BASED UPON INFORMATION CURRENTLY AVAILABLE, THEY MAY PROVE TO BE INCORRECT. SAVE AS REQUIRED BY LAW OR BY THE LISTING RULES THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO FORWARD-LOOKING STATEMENTS IN THIS ANNOUNCEMENT THAT MAY OCCUR DUE TO ANY CHANGE IN THE DIRECTORS' EXPECTATIONS OR TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT HAS BEEN PREPARED AND ISSUED BY THE COMPANY AND IS AND WILL BE THE SOLE RESPONSIBILITY OF THE COMPANY. NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS OR WILL BE MADE AS TO, OR IN RELATION TO, AND NO RESPONSIBILITY OR LIABILITY IS OR WILL BE ACCEPTED BY CENKOS, BERENBERG OR ANY OF THEIR RESPECTIVE ADVISERS, AFFILIATES, AGENTS, BRANCHES, CONSULTANTS, DIRECTORS, EMPLOYEES, OFFICERS OR ANY OTHER PERSON AS TO OR IN RELATION TO THE ACCURACY OR COMPLETENESS OF THIS ANNOUNCEMENT OR ANY OTHER WRITTEN OR ORAL INFORMATION MADE AVAILABLE TO OR PUBLICLY AVAILABLE TO ANY PLACEE, ANY PERSON ACTING ON SUCH PLACEE'S BEHALF OR ANY OF THEIR RESPECTIVE ADVISERS, AND ANY LIABILITY THEREFOR IS EXPRESSLY DISCLAIMED.
THIS ANNOUNCEMENT HAS NOT BEEN EXAMINED OR APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO EXAMINED OR APPROVED.
This Announcement should be read in its entirety.
Terms and conditions of, and the mechanics of participation in, the Placing
This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. By participating in the Placing, each Placee will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix.
No commission will be paid to Placees or by Placees in respect of any Placing Shares.
Terms and conditions of, and the mechanics of participation in, the Open Offer
A Circular which explains the background to and reasons for the Placing, Subscription and Open Offer, contains a notice convening the General Meeting ("Notice") will be sent to Shareholders. The Circular will also contain the terms and conditions of, and the mechanics of participation in, the Open Offer. The Circular is expected to be sent to Shareholders on or around 19 March 2021.
Details of the Placing Agreement and the Placing Shares
Cenkos and Berenberg as joint brokers (together the "Brokers" and each a "Broker") have entered into the Placing and Open Offer Agreement ("Placing Agreement") with the Company pursuant to which, on the terms and subject to the conditions set out in such Placing Agreement, each of Cenkos and Berenberg, as agent for and on behalf of the Company, has agreed (severally and not jointly and severally) to use their respective reasonable endeavors to procure Placees for the Placing Shares at the Issue Price (as defined below). The First Placing is being underwritten by Berenberg. The Second Placing, the Subscription and the Open Offer are not being underwritten.
The price at which the Placing Shares are to be placed will be 40 pence per Ordinary Share (the "Issue Price"). The final number of Placing Shares will be decided at the close of the Bookbuild following the execution of a placing supplement agreement by the Company and the Brokers (the "Placing Supplement"). The timing of the closing of the book and allocations are at the discretion of the Company and the Brokers. Details of the number of Placing Shares will be announced as soon as practicable after the close of the Bookbuild.
The Placing Shares will, when issued, be subject to the articles of association of the Company and credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares.
The Placing Agreement contains certain undertakings, representations, warranties and indemnities given by the Company for the benefit of Cenkos and Berenberg. Cenkos and Berenberg have absolute discretion as to whether or not to bring an action against the Company for breach of these undertakings, warranties and indemnities.
Cenkos and Berenberg have the right to terminate the Placing Agreement in certain circumstances, details of which are set out below.
Application for Admissions
The Placing is being conducted in two tranches ("First Placing" and "Second Placing"). The First Placing Shares will be allotted and issued pursuant to the Placing and are expected to be admitted to trading on AIM on 22 March 2021 ("First Admission"). The First Placing will utilise the Company's existing shareholder authorities to allot and issue new Ordinary Shares on a non-pre-emptive basis for cash.
Subject to the passing of the Resolutions, the Second Placing Shares will be allotted and issued pursuant to the Placing and are expected to be admitted to trading on AIM on 7 April 2021 ("Second Admission").
Applications have been, or will be made to the London Stock Exchange for the admission of the First Placing Shares, the First Subscription Shares and Second Placing Shares, the Second Subscription Shares and the Open Offer Shares to trading on AIM (together, "Admissions").
First Admission is conditional, inter alia, upon the Placing Agreement not having been terminated and becoming unconditional in respect of the First Placing Shares. Second Admission of the Second Placing Shares is also conditional, inter alia, upon the passing of the Resolutions by the Shareholders at the General Meeting to be held at 11:00 a.m. on 6 April 2021 and upon the Placing Agreement not having been terminated and becoming unconditional in respect of the Second Placing Shares.
Principal terms of the Placing
Cenkos and Berenberg are acting as joint brokers to the Placing, as agents for and on behalf of the Company. Each of Cenkos, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA"), and Berenberg, which is regulated by the German Federal Financial Supervisory Authority and subject to limited regulation in the United Kingdom by the FCA, 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 either Cenkos or Berenberg or for providing advice in relation to the matters described in this Announcement.
