TIDMBIDS
RNS Number : 5718Q
Bidstack Group PLC
18 October 2023
Certain information contained within this Announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as applied in
the United Kingdom. Upon publication of this Announcement, this
information is now considered to be in the public domain.
18 October 2023
Bidstack Group Plc
("Bidstack" or the "Company" or the "Group")
Secured Convertible Loan Agreement with Irdeto B.V.
Share Capital Reorganisation
Update on Proposed Commercial Partnership with Virtual Sport
Technology Limited ("VST")
Bidstack Group Plc (AIM: BIDS), the in-game brand activation
platform, announces that it has agreed to enter into (i) a loan
agreement ("Loan Agreement"), (ii) a subscription and share option
agreement ("Share Option Agreement"); and (iii) a composite
guarantee and debenture ("Security Agreement") with Irdeto B.V.
("Irdeto") (the Loan Agreement and Share Option Agreement together
being the "CLN", and the CLN and the Security Agreement being the
"Agreements"). The Agreements will, subject to certain shareholder
approvals explained below, provide the Company with a secured
convertible loan note facility of up to four separate tranches of
GBP0.6m, aggregating up to GBP2.4m from Irdeto. Irdeto, a world
leader in digital platform cybersecurity, empowering businesses to
innovate for a secure, connected future, previously invested GBP5m
in Bidstack as part of the Company's fundraise in October 2022.
Irdeto currently holds 175,438,596 ordinary shares in Bidstack,
representing 13.49% of the total voting rights ("TVR") in the
Company.
The funds received from the Loan Agreement will provide the
Company with additional working capital.
In order to enable Irdeto to utilise the Share Option Agreement,
drawdown of further full tranches under the Loan Agreement
(following the initial tranche of GBP0.6m) is conditional upon :
(i) the approval by the Company's shareholders of a share capital
reorganisation; and (ii) the approval of a waiver of Rule 9 ("Rule
9 Waiver") of the City Code on Takeovers and Mergers (the "City
Code") by the Panel on Takeovers and Mergers ("the Panel") and the
independent shareholders of the Company, voting on a poll, in
general meeting, which is further explained below.
The Agreements
The principal terms of the Agreements are as follows:
Loan Agreement
-- Bidstack is to be provided with a secured loan facility
("Facility"), drawable in individual tranches each of up to
GBP0.6m, with an aggregate facility cap of GBP2.4m.
-- Interest will be charged at 10% per annum on drawn amounts -
to be capitalised on the last business day of each month.
-- Irdeto will charge a commitment fee of 2% per annum on any
undrawn facility - capitalised on the last business day of each
month.
-- Repayment in whole or in part (of not less than GBP0.5m per
repayment) can be undertaken by the Company on 20 business days'
notice (unless Irdeto serves notice to convert under the Share
Option Agreement).
-- Subject to the terms of the loan, drawdowns remain available
until 31 December 2024 and the final repayment date for the loan is
31 December 2026.
-- Bidstack may not create other security or indebtedness
without Irdeto's consent and the Loan Agreement remains subject to
certain financial covenants in respect of operating expenditure and
cash.
-- Bidstack is to produce a circular ("Circular") to seek
shareholders' approval of a Rule 9 Waiver and to approve the
subdivision of its ordinary shares such that the nominal value for
an ordinary share in the Company will be 0.001 pence per share
(and, for each new ordinary share of 0.001 pence per share, a
deferred share of 0.499 pence per share will be created). The
reason for the subdivision is explained further below.
-- Drawdown is subject to a number of conditions precedent
including that Bidstack may not drawdown beyond a level that would,
if converted, lead to Irdeto holding more than 29.99% of Bidstack's
issued share capital without having obtained a Rule 9 Waiver
approved by the independent shareholders voting on a poll at a
general meeting.
-- During the term of the Loan Agreement, Irdeto will be given
the opportunity to participate in any equity offers so as to
maintain its interest in Bidstack immediately prior to the relevant
equity offer.
Share Option Agreement
-- The earliest date which Irdeto can serve an option notice to
convert the Facility into ordinary shares is the date after the
general meeting to be called pursuant to the Circular.
