TIDMCPR
RNS Number : 5485T
Carpetright PLC
15 November 2019
ISIN: GB0001772945
LEI: 213800GO32BSNNHXID90
15 November 2019
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 THAT
JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
RECOMMED CASH ACQUISITION
of
Carpetright plc
by
Meditor Holdings Limited
(a company incorporated for this purpose by Meditor European
Master Fund Limited)
to be implemented by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary of the Acquisition
-- The boards of MHL and Carpetright announce that they have agreed
the terms of a recommended cash offer to be made by MHL to acquire
the entire issued and to be issued share capital of Carpetright
not already owned by Meditor Fund. MHL is a newly incorporated
wholly-owned subsidiary of Meditor Fund established specifically
for the purpose of the Acquisition, which is to be implemented
by way of the Scheme.
-- Meditor Fund is the beneficial owner of 29.9% of the issued
shares of Carpetright. As previously disclosed, on 3 September
2019, Meditor Fund purchased the lenders' interests in Carpetright's
RCF. That facility is due to expire on 31 December 2019. Carpetright's
Overdraft Facilities are also due to expire on 31 December 2019.
Further, the unsecured loan provided to Carpetright by Meditor
Fund on 11 May 2018 is due for repayment on 31 July 2020 at
a value of GBP25.7 million.
-- Under the terms of the Scheme, holders of Scheme Shares will
be entitled to receive 5p in cash per Scheme Share, valuing
the entire issued and to be issued share capital of Carpetright
at GBP15,189,358.20 on a fully diluted basis1 .
-- The Scheme is unanimously recommended by the Directors.
-- Irrevocable undertakings and a letter of intent to vote in favour
of the Scheme have been received in respect of an aggregate
of 91,924,468 Carpetright Shares representing 30.3% of the issued
share capital of Carpetright (and 43.2% of the issued share
capital not currently held by Meditor Fund) as at the Latest
Practicable Date.
-- It is intended that the Acquisition will be effected by way
of the Scheme, which is a scheme of arrangement under Part 26
of the Companies Act requiring Court sanction. However, MHL
reserves the right to elect to implement the Acquisition by
way of a Takeover Offer, subject to the Panel's consent. In
order to become Effective, the Scheme must be approved by a
majority in number of the holders of Scheme Shares voting at
the Court Meeting, either in person or by proxy, representing
at least 75% in value of the Scheme Shares voted. In addition,
the Carpetright Resolution must be passed by the requisite majority
or majorities at the General Meeting. The Scheme will also need
to be sanctioned by the Court. Finally, a copy of the Scheme
Court Order must be delivered to the Registrar of Companies
for registration, upon which the Scheme will become Effective.
-- The Acquisition will be made in accordance with the Code and
on the terms and subject to the conditions in this announcement,
in particular the Conditions (which include the FCA granting
its consent to a change of controller of Carpetright) and the
further terms and conditions that will be set out in the Scheme
Document.
-- It is expected that the Scheme Document, containing further
information about the Acquisition and notices of the Court Meeting
and the General Meeting, will be published as soon as practicable
and, in any event, within 28 days of this announcement.
The Directors, who have been so advised by Peel Hunt 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 Directors, Peel Hunt has taken into account the Directors'
commercial assessments.
Accordingly, the Directors intend to recommend unanimously that
Carpetright Shareholders vote or procure votes to approve the
Scheme at the Court Meeting and vote or procure votes in favour of
the Carpetright Resolution at the General Meeting as they have
irrevocably undertaken to do in respect of their beneficial
holdings which in aggregate amount to 755,724 Carpetright Shares,
representing approximately 0.2% of the issued share capital of
Carpetright.
Commenting on the Acquisition, Bob Ivell, Chairman of
Carpetright, said:
"We believe the MHL offer is in the best interests of all
stakeholders. While we have made significant progress with our
recovery plan for the Carpetright Group, our ability to invest in
the future of the business has been constrained against the
backdrop of limiting banking covenants and a very challenging
consumer market. With a recapitalised business and the backing of a
committed new owner with the resources to invest in Carpetright for
the long term, we will be able to complete our recovery in the
private arena and emerge as a stronger business."
Commenting on the Acquisition, Talal Shakerchi, Director of MHL,
said:
"I believe this Scheme represents the best outcome for all
stakeholder groups. In particular, with Meditor's support and
financial backing and without the constraints of a public market
listing, Carpetright will be well positioned to compete more
effectively. This will facilitate substantially increased
investment in Carpetright's committed employees and its store
estate as well as driving new initiatives and improvements. I am
excited about the long term prospects and opportunities for the
Carpetright business."