Participation in the Placing will only be available to persons who may lawfully be, and are, invited by Cenkos or Berenberg to participate. Cenkos and Berenberg and any of their affiliates are entitled to participate in the Placing as principal.
Cenkos and Berenberg are proceeding with the Bookbuild for the purpose of assessing the demand from institutional and other investors for subscribing for Placing Shares at the Issue Price and the Company then issuing the Placing Shares under the Placing to raise approximately £7.29 million for the Company under the First Placing and minimum approximately £12.18 million for the Company under the Second Placing, in each case before expenses. The exact number of Placing Shares to be allocated and issued to each Placee shall be determined by the Brokers (in consultation with the Company) following completion of the Bookbuild. The Brokers will commence the Bookbuild today and it is expected to close no later than 8:00 p.m. on 18 March 2021 but may be closed earlier or later at the Brokers' discretion. Completion of the Bookbuild is at the discretion of the Company and there is no guarantee that the Bookbuild will be completed. The Brokers may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The number of Placing Shares will be announced on a Regulatory Information Service following completion of the Bookbuild.
Each Placee's allocation of Placing Shares will be communicated orally or by email by the relevant Broker to the relevant Placee. That oral or email confirmation will give rise to an irrevocable, legally binding commitment by such Placee, in favour of the Brokers and the Company, under which it agrees to acquire the number of Placing Shares allocated to it at the Issue Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's articles of association. Except with the relevant Broker's consent, such commitment will not be capable of variation, revocation, termination or rescission at either the time of such oral confirmation or any time thereafter.
The Issue Price shall be payable to the Brokers by all Placees in accordance with the terms of this Appendix.
Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the relevant Broker (as agent for the Company), to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Issue Price and the number of Placing Shares such Placee has agreed to acquire and that the Company has agreed to allot and issue to that Placee.
Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made on the basis explained below under "Registration and Settlement".
All obligations of the Brokers under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing".
By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and/or set out in the Placing Agreement and will not otherwise be capable of rescission or termination by the Placee.
To the fullest extent permissible by law and applicable FCA rules, none of (a) the Brokers (or either of them), (b) any of Brokers' respective affiliates, agents, directors, officers, employees or consultants, (c) to the extent not contained within (a) or (b), any person connected with either of the Brokers (as defined in the FSMA) ((b) and (c) being together "affiliates" and individually an "affiliate" of either Broker or (d) any person acting on behalf of either Broker, shall have any liability (including, to the extent permissible by law, any fiduciary duties) to any Placee or to any other person whether acting on behalf of a Placee or otherwise. In particular, neither of the Brokers nor any of their respective affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of their conduct of the Placing or of such alternative method of effecting the Placing as the Brokers and the Company may agree.
Registration and Settlement
Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by the relevant Broker in accordance with either the standing CREST or certificated settlement instructions which they have in place with Berenberg (acting as settlement agent).
Settlement of transactions in the Placing Shares (ISIN: JE00BH6XDL31) will take place within the CREST system, subject to certain exceptions. Settlement through CREST with respect to the Placing Shares will be on a delivery versus payment basis unless otherwise notified by the Brokers and it is expected to occur at 8.00 a.m. on 22 March 2021 with respect to the First Placing Shares and at 8.00 a.m. on 7 April 2021 with respect to the Second Placing Shares.
In the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and Berenberg may agree that the Placing Shares should be issued in certificated form.
Berenberg also reserves the right to require settlement for the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as it deems necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of two percentage points above prevailing LIBOR as determined by the Brokers.
Each Placee is deemed to agree that if it does not comply with these obligations, Berenberg may sell any or all of their Placing Shares on their behalf and retain from the proceeds, for Berenberg's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of their Placing Shares on their behalf.
If Placing Shares are to be delivered to a custodian or settlement agent and insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to stamp duty or stamp duty reserve tax. If there are any circumstances in which any stamp duty or stamp duty reserve tax or other similar taxes or duties (including any interest and penalties relating thereto) is payable in respect of the allocation, allotment, issue, sale, transfer or delivery of the Placing Shares (or, for the avoidance of doubt, if any stamp duty or stamp duty reserve tax is payable in connection with any subsequent transfer or agreement to transfer Placing Shares), the Company shall not be responsible for payment thereof.
Conditions of the First Placing and Second Placing
The First Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.
The obligations of each of the Brokers under the Placing Agreement are, and the First Placing is, conditional upon, inter alia:
1. the Company complying with its obligations under the Placing Agreement in all material respects and under this Appendix, to the extent that they fall to be performed or satisfied before First Admission;
2. the publication of the Placing results announcement through a Regulatory Information Service by no later than 5.00 pm on the date of the Placing Agreement (or by such other time and/or date as the Company and the Brokers may agree);
3. the Asset Purchase Agreement having been executed by all the parties thereto, and not having been terminated or rescinded prior to First Admission;
4. the warranties and representations being true and accurate and not misleading on and as of the date of the Placing Agreement and immediately prior to First Admission, by reference to the facts and circumstances then subsisting; and
5. First Admission occurring not later than 8.00 am on 22March 2021 (or such later time or date as the Brokers may agree with the Company, in any event being no later than 31 March 2021).
