TIDMTPFG TIDMHUNT
RNS Number : 1368N
Property Franchise Group PLC (The)
28 January 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT IS DEEMED BY THE PROPERTY FRANCHISE GROUP PLC
AND HUNTERS PROPERTY PLC TO CONTAIN INSIDE INFORMATION AS
STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO
596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN
(WITHDRAWAL) ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT
VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN
THIS ANNOUNCEMENT IS NOT A PROSPECTUS OR PROSPECTUS EQUIVALENT
DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN
RELATION TO THE NEW TPFG SHARES EXCEPT ON THE BASIS OF INFORMATION
IN THE SCHEME DOCUMENT AND THE TPFG CIRCULAR WHICH ARE PROPOSED TO
BE PUBLISHED IN DUE COURSE
FOR IMMEDIATE RELEASE
28 January 2021
RECOMMED ACQUISITION TO BE IMPLEMENTED BY WAY OF A CASH AND
SHARE OFFER
for
HUNTERS PROPERTY PLC
by
THE PROPERTY FRANCHISE GROUP PLC
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Further to the announcement by Hunters on 4 December 2020 in
which Hunters confirmed it had received a preliminary approach from
The Property Franchise Group, the Boards of Directors of The
Property Franchise Group and Hunters are pleased to announce that
they have reached agreement on the terms of a recommended cash and
share offer pursuant to which The Property Franchise Group will
acquire the entire issued and to be issued ordinary share capital
of Hunters (the "Acquisition" forming the "Enlarged Group"). The
Acquisition is to be effected by means of a court-sanctioned scheme
of arrangement between Hunters and the Scheme Shareholders under
Part 26 of the Companies Act.
Key terms of the Acquisition
Under the terms of the Acquisition, for each Hunters Share,
Hunters Shareholders will be entitled to receive:
0.1655 New TPFG Shares
and
43.2 pence in cash
On the basis of a price of 174 pence per TPFG Share, being the
price agreed at the time of the approach by The Property Franchise
Group to Hunters, the Acquisition values each Hunters Share at 72
pence (the "Offer Price") and the entire issued and to be issued
share capital of Hunters at approximately GBP24.2 million.
In addition, the Hunters Directors intend to declare a special
interim dividend of 2.7 pence per Hunters Share for the year ended
31 December 2020 ("Special Dividend"). The Special Dividend would
be payable to the holders of Hunters Shares on a record date to be
announced on or before the publication of the Scheme Document.
The Offer Price represents:
-- a 4.0 per cent. discount to the Closing Price per
Hunters Share of 75 pence on the Latest Practicable
Date;
-- a 23.1 per cent. premium to the Closing Price per
Hunters Share of 58.5 pence on 3 December 2020 (being
the Business Day prior to the commencement of the
Offer Period);
-- a 16.3 per cent. premium to the three-month
volume-weighted
average price per Hunters Share of 61.9 pence (being
the volume weighted average Closing Price for the
three-month period ended on the Latest Practicable
Date; and
-- a 32.3 per cent. premium to the six-month volume
-weighted average price per Hunters Share of 54.4
pence (being the volume weighted average Closing
Price for the six-month period ended on the Latest
Practicable Date
On the basis of a price of 191.5 pence per TPFG Share, being the
Closing Price on the Latest Practicable Date, the Acquisition
values each Hunters Share at 74.9 pence and the entire issued and
to be issued share capital of Hunters at approximately GBP25.2
million, which represents a premium of 28.0 per cent. to the
Closing Price per Hunters Share of 58.5p on 3 December 2020 (being
the Business Day prior to the commencement of the Offer
Period).
Immediately following completion of the Acquisition, existing
TPFG Shareholders will hold approximately 82.3 per cent. and
Hunters Shareholders will hold approximately 17.7 per cent.
respectively of The Property Franchise Group, on a non-diluted
basis.
Highlights of the Acquisition
The TPFG Board and the Hunters Board each believe that the
Acquisition provides compelling value for Hunters Shareholders and
potential for TPFG Shareholders in the context of a potentially
challenging housing market and broader macro-economic uncertainty
as a result of the Covid-19 pandemic. The terms of the Acquisition
provide Hunters Shareholders with a combination of certain cash, as
well as the New TPFG Shares, allowing participation in the future
capital and income returns of the enlarged business, with the Offer
Price representing a significant premium to Hunters' share price
performance prior to the Rule 2.4 Announcement by Hunters on 4
December 2020. The Offer Price represents a 32.3 per cent. premium
to Hunters' volume weighted average share price over the six months
ended on 27 January 2021, being the Latest Practicable Date.
The TPFG Board and the Hunters Board each believe that the key
reasons for proceeding with the Acquisition are as follows:
-- Enhanced scale and geographic reach - the Enlarged Group
will benefit from increased scale with more than 400 physical
branches, managing in excess of 70,000 tenanted properties
managed and selling more than 20,000 properties per annum.
-- Earnings accretion and annual synergies - the TPFG Board
has identified areas of potential synergies, which would
provide a stronger platform for further organic growth
and further enhancement of the progressive and resilient
dividend policy. These are anticipated to be largely cost
synergies including but not limited to: leverage of IT
expertise, operational savings from duplicated costs across
some administrative functions and operational cost savings
from the cancellation of Hunters' AIM quotation.
-- Acceleration of financial services strategy - the Enlarged
Group would have the scale to make effective use of The
Property Franchise Group's plans to create a pool of 100
financial advisers, as well as to justify further recruitment
in this area. To date, neither The Property Franchise Group
nor Hunters has been able to fully exploit the significant
opportunities that exist in this area.
-- Strengthened management team - it is proposed that the
Executive Directors of both The Property Franchise Group
and Hunters will remain within the Enlarged Group following
completion of the Acquisition. It is proposed that Glynis
Frew, Chief Executive of Hunters, will join the Enlarged
Group as an Executive Director of The Property Franchise
Group whilst Ed Jones will join as Group Finance Director
and Company Secretary, a non-board position, while remaining
an Executive Director of Hunters. Gareth Samples will remain
as the TPFG Group CEO and David Raggett as the TPFG Group
CFO. It is proposed that Dean Fielding, a Non-Executive
Director of Hunters, will join the Enlarged Group as an
independent Non-Executive Director of The Property Franchise
Group. Richard Martin will continue as Non-Executive Chairman
of the Enlarged Group, Paul Latham will become Deputy Chairman
and Non-Executive Director Phil Crooks will also remain
on the TPFG Board as an independent Non-Executive Director.
-- Furthermore, the TPFG Board believes that the Acquisition
provides significant opportunities to properly exploit
the existing and additional income streams within the Enlarged
Group from converting independent operators to franchisees,
assisting franchisees in the purchase of managed portfolios
of tenanted properties, and through the use of digital
marketing over a considerably increased customer database.
Details of The Property Franchise Group
-- The TPFG Group is a UK-based property franchise business.
Since the admission of The Property Franchise Group to AIM in
December 2013, the TPFG Group has steadily grown its revenues from
GBP4.1 million to GBP11.4 million for the financial year ended 31
December 2019. For the same period, the TPFG Group increased its
adjusted operating profit from GBP1.8 million to GBP5.0 million.
This has been achieved primarily through organic growth but also
supported by acquisitions, including the TPFG Group's purchase of
EweMove in 2016, which expanded its offering to include a hybrid
estate agency model.
-- The TPFG Group has a strong presence in lettings and, at the
date of this Announcement, manages 58,000 properties on behalf of
landlords. It also has a growing presence in estate agency,
completing on the sale of 10,800 homes in 2019. The TPFG Group is a
multi-award winning business with recent successes including "best
national lettings agent" at the EA Masters awards in 2019 and "the
hybrid estate agency of the year" at the 2019 Negotiator awards for
EweMove. CJ Hole and Parkers, brands owned by the TPFG Group, also
won Best Estate Agent Guide awards in 2019.
Details of Hunters
-- The Hunters Group is a franchised estate agency group based
in the UK, with its head office in York. The group has traded under
the Hunters brand since inception in 1992. As a result of both
organic growth and acquisition, at 31 December 2020 its network
comprises 209 branches. The Hunters brand has become widely known
and has a strong reputation within the estate and lettings agency
market. The business was founded on the principles of delivering
excellent customer service, unrivalled proactivity and the best
results for its customers. These principles remain at the heart of
Hunters.
-- Hunters was admitted to trading on AIM in July 2015. In its
financial year ending 31 December 2019, the Hunters Group generated
turnover of GBP14 million (31 December 2018: GBP14 million). During
the twelve-month period ended 31 December 2019 the EBITDA of the
Hunters Group was GBP2.8 million (31 December 2018: GBP2.3
million), the adjusted profit before tax was GBP2.1 million (31
December 2018: GBP2.0 million) and the basic adjusted earnings per
Hunters Share was 5.86 pence (31 December 2018: 5.93 pence).
Enlarged Group
-- The Property Franchise Group and Hunters have complementary
businesses. The TPFG Board and the Hunters Board each believe that
the Acquisition will allow the Enlarged Group to enhance its value
proposition to franchisees and customers, while building a stronger
and more efficient franchised network. The Property Franchise Group
envisages that the business of Hunters would continue to operate
materially in the same way without significant disruption to the
business of either The Property Franchise Group or Hunters once the
Hunters Group has been fully integrated with the TPFG Group.
-- The Property Franchise Group holds in high regard the
achievements and expertise of the existing management and employees
of Hunters. The Property Franchise Group proposes that Glynis Frew,
Chief Executive of Hunters, will join the Enlarged Group as an
Executive Director of The Property Franchise Group on completion of
the Acquisition, whilst Ed Jones will join as Group Finance
Director and Company Secretary, a non-board position, while
remaining an Executive Director of Hunters. It is proposed that
Dean Fielding, a Non-Executive Director of Hunters, will join the
Enlarged Group as an independent Non-Executive Director of The
Property Franchise Group on completion of the Acquisition.
-- The TPFG Board has identified areas of potential cost
synergies which will be reviewed in more detail following
completion of the Acquisition. Subject to the below, The Property
Franchise Group does not intend to initiate any material headcount
reductions within the Hunters Group as a result of the Acquisition
and expects that existing employees of the Hunters Group will
continue to contribute to Hunters' ongoing success. However, to the
extent that there are operational inefficiencies or a duplication
of functions or roles within the Enlarged Group, this will result
in a limited number of headcount reductions.
-- At this stage The Property Franchise Group has not yet
developed a proposal as to how any such headcount reductions might
be implemented and will only develop and implement such a proposal
once the review referred to above has been completed. Any
implementation of headcount reductions by the Enlarged Group will
be subject to comprehensive planning and engagement with employees
and consultation with employee representatives as required by
applicable law. Any affected employees will be treated in a fair
and equitable manner.
-- It is proposed that the Non-Executive Directors of Hunters
will each resign as a Hunters Director upon completion of the
Acquisition, save for Dean Fielding who it is proposed will join
the Enlarged Group as an independent Non-Executive Director of The
Property Franchise Group on completion of the Acquisition.
Dividends
-- The Property Franchise Group expects to pay a second interim
dividend, in lieu of a final dividend for FY 2020 of 6.6 pence per
TPFG Share. It is expected that this dividend will be paid during
the period following this Announcement and before the Scheme
becomes Effective. This dividend would be payable to existing TPFG
Shareholders only.
-- The Hunters Directors intend to declare a special interim
dividend of 2.7 pence per Hunters Share for the year ended 31
December 2020 ("Special Dividend"). The Special Dividend would be
payable to the holders of Hunters Shares on a record date to be
announced on or before the publication of the Scheme Document.
The Acquisition is subject to the Conditions and further terms
set out in Appendix I to this Announcement and to be set out in the
Scheme Document, which it is expected will be despatched to Hunters
Shareholders as soon as reasonably practicable following the
release of the Announcement.
Hunters recommendation
The Hunters Directors, who have been so advised by Spark
Advisory as to the financial terms of the Acquisition, consider the
terms of the Acquisition to be fair and reasonable. In providing
its advice to the Hunters Directors, Spark Advisory has taken into
account the commercial assessments of the Hunters Directors. Spark
Advisory is providing independent financial advice to the Hunters
Directors for the purposes of Rule 3 of the Takeover Code.
Accordingly, the Hunters Directors confirm that they intend to
recommend unanimously that Hunters Shareholders vote in favour of
the Scheme at the Hunters Court Meeting and in favour of the
Hunters Special Resolution to be proposed at the Hunters General
Meeting as they have irrevocably undertaken to do in respect of
their own beneficial holdings (and the beneficial holdings which
are under their control) of 11,212,619 Hunters Shares representing,
in aggregate, approximately 34.2 per cent. of the ordinary share
capital of Hunters in issue on the Latest Practicable Date.
Irrevocable undertakings
In addition to the Hunters Directors, The Property Franchise
Group has received irrevocable undertakings from Nigel Wray, John
Waterhouse and Martin Robinson to vote in favour of the Scheme at
the Hunters Court Meeting and in favour of the Hunters Special
Resolution to be proposed at the Hunters General Meeting, in
respect of a total of 12,134,287 Hunters Shares, representing
approximately 37.0 per cent. of the ordinary share capital of
Hunters in issue on the Latest Practicable Date.
In aggregate, therefore, irrevocable undertakings to vote in
favour of the Scheme at the Hunters Court Meeting and the Hunters
Special Resolution to be proposed at the Hunters General Meeting
have been received in respect of a total of 23,346,906 Hunters
Shares, representing approximately 71.1 per cent. of the ordinary
share capital of Hunters in issue on the Latest Practicable
Date.
Further details of these irrevocable undertakings are set out in
Appendix III to this Announcement.
The Property Franchise Group recommendation
In order to allot the New TPFG Shares, The Property Franchise
Group will be required to seek the approval of the TPFG
Shareholders at the TPFG General Meeting. The Acquisition is
accordingly conditional on such approval being obtained.
The TPFG Directors have received financial advice from Cenkos
Securities in relation to the Acquisition. In providing its advice
to the TPFG Directors, Cenkos Securities has taken into account the
TPFG Directors' commercial assessment of the Acquisition.
The TPFG Directors consider the Acquisition to be in the best
interests of the TPFG Shareholders as a whole and intend to
recommend unanimously that TPFG Shareholders vote in favour of the
TPFG Resolution to be proposed at the TPFG General Meeting, as
those TPFG Directors who are interested in TPFG Shares have
irrevocably undertaken to do in respect of their own beneficial
holdings (and the beneficial holdings which are under their
control) of 8,317,350 TPFG Shares representing, in aggregate,
approximately 32.2 per cent. of the ordinary share capital of The
Property Franchise Group in issue on the Latest Practicable
Date.
General
The Acquisition is expected to be effected by means of a
court-sanctioned scheme of arrangement between Hunters and the
Scheme Shareholders under Part 26 of the Companies Act. The
Acquisition will also be subject to the Conditions and further
terms set out in Appendix I to this Announcement and to be set out
in the Scheme Document. Further details of the Acquisition are
contained in the full text of this Announcement (and will be
included in the Scheme Document). The Property Franchise Group
reserves the right to elect to implement the Acquisition by way of
a Takeover Offer, subject to the Panel's consent.
It is expected that the Scheme Document (including notices of
the Hunters Meetings) together with the relevant Forms of Proxy
will be sent to Hunters Shareholders as soon as is reasonably
practicable and in any event within 28 days of the date of this
Announcement, unless otherwise agreed with the Panel.
It is expected that the TPFG Circular, which will contain notice
of the TPFG General Meeting, will be published and sent to TPFG
Shareholders at or around the same time as the Scheme Document is
posted to Hunters Shareholders.
The Scheme Document and the TPFG Circular will each be made
available by The Property Franchise Group on its
website at https://thepropertyfranchisegroup.co.uk/investors and by Hunters on its website at https://www.hunters.com/other-services/investor-relations
The Hunters Meetings are expected to be held on or around 5
March 2021 and the TPFG General Meeting is expected to be held in
advance of the Hunters Meetings. The Scheme is expected to be
Effective in March 2021, subject to satisfaction or (where
applicable) waiver of the Conditions and certain further terms set
out in Appendix I to this Announcement and to be set out in the
Scheme Document.
Commenting on the Acquisition, Richard Martin, TPFG's
Non-Executive Chairman, said: "I am delighted to confirm that we
have reached an agreement with the Hunters Board and major Hunters
Shareholders on the recommended acquisition of Hunters. We believe
that the Acquisition represents a compelling opportunity for all
shareholders.
"Hunters, with its reputable brand, experienced management team,
trusted franchisees and strength in residential sales, is
complementary to our current offering. The Acquisition will enable
us to continue to grow in the sector and, ultimately, deliver
greater value to shareholders."
Commenting on the Acquisition, Kevin Hollinrake , Chairman of
Hunters, said:
"We founded Hunters almost three decades ago with a single small
office in York and a huge ambition to offer a brilliant service to
our customers and to become the nation's favourite property agency.
Our ambition for our customers and our brand is undimmed and we see
this consolidation as the vital next step that allows us to invest
in the services, training and technology our customers and
franchisees need. The success we have achieved is a tribute to the
incredible efforts of the thousands of people who provide the
service on the ground and the passion and commitment of our
management team. I am so grateful, and indeed moved, that every
member of our network remains faithful to our original vision and
values and I know that they will continue to do so."
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement (including the Appendices).
The Acquisition will be subject to the Conditions and further terms
set out in Appendix I and to be set out in the Scheme Document.
Appendix II contains further details of the sources of information
and bases of calculations set out in this Announcement, Appendix
III contains a summary of the irrevocable undertakings received by
The Property Franchise Group (including those irrevocable
undertakings given by the Hunters Directors and the TPFG Directors)
and Appendix IV contains definitions of certain expressions used in
this summary and in this Announcement.
Enquiries:
Hunters
Glynis Frew - Chief Executive
Ed Jones - Chief Financial Officer 01904 756 197
Spark Advisory Partners Limited (Hunters'
Financial Adviser and Nominated Adviser)
Andrew Emmott 0113 370 8971
Dowgate Capital Limited (Hunters' Corporate
Broker)
James Serjeant 020 3903 7715
The Property Franchise Group
Gareth Samples, Chief Executive Officer
David Raggett, Chief Financial Officer 01202 405549
Cenkos Securities plc (The Property Franchise
Group's Financial Adviser and Nominated
Adviser)
Max Hartley
Callum Davidson 0207 397 8900
Alma (The Property Franchise Group's PR
advisers)
Susie Hudson 0203 405 0209
Justine James
Harriet Jackson
Financial Advisers
Cenkos Securities plc ("Cenkos Securities"), which is authorised
and regulated in the United Kingdom by the Financial Conduct
Authority, is acting exclusively for The Property Franchise Group
and no one else in connection with the Acquisition and the other
matters referred to in this Announcement and the Scheme Document
and will not be responsible to anyone other than The Property
Franchise Group for providing the protections afforded to clients
of Cenkos Securities or for providing advice in connection with the
Acquisition or any matter or arrangement referred to herein.
Spark Advisory Partners Limited ("Spark Advisory") , which is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting exclusively for Hunters and no one
else in connection with the Acquisition, the other matters referred
to in this Announcement and the Scheme Document and will not be
responsible to anyone other than Hunters for providing the
protections afforded to clients of Spark Advisory or for providing
advice in connection with the Acquisition or any matter or
arrangement referred to herein.
Cenkos Securities, Spark Advisory and Dowgate have given and not
withdrawn their consent to the publication of this Announcement
with the inclusion in it of the references to their respective
names and (where applicable) advice in the form and context in
which they appear.