This summary should be read in conjunction with, and is subject
to, the full text of this announcement. The Acquisition will be
subject to the conditions and further terms set out in Appendix 1
to this announcement and to the full terms and conditions to be set
out in the Scheme Document. Appendix 2 to this announcement
contains a summary of the irrevocable undertakings and letter of
intent received in relation to the Acquisition. Appendix 3 to this
announcement contains the sources and bases of certain information
used in this summary and in this announcement. Appendix 4 to this
announcement contains definitions of certain terms used in this
summary and in this announcement.
Enquiries
Meditor Holdings Limited
Talal Shakerchi Tel: 01372 467779
Panmure Gordon (UK) Limited
(Financial Adviser to Meditor Holdings Limited)
Dominic Morley
Toby Rolls Tel: 020 7886
Atholl Tweedie 2500
Carpetright plc
Wilf Walsh, Chief Executive Officer
Jeremy Simpson, Chief Financial Officer Tel: 01708 802000
Peel Hunt LLP
(Financial Adviser to Carpetright plc)
Dan Webster
George Sellar
Michael Nicholson Tel: 020 7418
Al Rae 8900
Citigate Dewe Rogerson (Financial PR)
Kevin Smith Tel: 020 7638
Nick Hayns 9571
Important Notices
Panmure Gordon (UK) Limited, which is authorised and regulated
in the UK by the FCA, is acting exclusively for MHL and Meditor
Fund and no one else in connection with the matters described in
this announcement and is not advising any other person and
accordingly will not be responsible to anyone other than MHL and
Meditor Fund for providing the protections afforded to clients of
Panmure Gordon (UK) Limited nor for providing advice in relation to
the matters described in this announcement.
Peel Hunt LLP, which is authorised and regulated in the UK by
the FCA, is acting exclusively for Carpetright and for no one else
in connection with the matters described in this announcement and
is not advising any other person and accordingly will not be
responsible to anyone other than Carpetright for providing the
protections afforded to clients of Peel Hunt LLP nor for providing
advice in relation to the matters described in this
announcement.
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 an invitation to purchase or subscribe for any securities
or the solicitation of an offer to buy or subscribe for any
securities pursuant to the Acquisition or otherwise. The
Acquisition will be made solely by the Scheme Document and the
Forms of Proxy accompanying the Scheme Document, which will contain
the full terms and conditions of the Acquisition, including details
of how the Acquisition may be approved.
This announcement has been prepared in connection with proposals
in relation to a scheme of arrangement pursuant to and for the
purpose of complying with English law and the Code and 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 jurisdictions outside England. Nothing in this
announcement should be relied on for any other purpose.
Carpetright will prepare the Scheme Document to be distributed
to Carpetright Shareholders at no cost to them. Carpetright and MHL
urge Carpetright Shareholders to read the Scheme Document when it
becomes available because it will contain important information
relating to the Acquisition.
Overseas Jurisdictions
The release, publication or distribution of this announcement in
jurisdictions other than the UK may be restricted by the laws of
those jurisdictions and therefore persons into whose possession
this announcement comes should inform themselves about and observe
such restrictions. Further details in relation to the Overseas
Shareholders will be contained in the Scheme Document. Any failure
to comply with any such restrictions may constitute a violation of
the securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the Acquisition disclaim any responsibility or liability for the
violation of such restrictions by any person.
Unless otherwise determined by MHL or required by the Code, and
permitted by applicable law and regulation, the Acquisition will
not be made available, 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 Scheme by
any such means from within a Restricted Jurisdiction or any other
jurisdiction if to do so would constitute a violation of the laws
of that jurisdiction. Accordingly, copies of this announcement and
all documents relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction, and
persons receiving this announcement and all documents relating to
the Acquisition (including custodians, nominees and trustees) must
not mail or otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction.
The availability of the Acquisition to Carpetright Shareholders
who are not resident in the UK may be affected by the laws of the
relevant jurisdictions in which they are resident. Persons who are
not resident in the UK should inform themselves of, and observe,
any applicable requirements.
The Acquisition is subject to the applicable requirements of the
Code, the Panel, the London Stock Exchange and the FCA.
