TIDMSAGA
RNS Number : 5408X
SAGA PLC
01 September 2020
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
30 August 2020
Statement regarding prospective GBP150m equity raise
and strategic investment by Sir Roger De Haan
Saga plc ("Saga" or the "Company") notes recent media
speculation and today announces that it is at the advanced stage of
a prospective GBP150 million equity capital raise (the "Proposed
Equity Raise") in order to strengthen its balance sheet, improve
liquidity and support the execution of its reinvigorated strategy
under its strengthened management team. As such, the Company
confirms the Proposed Equity Raise, which would be subject to
shareholder approval, would comprise:
-- Prospective GBP150m equity raise intended to be launched on
or around 10 September with the Company's interim results
announcement, structured as a firm placing and a placing and open
offer.
-- Sir Roger De Haan intends to invest, subject to final
documentation, up to GBP100m in the Proposed Equity Raise. It is
expected that Sir Roger will make his investment through:
o a firm placing of 224m new ordinary shares representing 20% of
the current issued share capital of the Company, to be issued at
27p per share, a 98% premium to the 13.61p closing price of Saga
shares on 28 August 2020, reflecting his belief in the underlying
strength of the Saga brand and business and his confidence in the
new strategy under the strengthened management team. This would
contribute GBP60.6m of the proposed GBP150m capital raise;
o a further firm placing, raising GBP14.9m on the same pricing
and terms as will apply to Saga shareholders subject to a maximum
issue price of 15p per share; and
o participating as a conditional placee for shares representing
GBP24.5m of the placing and open offer (expected to raise total
proceeds of GBP74.5m), also subject to a maximum issue price of 15p
per share, subject to clawback by Saga shareholders in the open
offer.
-- Alongside his investment, Sir Roger would join the Board and
become Non-Executive Chairman, taking over from Patrick O'Sullivan
upon completion of the Proposed Equity Raise. Sir Roger would serve
for an expected term of three years, subject to annual re-election
by shareholders.
-- Sir Roger (alongside affiliated family trusts) owned Saga
prior to the sale of the Company to private equity group
Charterhouse in 2004. He was Chief Executive and Chairman of Saga
for 20 years, prior to the sale, a period of significant growth for
the business, establishing it as a leading brand for older
consumers. As such, he has significant expertise in the Insurance
and Travel sectors and serving Saga's distinct customer
segment.
-- Sir Roger's proposed investment in the Company has received
regulatory approval from the UK's Financial Conduct Authority, the
Gibraltar Financial Services Commission and the Jersey Financial
Services Commission.
-- The launch of the Prospective Equity Raise is subject to
approval of the Prospectus by the FCA, which is at an advanced
stage.
The Board unanimously considers that the Proposed Equity Raise
will support the execution of its reinvigorated strategy under its
strengthened management team, which it believes will return Saga to
sustainable growth and lead to the restoration of significant
shareholder value. Saga has continued to make good progress against
the plan launched last year and has taken a series of actions in
the last six months to protect the business from the significant
disruption that has resulted from COVID-19, especially in relation
to the Group's travel operations. In the last six months the Group
has:
-- Strengthened its financial position by completing key
non-core disposals, ensuring sufficient available liquidity to fund
the travel business through a period of severe disruption and
further implementing initiatives to reduce future run rate costs by
GBP20m per annum;
-- Agreed amendments to its corporate and ship debt facilities;
-- Taken decisive actions to react to the COVID-19 outbreak to
ensure the Company maintained its operations throughout by rapidly
shifting to a full remote working model and minimising the burn
costs within its Travel business, completing the sale of the Saga
Sapphire cruise ship, successfully repatriating all Saga customers,
colleagues and crew and docking Saga's Spirit of Discovery cruise
ship in Tilbury;
-- Made continued progress in Insurance, supported by the
success of the three-year fixed-price product and the offer to
customers of one of the first inclusive, stand-alone travel
policies to offer some cover for COVID-19;
-- Continued the transformation of the Cruise business, which
will be completed with delivery of Spirit of Adventure, expected at
the end of September 2020;
-- Taken actions to reshape the strategy of Tours business; and
-- Completed an in-depth strategy review, with conclusions and
reshaped plans to be published alongside the interim results and
launch of the Proposed Equity Raise on or around 10 September:
o The management team has reviewed every facet of Saga's
strategy
o The revised strategy will be based on management's belief that
Saga is a strong brand with significant potential and that it is
successful where it offers truly differentiated products and
services
o Plans will be set out to correct the under-investment in
brand, data and digital and to continue to drive efficiencies and
organisational and cultural change designed to make Saga more
customer focused
-- Recent trading has been in line with expectations and
consistent with the commentary in the AGM trading statement,
published on 22 June 2020.
The Board is encouraged by the progress made since the start of
the year and by the resilience of the business through a time of
unprecedented challenge and change and believes the current
COVID-19 crisis highlights the strength of the Saga brand, its
diversified business model and its direct relationship with its
customers.
The Proposed Equity Raise is intended to strengthen the
Company's financial position against the backdrop of the COVID-19
outbreak and the ongoing suspension of Travel and to better
position Saga for longer-term recovery and growth.
In determining to proceed with this capital raising and place
the Company on a stronger financial footing, the Board considered a
number of options and also recently evaluated and rejected an
unsolicited and highly conditional 33p indicative approach for the
Company from a consortium of two US financial investors. This 33p
offer followed several earlier indicative approaches from the
consortium which commenced at a significantly lower valuation. The
investors have since confirmed that they are no longer considering
an offer for the Company. This is not a statement to which Rule 2.8
of the City Code on Takeovers and Mergers applies.