Dowgate Capital Limited ("Dowgate"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority
, is acting exclusively for Hunters and no one else in connection
with the Acquisition , the other matters referred to in this
Announcement and the Scheme Document and will not be responsible to
anyone other than Hunters for providing the protections afforded to
clients of Dowgate or for providing advice in connection with the
Acquisition or any matter or arrangement referred to herein.
Legal Advisers
CMS Cameron McKenna Nabarro Olswang LLP is retained as legal
adviser to The Property Franchise Group. DWF Law LLP is retained as
legal adviser to Hunters.
Further information
The Acquisition will be made solely by means of the Scheme
Document (or, in the event that the Acquisition is to be
implemented by means of Takeover Offer, the offer document) which
will contain the full terms and conditions of the Acquisition,
including details of how to vote in respect of the Scheme (or,
accept the Takeover Offer as the case may be).
This Announcement does not constitute a prospectus or prospectus
equivalent document. The New TPFG Shares to be issued pursuant to
the Acquisition are not being offered to the public by means of
this Announcement. The Acquisition will be subject to the
applicable requirements of the Takeover Code, the Panel, the AIM
Rules, the London Stock Exchange, the FCA, the Market Abuse
Regulation and the Disclosure Guidance and Transparency Rules.
Any vote, approval, decision or other response to the
Acquisition by the Hunters Shareholders should be made only on the
basis of the information in the Scheme Document. Hunters
Shareholders are strongly advised to read the formal documentation
in relation to the Acquisition once it has been despatched. It is
expected that the Scheme Document (including notices of the Hunters
Meetings) together with the relevant Forms of Proxy, will be posted
to Hunters Shareholders as soon as is reasonably practicable and in
any event within 28 days of this Announcement, unless otherwise
agreed with the Panel.
Hunters will prepare the Scheme Document to be distributed to
Hunters Shareholders and which will be available on The Property
Franchise Group's website at
https://thepropertyfranchisegroup.co.uk/investors and Hunters'
website at
https://www.hunters.com/other-services/investor-relations . Hunters
and The Property Franchise Group urge Hunters Shareholders to read
the Scheme Document when it becomes available because it will
contain important information relating to the Acquisition, the New
TPFG Shares and the TPFG Group. Any vote in respect of resolutions
to be proposed at the Hunters Meetings to approve the Acquisition,
the Scheme or related matters, should be made only on the basis of
the information contained in the Scheme Document. Each Hunters
Shareholder is urged to consult its independent professional
advisers immediately regarding the tax consequences of the
Acquisition applicable to them.
The Property Franchise Group will prepare the TPFG Circular to
be distributed to TPFG Shareholders and which will be available on
The Property Franchise Group's website at
https://thepropertyfranchisegroup.co.uk/investors . The Property
Franchise Group urges TPFG Shareholders to read the TPFG Circular
when it becomes available. Any vote in respect of the TPFG
Resolution should be made only on the basis of the information in
the TPFG Circular. It is expected that the TPFG Circular (including
the notice of the TPFG General Meeting) together with the TPFG Form
of Proxy, will be posted to TPFG Shareholders as soon as reasonably
practicable following this Announcement.
The statements contained in this Announcement are made as at the
date of this Announcement, unless some other time is specified in
relation to them. Nothing contained in this Announcement shall be
deemed to be a forecast, projection or estimate of the future
financial performance of Hunters or the Hunters Group or The
Property Franchise Group or the TPFG Group except where otherwise
stated.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation. The person responsible
for arranging for the release of this announcement on behalf of The
Property Franchise Group is David Raggett and on behalf of Hunters
is Ed Jones.
Notice to Overseas Shareholders
The release, publication or distribution of this Announcement in
certain jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to the laws of
any jurisdiction other than the United Kingdom should inform
themselves of, and observe, any applicable requirements. Any
failure to comply with the restrictions may constitute a violation
of the securities laws of any such jurisdiction. This Announcement
is for information purposes only and is not intended to and does
not constitute or form part of an offer to sell or subscribe for or
any invitation to purchase or subscribe for any securities or the
solicitation of an offer to buy, otherwise acquire, subscribe for,
sell or otherwise dispose of any securities or the solicitation of
any vote or approval in any jurisdiction, pursuant to the
Acquisition or otherwise nor shall there be any sale, issuance or
transfer of securities of The Property Franchise Group pursuant to
the Acquisition or otherwise in any jurisdiction in contravention
of applicable law. This Announcement has been prepared for the
purposes of complying with the laws of England and Wales, the
Takeover Code, the AIM Rules, the Market Abuse Regulation and the
Disclosure Guidance and Transparency Rules and the information
disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with
the laws of any jurisdiction outside England and Wales.
Unless otherwise determined by The Property Franchise Group or
required by the Takeover Code, and permitted by applicable law and
regulation, the Acquisition, copies of this Announcement and all
documents relating to the Acquisition will not be and must not be
made available, mailed or otherwise forwarded, distributed or sent,
directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no
person may vote in favour of the offer by any such use, means,
instrumentality or form within a Restricted Jurisdiction or any
other jurisdiction if to do so would constitute a violation of the
laws of that that jurisdiction.
If the Acquisition is to be implemented by way of a Takeover
Offer (unless otherwise permitted by applicable law and regulation)
the Takeover Offer may not be made, directly or indirectly, in or
into, or by the use of the mails, or by any other means of
instrumentality (including without limitation, telephonically or
electronically) of interstate or foreign commerce of, or any
facilities of a national, state or other securities exchange of any
Restricted Jurisdiction, and the Takeover Offer will not be capable
of acceptance by any such use, means, instrumentality or facilities
or from or within any Restricted Jurisdiction.
The availability of the New TPFG Shares under the Acquisition to
Hunters Shareholders who are not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions in which they
are resident or to which they are subject. Persons who are not
resident in the United Kingdom or who are subject to the laws of
other jurisdictions should inform themselves of, and observe, any
applicable legal requirements or regulatory requirements.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Notice to US holders
Hunters Shareholders in the United States should note that the
Acquisition relates to the securities of an English company with a
listing on AIM and is proposed to be made by means of a scheme of
arrangement provided for under, and governed by, the laws of
England and Wales. A transaction effected by means of a scheme of
arrangement is not subject to the proxy solicitation or tender
offer rules under the US Exchange Act. Accordingly, the Scheme is
subject to procedural and disclosure requirements, rules and
practices applicable in the United Kingdom to schemes of
arrangement involving a target company in England listed on AIM,
which are different from the procedural and disclosure requirements
of the US proxy solicitation and tender offer rules under the US
Exchange Act. The Property Franchise Group reserves the right,
subject to the prior written consent of the Panel, to elect to
implement the Acquisition by way of a Takeover Offer. If in the
future The Property Franchise Group exercises its right to
implement the Acquisition by way of a Takeover Offer, such Takeover
Offer will be made in compliance with all applicable laws and
regulations, including, to the extent applicable, Section 14(e) of
the US Exchange Act and Regulation 14E thereunder. Such Takeover
Offer would be made in the United States by The Property Franchise
Group and no one else. In addition to any such Takeover Offer, The
Property Franchise Group, certain affiliated companies and the
nominees or brokers (acting as agents) may make certain purchases
of, or arrangements to purchase, shares in Hunters outside such
Takeover Offer during the period in which such Takeover Offer would
remain open for acceptance. If such purchases or arrangements to
purchase were to be made, they would be made outside the United
States in compliance with applicable law, including the US Exchange
Act. Any information about such purchases will be disclosed as
required in the United Kingdom, will be reported to a Regulatory
Information Service of the FCA and will be available on the London
Stock Exchange website: http://www.londonstockexchange.com/ .
The New TPFG Shares to be issued under the Scheme have not been
and will not be registered under the US Securities Act or under any
laws or with any securities regulatory authority of any State or
other jurisdiction of the United States and may only be offered or
sold in the United States in reliance on an exemption from the
registration requirements of the US Securities Act. The New TPFG
Shares are expected to be issued in reliance upon the exemption
from the registration requirement of the US Securities Act provided
by Section 3(a)(10) thereof. Hunters Shareholders who are or will
be "affiliates" (within the meaning of Rule 144 under the US
Securities Act) of The Property Franchise Group or Hunters prior
to, or of The Property Franchise Group after, the Effective Date
will be subject to certain US transfer restrictions relating to the
New TPFG Shares received pursuant to the Scheme as will be further
described in the Scheme Document.
For the purposes of qualifying for the exemption from the
registration requirement of the US Securities Act provided by
Section 3(a)(10) thereunder, Hunters will advise the Court that the
Court's sanctioning of the Scheme will be relied on by The Property
Franchise Group as an approval of the Scheme following a hearing on
the fairness of the terms and conditions of the Scheme to Hunters
Shareholders at which all Hunters Shareholders are entitled to
appear in person or through counsel to support or oppose the
sanctioning of the Scheme and with respect to which notification is
given to all Hunters Shareholders.
None of the securities referred to in this Announcement have
been approved or disapproved by the US Securities and Exchange
Commission, any State securities commission in the United States or
any other US regulatory authority, nor have any such authorities
passed judgment upon the fairness or the merits of the Acquisition
or determined if the information in this Announcement is accurate
or complete. Any representation to the contrary is a criminal
offence in the United States.
US holders of Hunters Shares also should be aware that the
transaction contemplated herein may have tax consequences in the
United States and that such consequences, if any, are not described
herein. US holders of Hunters Shares are urged to consult with
independent professional advisers regarding the legal, tax and
financial consequences of the Acquisition applicable to them,
It may be difficult for US holders of Hunter Shares to enforce
their rights and claims arising out of the US federal securities
laws, since The Property Franchise Group and Hunters are organised
in a country other than the United States, and some or all of their
officers and directors may be residents of, and some or all of
their asses may be located in, countries other than the United
States. US holders of Hunters Shares may have difficulty effecting
service of process within the United States upon those persons or
recovering against judgments of US courts, including judgments
based upon the civil liability provisions of the US federal
securities laws. US holders of Hunters Shares may not be able to
sue a non-US company or its officers or directors in a non-US court
for violations of US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgement.
The financial information included in this Announcement and
other documentation related to the Acquisition has been or will
have been prepared in accordance with International Financial
Reporting Standards and thus may not be comparable to financial
information of US companies or companies whose financial statements
are prepared in accordance with US generally accepted accounting
principles.
Further details in relation to US holders will be contained in
the Scheme Document.
Forward looking statements
This Announcement (including information incorporated by
reference into this Announcement), oral statements made regarding
the Acquisition and other information published by The Property
Franchise Group and Hunters contains statements about The Property
Franchise Group and Hunters that are or may be forward looking
statements. All statements other than statements of historical
facts included in this Announcement may be forward looking
statements. Without limitation, any statements preceded or followed
by or that include the words "targets", "plans", "believes",
"expects", "subject to", "aims", "intends", "will", "may", "might",
"could", "would", "should", "anticipates", "scheduled",
"estimates", "projects", "budget", "forecasts" or words or terms of
similar substance or the negative thereof, are forward looking
statements. Forward looking statements include statements relating
to the following: (i) future capital expenditures, expenses,
revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects;
(ii) business and management strategies and the expansion and
growth of The Property Franchise Group's or Hunters' or the
Enlarged Group's operations and potential synergies resulting from
the Acquisition; and (iii) the effects of government regulation on
The Property Franchise Group's or Hunters' or the Enlarged Group's
businesses.
Such forward looking statements involve risks and uncertainties
that could significantly affect expected results and/or operations
of The Property Franchise Group and Hunters and are based on
certain key assumptions and assessment made by The Property
Franchise Group and Hunters in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. Many
factors could cause actual results to differ materially from those
projected or implied in any forward looking statements. There are
several factors which could cause actual results to differ
materially from those expressed or implied in forward looking
statements. Among the factors that could cause actual results to
differ materially from those described in the forward looking
statements are changes in the global, political, economic,
business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax rates and future
business acquisitions or disposals. Such statements are qualified
in their entirety by the inherent risks and uncertainties
surrounding future expectations. Due to such uncertainties and
risks, readers are cautioned not to place reliance on such forward
looking statements, which speak only as of the date hereof.
Neither Hunters nor The Property Franchise Group, nor any of
their respective associates or directors, officers or advisers,
provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward
looking statements in this Announcement will actually occur. Except
as expressly provided in this Announcement, they have not been
reviewed by the auditors of Hunters or The Property Franchise
Group. All subsequent oral or written forward looking statements
attributable to Hunters or The Property Franchise Group or any of
their respective members, directors, officers or employees or any
persons acting on their behalf are expressly qualified in their
entirety by the cautionary statement above. Should one or more of
these risks or uncertainties materialise, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in this Announcement. Furthermore, neither The
Property Franchise Group or Hunters, nor any of their respective
members, directors, officers, employees, advisers and any person
acting on behalf of one or more of them assumes, and expressly
disclaims, any obligation to update or correct the information
contained in this Announcement (whether as a result of new
information, future events or otherwise) except as required by
applicable law (including as required by the Takeover Code, the AIM
Rules and the Disclosure Guidance and Transparency Rules).
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in one per cent. or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the Offer Period and, if later, following the
announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) of the Takeover
Code applies must be made by no later than 3.30 p.m. (London time)
on the 10th Business Day following the commencement of the Offer
Period and, if appropriate, by no later than 3.30 p.m. (London
time) on the 10th Business Day following the announcement in which
any securities exchange offeror is first identified. Relevant
persons who deal in the relevant securities of the offeree company
or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or
becomes, interested in one per cent. or more of any class of
relevant securities of the offeree company or of any securities
exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain
details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s), save to the extent that these
details have previously been disclosed under Rule 8 of the Takeover
Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the
Takeover Code applies must be made by no later than 3.30 p.m.
(London time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3 of the Takeover Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of
the Takeover Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
Offer Period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Information relating to Hunters Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Hunters Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Hunters may be provided to The Property
Franchise Group during the Offer Period as required under Section 4
of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of
the Takeover Code.
No profit forecast or estimates
No statement in this Announcement is intended as a profit
forecast or profit estimate for any period. No statement in this
Announcement should be interpreted to mean that earnings of Hunters
or The Property Franchise Group, or earnings per Hunters Share or
earnings per TPFG Share, for the current or future financial years
would necessarily match or exceed the historical published earnings
of Hunters or The Property Franchise Group, or earnings per Hunters
Share or earnings per TPFG Share.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Publication on website
In accordance with Rule 26.1 of the Takeover Code, a copy of
this Announcement and the documents required to be published under
Rule 26 of the Takeover Code will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on The Property Franchise Group's and
Hunters' websites at https://thepropertyfranchisegroup.co.uk/ and
https://www.hunters.com/other-services/investor-relations,
respectively, by no later than 12.00 p.m. on the Business Day
following this Announcement.
Neither the contents of The Property Franchise Group's website,
nor those of Hunters' website, nor those of any other website
accessible from hyperlinks on either The Property Franchise Group's
or Hunters' website, are incorporated into or form part of this
Announcement.
Availability of hard copies
Pursuant to Rule 30.3 of the Takeover Code, a person so entitled
may request a copy of this Announcement and any information
incorporated into it by reference to another source in hard copy
form. A person may also request that all future documents,
announcements and information to be sent to that person in relation
to the Acquisition should be in hard copy form.
Hunters Shareholders may request a hard copy of this
Announcement (and any information incorporated by reference in this
Announcement) by writing to Neville Registrars of Neville House,
Steelpark Road, Halesowen B62 8HD or by calling 0121 585 1131 (or,
if calling from outside the UK, on +44 121 585 1131). Calls are
charged at the standard geographic rate and will vary by provider.
Calls outside the UK will be charged at the standard applicable
rate. The helpline is open between 9.00 a.m. to 5.30 p.m. Monday to
Friday excluding public holidays in England and Wales. Please note
that Neville Registrars cannot provide any legal or tax advice and
calls may be recorded and monitored for security and training
purposes. It is important that you note that unless you make such a
request, a hard copy of this Announcement and any such information
incorporated by reference in it will not be sent to you. You may
also request that all future documents, announcements and
information to be sent to you in relation to the Acquisition should
be in hard copy form.
TPFG Shareholders may request a hard copy of this Announcement
(and any information incorporated by reference in this
Announcement) by writing to TPFG Registrar of The Pavilions,
Bridgwater Road, Bristol BS99 6ZY. Please note that the TPFG
Registrar cannot provide any legal or tax advice and calls may be
recorded and monitored for security and training purposes. It is
important that you note that unless you make such a request, a hard
copy of this Announcement and any such information incorporated by
reference in it will not be sent to you. You may also request that
all future documents, announcements and information to be sent to
you in relation to the Acquisition should be in hard copy form.
Rule 2.9 Requirement
In accordance with Rule 2.9 of the Takeover Code, Hunters
confirms that as at the date of this Announcement, it has in issue
and admitted to trading on AIM 32,814,588 ordinary shares of 4
pence each. Hunters has no Hunters Shares held in treasury. The
International Securities Identification Number (ISIN) of the
ordinary shares is GB00BYMW5L71.
In accordance with Rule 2.9 of the Takeover Code, The Property
Franchise Group confirms that as at the date of this Announcement,
it has in issue and admitted to trading on AIM 25,822,750 ordinary
shares of 1 pence each. The Property Franchise Group has no TPFG
Shares held in treasury. The International Securities
Identification Number (ISIN) of the ordinary shares is
GB00BH0WFH67.
The Acquisition is subject to the provisions of the Takeover
Code.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT IS DEEMED BY THE PROPERTY FRANCHISE GROUP PLC
AND HUNTERS PROPERTY PLC TO CONTAIN INSIDE INFORMATION AS
STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO
596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN
(WITHDRAWAL) ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT
VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN
THIS ANNOUNCEMENT IS NOT A PROSPECTUS OR PROSPECTUS EQUIVALENT
DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN
RELATION TO THE NEW TPFG SHARES EXCEPT ON THE BASIS OF INFORMATION
IN THE SCHEME DOCUMENT AND THE TPFG CIRCULAR WHICH ARE PROPOSED TO
BE PUBLISHED IN DUE COURSE
FOR IMMEDIATE RELEASE
28 January 2021
RECOMMED ACQUISITION TO BE IMPLEMENTED BY WAY OF CASH AND SHARE
OFFER
for
HUNTERS PROPERTY PLC
by
THE PROPERTY FRANCHISE GROUP PLC
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
1. Introduction
1.1 Further to the announcement by Hunters on 4 December 2020 in
which Hunters confirmed it had received a preliminary approach from
The Property Franchise Group, the Boards of Directors of The
Property Franchise Group and Hunters are pleased to announce that
they have reached agreement on the terms of a recommended cash and
share offer pursuant to which The Property Franchise Group will
acquire the entire issued and to be issued ordinary share capital
of Hunters (the "Acquisition"). The Acquisition is to be effected
by means of a scheme of arrangement under Part 26 of the Companies
Act.
2. The Acquisition
2.1 Under the terms of the Acquisition, which will be subject to
the Conditions and further terms set out in Appendix I to this
Announcement and to be set out in the Scheme Document, Hunters
Shareholders will be entitled to receive for each Hunters
Share:
0.1655 New TPFG Shares
and
43.2 pence in cash
On the basis of a price of 174 pence per TPFG Share, being the
price agreed at the time of the approach by The Property Franchise
Group to Hunters, the Acquisition values each Hunters Share at 72
pence (the "Offer Price") and the entire issued and to be issued
share capital of Hunters at approximately GBP24.2 million.