Additional information for US Investors
Carpetright Shareholders in the United States should note that
the Acquisition relates to the securities of a UK company and is
proposed to be effected by means of a scheme of arrangement under
English law. This announcement, the Scheme Document and certain
other documents relating to the Acquisition have been or will be
prepared in accordance with English law, the Code and UK disclosure
requirements, format and style, all of which differ from those in
the United States. A transaction effected by means of a scheme of
arrangement is not subject to the tender offer rules or the proxy
solicitation rules under the US Exchange Act. Accordingly, the
Acquisition is subject to the disclosure requirements of and
practices applicable in the UK to schemes of arrangement, which
differ from the disclosure requirements of the United States tender
offer and proxy solicitation rules. If, in the future, MHL
exercises the right to implement the Acquisition by way of a
Takeover Offer and determines to extend the offer into the United
States, the Acquisition will be made in compliance with applicable
United States laws and regulations, including any applicable
exemptions under the US Exchange Act.
Carpetright's financial statements, and all financial
information that is included in this announcement or that may be
included in the Scheme Document, or any other documents relating to
the Acquisition, have been or will be prepared in accordance with
International Financial Reporting Standards or other reporting
standards or accounting practice which may not be comparable to
financial statements of companies in the United States or other
companies whose financial statements are prepared in accordance
with US generally accepted accounting principles.
The receipt of cash pursuant to the Acquisition by a US holder
as consideration for the transfer of its Scheme Shares pursuant to
the Scheme will likely be a taxable transaction for United States
federal income tax purposes and under applicable United States
state and local, as well as foreign and other, tax laws. Each
Carpetright Shareholder is urged to consult their independent
professional adviser immediately regarding the tax consequences of
the Acquisition applicable to that Carpetright Shareholder.
It may be difficult for US holders to enforce their rights and
claims arising out of the US federal securities laws, since MHL and
Carpetright are located in countries other than the US, and some or
all of their officers and directors may be residents of countries
other than the US. US holders 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.
In accordance with normal UK practice and consistent with Rule
14e-5(b) of the US Exchange Act, MHL, certain affiliated companies
and their nominees or brokers (acting as agents) may make certain
purchases of, or arrangements to purchase, shares in Carpetright
outside of the US, other than pursuant to the Acquisition, until
the date on which the Scheme becomes effective in accordance with
its terms, lapses or is otherwise withdrawn. If such purchases or
arrangements to purchase were to be made they would occur either in
the open market at prevailing prices or in private transactions at
negotiated prices and comply with applicable law, including the US
Exchange Act. Any information about such purchases or arrangements
to purchase will be disclosed as required in the UK, will be
reported to a Regulatory Information Service and will be available
on the London Stock Exchange website at
www.londonstockexchange.com.
Forward-looking statements
This announcement, oral statements made regarding the
Acquisition, and other information published by or concerning
Meditor Group and Carpetright Group contain statements which are,
or may be deemed to be, "forward-looking statements" in respect of
the financial condition, results of operations and business of or
concerning Meditor Group and Carpetright Group and their respective
groups, and certain plans and objectives of or concerning Meditor
Group and Carpetright Group. All statements other than statements
of historical fact are forward-looking statements. Forward-looking
statements are prospective in nature and are not based on
historical facts, but rather on current expectations and
projections of the management of MHL and Carpetright about future
events and are therefore subject to risks and uncertainties which
could cause actual results to differ materially from the future
results expressed or implied by the forward-looking statements. The
forward-looking statements contained in this announcement include
statements relating to the expected effects of the Acquisition, the
expected timing and scope of the Acquisition and other statements
other than historical facts. Often, but not always, forward-looking
statements can be identified by the use of forward-looking words
such as "plans", "expects" or "does not expect", "is expected", "is
subject to", "project", "will likely result", "will continue",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or statements that certain
actions, events or results "may", "could", "should", "would",
"might" or "will" be taken, occur or be achieved. Although MHL and
Carpetright believe that the expectations reflected in such
forward-looking statements are reasonable, MHL and Carpetright can
give no assurance that such expectations will prove to be
correct.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that may occur in the future. There are a number of
factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking
statements. In addition to the information regarding these risks,
uncertainties, assumptions and other factors set forth in the
public filings made by MHL and Meditor Fund and the public filings
(if any) made by Carpetright, important risk factors that may cause
such a difference include, but are not limited to, (i) the
completion of the Acquisition on anticipated terms and timing, (ii)
legislative, regulatory and economic developments, (iii) the impact
of foreign exchange rates, (iv) the performance of the global
economy, and (v) unpredictability and severity of catastrophic
events, including, but not limited to, acts of terrorism or
outbreak of war or hostilities. While the list of factors presented
here is considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realisation of forward-looking statements. Such
forward-looking statements should therefore be construed in the
light of such factors.