-- During the option period, Irdeto may elect to convert some or
all of the amount outstanding under the Loan Agreement, from time
to time, into ordinary shares at a conversion price of the lower of
0.275p per ordinary share (before the share consolidation set out
below) and 10% below the closing mid-market price per ordinary
share on the date of Irdeto's election to convert or, where that
date is not a trading day, the last closing mid-market price per
ordinary share ("Subscription Price"). However, if the Subscription
Price would result in a price which is less than the nominal value
of an ordinary share, to enable to convert at such time, Irdeto can
elect to pay the nominal value for each ordinary share.
-- Ordinary shares issued under the Share Option Agreement will
rank pari passu with the existing ordinary shares and the Company
will apply to AIM for permission for the shares to be admitted to
trading.
-- Bidstack may not in any event issue new ordinary shares to
Irdeto that would result in Irdeto holding in excess of 29.99% of
the TVR in Bidstack, in the absence of a Rule 9 Waiver having been
approved by the independent shareholders in Bidstack, voting on a
poll, at a general meeting.
-- Subject to obtaining a Rule 9 Waiver, if Irdeto's
shareholding does exceed 30% of Bidstack's issued capital, Irdeto
will be entitled to nominate an additional Non-Executive Director
to the Company's Board (that is, in addition to Doug Lowther, the
CEO of Irdeto, who is currently a Non-Executive Director on the
Company's Board).
Security Agreement
Bidstack Group Plc and each English trading subsidiary provides
a guarantee and indemnity under the Security Agreement and provides
security, by way of fixed and floating charges (as applicable) over
the shares of Bidstack Group Plc's subsidiaries, Group intellectual
property, Group UK bank accounts and the amounts standing to the
credit of them from time to time and Group insurance contracts.
Related Party Transaction
Irdeto is a substantial shareholder in the Company with a
holding of 175,438,596 ordinary shares which represents 13.49% of
Bidstack's currently issued share capital and TVR. Doug Lowther,
the CEO of Irdeto, is a Non-Executive Director on the Company's
Board.
The Board, (save for Doug Lowther who has not participated in
any discussion relating to the Facility or the Agreements) having
consulted with the Company's Nominated Adviser, SPARK Advisory
Partners Limited, considers the entry into the Facility and the
terms of the Agreements are fair and reasonable insofar as the
Company's shareholders are concerned.
Share Capital Reorganisation
The Company's existing ordinary shares have a nominal value of
0.5 pence at present. Given the Company's current share price, in
order to issue shares, and in order to enable the Company to issue
new ordinary shares pursuant to the Share Option Agreement at the
Subscription Price, the Company is proposing to undertake a share
capital reorganisation ("Reorganisation"). The Board considers the
Reorganisation to have merit in its own right as the the high
number of existing ordinary shares combined with the low absolute
share price is unwieldly for the shareholders of the Company and
others wishing to deal in the Company's shares and negatively
affects investors' perception of the Company.
Subject to approval by the Company's shareholders at the
proposed general meeting, pursuant to the proposed sub-division,
each existing ordinary share of 0.5 pence would be divided into one
new ordinary share of 0.001 pence ("New Ordinary Share") and one
deferred share of 0.499 pence ("Deferred Share").
At the same general meeting, the Company will also propose a
1,000 for 1 consolidation of New Ordinary Shares to create "New
Consolidated Ordinary Shares" with a nominal value of 1 pence per
New Consolidated Ordinary Share. The Company will issue a further
16 New Ordinary Shares immediately prior to the consolidation
taking effect to ensure the aggregate total New Ordinary Shares
prior to the consolidation are divisible by 1,000.
Certain amendments must be made to the Company's articles of
association to facilitate the Reorganisation. Full details of those
amendments and the Reorganisation generally will be given in the
shareholder circular and notice convening a general meeting, which
will be published as soon as is practicable, made available on the
Company's website and sent to shareholders who have requested
physical copies of the Company's documents.
Rule 9 Waiver
The Code applies to Bidstack. Under Rule 9 of the Code, any
person who acquires an interest in shares which, taken together
with shares in which that person or any person acting in concert
with that person is interested, carry 30% or more of the voting
rights of a company which is subject to the Code is normally
required to make an offer to all the remaining shareholders to
acquire their shares.