In addition, the Hunters Directors intend to declare a special
interim dividend of 2.7 pence per Hunters Share for the year ended
31 December 2020 ("Special Dividend"). The Special Dividend would
be payable to the holders of Hunters Shares on a record date to be
announced on or before the publication of the Scheme Document.
The Offer Price per Hunters Share represents approximately:
-- a 4.0 per cent. discount to the Closing Price per Hunters
Share of 75 pence on the Latest Practicable Date;
-- a 23.1 per cent. premium to the Closing Price per Hunters
Share of 58.5 pence on 3 December 2020 (being the Business Day
prior to the commencement of the Offer Period);
-- a 16.3 per cent. premium to the three-month volume -weighted
average price per Hunters Share of 61.9 pence (being the volume
weighted average Closing Price for the three-month period ended on
the Latest Practicable Date; and
-- a 32.3 per cent. premium to the six-month volume -weighted
average price per Hunters Share of 54.4 pence (being the volume
weighted average Closing Price for the six-month period ended on
the Latest Practicable Date.
On the basis of a price of 191.5 pence per TPFG Share, being the
Closing Price on the Latest Practicable Date, the Acquisition
values each Hunters Share at 74.9 pence and the entire issued and
to be issued share capital of Hunters at approximately GBP25.2
million, which represents a premium of 28.0 per cent. to the
Closing Price per Hunters Share of 58.5p on 3 December 2020 (being
the Business Day prior to the commencement of the Offer
Period).
Immediately following completion of the Acquisition, existing
TPFG Shareholders will hold approximately 82.3 per cent. and
Hunters Shareholders will hold approximately 17.7 per cent.
respectively of The Property Franchise Group on a non-diluted
basis.
The New TPFG Shares will be issued credited as fully paid and
will rank pari passu in all respects with the TPFG Shares in issue
at the time the New TPFG Shares are issued pursuant to the
Acquisition, including the right to receive and retain dividends
and other distributions declared, made or paid by reference to a
record date falling after the Effective Date. Application will be
made for the New TPFG Shares to be admitted to trading on AIM.
The Hunters Shares will be acquired by The Property Franchise
Group fully paid and free from all liens, charges, equitable
interests, encumbrances and rights of pre-emption and any other
interests of any nature whatsoever and together with all rights
attaching thereto.
It is expected that the Scheme Document will be published as
soon as is reasonably practicable and in any event within 28 days
of this Announcement, unless otherwise agreed with the Panel. It is
expected that the Hunters Meetings will be held on or around 5
March 2021 and that the Scheme will become Effective in March
2021.
The Offer Price is on the basis that the Special Dividend will
be declared on or before publication of the Scheme Document. The
Special Dividend will only be payable to Hunters Shareholders.
If any dividend (other than the Special Dividend) and/or other
distribution and/or return of value is authorised, declared, made
or paid in respect of the Hunters Shares on or after the date of
this Announcement and before the Effective Date, The Property
Franchise Group reserves the right to reduce the value of the
consideration payable for each Hunters Share under the Acquisition
by up to the amount per Hunters Share of such dividend,
distribution or return of capital. If any such dividend and/or
other distribution and/or other return of value occurs and The
Property Franchise Group exercises its rights pursuant to this
paragraph, any reference in this Announcement to the Offer Price
shall be deemed to be a reference to the Offer Price as so reduced.
Any exercise by The Property Franchise Group of its rights referred
to in this paragraph shall be the subject of an announcement and,
for the avoidance of doubt, shall not be regarded as constituting
any revision or variation of the Acquisition. To the extent that
any such dividend and/or distribution and/or return of capital is
declared, made, paid in respect of the Hunters Shares and (i) is
transferred pursuant to the Acquisition on a basis which entitles
The Property Franchise Group to receive the dividend and/or
distribution and/or return of capital and to retain it or (ii) such
dividend and/or distribution and/or return of capital is cancelled,
the Offer Price will not be subject to change in accordance with
this paragraph.
3. Background to and Reasons for the Acquisition
The TPFG Group is a UK-based property franchise business. Since
the admission of The Property Franchise Group to AIM in December
2013, the TPFG Group has steadily grown its revenues from GBP4.1
million to GBP11.4 million for the financial year ended 31 December
2019. For the same period, the TPFG Group increased its adjusted
operating profit from GBP1.8 million to GBP5.0 million. This has
been achieved primarily through organic growth but also supported
by acquisitions, including the TPFG Group's purchase of EweMove in
2016, which expanded its offering to include a hybrid estate agency
model.
Today, the TPFG Group operates as a pure franchising business
through six award winning brands, operating almost 250 offices
across the UK, with over 60 per cent. of its franchisees having
traded for over five years.
The TPFG Board has over the past few years been monitoring the
market for an attractive opportunity with a view to achieving
increased scale of its property franchising model.
The Hunters Group is a property franchise business, specialising
in residential sales and lettings, based in the UK, with its head
office in York. The Hunters Group has traded under the Hunters
brand since inception in 1992. As a result of both organic and
acquisitive growth, as at 31 December 2020 its network comprised
209 branches. The Hunters brand has become widely known and has a
strong reputation within the estate and lettings agency market.
The TPFG Board believes that Hunters is a complementary business
to acquire and that a combination of The Property Franchise Group
and Hunters provides an opportunity to create a leading entity in
the UK property franchising sector, with enhanced potential for
growth within the Enlarged Group.
The TPFG Board and Hunters Board believe that the Acquisition
provides compelling value for Hunters Shareholders in the context
of a challenging housing market and broader macro-economic
uncertainty as a result of the Covid-19 pandemic. The terms of the
Acquisition provide Hunters Shareholders with a combination of
certain cash, as well as the New TPFG Shares, allowing
participation in the future capital and income returns of the
enlarged business, with the Offer Price representing a significant
premium to Hunters' share price performance prior to the Rule 2.4
Announcement by Hunters on 4 December 2020. The Offer Price
represents a premium of 32.3 per cent. to Hunters' volume weighted
average share price over the six months ended on 27 January 2021,
being the Latest Practicable Date.
It is anticipated that the Enlarged Group will benefit from
increased scale, which would enable it to take full advantage of
the UK housing market.
Further to the above, the TPFG Board believes that the key
reasons for proceeding with the Acquisition are as follows:
-- Enhanced scale and geographic reach - the Enlarged Group will
benefit from increased scale with more than 400 physical branches,
managing in excess of 70,000 tenanted properties and selling more
than 20,000 properties per annum.
-- Earnings accretion and annual synergies - the TPFG Board has
identified areas of potential synergies, which would provide a
stronger platform for further organic growth and further
enhancement of the progressive and resilient dividend policy. These
are anticipated to be largely cost synergies including but not
limited to: leverage of IT expertise, operational savings from
duplicated costs across some administrative functions and
operational cost savings from the cancellation of Hunters' AIM
quotation.
-- Acceleration of financial services strategy - the Enlarged
Group would have the scale to make effective use of The Property
Franchise Group's plans to create a pool of 100 financial advisers,
as well as to justify further recruitment in this area. To date,
neither The Property Franchise Group nor Hunters has been able to
fully exploit the significant opportunities that exist in this
area.
-- Strengthened management team - it is proposed that the
executive directors of both The Property Franchise Group and
Hunters will remain within the Enlarged Group following completion
of the Acquisition. It is proposed that Glynis Frew, Chief
Executive of Hunters, will join the Enlarged Group as an Executive
Director of The Property Franchise Group whilst Ed Jones will join
as Group Finance Director and Company Secretary, a non-board
position. Gareth Samples will remain as the TPFG Group CEO and
David Raggett as the TPFG Group CFO. It is proposed that Dean
Fielding, currently a Non-Executive Director of Hunters, will join
the Enlarged Group as an independent Non-Executive Director of The
Property Franchise Group. Richard Martin will continue as
Non-Executive Chairman of the Enlarged Group, Paul Latham will
become Deputy Chairman and Non-Executive Director Phil Crooks will
also remain on the TPFG Board as an independent Non-Executive
Director.
-- Furthermore, the TPFG Board believes that the Acquisition
provides significant opportunities to properly exploit the existing
and additional income streams within the Enlarged Group from
converting independent operators, assisting franchisees in the
purchase of managed portfolios of tenanted properties, and through
the use of digital marketing over a considerably increased customer
database.
For the reasons set out above, the TPFG Board believes that the
Acquisition is in the best interest of the shareholders of both The
Property Franchise Group and Hunters in the immediate and long
term.
4. Directors, management, employees, pensions, research and development and locations
4.1 The Property Franchise Group's strategic plans for Hunters
The Property Franchise Group and Hunters have complementary
businesses. The TPFG Board believes that the Acquisition will allow
the Enlarged Group to enhance its value proposition to franchisees
and customers, while building a stronger and more efficient
franchisee network. The Property Franchise Group envisages that the
business of Hunters would continue to operate materially in the
same way without significant disruption to the businesses of either
The Property Franchise Group or Hunters once the Hunters Group has
been fully integrated with the TPFG Group.
The TPFG Board has identified areas of potential synergies,
which would provide a stronger platform for further organic growth
and further enhancement of the progressive and resilient dividend
policy. These are anticipated to be largely cost synergies at the
outset including but not limited to: leverage of IT expertise,
operations cost savings from the cancellation of Hunters' AIM
quotation and operational savings from duplicated costs across some
administrative functions.
4.2 Employees and Management
The Property Franchise Group holds in high regard the
achievements and expertise of the existing management and employees
of Hunters.
The TPFG Board has identified areas of potential cost synergies
which will be reviewed in more detail following completion of the
Acquisition. Subject to the below, The Property Franchise Group
does not intend to initiate any material headcount reductions
within the Hunters Group as a result of the Acquisition and expects
that existing employees of Hunters will continue to contribute to
Hunters' ongoing success. However, to the extent that there are
operational inefficiencies or a duplication of functions or roles
within the Enlarged Group, this would result in a limited number of
headcount reductions.
At this stage The Property Franchise Group has not yet developed
a proposal as to how any such headcount reductions might be
implemented and will only develop and implement such a proposal
once the review referred to above has been completed. Any
implementation of headcount reductions by the Enlarged Group will
be subject to comprehensive planning and engagement with employees
and consultation with employee representatives as required by
applicable law. Any affected employees will be treated in a fair
and equitable manner.
It is proposed that the existing Non-Executive Directors of
Hunters will each resign as a Hunters Director upon completion of
the Acquisition, save for Dean Fielding who it is proposed will
join the TPFG Board as an independent Non-Executive Director.
4.3 Existing Rights and pensions schemes
The Property Franchise Group otherwise confirms that, following
completion of the Acquisition, the existing contractual and
statutory employment rights, including in relation to pensions, of
the Hunters Group's management and employees will be fully
safeguarded in accordance with applicable law. The Property
Franchise Group does not intend to make any changes with regards to
the Hunters Group's existing pension scheme including with regard
to the accrual of benefits for existing members and the admission
of new members. Hunters does not have any defined benefit pension
scheme.
4.4 Locations and headquarters
Following the completion of the Acquisition, The Property
Franchise Group does not intend to make any restructurings or
changes in location of either The Property Franchise Group's or
Hunters' headquarters and headquarters functions and places of
business. In addition, no changes are expected with respect to the
deployment of Hunters' fixed asset base or the research and
development functions of Hunters.
4.5 Trading Facilities
The Hunters Shares are currently admitted to trading on AIM.
Subject to the Scheme becoming Effective, an application will be
made to the London Stock Exchange to cancel the admission of the
Hunters Shares to trading on AIM, following which Hunters will be
re-registered as a private limited company.
4.6 The effect of the Covid-19 pandemic on near-term operational
execution and decision-making
The unknown duration and extent of the macro and micro economic
consequences of the Covid-19 pandemic and the steps taken by the UK
Government to address health risks remain a material risk. The
ongoing pandemic may impact the Enlarged Group's views on near-term
operational execution and decision-making, and therefore the
Enlarged Group may need to be agile to adapt its operational and
strategic intentions to the impact of the pandemic.
5. RecommendationS
Hunters
5.1 The Hunters Directors, who have been so advised by Spark
Advisory as to the financial terms of the Acquisition, consider the
terms of the Acquisition to be fair and reasonable. In providing
its advice to the Hunters Directors, Spark Advisory has taken into
account the commercial assessments of the Hunters Directors. Spark
Advisory is providing independent financial advice to the Hunters
Directors for the purposes of Rule 3 of the Takeover Code.
Accordingly, the Hunters Directors confirm that they intend to
recommend unanimously that Hunters Shareholders vote in favour of
the Scheme at the Hunters Court Meeting and in favour of the
Hunters Special Resolution to be proposed at the Hunters General
Meeting as they have irrevocably undertaken to do in respect of
their own beneficial holdings (and the beneficial holdings which
are under their control) of 11,212,619 Hunters Shares representing,
in aggregate, approximately 34.2 per cent. of the ordinary share
capital of Hunters in issue on the Latest Practicable Date.
The Property Franchise Group
5.2 In order to allot the New TPFG Shares, The Property
Franchise Group will be required to seek the approval of the TPFG
Shareholders at the TPFG General Meeting. The Acquisition is
accordingly conditional on such approval being obtained. The TPFG
Directors have received financial advice from Cenkos Securities in
relation to the Acquisition. In providing its advice to the TPFG
Directors, Cenkos Securities has taken into account the TPFG
Directors' commercial assessment of the Acquisition. The TPFG
Directors consider the Acquisition to be in the best interests of
the TPFG Shareholders as a whole and intend to recommend
unanimously that TPFG Shareholders vote in favour of the TPFG
Resolution to be proposed at the TPFG General Meeting, as those
TPFG Directors who are interested in TPFG Shares have irrevocably
undertaken to do in respect of their own beneficial holdings (and
the beneficial holdings which are under their control) of 8,317,350
TPFG Shares representing, in aggregate, approximately 32.2 per
cent. of the ordinary share capital of The Property Franchise Group
in issue on the Latest Practicable Date.
6. Background to and Reasons for the HUNTERS Board Recommendation
6.1 Further to the reasons set out in paragraph 3 above, the
Hunters Board believes that the Offer Price represents an
attractive premium for Hunters Shareholders, providing immediate
cash realisation as well as the New TPFG Shares, which enable
participation by Hunters Shareholders in the future capital and
income returns of the Enlarged Group.
The Hunters Board believes that the Enlarged Group would provide
a larger, more resilient entity in a time of macro-economic
uncertainty, with a strengthened management team, greater liquidity
in shares, cost synergies and significant opportunities to properly
exploit the existing and additional income streams within the
Enlarged Group.
7. Irrevocable Undertakings
Hunters Meetings
7.1 The Property Franchise Group has received irrevocable
undertakings from each of the Hunters Directors and from Nigel
Wray, John Waterhouse and Martin Robinson to vote in favour of the
Scheme at the Hunters Court Meeting and in favour of the Hunters
Special Resolution to be proposed at the Hunters General Meeting,
in respect of a total of 23,346,906 Hunters Shares, representing
approximately 71.1 per cent. of the ordinary share capital of
Hunters in issue as at the Latest Practicable Date.
TPFG General Meeting
7.2 The Property Franchise Group has also received irrevocable
undertakings from each of the TPFG Directors to vote in favour of
the TPFG Resolution to be proposed at the TPFG General Meeting, in
respect of a total of 8,317,350 TPFG Shares, which represents
approximately 32.2 per cent. of the ordinary share capital of The
Property Franchise Group in issue as at the Latest Practicable
Date).
7.3 Further details of these irrevocable undertakings are set
out in Appendix III to this Announcement.
8. Information on The Property Franchise Group
8.1 The TPFG Group is a franchised property business in the UK.
The Property Franchise Group is the holding company of five trading
subsidiaries with a stable of six national and regional estate and
letting agency brands operating over 240 physical branches across
the UK: Martin & Co, EweMove, Whitegates, Ellis & Co, CJ
Hole and Parkers.
8.2 The Property Franchise Group adopted a franchise model in
1995 and has enjoyed a high level of franchisee retention. The
Group's origin is Martin & Co, a business started as an estate
agency in Yeovil by Richard & Kathy Martin in 1986. The
Martin's then added a lettings service and in 1995 began to
franchise their business model.
8.3 The Property Franchise Group is a public company quoted on
AIM (AIM: TPFG) with a current market capitalisation of
approximately GBP50 million (as at the Latest Practicable Date).
The Property Franchise Group was admitted to trading on AIM in
December 2013.
8.4 The TPFG Group has a strong presence in lettings and, as at
the date of this Announcement, manages 58,000 properties on behalf
of landlords. It also has a growing presence in estate agency,
completing on the sale of 10,800 homes in 2019. The Property
Franchise Group is a multi-award winning business with recent
successes including "best national lettings agent" at the EA
Masters awards in 2019 and "the hybrid estate agency of the year"
at the 2019 Negotiator awards for EweMove. CJ Hole and Parkers,
brands owned by the TPFG Group, also won Best Estate Agent Guide
awards in 2019.
8.5 In its financial year ending 31 December 2019, the TPFG
Group revenue for the financial year to 31 December 2019 was
GBP11.4 million (31 December 2018: GBP11.2 million). During the
twelve month period ended 31 December 2019, the adjusted EBITDA of
the TPFG Group was GBP5.3 million (31 December 2018: GBP5.1
million) an increase of GBP0.2 million (5 per cent.) over the prior
year. The profit before tax was GBP4.0 million for 2019 (2018:
GBP4.3 million) and the average earnings per share was 12.5 pence
(2018: 13.3 pence)
8.6 In the interim results of the TPFG Group for the period
ended 30 June 2020 (published on 8 September 2020), the TPFG Group
reported robust revenues of GBP5.4 million despite the closure and
challenges caused by the Covid-19 pandemic. The TPFG Group's profit
before tax position remained stable at GBP2.0 million. The TPFG
Group's balance sheet was strong with a net cash position of GBP6.1
million at 30 June 2020 (30 June 2019: GBP2.8 million) and net cash
generated from operations of GBP2.2 million.
9. Information on Hunters
9.1 The Hunters Group is a franchised estate agency group based
in the UK, with its head office in York. The group has traded under
the Hunters brand since inception in 1992. As a result of both
organic growth and acquisitions, at 31 August 2020 its network
comprises 209 branches. The Hunters brand has become widely known
and has a strong reputation within the estate and lettings agency
market. The business was founded on the principles of delivering
excellent customer service, unrivalled proactivity and the best
results for its customers. These principles remain at the heart of
Hunters.
9.2 Hunters is a public company quoted on AIM (AIM: HUNT) with a
current market capitalisation of approximately GBP23.0 million (as
at the Latest Practicable Date).
9.3 Hunters was admitted to trading on AIM in July 2015. In its
financial year ending 31 December 2019, the Hunters Group generated
turnover of GBP14 million (31 December 2018: GBP14 million). During
the twelve month period ended 31 December 2019 the EBITDA of the
Hunters Group was GBP2.8 million (31 December 2018: GBP2.3
million), the adjusted profit before tax was GBP2.1 million (31
December 2018: GBP2.0 million) and the adjusted basic earnings per
share was 5.86 pence (31 December 2018: 5.93 pence).
9.4 In the interim results of the Hunters Group for the period
ended 30 June 2020 (published on 29 September 2020), the net assets
of the Hunters Group stood at GBP8 million (31 December 2019:
GBP7.5 million), the retained cash was GBP5.6 million (31 December
2019: GBP1.3 million) and its net debt stood at GBP2.2 million (31
December 2019: GBP3.2 million). Included in these figures is the
Hunters Group's GBP3.5 million Coronavirus Business Interruption
Loan which it has not used.