Neither MHL, Meditor Fund nor Carpetright, nor any member of the
Meditor Group or the Carpetright Group or any of their respective
associates or directors, officers or advisers provides any
representation, warranty, assurance or guarantee that the
occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually
occur. You are cautioned not to place undue reliance on these
forward-looking statements. Each forward-looking statement speaks
only as at the date of this announcement. Other than in accordance
with their legal or regulatory obligations (including under the
Code, the Listing Rules, the Disclosure Guidance and Transparency
Rules and MAR), no member of the Carpetright Group nor member of
the Meditor Group is under, or undertakes, any obligation, and each
of the foregoing expressly disclaims any intention or obligation,
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
All forward-looking statements contained in this announcement
are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section.
No profit forecasts or estimates
No statement in this announcement is intended as a profit
forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings or
earnings per share for Carpetright for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per share for Carpetright.
Opening Position and Dealing Disclosure Requirements of the
Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% 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) 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 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 Code, any person who is, or becomes,
interested in 1% 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. A Dealing Disclosure by a person to whom Rule 8.3(b) 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.
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).
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 Takeover 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.
Right to switch to a Takeover Offer
MHL reserves the right to elect, with the consent of the Panel,
to implement the Acquisition by way of a Takeover Offer for the
entire issued and to be issued share capital of Carpetright (save
for the Carpetright Shares held by Meditor Fund) as an alternative
to the Scheme. In such an event, the Takeover Offer will be
implemented on the same terms or, if MHL so decides, on such other
terms being no less favourable (subject to appropriate amendments),
so far as applicable, as those which would apply to the Scheme.
Information relating to Carpetright Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Carpetright Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Carpetright may be provided to MHL during the
offer period as required under Section 4 of Appendix 4 of the Code
to comply with Rule 2.11(c) of the Code.
Right to receive documents in hard copy form
Any person entitled to receive a copy of documents,
announcements and information relating to the Acquisition is
entitled to receive such documents in hard copy form free of
charge. A person may also request that all future documents,
announcements and information in relation to the Acquisition are
sent to them in hard copy form. Hard copies of such documents,
announcements, and information will not be sent unless
requested.
A hard copy of this announcement may be requested by contacting
Carpetright's registrar, Computershare Investor Services PLC,
either in writing to The Pavilions, Bridgwater Road, Bristol BS99
6ZZ or by calling the helpline on +44 (0370) 889 3261. Calls
outside the UK will be charged at the applicable international
rate. Lines are open between 8.30 a. m. and 5.30 p. m. Monday to
Friday excluding public holidays in England and Wales.
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.
Rule 2.9 requirement
For the purposes of Rule 2.9 of the Code, Carpetright confirms
that, as at close of business on 14 November 2019 (being the last
Business Day before the date of this announcement), the current
issued share capital of Carpetright comprised 303,787,164 ordinary
shares of GBP0.01 each. The International Securities Identification
Number for the ordinary shares is GB0001772945.
Publication of this announcement on website
A copy of this announcement and the documents required to be
published pursuant to Rule 26.1 of the Code will be available, free
of charge, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, and on Carpetright's website
(https://www.carpetright.plc.uk/) by no later than 12.00 noon on 18
November 2019 (being the Business Day following the date of this
announcement).
For the avoidance of doubt, the contents of this website and any
websites accessible from hyperlinks on this website are not
incorporated into and do not form part of this announcement.
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 THAT JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
15 November 2019
RECOMMED CASH ACQUISITION
of
Carpetright plc
by
Meditor Holdings Limited
(a company incorporated for this purpose by Meditor European
Master Fund Limited)
to be implemented by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
1. Introduction
The boards of MHL and Carpetright announce that they have agreed
the terms of a recommended cash offer to be made by MHL (a newly
incorporated wholly-owned subsidiary of Meditor Fund) to acquire
the entire issued and to be issued share capital of Carpetright not
already owned by Meditor Fund. The Acquisition is intended to be
implemented by means of the Scheme.
2. The Acquisition
The Acquisition, which will be subject to the Conditions (which
includes the FCA granting its consent to a change of controller of
Carpetright), the further terms set out below and the terms to be
further set out in the Scheme Document, will be made on the
following basis:
for each Scheme Share: five (5) pence in cash.
The Acquisition values the entire issued and to be issued share
capital of Carpetright at GBP15,189,358.20 on a fully diluted
basis(21) .
The Scheme Shares will be acquired by MHL fully paid and free
from all liens, equitable interests, charges, encumbrances and
other interests whatsoever and together with all rights now or
hereafter attaching thereto (if any), including the right to
receive in full and retain all dividends and other distributions
declared, made or paid hereafter.