The Second Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.
The obligations of each of the Brokers under the Placing Agreement are, and the Second Placing is, conditional upon, inter alia:
1. First Admission having occurred;
2. the General Meeting having taken place on the date set out in the Notice, no adjournment of the General Meeting having occurred without the prior written consent of the Placing Agents and each of the Resolutions having been passed thereat by the requisite majority without amendment;
3. the Company complying with its obligations under the Placing Agreement in all material respects and under this Appendix, to the extent that they fall to be performed or satisfied before Second Admission;
4. the warranties and representations being true and accurate and not misleading as at the date of Second Admission, by reference to the facts and circumstances then subsisting;
5. Second Admission occurring not later than 8.00 am on 7 April 2021 (or such later time or date as the Brokers may agree with the Company, in any event being no later than 30 April 2021),
(all conditions to the obligations of each of the Brokers included in the Placing Agreement in respect of First Admission and Second Admission (and either or both of them as the context requires) being together, the "Conditions").
If any of the Conditions set out in the Placing Agreement are not fulfilled or, where permitted, waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and the Brokers may agree), or the Placing Agreement is terminated in accordance with the circumstances described under "Termination of the First Placing" or "Termination of the Second Placing" below, the Placing will lapse and each Placee's rights and obligations shall cease and terminate at such time, all monies received from a Placee pursuant to the Placing shall be returned to such Placee without interest, at the risk of the relevant Placee, and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.
Certain Conditions may be waived in whole or in part by the Brokers acting jointly in their absolute discretion and the Brokers may also agree in writing with the Company to extend the time for satisfaction of any condition. Any such extension or waiver will not affect Placees' commitments as set out in this Appendix.
The Brokers may terminate the Placing Agreement in certain circumstances, details of which are set out below.
Neither of the Brokers, the Company nor any of their respective affiliates, agents, consultants, directors, employees or officers shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing, each Placee agrees that any such decision is within the absolute discretion of the Brokers.
Termination of the Placing
First Placing Termination
Either of the Brokers may terminate the obligations of both Brokers under the Placing Agreement, in accordance with its terms, at any time prior to First Admission if, inter alia:
1. In the opinion of either Broker (acting in good faith) any statement contained in this Announcement, or any other document or announcement issued or published by or on behalf of the Company in connection with the Placing, is or has become untrue or inaccurate in any material respect or misleading;
2. any of the warranties and representations is not, or has ceased to be, true, accurate and not misleading;
3. the Asset Purchase Agreement is terminated;
4. in the opinion of either Broker (acting in good faith) there has occurred any material adverse change in the financial position, business or prospects of the Company (whether or not foreseeable at the time of the Placing Agreement); or
5. there has occurred any change in national or international financial, market, economic or political conditions (including a significant worsening of the COVID-19 pandemic) or there shall have occurred any event which is likely to have a material adverse effect on the business or prospects of the Company or to render the Placing impracticable or inadvisable.
Second Placing Termination
Either of the Brokers may terminate the obligations of both Brokers under the Placing Agreement, in accordance with its terms, at any time between First Admission and Second Admission if, inter alia:
1. in the opinion of either Broker (acting in good faith) any statement contained in this Announcement, or any other document or announcement issued or published by or on behalf of the Company in connection with the Placing, is or has become untrue or inaccurate in any material respect or misleading;
2. any of the warranties and representations is not, or has ceased to be, true, accurate and not misleading;
3. in the opinion of either Broker (acting in good faith) there has occurred any material adverse change in the financial position, business or prospects of the Company (whether or not foreseeable at the time of the Placing Agreement); or
4. there has occurred any change in national or international financial, market, economic or political conditions (including a significant worsening of the COVID-19 pandemic) or there shall have occurred any event which is likely to have a material adverse effect on the business or prospects of the Company or to render the Placing impracticable or inadvisable.
If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time, all monies received from a Placee pursuant to the Placing shall be returned to such Placee without interest, at the risk of the relevant Placee, and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.
By participating in the Placing, each Placee agrees with the Company and the Brokers that the exercise by the Company, or the Brokers, of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or the Brokers and that neither the Company nor the Brokers need make any reference to such Placee and that none of the Brokers, the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.
No admission document or prospectus
No offering document, admission document or prospectus will be made available in connection with the matters contained or referred to in this Announcement and no such document is required to be published, in accordance with Regulation (EU) 2017/1129 (the "Prospectus Regulation") or Regulation (EU) 2017/1129, as amended and retained in UK law on 31 December 2020 by the European Union (Withdrawal) Act 2018 (the "EUWA") (the "UK Prospectus Regulation"). Placees' commitments will be made solely on the basis of the information contained in this Announcement and subject to any further terms set forth in the contract note to be sent to individual Placees.