10. CURRENT TRADING
Hunters
10.1 On 29 September 2020, Hunters announced that it was trading
strongly following the UK national lockdown which ended in May 2020
and it continued to do so to the end of its financial year ending
31 December 2020. As a result of savings made and restructuring
undergone by the Hunters Group and the support provided under
various government initiatives, Hunters has been able to offset the
extent of the downside disruption. The Hunters Directors are
looking to report on the back of a strong finish to the financial
year ending 31 December 2020 and a network pipeline of GBP17
million (December 2019: GBP9 million). With strong trading since
the end of the first lockdown and having refrained from dividend
payments since November 2019, the Hunters Group net debt position
has improved accordingly.
The Property Franchise Group
10.2 On 8 September 2020 The Property Franchise Group announced
in its interim results that the TPFG Group had traded strongly
against the background of the pandemic and lockdowns. Furthermore,
activity since estate agents were able to re-open their offices at
the end of May 2020 had resulted in record performances being set
across lettings and sales in June 2020 and July 2020. Revenues for
H1 2020 were GBP5.4 million (H1 2019: GBP5.4 million); adjusted
EBITDA for H1 2020 was GBP2.5 million (H1 2019: GBP2.4m) and profit
before tax for H1 2020 was GBP2.0 million (H1 2019: GBP2.0
million). The TPFG Group reported a strong balance sheet with a net
cash position of GBP6.1 million allowing for a reinstatement of
dividend payments with an interim dividend of 2.1 pence and a
return to the execution of key strategic growth initiatives.
10.3 Current trading for The Property Franchise Group has
continued to be strong and the TPFG Board expects full year results
to be in line with management expectations.
11. DIVIDS
Hunters Dividends
11.1 Hunters announced on 29 September 2020 its intention to
reinstate dividends and pay in 2021 the equivalent of a full year
dividend. The Special Dividend in respect of the year ended 31
December 2020 of 2.7 pence per Hunters Share compares with the 2.4
pence per Hunters Share paid for the year ended 31 December 2018
(being the last full year dividend paid).
11.2 The Hunters Directors intend to declare a special interim
dividend of 2.7 pence per Hunters Share for the year ended 31
December 2020 ("Special Dividend"). The Special Dividend would be
payable to the holders of Hunters Shares on a record date to be
announced on or before the publication of the Scheme Document.
11.3 If any dividend (other than the Special Dividend) and/or
other distribution and/or return of value is authorised, declared,
made or paid in respect of the Hunters Shares on or after the date
of this Announcement and before the Effective Date, The Property
Franchise Group reserves the right to reduce the value of the
consideration payable for each Hunters Share under the Acquisition
by up to the amount per Hunters Share of such dividend,
distribution or return of capital. If any such dividend and/or
other distribution and/or other return of value occurs and The
Property Franchise Group exercises its rights pursuant to this
paragraph, any reference in this Announcement to the Offer Price
shall be deemed to be a reference to the Offer Price as so reduced.
Any exercise by The Property Franchise Group of its rights referred
to in this paragraph shall be the subject of an announcement and,
for the avoidance of doubt, shall not be regarded as constituting
any revision or variation of the Acquisition. To the extent that
any such dividend and/or distribution and/or return of capital is
declared, made, paid in respect of the Hunters Shares and (i) is
transferred pursuant to the Acquisition on a basis which entitles
The Property Franchise Group to receive the dividend and/or
distribution and/or return of capital and to retain it or (ii) such
dividend and/or distribution and/or return of capital is cancelled,
the Offer Price will not be subject to change in accordance with
this paragraph.
The Property Franchise Group Dividends
11.4 The Property Franchise Group has followed a progressive
dividend policy since its admission to AIM in December 2013. In
line with many listed companies it did not pay a final dividend for
2019. However, it was one of the first amongst listed property
companies to reinstate dividends with an interim payment of 2.1
pence per TPFG Share in September 2020.
11.5 The Property Franchise Group expects to pay a second
interim dividend, in lieu of a final dividend for FY 2020 of 6.6
pence. It is expected that this dividend will be paid during the
period following this Announcement and before the Scheme becomes
Effective. This dividend would be payable to existing TPFG
Shareholders only.
12. Arrangements Between The Property Franchise Group and Hunters Management
Appropriate incentivisation arrangements will be put in place
for the management of the Enlarged Group following completion of
the Acquisition, although no detailed discussions have taken place
to date between Hunters and The Property Franchise Group in
relation to such arrangements.
13. Hunters Share PLANS
As at the Latest Practicable Date, 1,888,000 options remained
outstanding under the Hunters Share Plans, of which 821,333 will be
valid for exercise prior to the Effective Date. The remaining
1,066,667 options granted under the Hunters Share Plans have been
surrendered or will not vest on the following bases:
-- conditional upon the Scheme becoming Effective, each of Ed
Jones, Glynis Frew and Kevin Hollinrake has agreed to surrender an
aggregate of 700,000 options granted pursuant to the LTIP; and
-- a further 366,667 options granted under the LTIP will not
vest upon the Scheme becoming Effective.
Participants in the Hunters Share Plans will be contacted
regarding the effect of the Acquisition on their rights under the
Hunters Share Plans and appropriate proposals will be made to such
participants in due course.
14. Financing
14.1 The cash consideration payable by The Property Franchise
Group under the terms of the Acquisition will be approximately
GBP14.5 million. The consideration payable by The Property
Franchise Group under the terms of the Acquisition will be financed
by a combination of: (a) a loan facility from Barclays Bank PLC,
the proceeds of which may be used towards, inter alia, financing
the consideration paid or payable under the terms of the
Acquisition and (b) existing cash resources of The Property
Franchise Group. The financing made available under the loan
facility is made available on a certain funds basis. Details of the
facility agreement will be set out in the Scheme Document.
14.2 In accordance with Rule 2.7(d) of the Takeover Code, Cenkos
Securities, as financial adviser to The Property Franchise Group,
is satisfied that sufficient resources are available to The
Property Franchise Group to enable it to satisfy in full the cash
consideration payable to Hunters Shareholders under the terms of
the Acquisition.
15. Offer-Related Arrangements
Non-Disclosure Agreement
15.1 The Property Franchise Group and Hunters entered into a
non-disclosure agreement on 16 December 2020 pursuant to which each
of The Property Franchise Group and Hunters has undertaken to keep
confidential information relating to the other party and not to
disclose it to third parties (other than to permitted disclosees)
unless required by law or regulation. These confidentiality
obligations continue in effect until the earlier of the Scheme
becoming Effective and the date falling two years from the date of
the non-disclosure agreement.
16. Structure of the Acquisition
It is intended that the Acquisition will be effected by means of
a court-sanctioned scheme of arrangement between Hunters and Scheme
Shareholders under Part 26 of the Companies Act.
The purpose of the Scheme is to provide for The Property
Franchise Group to become the holder of the entire issued and to be
issued ordinary share capital of Hunters.
Under the Scheme, the Scheme Shares will be transferred to The
Property Franchise Group, in consideration for which Scheme
Shareholders will receive the cash and share consideration on the
basis set out in paragraph 2 above.
The New TPFG Shares will be issued in registered form and will
be capable of being held in both certificated and uncertificated
form. The New TPFG Shares will be issued by The Property Franchise
Group to Scheme Shareholders no later than 14 days after the
Effective Date. Fractions of the New TPFG Shares will not be
allotted or issued pursuant to the Acquisition, but entitlements of
Scheme Shareholders will be rounded down to the nearest whole
number of New TPFG Shares and all fractions of New TPFG Shares will
be aggregated and sold in the market as soon as practicable after
the Effective Date. The net proceeds of such sale (after deduction
of broking fees and other sale costs and expenses, together with
any tax or foreign exchange conversion fees payable on the sale)
will be distributed in due proportions to Scheme Shareholders who
would otherwise have been entitled to such fractions (rounded down
to the nearest penny), save that individual entitlements to amounts
of less than GBP5.00 will be retained for the benefit of the
Enlarged Group
To become Effective, the Scheme must be approved by a majority
in number of the Hunters Shareholders present and voting (and
entitled to vote) at the Hunters Court Meeting, either in person or
by proxy, representing at least 75 per cent. in value of the
Hunters Shares which are voted at the Hunters Court Meeting (or any
adjournment thereof), together with the approval of the Court and
the passing at the Hunters General Meeting of the Hunters Special
Resolution necessary to implement the Scheme.
The Scheme is also subject to the Conditions and further terms
set out in Appendix I to this Announcement and to be set out in the
Scheme Document.
Once the necessary approvals from Hunters Shareholders have been
obtained and the other Conditions have been satisfied or (where
applicable) waived, the Scheme must be sanctioned by the Court. The
Scheme will become Effective in accordance with its terms upon a
copy of the Court Order being delivered to the Registrar of
Companies for registration. Subject to satisfaction of the
Conditions, the Scheme is expected to become Effective in March
2021.
The Acquisition will lapse if the Scheme does not become
Effective by 28 May 2021 (or such later date as The Property
Franchise Group and Hunters may agree).
Upon the Scheme becoming Effective, (i) it will be binding on
all Scheme Shareholders, irrespective of whether or not they
attended or voted at the Hunters Court Meeting or the Hunters
General Meeting (and, if they attended and voted, whether or not
they voted in favour) and (ii) share certificates in respect of
Scheme Shares will cease to be valid and entitlements to Scheme
Shares held within the CREST system will be cancelled.
Further details of the Scheme, including an indicative timetable
for its implementation, will be set out in the Scheme Document,
which is expected to be despatched to Hunters Shareholders as soon
as reasonably practicable following the release of this
Announcement. The timing of events which relate to the
implementation of the Acquisition is, however, subject to the
approval of the Court and is therefore subject to change.
17. Conditions to the Acquisition
17.1 The Acquisition will be subject to the Conditions and
further terms set out in full in Appendix I to this Announcement
and to be set out in the Scheme Document. The Acquisition is
conditional upon the Scheme becoming unconditional and Effective,
subject to the Takeover Code, on or before 11.59 p.m. on the Long
Stop Date. In summary, the Scheme is conditional, inter alia, upon
the following events occurring on or before the Long Stop Date:
17.1.1 a resolution to approve the Scheme being passed by a
majority in number of the Hunters Shareholders who are present and
vote (and who are entitled to vote) at the Hunters Court Meeting
(or any adjournment thereof), either in person or by proxy,
representing not less than 75 per cent. in value of the Hunters
Shares voted;
17.1.2 such Hunters Court Meeting being held on or before the
22(nd) day after the expected date of the Hunters Court Meeting to
be set out in the Scheme Document in due course or such later date
(if any) as The Property Franchise Group and Hunters may agree and
which the Court may allow;
17.1.3 all resolutions necessary to implement the Scheme being
duly passed by the requisite majority or majorities at the Hunters
General Meeting or any adjournment thereof;
17.1.4 such Hunters General Meeting, or any adjournment of such
meeting, being held on or before the 22(nd) day after the expected
date of the Hunters General Meeting to be set out in the Scheme
Document in due course or such later date (if any) as The Property
Franchise Group and Hunters may agree and which the Court may
allow;
17.1.5 the Scheme being sanctioned (with or without
modification, but subject to any such modification being on terms
agreed by The Property Franchise Group and Hunters), by the
Court;
17.1.6 the Sanction Hearing being held on or before the 22(nd)
day after the expected date of the Sanction Hearing as set out in
the Scheme Document or such later date (if any) as The Property
Franchise Group and Hunters may agree and which the Court may
allow;
17.1.7 a copy of the Scheme Court Order being delivered to the Registrar of Companies;
17.1.8 the passing at the TPFG General Meeting (or at any
adjournment thereof) of the TPFG Resolution to authorise the
allotment and issue of the New TPFG Shares to Hunters Shareholders
(and any other Hunters Shareholders whose Hunters Shares are issued
after the Scheme becomes Effective);
17.1.9 the London Stock Exchange having acknowledged to The
Property Franchise Group or its agent (and such acknowledgement not
having been withdrawn) that the New TPFG Shares will be admitted to
trading on AIM;
17.1.10 in so far as the Acquisition satisfies the thresholds
for notification and premerger authorisation under the United
Kingdom Enterprise Act 2002, where the CMA has opened a CMA Merger
Investigation either (i) confirmation having been received in
writing from the CMA that the CMA does not intend to make a CMA
Phase 2 Reference in connection with the Acquisition or any matters
arising therefrom; or (ii) the period within which the CMA is
required to decide whether the duty to make a CMA Phase 2 Reference
applies with respect to the Acquisition or any matters arising
therefrom has expired without such a decision having been made;
and
17.1.11 the other Conditions not otherwise identified above (but
set out in Appendix I of this Announcement) either being satisfied
or, with the exception of certain conditions which are not capable
of waiver, waived.
17.2 The Condition that the Scheme must become unconditional and
Effective on or before 11.59 p.m. on the Long Stop Date and the
Conditions set out in sub-paragraphs 17.1.1, 17.1.3, 17.1.5,
17.1.7, 17.1.8 and 17.1.9 above are not capable of being waived, in
whole or in part.
18. The Property Franchise Group approval to issue New TPFG Shares
18.1 The Acquisition involves the issue of New TPFG Shares to
Hunters Shareholders. Accordingly, The Property Franchise Group
will be required to seek the approval of TPFG Shareholders for the
allotment and issue of New TPFG Shares at the TPFG General Meeting.
The Acquisition will be conditional on, among other things, the
TPFG Resolution being passed by the requisite majority of TPFG
Shareholders at the TPFG General Meeting.
18.2 The Property Franchise Group will prepare the TPFG Circular
which will contain a notice convening the TPFG General Meeting. It
is expected that the TPFG Circular will be published and posted to
TPFG Shareholders at or around the same time as the Scheme Document
is posted to Hunters Shareholders. The TPFG Circular will be made
available by The Property Franchise Group on its website at
https://thepropertyfranchisegroup.co.uk/investors.
18.3 If the issue of New TPFG Shares to any Restricted Overseas
Person, or to any person who is reasonably believed to be a
Restricted Overseas Person, would or may infringe the laws of a
jurisdiction outside England and Wales or would or may require any
governmental or other consent or any registration, filing or other
formality which cannot be complied with, or compliance with which
would be unduly onerous, The Property Franchise Group may at its
discretion determine that such Restricted Overseas Person shall
either (i) not have allotted or issued to him New TPFG Shares and
that the New TPFG Shares which would otherwise have been
attributable to such Restricted Overseas Person under the terms of
the Acquisition shall be sold in the market and the cash proceeds
of such sale be forwarded to such Restricted Overseas Person or
(ii) that the New TPFG Shares shall be issued to such Restricted
Overseas Person but shall be sold in the market on his behalf and
the cash proceeds of such sale forwarded to the relevant Restricted
Overseas Person (in each case after deduction of broking fees and
other sale costs and expenses, together with any tax or foreign
exchange conversion fees payable on the sale).
19. ADMISSION OF New TPFG Shares
Prior to the Effective Date, an application will be made to the
London Stock Exchange for the New TPFG Shares to be admitted to
trading on AIM. It is expected that Admission will become Effective
and that unconditional dealings in the New TPFG Shares will
commence at 8.00 a.m. on the first Business Day following the
Effective Date. The New TPFG Shares will not be listed on any stock
exchange other than AIM, and have not been, and will not be,
registered under the US Securities Act or under any laws of any
state or other jurisdiction of the United States.
20. De-Listing and Re-Registration
20.1 Prior to the Scheme becoming Effective, Hunters will make
an application to request the London Stock Exchange to cancel the
trading of the Hunters Shares on AIM, to take effect shortly after
the Effective Date.
On the Effective Date, Hunters will become a wholly-owned
subsidiary of The Property Franchise Group and share certificates
in respect of Hunters Shares will cease to be valid and should be
destroyed. In addition, entitlements to Hunters Shares held within
the CREST system will be cancelled on the Effective Date.
Upon the Scheme becoming Effective, The Property Franchise Group
will acquire the Hunters Shares fully paid and free from all liens,
equitable interests, charges, encumbrances and other third party
rights of any nature whatsoever and together with all rights
attaching to them including the right to receive and retain all
dividends and distributions (if any) declared, made or paid by
reference to a record date after the Effective Date.
It is also proposed that, following the Effective Date and after
its shares are delisted, Hunters will be re-registered as a private
limited company.
21. DISCLOSURE OF INTERESTS
21.1 Save in respect of the irrevocable undertakings referred to
in paragraph 7 above, as at the Latest Practicable Date neither The
Property Franchise Group, nor any of the TPFG Directors, nor, so
far as The Property Franchise Group is aware, any person acting in
concert (within the meaning of the Takeover Code) with it:
-- had any interest in, or right to subscribe for, any relevant securities of Hunters;
-- had any short positions in respect of relevant securities of
Hunters (whether conditional or absolute and whether in the money
or otherwise), including any short position under a derivative, any
agreement to sell or any delivery obligation or right to require
another person to purchase or take delivery;
-- had borrowed or lent any relevant securities of Hunters
(including, for these purposes, any financial collateral
arrangements of the kind referred to in Note 4 on Rule 4.6 of the
Takeover Code) save for any borrowed shares which have been either
on-lent or resold; or
-- was a party to any dealing arrangement of the kind referred
to in Note 11 on the definition of acting in concert in the
Takeover Code.
22. OVERSEAS SHAREHOLDERS
22.1 The release, publication or distribution of this
Announcement to, and the availability of the New TPFG Shares to be
issued pursuant to the Acquisition to Hunters Shareholders who are
not resident in the United Kingdom may be affected by the laws of
the relevant jurisdictions in which they are resident or to which
they are subject. Persons who are not resident in the United
Kingdom or who are subject to the laws of other jurisdictions
should inform themselves of, and observe, any applicable legal
requirements or regulatory requirements. Any failure to comply with
the restrictions may constitute a violation of the securities laws
of any such jurisdiction. Further details in relation to Overseas
Shareholders of Hunters will be found in the Scheme Document.
This Announcement is for information purposes only and is not
intended to and does not constitute or form part of an offer to
sell or subscribe for or any invitation to purchase or subscribe
for any securities or the solicitation of an offer to buy,
otherwise acquire, subscribe for, sell or otherwise dispose of any
securities or the solicitation of any vote or approval in any
jurisdiction, pursuant to the Acquisition or otherwise nor shall
there be any sale, issuance or transfer of securities of The
Property Franchise Group pursuant to the Acquisition or otherwise
in any jurisdiction in contravention of applicable law. This
Announcement has been prepared for the purposes of complying with
the laws of England and Wales, and the Takeover Code, the AIM
Rules, the Market Abuse Regulation and, the Disclosure Guidance and
Transparency Rules and the information disclosed may not be the
same as that which would have been disclosed if this Announcement
had been prepared in accordance with the laws of any jurisdiction
outside England and Wales.
The New TPFG Shares to be issued under the Acquisition have not
been and will not be registered under the US Securities Act or
under any laws or with any securities regulatory authority of any
state or other jurisdiction of the United States. Accordingly,
unless an exemption under relevant securities laws is available,
including the exemption from the registration requirements of the
US Securities Act provided by Section 3(a)(10) thereof, the New
TPFG Shares are not being, and may not be, offered, sold, resold,
delivered or distributed, directly or indirectly, in, into or from
the United States. The New TPFG Shares referred to in this
Announcement have not been approved or disapproved by the US
Securities and Exchange Commission, any State securities commission
in the United States or any other US regulatory authority, nor have
any such authorities passed judgment upon the fairness or the
merits of the Acquisition or determined if the information in this
Announcement is accurate or complete. Any representation to the
contrary is a criminal offence in the United States.