The Scheme will be conditional on Carpetright Shareholders
approving the Scheme and the other Conditions (which include the
consent of the FCA to the change of controller of Carpetright, in
connection with Carpetright's credit broking authorisations from
the FCA) having been satisfied or (where applicable) waived. The
Scheme will only become Effective once sanctioned by the Court and
upon delivery of the Scheme Court Order to the Registrar of
Companies for registration.
If any dividend or other distribution is authorised, declared,
made or paid in respect of Scheme Shares on or after the date of
this announcement and before the Scheme Effective Date, MHL
reserves the right to reduce the Acquisition Price by the amount of
any such dividend or other distribution.
There are no agreements or arrangements to which MHL is a party
which relate to the circumstances in which it may or may not invoke
or seek to invoke a pre-condition or condition of the
Acquisition.
3. Irrevocable Undertakings and letter of intent
Irrevocable undertakings and a letter of intent to vote in
favour of the Acquisition have been received in respect of an
aggregate of 91,924,468 Carpetright Shares, representing 30.3% of
the issued share capital of Carpetright (and 43.2% of the issued
share capital not currently held by Meditor Fund) as at the Latest
Practicable Date.
Further details of the irrevocable undertakings and letter of
intent entered into are set out in Appendix 2.
4. Background to and reasons for the Recommendation
Historical macroeconomic and competitive environment and impact
on trading performance
Carpetright operates in a highly competitive environment. From
2016 to 2018, the Carpetright Group's profitability and financial
position deteriorated due both to specific factors affecting the
Carpetright Group and macroeconomic challenges, as follows:
-- the UK's decision to exit the European Union on 23 June 2016
("Brexit"), which resulted in a dramatic depreciation of Sterling
against the Euro that had the effect of increasing the cost
of goods from the Carpetright Group's European suppliers, requiring
Carpetright to raise prices which negatively impacted UK sales;
-- the decline in consumer confidence since the Brexit vote, which
has had a negative impact on UK consumer spending;
-- a significant intensification in the competitive environment
in the UK floorcoverings market with a new national competitor
entering the market with a widespread and aggressive store opening
programme that put significant pressure on the Carpetright Group's
best performing stores; and
-- the legacy issue of an oversized real estate portfolio consisting
of too many sites on long leases with unsustainable rents.
In response to this adverse trading environment, Carpetright
undertook strategic and operational decisions to improve the
business, as well as pursuing a restructuring in early 2018 (the
"Restructuring"). The Restructuring involved the following:
-- a company voluntary arrangement ("CVA") in order to rationalise
Carpetright's leasehold obligations and restore the viability
of the business;
-- a GBP12.5 million loan from Meditor Fund to assist with short-term
working capital requirements;
-- funding of GBP17.25 million (gross) by way of the subscription
for an unsecured loan note provided by Meditor Fund ("Meditor
Loan Note");
-- the successful completion of a placing and open offer (the "Placing
and Open Offer"), raising net proceeds of GBP60 million; and
-- amendments to Carpetright's GBP45 million Revolving Credit Facility
("RCF") and the overdraft facilities provided by National Westminster
Bank plc and Ulster Bank Ireland DAC (the "Overdraft Facilities")
including:
i. extending the maturity date of the RCF to 31 December 2019,
from 31 July 2019;
ii. amending financial covenant requirements for future testing
dates; and
iii. making the Overdraft Facilities committed,
(together, the "Refinancing").
The GBP60 million net proceeds raised by the Placing and Open
Offer was principally used by Carpetright to: (i) repay the GBP12.5
million loan with Meditor Fund (detailed above) and (ii) satisfy an
increase in its working capital requirements.
Carpetright's strategy has also focussed on several key areas
including: (i) implementing IT infrastructure upgrades across the
UK business to drive efficiencies and further online opportunities;
(ii) entering into new partnerships, such as with Furniture
Village, to deliver increased customer reach with minimal capital
commitments; (iii) a continued drive to optimise the UK store
estate by means of the CVA through selective closures and
relocations to further reduce costs; and (iv) investing in and
delivering improved returns from Carpetright's operations in the
Netherlands and Belgium, together with a turnaround of its
currently loss making business in the Republic of Ireland.
Despite this operational progress, Carpetright has continued to
experience a very challenging trading environment, as presented in
the results for the year ended 27 April 2019 ("FY2019") (announced
in June 2019). Carpetright revenue in FY2019 decreased by 13.4% to
GBP386.4 million. In the UK, like-for-like sales in the full year
declined 9.1% compared to like-for-like sales growth of 3.4% in the
Rest of Europe. Underlying EBITDA was GBP2.9 million, compared to
GBP7.1 million for the year ended 28 April 2018 ("FY2018"), and
Carpetright made an underlying loss before tax of GBP16.9 million.