While preparations to finalise the Proposed Equity Raise are
well-advanced, there can be no certainty that the Proposed Equity
Raise will go ahead and the Board will keep shareholders updated as
appropriate.
Enquiries:
Saga plc Tel: +44 (0) 77
(Director of Investor Relations and Corporate 3877 7479
Finance)
Mark Watkins
J.P. Morgan Cazenove Tel: +44 (0) 20
(Joint corporate broker and financial adviser) 7742 4000
Edward Squire / James A. Kelly / Andrew
Stockdale
Tel: +44 (0) 20
Numis 7260 1000
(Joint corporate broker)
Charles Farquhar / Stephen Westgate / Jamie
Loughborough
Goldman Sachs Tel: +44 ( 0) 20
(Joint financial adviser) 7774 1000
Anthony Gutman / Chris Emmerson
Headland Consultancy Tel: +44 ( 0) 20
(Communications adviser) 3805 4822
Susanna Voyle / Henry Wallers / Sophie O'Donoghue
The person responsible for making this Announcement on behalf of
the Company is Mark Watkins, Director of Investor Relations and
Corporate Finance.
Additional information
This announcement is for information purposes only and is not
intended to, and does not, constitute or form part of any offer,
invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any
securities of the Company (the "Securities"), or the solicitation
of any vote or approval in, the United States (including its
territories and possessions, any state of the United States and the
District of Columbia) (the "United States" or "US") or in any other
jurisdiction, pursuant to this announcement or otherwise. Any
offer, if made, will be made solely by certain offer documentation
which will contain the full terms and conditions of any offer,
including details of how it may be accepted. The distribution of
this announcement in jurisdictions other than the UK and the
availability of any offer to shareholders of Saga who are not
resident in the UK may be affected by the laws of relevant
jurisdictions. Therefore, any persons who are subject to the laws
of any jurisdiction other than the UK or shareholders of Saga who
are not resident in the UK will need to inform themselves about and
observe any applicable requirements.
The Securities referred to herein have not been and will not be
registered under the US Securities Act of 1933, as amended (the
"Securities Act"), or under the securities laws or with any
securities regulatory authority of any state or other jurisdiction
of the United States, and accordingly may not be offered, sold,
pledged or transferred, directly or indirectly, in, into or within
the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and the securities laws of any relevant state or
jurisdiction of the United States. There will be no public offering
of Securities in the United States and there is no intention to
register any portion of any offering in the United States.
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority (the "PRA") and regulated by the
Financial Conduct Authority and the PRA in the United Kingdom, is
acting exclusively for Saga and no one else in connection with the
matters referred to in this announcement and will not be
responsible to anyone other than Saga for providing the protections
afforded to clients of Goldman Sachs International, or for
providing advice in relation to the matters referred to in this
announcement.
Numis Securities Limited ("Numis"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
is acting exclusively for Saga and no one else in connection with
the matters set out in this announcement and will not regard any
other person as its client in relation to the matters in this
announcement and will not be responsible to anyone other than Saga
for providing the protections afforded to clients of Numis, or for
providing advice in relation to any matter referred to herein.
J.P. Morgan Securities plc, which conducts its UK investment
banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"),
and which is authorised in the United Kingdom by the PRA and
regulated by the PRA and the Financial Conduct Authority, is acting
as financial adviser exclusively for
Saga and no one else in connection with the matters set out in
this announcement and will not regard any other person as its
client in relation to the matters in this announcement and will not
be responsible to anyone other than Saga for providing the
protections afforded to clients of J.P. Morgan Cazenove or its
affiliates, or for providing advice in relation to any matter or
arrangement referred to herein.
Other
This announcement contains "forward-looking statements", which
include statements other than statements of historical facts,
including, without limitation, those regarding the Company's
intentions, beliefs or current expectations concerning, among other
things, its future financial condition and performance and results
of operations; its strategy, plans, objectives, prospects, growth,
goals and targets; future developments in the industry and markets
in which the Company participates or is seeking to participate; and
anticipated regulatory changes in the industry and markets in which
the Company operates. In some cases, these forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "aim", "anticipate", "believe",
"continue", "could", "estimate", "expect", "forecast", "guidance",
"intend", "may", "plan", "project", "should" or "will" or, in each
case, their negative, or other variations or comparable
terminology. By their nature, forward-looking statements are
subject to known and unknown risks, uncertainties and other factors
because they relate to events and depend on circumstances that may
or may not occur in the future. Such forward-looking statements are
based on numerous assumptions, some of which are outside of the
Company's influence and/or control, regarding the Company's present
and future business strategies and the environment in which the
Company will operate in the future. Shareholders and potential
investors are cautioned that forward-looking statements are not
guarantees of future performance and that the Company's actual
financial condition, results of operations, cash flows and
distributions to shareholders and the development of its financing
strategies, and the development of the industry in which it
operates, may differ materially from the impression created by the
forward-looking statements contained in this announcement. In
addition, even if the Company's financial condition, results of
operations, cash flows and distributions to Shareholders and the
development of their financing strategies, and the development of
the industry in which they operate, are consistent with the
forward-looking statements contained in this announcement, those
results or developments may not be indicative of results or
developments in subsequent periods. No statement in this
announcement is intended to be a profit forecast.
This announcement does not constitute a recommendation
concerning any shareholder's or investor's options with respect to
the Proposed Equity Raise. The price of shares may go down as well
as up and investors may not get back the full amount invested upon
disposal of the shares. Past performance is no guide to future
performance. The contents of this announcement are not to be
construed as legal, business, financial or tax advice. Each
investor or prospective investor should consult his, her or its own
legal adviser, business adviser, financial adviser or tax adviser
for legal, financial, business or tax advice.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this announcement.
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END
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September 01, 2020 02:13 ET (06:13 GMT)
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