23. General
The Property Franchise Group reserves the right, with the
consent of the Panel, to elect to implement the Acquisition of the
Hunters Shares by way of a Takeover Offer as an alternative to the
Scheme. In such event, the Acquisition will be implemented on
substantially the same terms as those which would apply to the
Scheme (subject to appropriate amendments, including an acceptance
condition set at 90 per cent. of the shares to which such offer
relates or such lesser percentage, being more than 50 per cent., as
The Property Franchise Group may decide). However, if The Property
Franchise Group were to elect to implement the Acquisition by way
of a Takeover Offer, such Takeover Offer will be made in compliance
with all applicable laws and regulations. If the Acquisition is
effected by way of a Takeover Offer and such offer becomes or is
declared unconditional in all respects and sufficient acceptances
are received in respect of such offer, The Property Franchise Group
intends to: (i) make an application to request the London Stock
Exchange to cancel trading of Hunters Shares on AIM; and (ii)
exercise its rights (to the extent such rights are available) to
apply the provisions of Chapter 3 of Part 28 of the Companies Act
to acquire compulsorily the remaining Hunters Shares in respect of
which such offer has not been accepted.
The Acquisition will be made subject to the Conditions and
further terms set out in Appendix I to this Announcement and to be
set out in the Scheme Document. The bases and sources of certain
financial information contained in this Announcement are set out in
Appendix II to this Announcement. A summary of the irrevocable
undertakings received by The Property Franchise Group is contained
in Appendix III to this Announcement. Certain terms used in this
Announcement are defined in Appendix IV to this Announcement.
The Acquisition will be governed by the laws of England and
Wales and will be subject to the jurisdiction of the courts of
England and Wales. The Acquisition will be subject to the
applicable requirements of the Takeover Code, the Panel, the AIM
Rules, the London Stock Exchange, the FCA, the Market Abuse
Regulation and the Disclosure Guidance and Transparency Rules.
Each of Cenkos Securities and Spark Advisory has given and not
withdrawn its consent to the publication of this Announcement with
the inclusion herein of the references to their opinions and names
(as applicable) in the form and context in which they are
included.
24. Documents on Display
24.1 Copies of the following documents will be made available on
The Property Franchise Group and Hunters' websites at
https://thepropertyfranchisegroup.co.uk/investors and
https://www.hunters.com/other-services/investor-relations ,
respectively until the end of the Offer Period:
-- this Announcement;
-- the irrevocable undertakings referred to in paragraph 7 above
and summarised in Appendix III to this Announcement;
-- the documents relating to the financing of the Acquisition
referred to in paragraph 14 above;
-- the Confidentiality Agreement; and
-- the consent letters referred to in paragraph 23.
Enquiries:
Hunters
Glynis Frew - Chief Executive
Ed Jones - Chief Financial Officer 01904 756 197
Spark Advisory Partners Limited (Hunters'
Financial Adviser and Nominated Adviser)
Andrew Emmott 0113 370 8971
Dowgate Capital Limited (Hunters' Corporate
Broker)
James Serjeant 020 3903 7715
The Property Franchise Group
Gareth Samples, Chief Executive Officer
David Raggett, Chief Financial Officer 01202 405549
Cenkos Securities plc (The Property Franchise
Group's Financial Adviser and Nominated
Adviser)
Max Hartley
Callum Davidson 0207 397 8900
Alma (The Property Franchise Group's PR
advisers)
Susie Hudson 0203 405 0209
Justine James
Harriet Jackson
Financial Advisers
Cenkos Securities plc ("Cenkos Securities"), which is authorised
and regulated in the United Kingdom by the Financial Conduct
Authority, is acting exclusively for The Property Franchise Group
and no one else in connection with the Acquisition and the other
matters referred to in this Announcement, the TPFG Circular and the
Scheme Document and will not be responsible to anyone other than
The Property Franchise Group for providing the protections afforded
to clients of Cenkos Securities or for providing advice in
connection with the Acquisition or any matter or arrangement
referred to herein.
Spark Advisory Partners Limited ("Spark Advisory") , which is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting exclusively for Hunters and no one
else in connection with the Acquisition, the other matters referred
to in this Announcement and the Scheme Document and will not be
responsible to anyone other than Hunters for providing the
protections afforded to clients of Spark Advisory or for providing
advice in connection with the Acquisition or any matter or
arrangement referred to herein.
Cenkos Securities, Spark Advisory and Dowgate have given and not
withdrawn their consent to the publication of this Announcement
with the inclusion in it of the references to their respective
names and (where applicable) advice in the form and context in
which they appear.
Dowgate Capital Limited ("Dowgate"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority
, is acting exclusively for Hunters and no one else in connection
with the Acquisition , the other matters referred to in this
Announcement and the Scheme Document and will not be responsible to
anyone other than Hunters for providing the protections afforded to
clients of Dowgate or for providing advice in connection with the
Acquisition or any matter or arrangement referred to herein.
Legal Advisers
CMS Cameron McKenna Nabarro Olswang LLP is retained as legal
adviser to The Property Franchise Group. DWF Law LLP is retained as
legal advisers to Hunters.
Further infomration
This Announcement is for information purposes only and is not
intended to and does not constitute or form part of an offer to
sell or subscribe for or any invitation to purchase or subscribe
for any securities or the solicitation of an offer to buy any
securities or the solicitation of any vote or approval in any
jurisdiction, pursuant to the Acquisition or otherwise. The
Acquisition will be made solely by means of the Scheme Document
(or, in the event that the Acquisition is to be implemented by
means of Takeover Offer, the offer document) or any document by
which the Acquisition is made which will contain the full terms and
conditions of the Acquisition, including details of how to vote in
respect of the Scheme.
This Announcement does not constitute a prospectus or prospectus
equivalent document. The New TPFG Shares to be issued pursuant to
the Acquisition are not being offered to the public by means of
this Announcement. The Acquisition will be subject to the
applicable requirements of the Takeover Code, the Panel, the AIM
Rules, the London Stock Exchange and the FCA.
Any vote, approval, decision or other response to the
Acquisition by the Hunters Shareholders should be made only on the
basis of the information in the Scheme Document. Hunters
Shareholders are strongly advised to read the formal documentation
in relation to the Acquisition once it has been despatched. It is
expected that the Scheme Document (including notices of the Hunters
Meetings) together with the relevant Forms of Proxy, will be posted
to Hunters Shareholders as soon as is reasonably practicable and in
any event within 28 days of this Announcement, unless otherwise
agreed with the Panel.
Hunters will prepare the Scheme Document to be distributed to
Hunters Shareholders. Hunters and The Property Franchise Group urge
Hunters Shareholders to read the Scheme Document when it becomes
available because it will contain important information relating to
the Acquisition, the New TPFG Shares and the TPFG Group. Any vote
in respect of resolutions to be proposed at the Hunters Meetings to
approve the Acquisition, the Scheme or related matters, should be
made only on the basis of the information contained in the Scheme
Document. Each Hunters Shareholder is urged to consult its
independent professional advisers immediately regarding the tax
consequences of the Acquisition applicable to them.
The Property Franchise Group will prepare the TPFG Circular to
be distributed to TPFG Shareholders and which will be available on
The Property Franchise Group's website at
https://thepropertyfranchisegroup.co.uk/investors . The Property
Franchise Group urges TPFG Shareholders to read the TPFG Circular
when it becomes available. Any vote in respect of the TPFG
Resolution should be made only on the basis of the information in
the TPFG Circular. It is expected that the TPFG Circular (including
the notice of the TPFG General Meeting) together with the TPFG Form
of Proxy, will be posted to TPFG Shareholders as soon as reasonably
practicable and in any event within 28 days of this Announcement,
unless otherwise agreed with the Panel.
The statements contained in this Announcement are made as at the
date of this Announcement, unless some other time is specified in
relation to them. Nothing contained in this Announcement shall be
deemed to be a forecast, projection or estimate of the future
financial performance of Hunters or the Hunters Group or The
Property Franchise Group or the TPFG Group except where otherwise
stated.
Notice to Overseas Shareholders
The release, publication or distribution of this Announcement in
certain jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to the laws of
any jurisdiction other than the United Kingdom should inform
themselves of, and observe, any applicable requirements. Any
failure to comply with the restrictions may constitute a violation
of the securities laws of any such jurisdiction. This Announcement
does not constitute an offer or an invitation to purchase or
subscribe for any securities or a solicitation of an offer to buy
any securities pursuant to this Announcement or otherwise or the
solicitation of any vote or approval in any jurisdiction in which
such offer or solicitation is unlawful. This Announcement has been
prepared for the purposes of complying with the laws of England and
Wales and the Takeover Code, the AIM Rules, the Market Abuse
Regulation, the Disclosure Guidance and Transparency Rules and the
information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance
with the laws of any jurisdiction outside England and Wales.
Unless otherwise determined by The Property Franchise Group or
required by the Takeover Code, and permitted by applicable law and
regulation, the Acquisition, copies of this Announcement and all
documents relating to the Acquisition will not be and must not be
made available, mailed or otherwise forwarded, distributed or sent,
directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no
person may vote in favour of the offer by any such use, means,
instrumentality or form within a Restricted Jurisdiction or any
other jurisdiction if to do so would constitute a violation of the
laws of that that jurisdiction.
If the Acquisition is to be implemented by way of a Takeover
Offer (unless otherwise permitted by applicable law and regulation)
the Takeover Offer may not be made, directly or indirectly, in or
into, or by the use of the mails, or by any other means of
instrumentality (including without limitation, telephonically or
electronically) of interstate or foreign commerce of, or any
facilities of a national, state or other securities exchange of any
Restricted Jurisdiction, and the Takeover Offer will not be capable
of acceptance by any such use, means, instrumentality or facilities
or from or within any Restricted Jurisdiction.
The availability of the New TPFG Shares under the Acquisition to
Hunters Shareholders who are not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions in which they
are resident or to which they are subject. Persons who are not
resident in the United Kingdom or who are subject to the laws of
other jurisdictions should inform themselves of, and observe, any
applicable legal requirements or regulatory requirements.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Notice to US holders
Hunters Shareholders in the United States should note that the
Acquisition relates to the securities of an English company with a
listing on AIM and is proposed to be made by means of a scheme of
arrangement provided for under, and governed by, the laws of
England and Wales. A transaction effected by means of a scheme of
arrangement is not subject to the proxy solicitation or tender
offer rules under the US Exchange Act. Accordingly, the Scheme is
subject to procedural and disclosure requirements, rules and
practices applicable in the United Kingdom to schemes of
arrangement involving a target company in England listed on AIM,
which are different from the procedural and disclosure requirements
of the US proxy solicitation and tender offer rules under the US
Exchange Act. The Property Franchise Group reserves the right,
subject to the prior written consent of the Panel, to elect to
implement the Acquisition by way of a Takeover Offer. If in the
future The Property Franchise Group exercises its right to
implement the Acquisition by way of a Takeover Offer, such Takeover
Offer will be made in compliance with all applicable laws and
regulations, including, to the extent applicable, Section 14(e) of
the US Exchange Act and Regulation 14E thereunder. Such Takeover
Offer would be made in the United States by The Property Franchise
Group and no one else. In addition to any such Takeover Offer, The
Property Franchise Group, certain affiliated companies and the
nominees or brokers (acting as agents) may make certain purchases
of, or arrangements to purchase, shares in Hunters outside such
Takeover Offer during the period in which such Takeover Offer would
remain open for acceptance. If such purchases or arrangements to
purchase were to be made, they would be made outside the United
States in compliance with applicable law, including the US Exchange
Act. Any information about such purchases will be disclosed as
required in the United Kingdom, will be reported to a Regulatory
Information Service of the FCA and will be available on the London
Stock Exchange website: http://www.londonstockexchange.com/ .
The New TPFG Shares to be issued under the Scheme have not been
and will not be registered under the US Securities Act or under any
laws or with any securities regulatory authority of any State or
other jurisdiction of the United States and may only be offered or
sold in the United States in reliance on an exemption from the
registration requirement of the US Securities Act. The New TPFG
Shares are expected to be issued in reliance upon the exemption
from the registration requirement of the US Securities Act provided
by Section 3(a)(10) thereof. Hunters Shareholders who are or will
be "affiliates" (within the meaning of Rule 144 under the US
Securities Act) of The Property Franchise Group or Hunters prior
to, or of The Property Franchise Group after, the Effective Date
will be subject to certain US transfer restrictions relating to the
New TPFG Shares received pursuant to the Scheme as will be further
described in the Scheme Document.
For the purposes of qualifying for the exemption from the
registration requirement of the US Securities Act provided by
Section 3(a)(10) thereunder, Hunters will advise the Court that the
Court's sanctioning of the Scheme will be relied on by The Property
Franchise Group as an approval of the Scheme following a hearing on
the fairness of the terms and conditions of the Scheme to Hunters
Shareholders at which all Hunters Shareholders are entitled to
appear in person or through counsel to support or oppose the
sanctioning of the Scheme and with respect to which notification is
given to all Hunters Shareholders.
None of the securities referred to in this Announcement have
been approved or disapproved by the US Securities and Exchange
Commission, any State securities commission in the United States or
any other US regulatory authority, nor have any such authorities
passed judgment upon the fairness or the merits of the Acquisition
or determined if the information in this Announcement is accurate
or complete. Any representation to the contrary is a criminal
offence in the United States.
US holders of Hunters Shares also should be aware that the
transaction contemplated herein may have tax consequences in the
United States and that such consequences, if any, are not described
herein. US holders of Hunters Shares are urged to consult with
independent professional advisers regarding the legal, tax and
financial consequences of the Acquisition applicable to them,
It may be difficult for US holders of Hunter Shares to enforce
their rights and claims arising out of the US federal securities
laws, since The Property Franchise Group and Hunters are organised
in a country other than the United States, and some or all of their
officers and directors may be residents of, and some or all of
their assets may be located in, countries other than the United
States. US holders of Hunters Shares may have difficulty effecting
service of process within the United States upon those persons or
recovering against judgments of US courts, including judgments
based upon the civil liability provisions of the US federal
securities laws. US holders of Hunters Shares may not be able to
sue a non-US company or its officers or directors in a non-US court
for violations of US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgement.
The financial information included in this Announcement and
other documentation related to the Acquisition has been or will
have been prepared in accordance with International Financial
Reporting Standards and thus may not be comparable to financial
information of US companies or companies whose financial statements
are prepared in accordance with US generally accepted accounting
principles.
Further details in relation to US holders will be contained in
the Scheme Document.
Forward looking statements
This Announcement (including information incorporated by
reference into this Announcement), oral statements made regarding
the Acquisition and other information published by The Property
Franchise Group and Hunters contains statements about The Property
Franchise Group and Hunters that are or may be forward looking
statements. All statements other than statements of historical
facts included in this Announcement may be forward looking
statements. Without limitation, any statements preceded or followed
by or that include the words "targets", "plans", "believes",
"expects", "aims", "intends", "will", "may", "might", "could",
"would", "should", "anticipates", "estimates", "projects",
"forecasts" or words or terms of similar substance or the negative
thereof, are forward looking statements. Forward looking statements
include statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of The Property Franchise
Group's or Hunters' operations and potential synergies resulting
from the Acquisition; and (iii) the effects of government
regulation on The Property Franchise Group's or Hunters'
businesses.
Such forward looking statements involve risks and uncertainties
that could significantly affect expected results and/or operations
of The Property Franchise Group and Hunters and are based on
certain key assumptions and assessment made by The Property
Franchise Group and Hunters in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. Many
factors could cause actual results to differ materially from those
projected or implied in any forward looking statements. There are
several factors which could cause actual results to differ
materially from those expressed or implied in forward looking
statements. Among the factors that could cause actual results to
differ materially from those described in the forward looking
statements are changes in the global, political, economic,
business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax rates and future
business acquisitions or disposals. Such statements are qualified
in their entirety by the inherent risks and uncertainties
surrounding future expectations. Due to such uncertainties and
risks, readers are cautioned not to place undue reliance on such
forward looking statements, which speak only as of the date
hereof.
Neither Hunters nor The Property Franchise Group, nor any of
their respective associates or directors, officers or advisers,
provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward
looking statements in this Announcement will actually occur. Except
as expressly provided in this Announcement, they have not been
reviewed by the auditors of Hunters or The Property Franchise
Group. All subsequent oral or written forward looking statements
attributable to Hunters or The Property Franchise Group or any of
their respective members, directors, officers or employees or any
persons acting on their behalf are expressly qualified in their
entirety by the cautionary statement above. Should one or more of
these risks or uncertainties materialise, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described in this Announcement. Furthermore, neither The
Property Franchise Group or Hunters, nor any of their respective
members, directors, officers, employees, advisers and any person
acting on behalf of one or more of them assumes any obligation to
update or correct the information contained in this Announcement
(whether as a result of new information, future events or
otherwise) except as required by applicable law (including as
required by the Takeover Code, the AIM Rules and the Disclosure
Guidance and Transparency Rules).
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in one per cent. or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the Offer Period and, if later, following the
announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) of the Takeover
Code applies must be made by no later than 3.30 p.m. (London time)
on the 10th Business Day following the commencement of the Offer
Period and, if appropriate, by no later than 3.30 p.m. (London
time) on the 10th Business Day following the announcement in which
any securities exchange offeror is first identified. Relevant
persons who deal in the relevant securities of the offeree company
or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or
becomes, interested in one per cent. or more of any class of
relevant securities of the offeree company or of any securities
exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain
details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s), save to the extent that these
details have previously been disclosed under Rule 8 of the Takeover
Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the
Takeover Code applies must be made by no later than 3.30 p.m.
(London time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3 of the Takeover Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with either of them (see Rules 8.1, 8.2 and 8.4
of the Takeover Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
Offer Period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Information relating to Hunters Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Hunters Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Hunters may be provided to The Property
Franchise Group during the Offer Period as requested under Section
4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of
the Takeover Code.
No profit forecast or estimates
No statement in this Announcement is intended as a profit
forecast or profit estimate for any period. No statement in this
Announcement should be interpreted to mean that earnings per
Hunters Share or earnings per TPFG Share for the current or future
financial years would necessarily match or exceed the historical
published earnings per Hunters Share or earnings per TPFG
Share.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Publication on website
A copy of this Announcement will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on The Property Franchise Group's and
Hunters' websites at
https://thepropertyfranchisegroup.co.uk/investors and
https://www.hunters.com/other-services/investor-relations ,
respectively, by no later than 12.00 p.m. on the Business Day
following this Announcement.
Neither the contents of The Property Franchise Group's website,
nor those of Hunters' website, nor those of any other website
accessible from hyperlinks on either The Property Franchise Group's
or Hunters' website, are incorporated into or form part of this
Announcement.
Availability of hard copies
Pursuant to Rule 30.3 of the Takeover Code, a person so entitled
may request a copy of this Announcement and any information
incorporated into it by reference to another source in hard copy
form. A person may also request that all future documents,
announcements and information to be sent to that person in relation
to the Acquisition should be in hard copy form.