Net debt decreased to GBP27.4 million from GBP53.0 million.
However, positive progress was shown by Carpetright's current
trading for the first eight weeks of the new financial year, with
UK like-for-like sales increasing by 8.5% and like-for-like sales
for the Rest of Europe ahead by 4.3% as trading conditions slowly
improved.
Notwithstanding progress being made to stabilise the business,
the implementation of the Refinancing has further restricted
Carpetright's ability to implement its strategic growth initiatives
in the intervening period, reflecting restrictions applied by
Carpetright's banking covenants and the costs of interest, which
have curtailed further investment in the business.
Further financial restructuring initiatives and background to
the Acquisition
Following the Refinancing, Carpetright engaged in discussions
with its bankers to refinance the RCF ahead of its maturity on 31
December 2019. Instead of agreeing to refinance the RCF, the
banking syndicate, on 3 September 2019, sold their interests under
the RCF to Meditor Fund, Carpetright's 29.9% shareholder. No
further changes to the terms of the RCF were made as part of
Meditor Fund's acquisition of the banks' interest in the RCF apart
from Meditor Fund becoming the lender of record. Meditor Fund also
acquired a 100% participation interest in the Overdraft Facilities
which are also due to expire on 31 December 2019 pursuant to a
participation agreement with the lenders. The Meditor Loan Note is
due for repayment on 31 July 2020 at a value of GBP25.7 million
(which includes rolled-up interest) (together with the RCF and the
Overdraft Facilities, comprising the "Debt Facilities").
Carpetright's statutory net debt as at 26 October 2019 was
approximately GBP27 million, comprising gross debt of GBP56
million, offset by cash and cash equivalents of GBP29 million (of
which approximately GBP20 million was restricted cash and monies
due from merchant and finance providers). In addition, accrued
interest amounted to GBP6.2 million. In line with normal seasonal
trends, statutory net debt is expected to increase to between
approximately GBP40 million to GBP50 million in December 2019, and
gross debt is expected to rise commensurately.
The Board believes that approximately GBP80 million is needed
for Carpetright to: (i) repay the Debt Facilities; (ii) meet
Carpetright's ongoing working capital requirements; and (iii)
provide Carpetright with the necessary growth capital to execute
its strategy.
Prior to and concurrent with discussions with Meditor Fund,
Carpetright has actively explored various other long-term financing
solutions including standard "high street" refinancing,
asset-backed lending, strategic asset sales and equity financing.
Having investigated these options thoroughly, the Board believes
that none of these solutions would be able to deliver the long-term
funding required by Carpetright.
Consequently, the Board believes that the offer from MHL is the
only viable route to deliver its requirements for a deliverable,
controllable solution to the long-term funding required to make
Carpetright a sustainable business.
MHL has informed Carpetright that, following the Scheme becoming
Effective, MHL intends to inject approximately GBP80 million of
long-term capital into Carpetright (the "Capital Injection") which
will: (i) allow Carpetright to repay the existing Debt Facilities;
and (ii) provide Carpetright with additional capital, giving the
business a far stronger balance sheet to enable it to pursue its
strategic and growth initiatives and a stable base for its
long-term future.
In the longer term, Carpetright anticipates that the Acquisition
and subsequent Capital Injection will allow it to explore
opportunities to improve its sourcing arrangements, further develop
its distribution model, mitigate the impact of competition in the
sector and pursue potential acquisitions.
Conclusion
In the absence of realistic alternatives to continue as an
independent business, the Board has concluded that the offer from
MHL provides the best solution and will place Carpetright's
business on a more secure basis to address Carpetright's ongoing
capital requirements. The offer in terms of value, form of
consideration offered and execution certainty also provides the
optimal available solution for Carpetright Shareholders, allowing
them to realise their investments in Carpetright for cash.
5. Recommendations
The Directors, who have been so advised by Peel Hunt 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 Directors, Peel Hunt has taken into account the Directors'
commercial assessments. Accordingly, the Directors intend to
recommend unanimously that Carpetright Shareholders vote or procure
votes to approve the Scheme at the Court Meeting and vote or
procure votes in favour of the Carpetright Resolution at the
General Meeting as they have irrevocably undertaken to do in
respect of their beneficial holdings which in aggregate amount to
755,724 Scheme Shares (representing approximately 0.2% of the
issued share capital of Carpetright).