Representations, warranties and further terms
By participating in the Placing, each Placee and/or any person acting on such Placee's behalf irrevocably confirms, acknowledges, agrees, represents, undertakes, and warrants with each of the Brokers that (save where the Brokers expressly agree in writing to the contrary):
1. it has read and understood this Announcement in its entirety and it agrees and acknowledges that the issue and acquisition of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements, undertakings and other information contained in this Appendix and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with the Placing, the Company, the Placing Shares or otherwise, other than the information contained in this Announcement;
2. it is a Relevant Person and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business;
3. in the case of a Relevant Person in the United Kingdom who acquires any Placing Shares pursuant to the Placing:
a. it is a UK Qualified Investor; and
b. in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Regulation 5(1) of the UK Prospectus Regulation:
i. the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale (i) to persons in the United Kingdom other than UK Qualified Investors or (ii) to persons in any Relevant Member State other than EU Qualified Investors or (iii) in circumstances in which the prior consent of the Brokers has been given to the offer or resale; or
ii. where Placing Shares have been acquired by it on behalf of persons in the United Kingdom other than UK Qualified Investors, the offer of those Placing Shares to it is not treated under the UK Prospectus Regulation as having been made to such persons; or
iii. where Placing Shares have been acquired by it on behalf of persons, other than EU Qualified Investors, in any Relevant Member State, the offer of those Placing Shares to it is not treated under the EU Prospectus Regulation as having been made to such persons;
4. in the case of a Relevant Person in a Relevant Member State who acquires any Placing Shares pursuant to the Placing:
a. it is an EU Qualified Investor; and
b. in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Regulation 5 of the EU Prospectus Regulation:
i. the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale (i) to persons in the United Kingdom other than UK Qualified Investors or (ii) to persons in any Relevant Member State other than EU Qualified Investors or (iii) in circumstances in which the prior consent of the Brokers has been given to the offer or resale; or
ii. where Placing Shares have been acquired by it on behalf of persons in the United Kingdom other than UK Qualified Investors, the offer of those Placing Shares to it is not treated under the UK Prospectus Regulation as having been made to such persons; or
iii. where Placing Shares have been acquired by it on behalf of persons, other than EU Qualified Investors, in any Relevant Member State, the offer of those Placing Shares to it is not treated under the EU Prospectus Regulation as having been made to such persons;
5. it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are acquired will not be, a resident of, or with an address in, or subject to the laws of, Australia, Canada, Japan, New Zealand or the Republic of South Africa, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of Australia, Canada, Japan, New Zealand or the Republic of South Africa and may not be offered, sold or acquired, directly or indirectly, within those jurisdictions;
6. it acknowledges that no action has been or will be taken by any of the Company, the Brokers or any person acting on their behalf that would, or is intended to, permit a public offer of the Placing Shares or in any country or jurisdiction where any such action for that purpose is required. In addition, the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the securities laws of Australia, Canada, Japan, New Zealand or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within Australia, Canada, Japan, New Zealand or the Republic of South Africa or in any country or jurisdiction where any such action for that purpose is required;
7. it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing, in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;
8. it is purchasing the Placing Shares for investment purposes and not with a view to distribution or resale, directly or indirectly, in or into the United States or otherwise in violation of the United States securities laws, and it will not reoffer, resell, pledge or otherwise transfer the Placing Shares except (a) outside the United States in an "offshore transaction" complying with the provisions of Regulation S to a person outside the United States and not known by the transferor to be a US Person or acting for the account or benefit of a US Person, by pre-arrangement or otherwise; or (b) to the Company or a subsidiary thereof;
9. it understands that the Placing Shares have not been and will not be registered under the US Securities Act or with any state or other jurisdiction of the United States and may not be reoffered or resold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. It understands that the Company has no intention to register the Placing Shares with the SEC or with any state securities commission and the Company is under no obligation to assist it in obtaining or complying with any exemption from registration. It also acknowledges that the Placing Shares will be "restricted securities" within the meaning of Rule 144(a)(3) under the US Securities Act and, for so long as the Placing Shares are "restricted securities", it shall not deposit such Placing Shares in any unrestricted depositary facility established or maintained by a depositary bank;
10. if the Placee is located outside of the United States, the Placee (a) is not a US Person and it is not acquiring the Placing Shares for the account or benefit of a US Person; and (b) at the time the Placing Shares are acquired it will be outside the United States and acquiring the Placing Shares in an "offshore transaction" within the meaning of and in accordance with Regulation S;
11. if the Placee is located in the United States or is a US Person:
a. it is a QIB and it is acquiring the Placing Shares for its own account, does not have any contract, undertaking or arrangement with any person or entity to sell, transfer or grant a participation with respect to any of the Placing Shares, and is not acquiring the Placing Shares with a view to distribution or resale, directly or indirectly, in or into the United States or otherwise in violation of the United States securities laws. Further, if it is acquiring Placing Shares as a fiduciary or agent for one or more investor accounts, each such account is a QIB;
b. it or a purchaser representative, adviser or consultant relied upon by it in reaching a decision to subscribe has such knowledge and experience in financial, tax and business matters as to enable it or such adviser or consultant to evaluate the merits and risks of an investment in the Company and to make an informed investment decision with respect thereto;
c. it acknowledges that the Placing Shares have not been offered to it and it is not purchasing the Placing Shares as a result of any "general solicitation" or "general advertising" (with the meaning of Rule 502(c) of Regulation D) or any "directed selling efforts" (with the meaning of Regulation S);