TPFG Shareholders may request a hard copy of this Announcement
(and any information incorporated by reference in this
Announcement) by writing to TPFG Registrar of The Pavilions,
Bridgwater Road, Bristol BS99 6ZY. Calls are charged at the
standard geographic rate and will vary by provider. Calls outside
the UK will be charged at the standard applicable rate. The
helpline is open between 9.00 a.m. to 5.30 p.m. Monday to Friday
excluding public holidays in England and Wales. Please note that
TPFG Registrar cannot provide any legal or tax advice and calls may
be recorded and monitored for security and training purposes. It is
important that you note that unless you make such a request, a hard
copy of this Announcement and any such information incorporated by
reference in it will not be sent to you. You may also request that
all future documents, announcements and information to be sent to
you in relation to the Acquisition should be in hard copy form.
Hunters Shareholders may request a hard copy of this
Announcement (and any information incorporated by reference in this
Announcement) by writing to Neville Registrars of Neville House,
Steelpark Road, Halesowen B62 8HD or by calling 0121 585 1131 (or,
if calling from outside the UK, on +44 0121 585 1131). Calls are
charged at the standard geographic rate and will vary by provider.
Calls outside the UK will be charged at the standard applicable
rate. The helpline is open between 9.00 a.m. to 5.30 p.m. Monday to
Friday excluding public holidays in England and Wales. Please note
that Neville Registrars cannot provide any legal or tax advice and
calls may be recorded and monitored for security and training
purposes. It is important that you note that unless you make such a
request, a hard copy of this Announcement and any such information
incorporated by reference in it will not be sent to you. You may
also request that all future documents, announcements and
information to be sent to you in relation to the Acquisition should
be in hard copy form.
Rule 2.9 Requirement
In accordance with Rule 2.9 of the Takeover Code, Hunters
confirms that as at the date of this Announcement, it has in issue
and admitted to trading on AIM is 32,814,588 ordinary shares of 4
pence each. Hunters has no Hunters Shares held in treasury. The
International Securities Identification Number (ISIN) of the
ordinary shares is GB00BYMW5L71.
In accordance with Rule 2.9 of the Takeover Code, The Property
Franchise Group confirms that as at the date of this Announcement,
it has in issue and admitted to trading on AIM is 25,822,750
ordinary shares of 1 pence each. The Property Franchise Group has
no TPFG Shares held in treasury. The International Securities
Identification Number (ISIN) of the ordinary shares is
GB00BH0WFH67.
The Acquisition is subject to the provisions of the Takeover
Code.
APPIX I
CONDITIONS AND FURTHER TERMS OF THE ACQUISITION
Part 1 The Conditions
1. The Acquisition will be conditional upon the Scheme becoming
unconditional and Effective, subject to the Takeover Code, by not
later than the Long Stop Date or such later date (if any) as The
Property Franchise Group and Hunters may, with the consent of the
Panel, agree and (if required) the Court may allow.
2. The Scheme will be conditional upon:
(a) the approval of the Scheme by a majority in number of
Hunters Shareholders who are present and vote (and who are entitled
to vote), whether in person or by proxy, at the Hunters Court
Meeting and at any separate class meeting which may be required by
the Court or at any adjournment of any such meeting, representing
not less than 75 per cent. in value of the Hunters Shares in issue
at the Voting Record Time voted by such Hunters Shareholders;
(b) the Hunters Court Meeting and any separate class meeting
which may be required by the Court or any adjournment of any such
meeting being held on or before the 22(nd) day after the expected
date of the Hunters Court Meeting to be set out in the Scheme
Document in due course (or such later date, if any, as may be
agreed by The Property Franchise Group and Hunters in writing and
the Court may allow);
(c) all resolutions necessary to implement the Scheme being duly
passed by the requisite majority or majorities at the Hunters
General Meeting or at any adjournment of that meeting;
(d) the Hunters General Meeting or any adjournment of that
meeting being held on or before the 22(nd) day after the expected
date of the Hunters General Meeting to be set out in the Scheme
Document in due course (or such later date, if any, as may be
agreed by The Property Franchise Group and Hunters in writing and
the Court may allow);
(e) the sanction of the Scheme by the Court with or without
modification (but subject to any such modification being acceptable
to The Property Franchise Group and Hunters) and an office copy of
the Court Order being delivered for registration to the Registrar
of Companies;
(f) the Sanction Hearing being held on or before the 22(nd) day
after the expected date of the Sanction Hearing to be set out in
the Scheme Document in due course (or such later date, if any, as
may be agreed by The Property Franchise Group and Hunters in
writing and the Court may allow).
3. In addition, subject to Part 2 of this Appendix I and to the
requirements of the Panel and in accordance with the Takeover Code,
the Acquisition will also be conditional upon the following
conditions and, accordingly, the necessary actions to make the
Scheme Effective will only be taken on the satisfaction or, where
relevant, waiver of the following Conditions (as amended if
appropriate):
(a) the passing at the TPFG General Meeting (or at any
adjournment thereof) of the TPFG Resolution to authorise the
allotment and issue of the New TPFG Shares to Hunters Shareholders
(and any other Hunters Shareholders whose Hunters Shares are issued
after the Scheme becomes Effective);
(b) the London Stock Exchange having acknowledged to The
Property Franchise Group or its agent (and such acknowledgment not
having been withdrawn) that the New TPFG Shares will be admitted to
trading on AIM;
(c) in so far as the Acquisition satisfies the thresholds for
notification and premerger authorisation under the United Kingdom
Enterprise Act 2002, where the CMA has opened a CMA Merger
Investigation either (i) confirmation having been received in
writing from the CMA that the CMA does not intend to make a CMA
Phase 2 Reference in connection with the Acquisition or any matters
arising therefrom; or (ii) the period within which the CMA is
required to decide whether the duty to make a CMA Phase 2 Reference
applies with respect to the Acquisition or any matters arising
therefrom has expired without such a decision having been made;
(d) no Third Party having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference, or having required any action
to be taken, or otherwise having done anything, or having enacted,
made or proposed any statute, regulation, decision, order or change
to be published practice and there not continuing to be outstanding
any statute, regulation, decision or order or having taken any
other action or step which would or might reasonably be expected
to:
(i) make the Acquisition, its implementation or the acquisition
or the proposed acquisition by The Property Franchise Group or any
member of the Wider TPFG Group of any shares or other securities
in, or control or management of, Hunters or any member of the Wider
Hunters Group void, illegal or unenforceable in any jurisdiction,
or otherwise directly or indirectly restrain, prevent, prohibit,
restrict, delay or otherwise materially adversely interfere with
the same or impose additional conditions or obligations with
respect to the Acquisition (or its implementation) or such
acquisition, or otherwise impede, challenge or interfere with the
Acquisition (or its implementation) or such acquisition, or require
material adverse amendment to the terms of the Acquisition or the
acquisition or proposed acquisition of any Hunters Shares or the
acquisition of control or management of Hunters or any member of
the Wider Hunters Group by The Property Franchise Group or any
member of the Wider TPFG Group;
(ii) materially limit or delay the ability of any member of the
Wider TPFG Group or any member of the Wider Hunters Group to
acquire or to hold or to exercise effectively, directly or
indirectly, all or any rights of ownership in respect of shares or
other securities (or the equivalent) in, or to exercise voting or
management control over, any member of the Wider Hunters Group or
any member of the Wider TPFG Group, as the case may be, taken as a
whole;
(iii) require, prevent or materially delay any divestiture or
alter the terms envisaged for any proposed divestiture by any
member of the Wider TPFG Group of any shares or other securities in
Hunters or any member of the Wider Hunters Group, in any case to an
extent which is or reasonably likely to be material in the context
of the Acquisition, or the Wider TPFG Group or the Wider Hunters
Group, as the case may be, taken as a whole, or in the context of
the Enlarged Group;
(iv) require, prevent or materially delay any divestiture or
alter the terms envisaged for any proposed divestiture by any
member of the Wider TPFG Group or by any member of the Wider
Hunters Group of all or any part of their respective businesses,
assets or properties or limit the ability of any of them to conduct
all or any part of their respective businesses or to own or control
any of their respective assets or properties or any part thereof,
in any such case to an extent which is or is reasonably likely to
be material in the context of the Acquisition, the Wider TPFG Group
or the Wider Hunters Group, as the case may be, taken as a whole,
or in the context of the Enlarged Group;
(v) require (save as pursuant to sections 974 to 991 of the
Companies Act and the implementation of the Acquisition), any
member of the Wider TPFG Group or of the Wider Hunters Group to
subscribe for or acquire, or to offer to subscribe for or acquire,
any shares or other securities (or the equivalent) or interest in
any member of the Wider Hunters Group or the Wider TPFG Group;
(vi) materially limit the ability of any member of the Wider
TPFG Group or of the Wider Hunters Group to integrate or
co-ordinate its business, or any part of it, with the businesses or
any part of the businesses of any other member of the Wider TPFG
Group and/or of the Wider Hunters Group in each case in a manner
which is material in the context of the Acquisition, or as the case
may be, in the context of the Wider TPFG Group or the Wider Hunters
Group, as the case may be, taken as a whole, or in the context of
the Enlarged Group;
(vii) result in any member of the Wider TPFG Group or the Wider
Hunters Group ceasing to be able to carry on business under any
name under which it presently does so (in any case to an extent
which is material in the context of the Acquisition, the Wider TPFG
Group or the Wider Hunters Group, as the case may be, taken as a
whole, or in the context of the Enlarged Group); or
(viii) otherwise adversely affect the business, assets, profits,
financial or trading position or prospects of any member of the
Wider TPFG Group or of any member of the Wider Hunters Group to an
extent which is material in the context of the Wider TPFG Group or
the Wider Hunters Group, as the case may be, in either case, taken
as a whole;
and all applicable waiting and other time periods during which
any such Third Party could take, institute, implement or threaten
such actions, proceedings, suit, investigation, enquiry or
reference or take any other step under any applicable legislation
or regulation of any relevant jurisdiction having expired, lapsed
or been terminated (as the case may be);
(e) all material notifications, filings and/or applications
which are necessary having been made, all applicable waiting and
other time periods (including any extensions of such waiting and
other time periods) under any applicable legislation or regulation
of any relevant jurisdiction having expired, lapsed or terminated
(as appropriate) and all material statutory or regulatory
obligations in any relevant jurisdiction having been complied with,
in each case in connection with the Acquisition or the acquisition
or proposed acquisition of any shares or other securities in, or
control of, Hunters or any other member of the Wider Hunters Group
by any member of the Wider TPFG Group or the carrying on by any
member of the Wider Hunters Group of its business;
(f) all Authorisations which are necessary in any relevant
jurisdiction for or in respect of the Acquisition (or its
implementation) or the acquisition or proposed acquisition of any
shares or other securities in, or control or management of, Hunters
or any other member of the Wider Hunters Group by The Property
Franchise Group or any member of the Wider TPFG Group or the
carrying on by any member of the Wider Hunters Group of its
business having been obtained, in terms and in a form reasonably
satisfactory to The Property Franchise Group from all appropriate
Third Parties or from any persons or bodies with whom any member of
the Wider TPFG Group or any member of the Wider Hunters Group has
entered into contractual arrangements and such Authorisations
together with all Authorisations necessary for any member of the
Wider Hunters Group to carry on its business remaining in full
force and effect, and there being no notice or other intimation of
any intention to revoke, suspend, restrict, modify or not to renew
any of the same having been made in connection with the Acquisition
or any other matter directly, or indirectly, arising from the
Acquisition (or its implementation), in each case where the absence
of such Authorisation would have a material adverse effect on the
Wider Hunters Group or the Wider TPFG Group taken as a whole and
all necessary statutory or regulatory obligations in any relevant
jurisdiction having been complied with;
(g) save as Disclosed there being no provision of any
arrangement, agreement, lease, licence, permit, franchise or other
instrument to which any member of the Wider Hunters Group is a
party, or by or to which any such member or any of its assets is or
may be bound, entitled or subject, or any circumstance, which, in
each case as a consequence of the Acquisition (or its
implementation) or the acquisition or proposed acquisition by The
Property Franchise Group or any member of the Wider TPFG Group or
otherwise of any shares or other securities (or the equivalent) in,
or control or management of, Hunters or any other member of the
Wider Hunters Group, could reasonably be expected to result in, in
any case to an extent which is or would be material in the context
of the Wider Hunters Group taken as a whole:
(i) any monies borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or any grant available to,
any member of the Wider Hunters Group being or becoming repayable
or being capable of being declared repayable immediately or prior
to their or its stated maturity or the ability of any member of the
Wider Hunters Group to borrow monies or incur any indebtedness
being withdrawn or inhibited or becoming capable of being withdrawn
or inhibited;
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property, assets or interests of any member of the Wider Hunters
Group or any such mortgage, charge or other security interest
(wherever and whenever created, arising or having arisen) becoming
enforceable;
(iii) any such arrangement, agreement, lease, licence, permit,
franchise or instrument, or the rights, liabilities, obligations or
interests of any member of the Wider Hunters Group thereunder,
being, or becoming capable of being, terminated or adversely
modified or affected or any adverse action being taken or arising
thereunder or any onerous obligation or liability arising
thereunder;
(iv) any asset or interest of any member of the Wider Hunters
Group or any asset the use of which is enjoyed by any member of the
Wider Hunters Group being or falling to be disposed of or charged
or ceasing to be available to any member of the Wider Hunters Group
or any right arising under which any such asset or interest could
be required to be disposed of or charged or could cease to be
available to any member of the Wider Hunters Group otherwise than
in the ordinary course of business;
(v) any member of the Wider Hunters Group ceasing to be able to
carry on business under any name under which it presently does
so;
(vi) the creation or assumption of any liabilities (actual or
contingent) by any member of the Wider Hunters Group other than
trade creditors in the ordinary course of business;
(vii) the rights, liabilities, obligations or interests of any
member of the Wider Hunters Group under any such arrangement,
agreement, lease, licence, permit, franchise or other instrument or
the interests or business of any such member in or with any other
person, firm, company or body (or any agreements or arrangements
relating to any such interests or business) being terminated,
adversely modified or affected;
(viii) the financial or trading position or the prospects or the
value or the profits of Hunters or of any member of the Wider
Hunters Group being prejudiced or adversely affected in any
manner;
(ix) the creation of any liability (actual or contingent) by any
member of the Wider Hunters Group; or
(x) any member of the Wider Hunters Group being required to
acquire or repay any shares in and/or indebtedness of any member of
the Wider Hunters Group owned by or owed to any third party;
and no event having occurred which, under any provision of any
such arrangement, agreement, lease, license, permit, franchise or
other instrument to which any member of the Wider Hunters Group is
a party, or by or to which any such member or any of its assets may
be found entitled or subject, could result in any of the events or
circumstances which are referred to in paragraphs (i) to (x) of
this Condition 3(g) in any case to an extent which is or would be
material in the context of the Wider Hunters Group as a whole;
(h) save as Disclosed no member of the Wider Hunters Group having since 31 December 2019:
(i) issued or agreed to issue, or authorised or proposed or
announced its intention to authorise or propose the issue of,
additional shares or securities of any class, or securities
convertible into or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares or convertible
securities (save as between Hunters and its wholly-owned
subsidiaries or between such wholly-owned subsidiaries or pursuant
to the Hunters Share Plans);
(ii) purchased, redeemed, repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
(or the equivalent) or reduced or, save in respect of the matters
mentioned in sub-paragraph (i) above made or authorised any other
change to any part of its share capital other than pursuant to the
implementation of the Acquisition;
(iii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus issue, dividend or other
distribution, whether payable in cash or otherwise (save for the
Special Dividend) declared before the Effective Date by any
wholly-owned subsidiary of Hunters to Hunters or any of their
respective wholly-owned subsidiaries;
(iv) save for transactions between Hunters and its respective
wholly-owned subsidiaries, or between such wholly-owned
subsidiaries, made, authorised, proposed or announced an intention
to make, propose or authorise any change in its loan capital or
issued or authorised the issue of any debentures or incurred or
increased any indebtedness or contingent liability;
(v) save for transactions between Hunters and its wholly-owned
subsidiaries or between such wholly-owned subsidiaries merged with,
demerged or acquired any body corporate, partnership or business or
acquired or disposed of or transferred, mortgaged or charged or
created any security interest over any material assets or any
right, title or interest in any material assets (including shares
in any undertaking and trade investments) or authorised, proposed
or announced the same, in each case which is material in the
context of the Wider Hunters Group taken as a whole;
(vi) issued, authorised or proposed or announced an intention to
authorise or propose the issue of, or made any change in or to, any
debentures or, other than trade credit incurred in the ordinary
course of business, incurred or increased any indebtedness or
liability (actual or contingent) except as between Hunters and any
of its wholly owned subsidiaries or between such wholly-owned
subsidiaries, which in any case is material in the context of the
Wider Hunters Group taken as a whole;
(vii) entered into, varied, authorised, proposed or announced an
intention to enter into or vary any contract, agreement,
transaction, arrangement or commitment (whether in respect of
capital expenditure or otherwise) which:
(aa) is of a long term, onerous or unusual nature or magnitude
or which involves or is or is reasonably likely to involve an
obligation of such a nature or magnitude;
(bb) restricts or could reasonably be expected to restrict the
business of any member of the Wider Hunters Group or the Wider TPFG
Group other than to a nature and extent which is normal in the
context of the business concerned; or
(cc) is other than in the ordinary course of business,
and which is, in any such case, material in the context of the
Wider Hunters Group taken as a whole;
(viii) entered into, implemented, effected or authorised any
merger, demerger, reconstruction, amalgamation, scheme, commitment
or other transaction or arrangement in respect of itself or another
member of the Wider Hunters Group;
(ix) entered into or varied or made an offer (which remains open
for acceptance) to vary the terms of any contract, agreement,
letter of appointment, commitment or arrangement with any of the
directors or senior executives of any member of the Wider Hunters
Group or changed or entered into any commitment to change the terms
of any of the Hunters Share Plans save for salary or fee increases
and bonuses not resulting in total annual remuneration of any
individual exceeding the immediately preceding year's remuneration
by more than three per cent. or other bonuses or variations of
terms in the ordinary course of business which are not material in
the context of the Acquisition or the Wider Hunters Group taken as
a whole;
(x) commenced negotiations with any of its creditors or taken
any step with a view to rescheduling or restructuring any of its
indebtedness or entered into a composition, compromise, assignment
or arrangement with any of its creditors whether by way of a
voluntary arrangement, scheme of arrangement, deed of compromise or
otherwise;
(xi) taken any corporate action or had any step, application,
filing in court, notice or legal proceedings started, served,
instituted or threatened against it or petition presented or order
made for its winding-up (voluntarily or otherwise), dissolution or
reorganisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of all or any
material part of its assets and revenues or any analogous
proceedings in any jurisdiction which in any case is material in
the context of the Wider Hunters Group taken as a whole;
(xii) been unable, or admitted in writing that it is unable, to
pay its debts or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or having entered into
or taken steps to enter into a moratorium, composition, compromise
or arrangement with its creditors in respect of its debts or ceased
or threatened to cease carrying on all or a substantial part of its
business;
(xiii) waived, settled, abandoned or compromised any claim or
admitted any dispute, claim or counter-claim whether made or
potential and whether by or against any member of the Wider Hunters
Group (other than in the ordinary and usual course of business) to
an extent which is material in the context of the Wider Hunters
Group taken as a whole;
(xiv) terminated or varied the terms of any agreement or
arrangement between any member of the Wider Hunters Group and any
other person in a manner which would or might reasonably be
expected to have a material adverse effect on the financial
position or prospects of the Wider Hunters Group taken as a
whole;
(xv) made any alteration to its articles of association other
than as required to implement the Acquisition;
(xvi) put in place any pension schemes for its Directors,
employees or their dependants or made or agreed or consented to any
change to:
(aa) the terms of the trust deeds constituting the pension