6. Information on Carpetright
Carpetright is a leading specialist floorcoverings retailer in
the UK. Since the first store was opened in 1988, the business has
developed both organically and through acquisition within the UK
and other European countries. Carpetright trades from stores in the
UK and the Republic of Ireland, which are managed from the UK, and
the Netherlands and Belgium, which are managed from the
Netherlands. For financial reporting, Carpetright is organised into
two business segments, the "UK" and the "Rest of Europe"
(comprising the Netherlands, Belgium and the Republic of
Ireland).
Carpetright operates in a highly fragmented market. According to
GlobalData, current estimates value the UK floorcovering market at
GBP1.9 billion in 2019, placing Carpetright as the market leader
with a share of around 18%. In the UK business, beds provide a
complementary revenue stream to Carpetright's core floorcoverings
offering. The total beds and bedding market is estimated to be
worth GBP3.8 billion and Carpetright's market penetration, whilst
low, is growing.
The nature of the Carpetright Group's product means that the
vast majority of customers prefer to visit a store in order to give
them the opportunity to see and touch their choice of
floorcovering. However, the internet is playing an ever-increasing
role in pre-purchase behaviour, becoming a vital research tool for
many customers, and the rapid growth of smart phone and tablet use
underlines the importance of having an effective and integrated
digital proposition.
The Carpetright Group's key business objective is to be a market
leading retailer of floorcoverings, offering a comprehensive range
of products at great value, supported by excellent customer
service, accessed through an integrated multi-channel
proposition.
The Carpetright Group's business strategy consists of four key
pillars:
-- 'Who we are': updating Carpetright's brand image and customer
perception, through modernising the store estate and investing
in its people;
-- 'What we sell': matching Carpetright's extensive range of floorcovering
products to market trends and composition;
-- 'How we sell': delivering high quality customer service and
an attractive customer proposition; and
-- 'Where we sell': providing an efficient multi-channel sales
platform with a right-sized real estate portfolio.
As at 26 October 2019 Carpetright had 449 stores, 319 in the UK
and 130 in the Rest of Europe. The total number of employees at the
same date was 2,689.
For FY2019, Carpetright generated revenue of GBP386.4 million
(FY2018: GBP446.3 million), with UK like-for-like sales declining
by 9.1% (FY2018: declined 3.6%) and Rest of Europe like-for-like
sales increasing by 3.4% (FY2018: increased 1.2%). Carpetright had
an underlying loss before tax of GBP16.9 million for the FY2019
(FY2018: GBP8.0 million underlying loss before tax). After the
impact of separately reported items, Carpetright had a loss before
tax of GBP24.8 million for FY2019 (FY2018: GBP69.8 million loss
before tax). For FY2019, Carpetright's underlying basic loss per
share was 5.1 pence (FY2018: 5.8 pence underlying basic loss per
share) and basic loss per share was 7.9 pence (FY2018: 93.6 pence
basic loss per share).
7. Information on MHL and Meditor Fund
MHL is a newly incorporated private limited company incorporated
in England on 8 November 2019 as a wholly owned subsidiary of
Meditor Fund. Its registered address is Prince Albert House, 18A
King Street, Maidenhead, Berkshire SL6 1EF. The directors of MHL
are Carl Gosta Samuel (Sam) Nisser and Talal D. Shakerchi.
MHL's strategy is initially to complete the Acquisition and then
to make further acquisitions of UK-based businesses. It plans to
provide long term support and capital to the businesses in which it
invests.
Meditor Fund was incorporated in 1998 in Bermuda as an
open-ended mutual fund investment company with company number
25157. Its registered address is Wessex House, 3rd Floor, 45 Reid
Street, Hamilton HM 12, Bermuda. The directors of Meditor Fund are
Brian F. Desmond, Talal D. Shakerchi, Edith G. Conyers and Susie M.
Tindall.
Meditor Fund's investment objective is "to maximise the long
term investment return in the base currency (Sterling) through a
concentrated global portfolio of primarily equity positions."
Meditor Fund invests principally in equity markets of developed
countries, primarily through direct equity holdings and exchange
traded funds (ETFs). It maintains a highly concentrated portfolio,
mainly of listed positions. Stocks are selected on the basis of an
assessment of fundamental investment attributes with a focus on
potential long term returns. Positions are normally held for long
periods but Meditor Fund retains flexibility to reduce positions or
exit them altogether as circumstances develop in relation to the
portfolio, markets, economic background and the investments
themselves.
As at the date of this document, MHL holds no interests in
Carpetright Shares. Meditor Fund is the beneficial owner of
91,097,241 Carpetright Shares, representing 29.9% of the shares in
issue. It is also the lender under the RCF which is due to expire
on 31 December 2019 and funds the Overdraft Facilities, which are
also due to expire on 31 December 2019. In addition it is the
provider of an unsecured loan which matures on 31 July 2020 at a
value of GBP25.7 million.