d. it acknowledges that the Company may require that any transferor furnish a legal opinion satisfactory to the Company and its counsel that any proposed transfer complies with any applicable federal, state and any other applicable securities laws. Appropriate stop transfer instructions may be placed with respect to the Placing Shares and the certificate representing the Placing Shares in certificated form (if any) sold in the United States will bear a legend substantially in the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. ACCORDINGLY, THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) IN AN OFFSHORE TRANSACTION COMPLYING WITH THE PROVISIONS OF REGULATION S UNDER THE U.S. SECURITIES ACT TO A PERSON OUTSIDE THE UNITED STATES AND NOT KNOWN BY THE TRANSFEROR TO BE A U.S. PERSON OR ACTING FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON, BY PRE-ARRANGEMENT OR OTHERWISE; (B) OR TO THE ISSUER OF THE SECURITIES OR A SUBSIDIARY OF THE ISSUER.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THESE SECURITIES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF THE COMPANY'S SECURITIES, ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK.";
e. it is aware that it must bear the economic risk of an investment in the Placing Shares for an indefinite period of time and it has the ability to bear such economic risk of its investment in the Placing Shares, has adequate means of providing for its current and contingent needs, has no need for liquidity with respect to its investment in the Placing Shares, and is able to sustain a complete loss of its investment in the Placing Shares;
f. it satisfies any and all standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of its residence or otherwise;
g. it has been given the opportunity to (i) ask questions of, and receive answers from the Company concerning the terms and conditions of the Placing and other matters pertaining to an investment in the Company and (ii) obtain any additional information that the Company can acquire without unreasonable effort or expense as it may require to evaluate the merits and risks of an investment in the Company, and all such questions, to the extent it has considered them material, have been answered;
h. it understands that no United States federal or state agency has passed upon the merits or risks of an investment in the Placing Shares or the contents of this document or made any finding or determination concerning the fairness or advisability of this investment;
b. it invests in or purchases securities similar to the Placing Shares in the normal course of business and it has: (a) conducted its own investigation with respect to the Company and the Placing Shares; (b) received and reviewed all information that it believes is necessary or appropriate in connection with our purchase of the Placing Shares; (c) made its own assessment and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Placing Shares; and (d) has sufficient knowledge and experience in financial and business matters and expertise in assessing credit, market and all other relevant risk and is capable of evaluating, and has evaluated, independently the merits, risks and suitability of purchasing the Placing Shares;
12. it and/or each person on whose behalf it is participating (i) is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions; (ii) has fully observed such laws and regulations; and (iii) has the capacity and has obtained all requisite authorities and consents (including, without limitation, in the case of a person acting on behalf of a Placee, all requisite authorities and consents to agree to the terms set out or referred to in this Appendix) under those laws or otherwise and has complied with all necessary formalities to enable it to enter into the transactions and make the acknowledgements, agreements, indemnities, representations, undertakings and warranties contemplated hereby and to perform and honour its obligations in relation thereto on its own behalf (and in the case of a person acting on behalf of a Placee on behalf of that Placee); (iv) does so agree to the terms set out in this Appendix and does so make the acknowledgements, agreements, indemnities, representations, undertakings and warranties contained in this Announcement on its own behalf (and in the case of a person acting on behalf of a Placee on behalf of that Placee); and (v) is and will remain liable to the Company and each of the Brokers for the performance of all its obligations as a Placee in the Placing (whether or not it is acting on behalf of another person);
13. it is acquiring the Placing Shares for its own account or if it is acquiring the Placing Shares on behalf of another person it confirms that it exercises sole investment discretion in relation to such other person's affairs and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its acquisition of Placing Shares;
14. it understands (or if acting on behalf of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix;
15. it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document: (i) is required under the EU Prospectus Regulation, the UK Prospectus Regulation or the PRR; or (ii) has been or will be prepared in connection with the Placing;
16. the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain information in accordance with the AIM Rules, which includes a description of the Asset Purchase Agreement, the Placing and the Open Offer (the "AIM Information"), and that it is able to obtain or access the AIM Information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;
17. it has made its own assessment of the Company, the Placing Shares and the terms of the Placing and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. It has not relied on (i) any investigation that the Brokers or any person acting on either Broker's behalf may have conducted with respect to the Company, the Placing or the Placing Shares; or (ii) any other information given or any other representations, statements or warranties made at any time by any person in connection with the Admissions, the Company, the Placing, the Placing Shares or otherwise;
18. none of the Brokers, the Company nor any of their respective affiliates, agents, consultants, directors, employees, officers or any person acting on behalf of any of them has provided, nor will provide, it with any material regarding the Placing Shares or the Company or any other person in addition to the information in this Announcement; nor has it requested either of the Brokers, the Company, any of their respective affiliates, agents, consultants, employees, directors or officers or any person acting on behalf of any of them to provide it with any such information;
19. the content of this Announcement has been prepared by and is exclusively the responsibility of the Company. Neither of the Brokers nor any persons acting on behalf of either of them are responsible for or has or shall have any liability for any information, representation, warranty or statement, written or oral relating to the Company and either contained in this Announcement or previously or concurrently published by or on behalf of the Company. Neither of the Brokers will be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, the AIM Information or otherwise. None of the Brokers, the Company, nor any of their respective affiliates, agents, consultants, directors, employees or officers has made any representation or warranty to the Placee, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the information in this Announcement or the AIM Information. Nothing in this Appendix shall exclude any liability of any person for fraudulent misrepresentation;
20. the only information on which it is entitled to rely and on which it has relied in committing to subscribe for the Placing Shares is contained in this Announcement. It has satisfied itself that such information is still current and is all that it deems necessary to make an investment decision in respect of the Placing Shares;