An offer under Rule 9 must be made in cash at the highest price
paid by the person required to make the offer, or any person acting
in concert with such person, for any interest in shares of the
company during the 12 months prior to the announcement of the
offer.
If the CLN was fully utilised at the earliest opportunity and
Bidstack made no cash repayments, Irdeto could own a maximum of
336,903,938,596 New Ordinary Shares (or 336,903,938 New
Consolidated Ordinary Shares) in the Company representing 99.67% of
the TVR. Note this is a theoretical calculation based on the lowest
price at which Bidstack could issue shares of 0.001 pence per New
Ordinary Share (or 1 pence per New Consolidated Ordinary Share)
following the Reorganisation and assumes no other shares are
issued.
Conversion New Ordinary Total Ordinary Aggregate Irdeto's maximum
Price Shares (assuming Shares in Total of Irdeto's percentage
full conversion issue (assuming holding including of TVR
at 31 December no other issues existing ordinary
2026) within the shares and
timeframe) New Ordinary
Shares
0.275 pence
(maximum) 1,224,467,273 2,525,323,273 1,399,905,869 55.44%
------------------ ----------------- ------------------- -----------------
0.1375 pence
(midway) 2,448,934,545 3,749,790,545 2,624,373,141 69.99%
------------------ ----------------- ------------------- -----------------
0.001 pence
(lowest) 336,728,500,000 338,029,356,000 336,903,938,596 99.67%
------------------ ----------------- ------------------- -----------------
Note: This illustrative table is shown prior to the
Reorganisation, but Irdeto's percentage of TVR should remain
unchanged post the Reorganisation.
Therefore, the Company will seek the approval of the Panel to
waive the obligation to make a general offer that would otherwise
arise on Irdeto as a result of conversion under the Share Option
Agreement, subject to approval on a poll by the independent
shareholders of the Company (being all shareholders other than
Irdeto) of the Rule 9 Waiver Resolution as set out in the Notice of
General Meeting to be sent to shareholders shortly.
General Meeting
A circular ("Circular") containing further details of the
Agreements, Reorganisation, changes to the articles of association
of the Company in respect of the Reorganisation and the Rule 9
Waiver and notice of the general meeting to approve the resolutions
required to implement the Reorganisation, changes to the articles
of association and the proposed Rule 9 Waiver, is expected to be
published and despatched to Bidstack shareholders in due course,
when a further announcement will be made. Following its
publication, the Circular will be available on the Group's
website.
Update on the proposed New Commercial Partnership with Virtual
Sport Technology Limited ("VST")
Following further discussions between the Company, its advisers
and VST, and the entering into the Agreements outlined herein, it
has been resolved, at this point, not to progress further with the
proposed new multi-year licensing agreement between Bidstack and
VST on the (non-binding, subject to contract) terms which were
outlined in an announcement dated 29 September 2023. Discussions
will continue with the new management of VST around the potential
of the Company and VST working together in some capacity, but with
a materially revised structure, to support the growth of the
Company's sports offering.
James Draper, CEO of Bidstack said:
"The loan agreement with our strategic investor Irdeto provides
Bidstack with additional working capital to focus on execution of
recently announced commercial partnerships. We are grateful for
Irdeto's continued support at this pivotal inflection point for
Bidstack and the in-game advertising industry."
Kelly van Krieken, Director - Corporate Development of Irdeto
said:
" Irdeto is pleased to announce the extension of our strategic
support for Bidstack. The in-game advertising market is an exciting
growth area in the video game space, and we look forward to the
opportunity that this continued investment will bring. "
-ENDS-
Contacts
Bidstack Group Plc
James Draper, CEO via SPARK
SPARK Advisory Partners Limited (Nomad)
Mark Brady / Neil Baldwin / James Keeshan +44 (0) 203 368 3550
Stifel Nicolaus Europe Limited (Broker)
Fred Walsh / Tom Marsh +44 (0) 20 7710 7600
Notes to editors
About Bidstack
Bidstack's technology empowers video game publishers to monetise
and manage spaces within their virtual environments. Its platform
provides real-time reporting, dynamic targeting and player
communication tools for brand activations and fan engagement.
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END
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October 18, 2023 10:45 ET (14:45 GMT)
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