schemes (if any) established by any member of the Wider Hunters
Group for its Directors, employees or their dependants; or
(bb) the contributions payable to any such schemes or to the
benefits which accrue or to the pensions which are payable
thereunder; or
(cc) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined; or
(dd) the basis upon which the liabilities (including pensions)
of such pension schemes are funded, valued or made,
or agreed or consented to any change to the trustees involving
the appointment of a trust corporation;
(xvii) proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme or other benefit relating to
the employment or termination of employment of any person employed
by the Wider Hunters Group;
(xviii) entered into any contract, agreement, commitment,
arrangement or agreement or passed any resolution or made any offer
(which remains open for acceptance) with respect to or announced
any intention to, or to propose to, effect any of the transactions,
matters or events referred to in this Condition (h); or
(xix) having taken (or agreed or proposed to take) any action
which requires, or would require, the consent of the Panel or the
approval of Hunters Shareholders in a general meeting in accordance
with, or as contemplated by, Rule 21.1 of the Takeover Code;
(i) since 31 December 2019 and save as Disclosed:
(i) no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or
prospects of any member of the Wider Hunters Group;
(ii) no litigation, arbitration proceedings, prosecution or
other legal or regulatory proceedings to which any member of the
Wider Hunters Group is or may become a party (whether as plaintiff,
defendant or otherwise) having been threatened, announced,
implemented or instituted by or against or remaining outstanding
against or in respect of any member of the Wider Hunters Group;
(iii) no enquiry or investigation by, or complaint or reference
to, any Third Party having been threatened, announced, implemented,
instituted by or against or remaining outstanding against or in
respect of any member of the Wider Hunters Group;
(iv) no contingent or other liability having arisen or become
apparent to any member of the TPFG Group which would be reasonably
likely to materially adversely affect any member of the Wider
Hunters Group, taken as a whole;
(v) no claim being made and no circumstance having arisen which
might reasonably be expected to lead to a claim being made under
the insurance of any member of the Wider Hunters Group where such
claim would not be covered by such insurance and where such claim
is material in the context of the Wider Hunters Group taken as a
whole; and
(vi) no steps having been taken which might reasonably be
expected to result in the withdrawal, cancellation, termination or
modification of any licence, permit or consent held by any member
of the Wider Hunters Group which is necessary for the proper
carrying on by such member of its business; and
(vii) no member of the Wider Hunters Group having conducted its
business in breach of any applicable laws and regulations;
(j) the TPFG Group not having discovered:
(i) that any financial, business or other information concerning
the Wider Hunters Group disclosed at any time by or on behalf of
any member of the Wider Hunters Group, whether publicly or not, to
The Property Franchise Group or otherwise, is misleading or
contains a misrepresentation of fact or omits to state a fact
necessary to make that information contained therein not misleading
and which was not subsequently corrected before the date of this
Announcement by disclosure by or on behalf of the Wider Hunters
Group through the publication of an announcement via the Regulatory
Information Service or otherwise; or
(ii) that any member of the Wider Hunters Group is subject to
any liability (actual or contingent) which is not disclosed in the
annual report and accounts of Hunters for the financial year ended
31 December 2019 or which is not otherwise disclosed to The
Property Franchise Group before the date of this Announcement;
or
(iii) any information which affects the import of any
information disclosed to The Property Franchise Group at any time
by or on behalf of any member of the Wider Hunters Group in each
case to an extent which is material and adverse in the context of
the Wider Hunters Group taken as a whole;
(k) the TPFG Group not having discovered that:
(i) any past or present member, Director, officer or employee of
the Wider Hunters Group is or has at any time engaged in any
activity, practice or conduct which would constitute an offence
under the Bribery Act 2010, the US Foreign Corrupt Practices Act of
1977 or any other applicable anti-corruption legislation or any
person that performs or has performed services for or on behalf of
the Wider Hunters Group is or has at any time engaged in any
activity, practice or conduct in connection with the performance of
such services which would constitute an offence under the Bribery
Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other
applicable anti-corruption legislation; or
(ii) any asset of any member of the Wider Hunters Group
constitutes criminal property as defined by section 340(3) of the
Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that
definition); or
(iii) any past or present member, Director, officer or employee
of the Wider Hunters Group, or any other person for whom any such
person may be liable or responsible, has engaged in any business
with, made any investments in, made any funds or assets available
to or received any funds or assets from: (a) any government, entity
or individual in respect of which US or European Union or British
persons, or persons operating in those territories, are prohibited
from engaging in activities or doing business, or from receiving or
making available funds or economic resources, by US or European
Union or English laws or regulations, including the economic
sanctions administered by the US Office of Foreign Assets Control,
or HM Treasury in the United Kingdom; or (b) any government, entity
or individual targeted by any of the economic sanctions of the
United Nations, the US, the UK, European Union or any of its member
states; or
(iv) a member of the Wider Hunters Group being engaged in any
transaction which would cause The Property Franchise Group to be in
breach of any law or regulation upon its Acquisition of Hunters,
including the economic sanctions of the US Office of Foreign Assets
Control, or HM Treasury in the United Kingdom, or any government,
entity or individual targeted by any of the economic sanctions of
the United Nations, the US, the UK, the European Union or any of
its member states;
in each case to an extent which is material in the context of
the Wider Hunters Group taken as a whole; and
(l) save as Disclosed, the TPFG Group not having discovered that:
(i) any past or present member of the Wider Hunters Group has
failed to comply with any applicable legislation, regulations or
common law of any jurisdiction or any notice, order or requirement
of any Third Party with regard to the use, treatment, handling,
storage, carriage, transport, release, disposal, discharge,
presence, spillage, release, leak or emission of any waste or
hazardous or harmful substance or any substance likely to impair
the environment (including property) or harm human or animal
health, or otherwise relating to environmental matters or the
health and safety of any person, or that there has otherwise been
any such use, treatment, handling, storage, carriage, transport,
release, disposal, discharge, presence, spillage, release, leak or
emission (whether or not the same constituted a non-compliance by
any person with any legislation, regulations or law and wherever
the same may have taken place) which, in any case, would be
reasonably likely to give rise to any material liability (whether
actual or contingent) or cost on the part of any member of the
Wider Hunters Group; or
(ii) there is, or is reasonably likely to be, any obligation or
liability, whether actual or contingent, to make good, repair,
reinstate, remedy or clean up any property now or previously owned,
occupied, operated or made use of or controlled by any past or
present member of the Wider Hunters Group or any other property or
controlled waters under any environmental legislation, regulation,
common law, notice, circular, order or other lawful requirement of
any relevant authority or Third Party in any jurisdiction or
otherwise; or
(iii) circumstances exist whereby a person or class of persons
would be likely to have a claim against a member of the Wider
Hunters Group in respect of any product or service used therein now
or previously sold or carried out by any past or present member of
the Wider Hunters Group,
in each case to an extent which is material in the context of
the Wider Hunters Group taken as whole.
Part 2: Waiver of Conditions and further terms of the
Acquisition and the Scheme
1. Subject to the requirements of the Panel, or if required, by
the Court, The Property Franchise Group reserves the right to waive
all or any of the Conditions in Part 1 above save for (i) the
Conditions contained in Conditions 1, 2(a), 2(c), 2(e), 3(a) and
3(b) which cannot be waived). If any of the deadlines in Conditions
in 2(b), 2(d) or 2(f) are not met, The Property Franchise Group
shall make an announcement by 8.00 a.m. on the Business Day
following such deadline confirming whether it has invoked or waived
the relevant Condition or agreed to extend the deadline.
2. The Scheme will not become Effective unless the Conditions
have been fulfilled or (if capable of waiver) waived or where
appropriate, have been determined by The Property Franchise Group
to be or remain satisfied, by no later than 11:59 p.m on the date
immediately preceding the date of the Sanction Hearing, failing
which the Scheme will lapse.
3. The Acquisition will lapse if the Scheme does not become
Effective by no later than 11.59 pm on the Long Stop Date.
4. The Property Franchise Group shall not be under any
obligation to waive (if capable of waiver), to determine to be or
remain satisfied or to treat as fulfilled any of the Conditions by
a date earlier than the latest date of the fulfilment of that
Condition notwithstanding that the other Conditions to the
Acquisition may at such earlier date have been waived or fulfilled
and that there are at such earlier date no circumstances indicating
that any such Conditions may not be capable of fulfilment.
5. If The Property Franchise Group is required by the Panel to
make an offer for the Hunters Shares under the provisions of Rule 9
of the Takeover Code, The Property Franchise Group may make such
alterations to the Conditions and certain further terms of the
Acquisition as are necessary to comply with the provisions of that
Rule.
6. The Acquisition will lapse if it or any matter arising from
or relating to the Scheme or Acquisition becomes subject to a CMA
Phase 2 Reference before the date of the Hunters Court Meeting.
7. The Property Franchise Group reserves the right to elect to
implement the Acquisition by way of a Takeover Offer (subject to
the Panel's consent)) as an alternative to the Scheme. In such
event, such offer will be implemented on the same terms and
conditions (subject to appropriate amendments, including (without
limitation) an acceptance condition set at 90 per cent. (or such
lower percentage (being more than 50 per cent.) as The Property
Franchise Group may decide (subject to the Panel's consent)) of the
shares to which such offer relates), so far as applicable, as those
which would apply to the Scheme (the "General Offer Acceptance
Condition"). Further, if sufficient acceptances of such Takeover
Offer are received and/or sufficient Hunters Shares are otherwise
acquired, it is the intention of The Property Franchise Group to
apply the provisions of section 979 of the Companies Act to
compulsorily acquire any outstanding Hunters Shares to which such
Takeover Offer relates.
8. The Hunters Shares will be acquired pursuant to the
Acquisition fully paid and free from all liens, charges, equitable
interests, security interests, encumbrances, rights of pre-emption
and any other rights and interests of any nature whatsoever and
together with all rights now and hereafter attaching thereto,
including voting rights and the right to receive and retain in full
all dividends and other distributions (if any) declared, or made or
on or after the Effective Date (excluding the Special
Dividend).
9. The New TPFG Shares will be issued credited as fully paid and
will rank pari passu in all respects with the TPFG Shares in issue
at the time the New TPFG Shares are issued pursuant to the
Acquisition, including the right to receive and retain dividends
and other distributions declared, made or paid by reference to a
record date falling after the Effective Date. Application will be
made for the New TPFG Shares to be admitted to trading on AIM.
10. Under Rule 13.5 of the Takeover Code, The Property Franchise
Group may only invoke a condition to the Acquisition so as to cause
the Acquisition not to proceed, to lapse or to be withdrawn where
the circumstances which give rise to the right to invoke the
condition are of material significance to The Property Franchise
Group in the context of the Acquisition. The Conditions contained
in Conditions 1 , 2 and 3(a) and 3(b) of Part 1 of this Appendix I
and the General Offer Acceptance Condition are not subject to this
provision of the Takeover Code. The Acquisition and the Scheme are
and will be governed by the laws of England and Wales and will be
subject to the exclusive jurisdiction of the English and Welsh
courts and to the Conditions and further terms set out in this
Appendix I and to be set out in the Scheme Document. The
Acquisition will also be subject to the applicable requirements of
the Companies Act, the Court, the regulations of the FCA, the
London Stock Exchange, the AIM Rules and the Takeover Code, the
Market Abuse Regulation and, the Disclosure Guidance and
Transparency Rules. This Announcement does not constitute, or form
part of, an offer or invitation to purchase Hunters Shares or any
other securities.
11. The availability of the New TPFG Shares under the
Acquisition to Hunters Shareholders who are not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident or to which they are
subject. Persons who are not resident in the United Kingdom or who
are subject to the laws of other jurisdictions should inform
themselves of, and observe, any applicable legal or regulatory
requirements. Further details in relation to Overseas Shareholders
will be contained in the Scheme Document. The New TPFG Shares to be
issued under the Acquisition have not been and will not be
registered under the US Securities Act or under any laws or with
any securities regulatory authority of any State or other
jurisdiction of the United States or under any of the relevant
securities laws of any other Restricted Jurisdiction. Accordingly,
the New TPFG Shares may not be offered, sold or delivered, directly
or indirectly, in or into the United States, or any other
Restricted Jurisdiction, except pursuant to exemptions from
applicable requirements of any such jurisdiction, including,
without limitation, the exemption from the registration
requirements of the US Securities Act provided by Section 3(a)(10)
thereof.
12. The Acquisition is not being made, directly or indirectly,
in, into or from, or by use of the mails of, or by any means of
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of, any jurisdiction where to do so would
violate the laws of that jurisdiction.
13. If any dividend (other than the Special Dividend) or other
distribution or return of capital is proposed, declared, made, paid
or becomes payable by Hunters in respect of a Hunters Share on or
after the date of this announcement and prior to the Acquisition
becoming Effective, The Property Franchise Group reserves the right
to reduce the value of the consideration payable for each Hunters
Share under the Acquisition by up to the amount per Hunters Share
of such dividend, distribution or return of capital. If any such
dividend and/or other distribution and/or other return of value
occurs and The Property Franchise Group exercises its rights
pursuant to this paragraph, any reference in this Announcement to
the Offer Price shall be deemed to be a reference to the Offer
Price as so reduced. Any exercise by The Property Franchise Group
of its rights referred to in this paragraph shall be the subject of
an announcement and, for the avoidance of doubt, shall not be
regarded as constituting any revision or variation of the
Acquisition. To the extent that any such dividend and/or
distribution and/or return of capital is declared, made, paid in
respect of the Hunters Shares and (i) is transferred pursuant to
the Acquisition on a basis which entitles The Property Franchise
Group to receive the dividend and/or distribution and/or return of
capital and to retain it or (ii) such dividend and/or distribution
and/or return of capital is cancelled, the Offer Price will not be
subject to change in accordance with this paragraph.
14. Fractions of the New TPFG Shares will not be allotted or
issued pursuant to the Acquisition, but entitlements of Hunters
Shareholders will be rounded down to the nearest whole number of
New TPFG Shares and all fractions of New TPFG Shares will be
aggregated and sold in the market as soon as practicable after the
Acquisition becomes Effective. The net proceeds of such sale (after
deduction of broking fees and other sale costs and expenses,
together with any tax or foreign exchange conversion fees payable
on the sale) will be distributed in due proportions to Hunters
Shareholders who would otherwise have been entitled to such
fractions (rounded down to the nearest penny), save that individual
entitlements to amounts of less than GBP5.00 will be retained for
the benefit of the Enlarged Group.
15. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
APPIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement, unless otherwise stated or the context
otherwise requires, the following bases and sources have been
used:
(i) The value placed by the Offer Price of GBP24.2 million
attributed to the fully diluted share capital of Hunters is based
on 33,635,921 Hunters Shares and an exchange ratio of 0.1655 New
TPFG Shares (at a price of 174 pence each being the price agreed at
the time of the approach by The Property Franchise Group to
Hunters) plus 43.2 pence in cash for each Hunters Share.
(ii) The Closing Prices of Hunters Shares and TPFG Shares are
based on the Closing Price of the relevant shares derived from the
Daily Official List for the relevant dates.
(iii) The fully diluted share capital of Hunters (being
33,635,921 Hunters Shares) is calculated on the basis of 32,814,588
Hunters Shares in issue on the Latest Practicable Date, and in
addition up to 821,333 further Hunters Shares which may be issued
on or after the date of this Announcement following the exercise of
options, under the Hunters Share Plans.
(iv) All share prices expressed in pence have been rounded to
the nearest pence and all percentages have been rounded to one
decimal place (other than the percentages in Part 1 of Appendix III
which have been rounded to the nearest two decimal places).
(v) Unless otherwise stated, the financial information relating
to Hunters is extracted from the audited consolidated financial
statements of Hunters for the financial year ended 31 December
2019, prepared in accordance with IFRS.
(vi) The financial information relating to TPFG Group is
extracted from the audited consolidated financial statements of
TPFG Group for the financial year ended 31 December 2019, prepared
in accordance with IFRS.
APPIX III
IRREVOCABLE UNDERTAKINGS
Irrevocable Undertakings
The following holders, controllers or beneficial owners of
Hunters Shares have given irrevocable undertakings to accept the
Acquisition and vote in favour of the Scheme at the Hunters Court
Meeting and the Hunters Special Resolution to be proposed at the
Hunters General Meeting to give effect to the Scheme:
Part 1- Hunters Directors
The Property Franchise Group has received irrevocable
undertakings from each of the Hunters Directors to vote in favour
of the Scheme at the Hunters Court Meeting and the Hunters Special
Resolution to be proposed at the Hunters General Meeting, in
respect of a total of 11,212,619 Hunters Shares, representing
approximately 34.17 per cent. of the ordinary share capital of
Hunters in issue as at the Latest Practicable Date:
Name Number of Hunters % of Hunters Shares
Shares in issue
Kevin Hollinrake 4,356,518 13.28%
----------------------------- -------------------------------
Ed Jones 4,027,629 12.27%
----------------------------- -------------------------------
Glynis Frew 1,917,622 5.84%
----------------------------- -------------------------------
Harry Hill 682,000 2.08%
----------------------------- -------------------------------
Dean Fielding 228,850 0.70%
----------------------------- -------------------------------
TOTAL 11,212,619 34.17%
----------------------------- -------------------------------
The irrevocable undertakings given by the Hunters Directors will
continue to be binding in the event that a higher competing offer
is made for Hunters.
Each irrevocable undertaking listed in this paragraph shall
lapse if, inter alia:
(A) the Scheme does not become Effective prior to 11.59 p.m. on the Long Stop Date; or
(B) any competing offer for the Hunters Shares is made which is
declared wholly unconditional (if implemented by way of a Takeover
Offer) or otherwise becomes effective (if implemented by way of a
Scheme); or
(C) the Acquisition is withdrawn or lapses in accordance with
its terms (except where the Acquisition is withdrawn or lapses as a
result of The Property Franchise Group exercising its right to
implement the Acquisition by way of a Takeover Offer in accordance
with the Takeover Code rather than by way of a Scheme or vice
versa); or
(D) any event occurs or becomes known to The Property Franchise
Group before despatch of this Announcement or an offer document (as
the case may be) as a result of which the Panel requires or agrees
that The Property Franchise Group need not make the Acquisition and
no new, revised or replacement Scheme or Takeover Offer is
announced in accordance with Rule 2.7 of the Takeover Code at the
same time.
Part 2- Hunters Shareholders (other than Directors of
Hunters)
The Property Franchise Group has received irrevocable
undertakings from Nigel Wray, John Waterhouse and Martin Robinson
to vote in favour of the Scheme at the Hunters Court Meeting and
the Hunters Special Resolution to be proposed at the Hunters
General Meeting, in respect of a total of 12,134,287 Hunters
Shares, representing approximately 36.98 per cent. of the ordinary
share capital of Hunters in issue on the Latest Practicable
Date:
Name Number of Hunters % of Hunters Shares
Shares in issue
Nigel Wray 5,959,500 18.16%
----------------------------- -------------------------------
John Waterhouse 4,134,411 12.60%
----------------------------- -------------------------------
Martin Robinson 2,040,376 6.22%
----------------------------- -------------------------------
TOTAL 12,134,287 36.98%
----------------------------- -------------------------------
The irrevocable undertakings in respect of John Waterhouse and
Martin Robinson shall lapse if, inter alia:
(A) the Scheme does not become effective prior to 11.59 p.m. on the Long Stop Date; or
(B) any competing offer for the Hunters Shares is made which is
declared wholly unconditional (if implemented by way of a Takeover
Offer) or otherwise becomes effective (if implemented by way of a
Scheme); or
(C) the Acquisition is withdrawn or lapses in accordance with
its terms (except where the Acquisition is withdrawn or lapses as a
result of The Property Franchise Group exercising its right to
implement the Acquisition by way of a Takeover Offer in accordance
with the Takeover Code rather than by way of a Scheme or vice
versa); or
(D) any event occurs or becomes known to The Property Franchise
Group before despatch of this Announcement or an offer document (as
the case may be) as a result of which the Panel requires or agrees
that The Property Franchise Group need not make the Acquisition and
no new, revised or replacement Scheme or Takeover Offer is
announced in accordance with Rule 2.7 of the Takeover Code at the
same time.