21. it has the funds available to pay for the Placing Shares which it has agreed to acquire and acknowledges, agrees and undertakes that it will make payment to the relevant Broker for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement or the relevant contract note, failing which the relevant Placing Shares may be placed with others on such terms as the Brokers may, in their absolute discretion, determine without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;
22. it, or the person specified by it for registration as a holder of the Placing Shares, will be responsible for any liability to stamp duty or stamp duty reserve tax payable on the acquisition of any of the Placing Shares or the agreement to subscribe for the Placing Shares and shall indemnify the Company and each of the Brokers in respect of the same on the basis that the Placing Shares will be allotted to a CREST stock account of either of the Brokers who will hold them as nominee on behalf of such Placee (or the person specified by it for registration as holder of the Placing Shares) until settlement with it in accordance with its standing settlement instructions;
23. the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that no instrument under which it subscribes for Placing Shares (whether as principal, agent or nominee) would be subject to stamp duty or stamp duty reserve tax at the increased rates referred to in those sections and that it, or the person specified by it for registration as holder of the Placing Shares, is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;
24. it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that neither of the Brokers have approved this Announcement in its capacity as an authorised person under section 21 of FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as a financial promotion by an authorised person;
25. it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA and MAR in respect of anything done in, from or otherwise involving the United Kingdom);
26. none of the Brokers, the Company, any of their respective affiliates, agents, consultants, directors, employees or officers or any person acting on behalf of any of them are making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any acknowledgements, agreements, indemnities, representations, undertakings or warranties contained in the Placing Agreement nor the exercise or performance of each of the Broker's rights and obligations thereunder, including any rights to waive or vary any conditions or exercise any termination right. Its participation in the Placing is on the basis that it is not and will not be a client of either of the Brokers and the Brokers have no duties or responsibilities to it for providing the protections afforded to their clients or customers under the rules of the FCA, and any payment by it will not be treated as client money governed by the rules of the FCA;
27. the Brokers and each of their respective affiliates, each acting as an investor for its or their own account(s), may, in accordance with applicable legal and regulatory provisions, bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by, the Brokers and/or any of their respective affiliates, acting as an investor for its or their own account(s). Neither the Brokers nor the Company intends to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;
28. it will not make any offer to the public of the Placing Shares and it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or anywhere in the EEA prior to the expiry of a period of twelve months from Second Admission (or First Admission if Second Admission does not occur), except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom for the purposes of section 85(1) of the FSMA or the PRR or an offer to the public in any Relevant Member State within the meaning of the EU Prospectus Regulation;
29. it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006, the Anti-Terrorism Crime and Security Act 2001 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (together, the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;
30. it is aware of the obligations regarding insider dealing in the Criminal Justice Act 1993, market abuse under the MAR and the Proceeds of Crime Act 2002 and confirms that it has and will continue to comply with those obligations;
31. it has neither received nor relied on any confidential or price-sensitive information concerning the Company in accepting this invitation to participate in the Placing;
32. if it has received any 'inside information' (for the purposes of the MAR and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities, it confirms that it has received such information within the market soundings regime provided for in article 11 of the MAR and associated delegated regulations and it has not: (i) dealt (or attempted to deal) in the securities of the Company or cancelled or amended a dealing in the securities of the Company; (ii) encouraged, recommended or induced another person to deal in the securities of the Company or cancelled or amended a dealing in the securities of the Company; or (iii) unlawfully disclosed inside information to any person, prior to the information being made publicly available;
33. in order to ensure compliance with the Money Laundering Regulations 2017, the Brokers, each for themselves and as agent on behalf of the Company or the Company's registrars may, in their absolute discretion, require verification of its identity. Pending the provision to the Brokers or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at the Brokers' absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at the Brokers' or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity, the Brokers, each for themselves and as agent on behalf of the Company, or the Company's registrars have not received evidence satisfactory to them, the Brokers and/or the Company may, at their absolute discretion, terminate their commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest, at the risk of the relevant Placee, to the account of the drawee's bank from which they were originally debited;
34. it acknowledges that its commitment to acquire Placing Shares on the terms set out in this Announcement and in the contract note will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or Brokers' conduct of the Placing;
35. it has such knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;
36. it irrevocably appoints any duly authorised officer of either of the Brokers as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to subscribe upon the terms of this Announcement;
37. the Company, the Brokers and others (including each of their respective affiliates, agents, directors, officers or employees) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to each Broker on its own behalf and on behalf of the Company and are irrevocable, and agrees that if any of the representations and agreements deemed to have been made by it by its subscription for Placing Shares are no longer accurate, it shall promptly notify the Company and the Brokers;
38. time is of the essence as regards its obligations under this Appendix;
39. any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to the Brokers; and
40. the terms and conditions in this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire Placing Shares pursuant to the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or the Brokers in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.