The irrevocable undertaking in respect of Nigel Wray shall lapse
if, inter alia,
(A) the Scheme does not become Effective or, as applicable the
Takeover Offer lapses or is withdrawn in accordance with its terms
(except where the Acquisition is withdrawn or lapses as a result of
The Property Franchise Group exercising its right to implement the
Acquisition by way of a Takeover Offer in accordance with the
Takeover Code rather than by way of a Scheme or vice versa); or
(B) a person, other than The Property Franchise Group, announces
a firm intention to make a competing offer to acquire the entire
issued share capital of Hunters (however structured), which is on
terms inter alia which represent an improvement (in the reasonable
opinion of Hunters' financial adviser) of ten per cent. of the
Offer Price (a "Competing Offer") by no later than 11.59 p.m. on a
date that is 7 days after the date of this Announcement and The
Property Franchise Group has not, on or before 11.59 p.m. on the
fourteenth day after the date of the announcement of such Competing
Offer announced a new, increased or revised offer which is equal to
or exceeds such Competing Offer in the reasonable opinion of
Hunters' financial adviser.
TPFG Directors
The following TPFG Directors have given irrevocable undertakings
in respect of their entire beneficial holdings (and the beneficial
holdings which are under their control) of TPFG Shares to vote or
procure votes in favour of the TPFG Resolution to be proposed at
the TPFG General Meeting, amounting in aggregate to 8,317,350 TPFG
Shares, representing approximately 32.21 per cent. of The Property
Franchise Group's existing issued ordinary share capital as at the
Latest Practicable Date:
Name Number of TPFG Shares % of TPFG Shares in
issue
Richard Martin 8,039,950 31.1%
--------------------------------- -------------------------------
Paul Latham 50,000 0.19%
--------------------------------- -------------------------------
David Raggett 227,400 0.88%
--------------------------------- -------------------------------
TOTAL 8,317,350 32.21%
--------------------------------- -------------------------------
Each irrevocable undertaking listed in this paragraph shall
lapse if, inter alia:
(A) the Scheme Document (if implemented by way of a scheme of
arrangement) or the offer document (if implemented by way of a
Takeover Offer) is not posted to Hunters Shareholders within the
permitted period under the Takeover Code or as otherwise agreed
with the Panel;
(B) any competing offer for the Hunters Shares is made which is
declared wholly unconditional (if implemented by way of a Takeover
Offer) or otherwise becomes effective (if implemented by way of a
Scheme); or
(C) the Acquisition is withdrawn or lapses in accordance with
its terms (except where the Acquisition is withdrawn or lapses as a
result of The Property Franchise Group exercising its right to
implement the Acquisition by way of a Takeover Offer in accordance
with the Takeover Code rather than by way of a Scheme or vice
versa); or
(D) any event occurs or becomes known to The Property Franchise
Group before despatch of this announcement or an offer document (as
the case may be) as a result of which the Panel requires or agrees
that The Property Franchise Group need not make the Acquisition and
no new, revised or replacement Scheme or Takeover Offer is
announced in accordance with Rule 2.7 of the Takeover Code at the
same time.
APPIX IV
DEFINITIONS
The following definitions apply throughout this Announcement
unless the context requires otherwise:
"Admission" admission of the New TPFG Shares to
trading on AIM;
"Acquisition" means the recommended cash and share
acquisition by The Property Franchise
Group of Hunters pursuant to which
The Property Franchise Group will
acquire the entire issued and to be
issued share capital of Hunters (other
than Hunters Shares already held by
the TPFG Group) to be implemented
by way of the Scheme or (should The
Property Franchise Group so elect,
subject to the consent of the Panel
(where necessary)) by way of a Takeover
Offer;
"AIM" the market of that name operated by
the London Stock Exchange;
"AIM Rules" Rules and Guidance notes for AIM Companies
and their nominated advisers issued
by the London Stock Exchange from
time to time relating to AIM traded
securities and the operation of AIM;
"Announcement" this Announcement made pursuant to
Rule 2.7 of the Takeover Code, including
its Appendices;
"Appendices" the appendices to this Announcement
and the Appendix has a corresponding
meaning;
"Authorisations" regulatory authorisations, orders,
recognitions, grants, consents, clearances,
confirmations, certificates, licences,
permissions or approvals;
"Business Day" a day (other than Saturdays, Sundays
and public holidays in the UK) on
which banks are open for business
in the City of London;
"Cenkos Securities" Cenkos Securities plc;
"Closing Price" the closing middle market price of
a Hunters Share on a particular trading
day as derived from the AIM appendix
to the London Stock Exchange Daily
Official List;
"CMA" the UK statutory body established
under the UK Enterprise and Regulatory
Reform Act 2013;
"CMA Merger Investigation" an investigation by the CMA on and
to determine whether to make a reference
under Article 33 of the Enterprise
Act 2002;
"CMA Phase 2 Reference" a reference pursuant to sections 22,
33, 45 or 62 of the Enterprise Act
2002 (as amended) of the Acquisition
to the chair of the CMA for the constitution
of a group under Schedule 4 to the
Enterprise and Regulatory Reform Act
2013 (as amended);
"Companies Act" the Companies Act 2006, as amended;
"Conditions" the conditions to the implementation
of the Scheme and the Acquisition,
as set out in Appendix I to this Announcement
and to be set out in the Scheme Document;
"Confidentiality Agreement" the confidentiality agreement dated
16 December 2020 between (1) The Property
Franchise Group and (2) Hunters;
"Court" the High Court of Justice in England
and Wales;
"Court Order" the order of the Court sanctioning
the Scheme under section 899 of the
Companies Act;
"CREST" the system for the paperless settlement
of trades in securities and the holding
of uncertificated securities operated
by Euroclear;
"Daily Official List" the Daily Official List of the London
Stock Exchange;
"Dealing Disclosure" has the same meaning as in Rule 8
of the Takeover Code;
"Disclosed" means fairly disclosed (i) in the
interim results of Hunters for the
six months to 30 June 2020; or (ii)
in this Announcement; or (iii) via
a Regulatory Information Service prior
to the date hereof by or on behalf
of Hunters; or (iv) in writing prior
to the date hereof by or on behalf
of Hunters to The Property Franchise
Group, or its financial, accounting
or legal advisers (specifically as
The Property Franchise Group's advisers
in relation to the Acquisition) before
the date of this Announcement;
"Disclosure Guidance and the disclosure rules and transparency
Transparency Rules" rules made by the FCA pursuant to
section 73A of FSMA;
"EC" or European Commission" the European Commission of the European
Union;
"Effective" means (a) if the Acquisition is implemented
by way of the Scheme, the Scheme having
become effective pursuant to its terms;
or
(b) if the Acquisition is implemented
by way of a Takeover Offer, the Takeover
Offer having been declared or become
unconditional in all respects in accordance
with the requirements of the Takeover
Code;
"Effective Date" the date on which the Acquisition
becomes Effective;
"Enlarged Group" the TPFG Group, including the Hunters
Group, following the Acquisition becoming
Effective;
"Euroclear" Euroclear UK & Ireland Limited;
"Excluded Shares" any Hunters Shares which:
(i) are registered in the name of
or beneficially owned by The Property
Franchise Group or its nominee(s)
or any subsidiary undertaking of The
Property Franchise Group or its nominee(s);
or
(ii) are held in treasury (unless
such Hunters Shares cease to be so
held);
"FCA" or "Financial Conduct the United Kingdom's Financial Conduct
Authority" Authority;
"Forms of Proxy" the forms of proxy for use at the
Hunters Meetings which will accompany
the Scheme Document;
"FSMA" the Financial Services and Markets
Act 2000 (as amended from time to
time);
"Hunters" Hunters Property plc, a company incorporated
in England & Wales with company number
09448465;
"Hunters Board" the Board of Hunters Directors;
"Hunters Court Meeting" the meeting of Scheme Shareholders
to be convened pursuant to an order
of the Court under the Companies Act
for the purpose of considering and,
if thought fit, approving the Scheme,
including any adjournment thereof;
"Hunters Directors" the Directors of Hunters as at the
date of this Announcement;
"Hunters General Meeting" the general meeting of Hunters Shareholders
to be convened in connection with
the Acquisition, including any adjournment
therefore, and expected to be held
immediately following the Hunters
Court Meeting;
"Hunters Group" Hunters and its subsidiary undertakings
and, where the context permits, each
of them;
"Hunters Meetings" the Hunters Court Meeting and the
Hunters General Meeting, and "Hunters
Meeting" shall be construed accordingly;
"Neville Registrars" Neville Registrars Limited, the registrars
to Hunters;
"Hunters Share Plans" together the Hunters Property Senior
Executive Share Option Scheme (dated
18 December 2015, as amended), the
Hunters Property Employee Share Option
Scheme (dated 18 December 2015), options
over Hunters Shares granted in 2015
replacing options originally granted
in 2013 and 2015 over shares in Hunters
Property Group Limited the EMI Share
Option Agreements (dated on or around
27 March 2015) granted to option holders
in exchange for the release of existing
EMI options (originally granted on
27 September 2013) and a standalone
option granted by Hunters evidenced
by a share option agreement dated
28 January 2016;
"Hunters Shareholders" the registered holders of Hunters
Shares;
"Hunters Shares" the existing unconditionally allotted
or issued and fully paid ordinary
shares of 4 pence each in the capital
of Hunters and any further such ordinary
shares which are unconditionally allotted
or issued before the Scheme becomes
Effective and a "Hunters Share" shall
mean any one of them;
"Hunters Special Resolution" the special resolution to be proposed
at the Hunters General Meeting in
connection with the Scheme;
"IFRS" International Financial Reporting
Standards;
"Latest Practicable Date" close of business on 27 January 2021
"Long Stop Date" being the last Business Day prior
"London Stock Exchange" to the date of this Announcement;
28 May 2021 or such other date as
The Property Franchise Group and Hunters
with the Panel's consent agree;
London Stock Exchange plc;
"Market Abuse Regulation" the UK version of the Market Abuse
Regulation (EU) (No 596/2014) which
is part of English law by virtue of
the European (Withdrawal) Act 2018,
as amended;
"New TPFG Shares" the TPFG Shares to be issued credited
as fully paid to the Scheme Shareholders
pursuant to the Scheme (and any other
Hunters Shareholders whose Hunters
Shares are issued after the Scheme
becomes Effective);
"Offer Period" the offer period (as defined in the
Takeover Code) relating to Hunters,
which commenced on 4 December 2020
(as extended by agreement with the
Panel by way of an extension notification
dated 29 December 2020 and a subsequent
extension notification dated 22 January
2021) and which will end on (i) the
earlier of the date on which the Scheme
becomes Effective and/or the date
on which the Scheme lapses or is withdrawn
(or such other date as the Panel may
decide); or (ii) the earlier of the
date on which the Takeover Offer has
become or has been declared unconditional
as to acceptances and/or the date
on which the Takeover Offer lapses
or is withdrawn (or such other date
as the Panel may decide), in each
case other than where such lapsing
or withdrawal is a result of The Property
Franchise Group exercising its right
to implement the Acquisition by way
of a Takeover Offer;
"Offer Price" 72 pence per Hunters Share;
"Opening Position Disclosure" has the same meaning as in Rule 8
of the Takeover Code;
"Overseas Shareholders" Hunters Shareholders (or nominees
of, or custodians or trustees for,
Hunters Shareholders) not resident
in, or nationals or citizens of the
United Kingdom;
"Panel" the UK Panel on Takeovers and Mergers;
"Registrar of Companies" the Registrar of Companies in England
and Wales;
"Regulations" the Uncertificated Securities Regulations
2001 (SI 2001 number 3755) as amended;
"Regulatory Information a regulatory information service that
Service" is approved by the FCA and is on the
list of Regulatory Information Services
maintained by the FCA;
"Restricted Jurisdiction" any jurisdiction where local laws
or regulations may result in a risk
of civil, regulatory or criminal exposure
if information concerning the Acquisition
is sent or made available to Hunters
Shareholders in that jurisdiction;
"Restricted Overseas Person" a person (including an individual,
partnership, unincorporated syndicate,
limited liability company, unincorporated
organisation, trust, trustee, executor,
administrator or other legal representative)
in, or resident in, or any person
whom The Property Franchise Group
believes to be in, or resident in,
a Restricted Jurisdiction (or any
custodian, nominee or trustee for
such persons) and person in any other
jurisdiction (other than persons in
the UK) whom The Property Franchise
Group is advised to treat as a restricted
overseas person in order to observe
the laws of such jurisdiction or to
avoid the requirement to comply with
any governmental or other consent
or any registration, filing or other
formality which The Property Franchise
Group regards as unduly onerous;
"Rule 2.4 Announcement" the announcement made by Hunters on
4 December 2020 regarding media speculation
pursuant to Rule 2.4 of the Takeover
Code;
"Sanction Hearing" the hearing by the Court of the claim
form to sanction the Scheme under
section 899 of the Companies Act;
"Scheme" the proposed scheme of arrangement
under Part 26 of the Companies Act
between Hunters and the Hunters Shareholders
to implement the Acquisition, with
or subject to any modification, addition
or condition approved or imposed by
the Court and agreed by Hunters and
The Property Franchise Group;
"Scheme Document" the document to be sent to Hunters
Shareholders containing, amongst other
things, the Scheme and the notices
convening the Hunters Meetings;
"Scheme Record Time" the time and date specified in the
Scheme Document by reference to which
the entitlements of Hunters Shareholders
under the Scheme will be determined,
expected to be 6:00 p.m. on the Business
Day before the Scheme becomes Effective;
"Scheme Shareholders" the holders of Scheme Shares from
time to time;
"Scheme Shares" the ordinary shares of GBP0.04 each
in the capital of Hunters:
(i) in issue at the date of the Scheme
Document;
(ii) (if any) issued after the date
of the Scheme Document and before
the Voting Record Time; and
(iii) (if any) issued at or after
the Voting Record Time but at or before
the Scheme Record Time, either on
terms that the original or any subsequent
holders of such shares are to be bound
by the Scheme or in respect of which
their holders are, or shall by such
time have agreed in writing to be,
bound by the Scheme,
and, in each case, remaining in issue
at the Scheme Record Time but excluding
any Excluded Shares;
"Significant Interest" in relation to an undertaking, a direct
or indirect interest of 20 per cent.
or more of the total voting rights
conferred by the equity share capital
(as defined in section 548 of the
Companies Act) of such undertaking;
"Spark Advisory" Spark Advisory Partners Limited, financial
advisers to Hunters;
"Special Dividend" the dividend of 2.7 pence per Hunters
Share;
"subsidiary", "subsidiary have the meanings ascribed to them
undertaking", "associated under the Companies Act;
undertaking", "holding
company undertaking"
"Takeover Code" the City Code on Takeovers and Mergers;
" Takeover Offer" has the meaning given to it in Part
28 of the Companies Act;
"Third Party" any government, government department,
governmental or quasi-governmental,
supranational, statutory, regulatory,
environmental or investigative body
or association, institution or agency
(including, without limitation, any
trade agency) or authority (including,
without limitation, any anti-trust
or merger control authority), any
court or professional or environmental
body or any other person or body whatsoever
in any relevant jurisdiction;
"The Property Franchise The Property Franchise Group Plc,
Group" a company incorporated in England
& Wales with company number 08721920
whose registered office is at 2 St.
Stephen's Court, St. Stephen's Road,
Bournemouth, Dorset, BH2 6LA or, where
the context requires, any direct or
indirect wholly-owned subsidiary of
The Property Franchise Group elected
by The Property Franchise Group and
notified in writing to Hunters prior
to posting of the Scheme Document
(or, if applicable, the offer document)
to be the purchaser of Hunters pursuant
to the Acquisition;
"TPFG Board" the Board of TPFG Directors;
"TPFG Circular" the circular to be published by The
Property Franchise Group and to be
sent to TPFG Shareholders including
the notice convening the TPFG General
Meeting to approve the issue of New
TPFG Shares in connection with the
Acquisition;
"TPFG Directors" the Directors of The Property Franchise
Group as at the date of this Announcement;
"TPFG Form of Proxy" the form of proxy which will accompany
the TPFG Circular;
"TPFG General Meeting" the general meeting of The Property
Franchise Group to be convened to
consider and, if thought fit, approve
the TPFG Resolution, including any
adjournment thereof;
"TPFG Group" The Property Franchise Group and its
subsidiary undertakings and, where
context permits, each of them;
"TPFG Registrar" Computershare Investor Services plc,
the registrars to The Property Franchise
Group;
"TPFG Resolution" the resolution to be proposed to TPFG
Shareholders at the TPFG General Meeting
to approve the issue and allotment
of the New TPFG Shares in connection
with the Acquisition;
"TPFG Shares" the existing unconditionally allotted
or issued and fully paid ordinary
shares of 1 pence each in the capital
of The Property Franchise Group;
"TPFG Shareholders" the holders of TPFG Shares;
"uncertificated" or "in a share or other security recorded
uncertificated form" on the relevant register as being
held in uncertificated form in CREST
and title to which, by virtue of the
Regulations, may be transferred by
means of CREST;
"United Kingdom" or "UK" the United Kingdom of Great Britain
and Northern Ireland;
"United States" or "US" the United States of America, its
territories and possessions, any State
of the United States of America, the
District of Columbia and all other
areas subject to its jurisdiction
and any political sub-division thereof;
"US Exchange Act" the US Securities Exchange Act of
1934, as amended;
"US Securities Act" the United States Securities Act of
1933, as amended;
"Voting Record Time" the time and date specified in the
Scheme Document by reference to which
entitlement to vote at the Hunters
Court Meeting will be determined,
expected to be 6.00 p.m. on the day
two days prior to the Hunters Court
Meeting or any adjournment thereof
(as the case may be);
"Wider Hunters Group" Hunters and its subsidiaries, subsidiary
undertakings associated undertakings
and any other body corporate, partnership,
joint venture or person in which Hunters
and such undertakings (aggregating
their interests) have a Significant
Interest; and.
"Wider TPFG Group" The Property Franchise Group and its
subsidiaries, subsidiary undertakings,
associated undertakings and any other
body corporate, partnership, joint
venture or person in which The Property
Franchise Group and all such undertakings
(aggregating their interests) have
a Significant Interest.
All references to "pounds", "pounds Sterling", "Sterling",
"GBP", "pence", "penny" and "p" are to the lawful currency of the
United Kingdom.
All references to statutory provision or law or to any order or
regulation shall be construed as a reference to that provision,
law, order or regulation as extended, amended, replaced or
re-enacted from time to time and all statutory instruments,
regulations and orders from time to time made thereunder or
deriving validity therefrom.
All the times referred to in this Announcement are London times
unless otherwise stated.
References to the singular include the plural and vice
versa.
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END
ACQZZGZMGRRGMZG
(END) Dow Jones Newswires
January 28, 2021 02:00 ET (07:00 GMT)
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