By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify on an after-tax basis and hold the Company, each Broker and each of their respective affiliates, agents, consultants, directors, employees and officers harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of any of the acknowledgements, agreements, representations, undertakings and warranties given by the Placee (and any person acting on such Placee's behalf) in this Appendix or incurred by either Broker, the Company or any of their respective affiliates, agents, consultants, directors, employees or officers arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix shall survive completion of the Placing.
The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, directly by the Company. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither the Company nor the Brokers shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and should notify the Brokers accordingly. In addition, Placees should note that they will be liable for any capital duty or gains, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable whether within or outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Brokers in the event that either the Company and/or the Brokers have incurred any such liability to such taxes or duties.
The acknowledgements, representations, undertakings and warranties contained in this Appendix are given to each Broker for itself and as agent on behalf of the Company and are irrevocable and will survive completion of the Placing.
Each Placee and any person acting on behalf of the Placee acknowledges that the Brokers do not owe any fiduciary or other duties to any Placee in respect of any acknowledgements, agreements, indemnities, representations, undertakings or warranties in the Placing Agreement.
When a Placee or any person acting on behalf of the Placee is dealing with a Broker, any money held in an account with the relevant Broker on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA made under FSMA. Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules.
References to time in this Announcement are to London time, unless otherwise stated. All times and dates in this Announcement may be subject to amendment.
No statement in this Announcement is intended to be a profit forecast, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
The price of Placing Shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the Placing Shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.
The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any market or other stock exchange other than AIM.
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.
APPENDIX III - DEFINITIONS
The following definitions apply throughout this Announcement unless the context otherwise requires:
"£", "GBP", "pounds", "pound sterling" or "sterling", "p", "penny" or "pence" are to the lawful currency of the UK;
"Admission" the admission of the Placing Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules (and references to 'Admission becoming effective' and similar expressions shall be construed accordingly);
"AIM" means the market of that name operated by the London Stock Exchange;
"AIM Information" has the meaning set out in warranty 16 of the Appendix;
"Announcement" means this announcement including, but not limited to, the Appendix and the information contained therein;
"Appendix" means the appendix to this Announcement;
"Application Form" means the application form, in agreed form, relating to the Open Offer for use, where relevant, by Qualifying Shareholders;
"Asset Purchase Agreement" means conditional agreement entered into between the Company, the Vendors and Guarantor (as defined therein) on or about the date of the Placing Agreement;
"Berenberg" means Joh. Berenberg, Gossler & Co. KG, London Branch (a German form of limited partnership), established under the laws of the Federal Republic of Germany registered with the Commercial Register at the Local Court of the City of Hamburg under registration number HRA 42659 with its registered office at Neuer Jungfernstieg 20, 20354 Hamburg, Germany acting through its London Branch at 60 Threadneedle Street, London, England, EC2R 8HP;
"Bookbuild" means the book building process to be undertaken by Cenkos and Berenberg to determine demand for participation in the Placing;
"Brokers" means Cenkos and Berenberg;
"Cenkos" means Cenkos Securities PLC, a company incorporated in England and Wales with registered number 5210733 whose registered office is at 6.7.8 Tokenhouse Yard, London EC2R 7AS;
"Circular" means the circular to be published by the Company in relation to the Placing, the Subscription and Open Offer and a notice convening the General Meeting;
"Company" means XLMEDIA PLC, registered in Jersey under number FC037471 whose registered office is at 12 Castle, St Helier, Jersey JE2 3RT;
"Dealing Day" means a day on which dealings in domestic securities may take place on, and with the authority of, the London Stock Exchange;
"EEA" means the European Economic Area;
"EU Prospectus Regulation" means the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market as may be amended from time to time;
"EU Qualified Investor" has the meaning given to it within the capitalised text at the beginning of the Appendix (and accordingly "EU Qualified Investors" means more than one EU Qualified Investor);
"FCA" means the UK Financial Conduct Authority;
"First Admission" admission of the First Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules which is expected to occur at 8.00 a.m. on 22 March 2021
"First Placing" the placing by Cenkos and Berenberg on behalf of the Company of the First Placing Shares at the Issue Price pursuant to the terms of the Placing Agreement
"First Placing Shares" the 18,236,585 new Ordinary Shares to be issued to placees by the Company at the Issue Price at First Admission
"First Subscription" means the conditional subscription for the First Subscription Shares pursuant to the Subscription Letters
"First Subscription Shares" the 476,281 new Ordinary Shares to be issued by the Company to subscribers at the Issue Price at First Admission
"FSMA" means the Financial Services and Markets Act 2000 (as may be amended from time to time);
"General Meeting" means the extraordinary general meeting of the Company's shareholders convened for 11.00 a.m. on 6 April 2021, notice of which will be set out at the end of the Circular;
"Issue Price" means the price payable per Placing Share;
"LIBOR" means the London Interbank Offered Rate;
"London Stock Exchange" means London Stock Exchange plc;
"MAR" means Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018;
"Open Offer" means the proposed conditional invitation made by the Company to Qualifying Shareholders to subscribe for the Open Offer Shares at the Issue Price, on the terms and subject to the conditions to be set out in the Circular and, where relevant, in the Application Form;
"Open Offer Shares" means the new Ordinary Shares being made available to Qualifying Shareholders pursuant to the Open Offer;
"Ordinary Shares" means the ordinary shares of $0.000001 each in the capital of the Company;
"Placee" means a person who is invited to and chooses to participate in the Placing by making or accepting an offer to acquire Placing Shares;
"Placing" means the placing of the First Placing Shares and Second Placing Shares at the Issue Price by the Brokers pursuant to the terms of the Placing Agreement;
"Placing Agreement" means the agreement dated 18 March 2021 and entered into between Cenkos, Berenberg and the Company;
"Placing Shares" means the number of new Ordinary Shares that the Company will allot pursuant to the Placing, as shall be determined by the Company in consultation with the Brokers;
"PRR" means the Prospectus Regulation Rules made by the FCA under section 73A of the FSMA;
"QIB" means a qualified institutional buyer as the term is defined in rule 144A under the US Securities Act (and accordingly "QIBs" means more than one QIB);
"Qualifying Shareholders" as defined in the Circular;
"Regulation D" means Regulation D promulgated under the US Securities Act;
"Regulation S" means Regulation S promulgated under the US Securities Act;
"Regulatory Information Service" shall have the same meaning as in the AIM Rules;
"Relevant Member State" means a member state of the EEA which has implemented the EU Prospectus Regulation;
"Relevant Person" has the meaning given to it within the capitalised text at the beginning of the Appendix (and accordingly "Relevant Persons" means more than one Relevant Person);
"Resolutions" the resolutions numbered 1 and 2 to be proposed at the General Meeting and which are necessary to allow the Second Placing, Second Subscription and Open Offer to proceed;
"Second Admission" admission of the Second Placing Shares, the Second Subscription Shares and the Open Offer Shares to trading on AIM becoming effective in accordance with the AIM Rules which is expected to occur at 8.00 a.m. on 7 April 2021
"Second Placing" the placing by Cenkos and Berenberg on behalf of the Company of the Second Placing Shares at the Issue Price pursuant to the terms of the Placing Agreement
"Second Placing Shares" the minimum 30,490,813 new Ordinary Shares to be issued to placees by the Company at the Issue Price at Second Admission
"Second Subscription" means the conditional subscription for the Second Subscription Shares pursuant to the Subscription Letters
"Second Subscription Shares" the 796,321 new Ordinary Shares to be issued by the Company to subscribers at the Issue Price at Second Admission
"Subscription" means the conditional subscription for up to 1,272,602 new Ordinary Shares pursuant to the Subscription Letters;
"Subscription Letters" the subscription letters dated on or around the date of the Placing Agreement in the approved terms between the Company and the subscribers in respect of the Subscription;
"UK" or "United Kingdom" means the United Kingdom of Great Britain and Northern Ireland;
"UK Prospectus Regulation" means the UK version of the EU Prospectus Regulation which is part of UK law by virtue of the European Union (Withdrawal) Act 2018;
"UK Qualified Investor" has the meaning given to it within the capitalised text at the beginning of the Appendix (and accordingly "UK Qualified Investors" means more than one UK Qualified Investor);
"United States" or "US" means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia;
"US Person" has the meaning given in Regulation S;
"US Securities Act" means the United States Securities Act of 1933, as may be amended from time to time; and
"Vendors" means (1) Lucky Panda Marketing Inc. and (2) Nelson Media S.A.
APPENDIX IV - EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2021
Record Date for entitlements under the Open Offer
6.00 p.m. on 16 March
Announcement of the Acquisition and Fundraising
7.00 a.m. on 18 March
Existing Shares marked "ex" by the London Stock Exchange
8.00 a.m. on 18 March
Announcement of the results of the Placing
18 March
Publication and dispatch of the Circular and, to Qualifying Non-CREST Shareholders, the Application Form
19 March
Open Offer Entitlements and Excess Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders
As soon as practical after 8.00 a.m. 19 March
First Admission and commencement of dealings of the First Placing Shares and First Subscription Shares
8.00 a.m. on 22 March
Latest recommended time and date for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST
4.30 p.m. on 26 March
Latest time and date for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements in CREST
3.00 p.m. on 29 March
Latest time and date for splitting of Application Forms under the Open Offer
3.00 p.m. on 30 March
Latest time for receipt of CREST proxy instructions and CREST voting instructions
11.00 a.m. on 1 April
Latest time and date for receipt of Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions (as appropriate)
11.00 a.m. on 1 April
General Meeting
11.00 a.m. on 6 April
Announcement of the results of the General Meeting and the Open Offer
6 April
Second Admission and commencement of dealings of the Second Placing Shares, Second Subscription Shares and Open Offer Shares
8.00 a.m. on 7 April
Second Placing Shares, Second Subscription Shares and Open Offer Shares credited to CREST stock accounts
7 April
Expected date for despatch of the definitive share certificates for the Placing Shares, Subscription Shares and Open Offer Shares
Within 5 days from Second Admission
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