8. Financing the Acquisition
Panmure Gordon (UK) Limited, in its capacity as the financial
adviser to MHL, is satisfied that sufficient cash resources are
available to MHL to satisfy in full the cash consideration payable
to Carpetright Shareholders under the terms of the Acquisition.
Further information on the financing of the Acquisition will be
set out in the Scheme Document.
9. Intentions with respect to Carpetright's business
MHL believes that Carpetright has a strong presence as market
leader in UK flooring retail with high levels of brand awareness.
Despite the sector having faced a number of challenges including
cost pressures, overcapacity and weak consumer spending and an
increase in competition (creating further pressures), MHL believes
that Carpetright's business is fundamentally strong and that
current adverse trading conditions will not persist indefinitely.
As such, MHL believes that if Carpetright is well funded for the
long term and the necessary investments are made then satisfactory
performance levels can be restored.
MHL also believes that Carpetright will benefit from private
ownership compared to its current status, whereby its ordinary
shares are publicly listed and traded, which creates significant
distractions for management, burdens the business with additional
costs and responsibilities and can have the effect of constraining
Carpetright from taking actions focussed on its longer term
interests.
In the three to six months following the Scheme becoming
Effective, MHL intends to conduct a review of Carpetright's
business and operations in conjunction with its management team
with a view to determining a sustainable strategy and forming a
plan to maximise the long-term success of the business (the
"Business Review"). This will cover all main aspects of the
business but focus areas are likely to include distribution model,
store portfolio, store investment programme, mix and source of
product, staff training, profitability of the Republic of Ireland
business, digital strategy and information technology. The Business
Review will examine where new investment can best support the
business as well as opportunities to expand through vertical or
horizontal integration.
MHL expects that the proposed Capital Injection will provide
Carpetright with: (i) capacity to repay the existing Debt
Facilities; (ii) additional capital to enable it to pursue
strategic and growth initiatives arising from the Business Review;
and (iii) a strengthened balance sheet and stable base for its
long-term future.
As a result of Carpetright's current constraints, its capital
expenditure in recent periods has been limited. If the Acquisition
is successful, with a strengthened balance sheet and an injection
of growth capital, MHL expects Carpetright to invest further in the
following areas: the store refurbishment programme; staff training;
the development of its digital platform; marketing; and its
operations in the Rest of Europe. The total cost of these
initiatives over the medium term is expected to be GBP20 to GBP25
million, to be funded as result of the proposed Capital
Injection.
If the Acquisition is successful, MHL intends that Carpetright
will also use the new funds to mitigate the impact of competition
in the sector. In the longer term, Carpetright anticipates that the
Acquisition and subsequent refinancing referred to above will allow
it to explore opportunities to improve its sourcing arrangements,
further develop its distribution model and evaluate potential
acquisitions.
Meditor Fund has confirmed that if by 28 December 2019:
(i) the Scheme has been approved by the Carpetright Shareholders
at the Court Meeting and General Meeting; and
(ii) no Condition to the Acquisition has ceased to be reasonably
likely to be satisfied before the Long-Stop Date,
then Meditor Fund will:
(i) offer to enter into a deed of forbearance pursuant to which
it will undertake not to exercise any right, or take any action
to (a) demand or recover repayment of any amount payable under
the RCF or the Meditor Loan Note, or (b) enforce any security
or guarantee given by any person in connection with the RCF
or the Meditor Loan Note or (c) declare the Meditor Loan Note
to be due and payable, in each case where such right or action
has arisen solely as a result of the failure by Carpetright
to repay the RCF and related amounts in full on the RCF maturity
date of 31 December 2019, until the earlier of: (a) the day
after the Long-Stop Date; and (b) any Condition ceasing to
be reasonably likely to be satisfied on or prior to the Long-Stop
Date;
(ii) make available to Carpetright an unsecured loan on arms' length
terms3 to enable Carpetright to replace the Overdraft Facilities,
which are due for repayment on 31 December 2019; and
(iii) use its reasonable endeavours to procure the necessary consents
under the RCF and Meditor Loan Note are made available to permit
the release to Carpetright (for use for general working capital
purposes) of disposal proceeds in the amount of approximately
GBP3.5m (as at 14 November 2019) which are currently held in
a blocked account pursuant to the terms of the RCF.
MHL does not intend, as a consequence of the Scheme, to make any
material changes to the deployment of any of Carpetright's
significant fixed assets.
MHL has confirmed that it does not currently intend to make any
changes in respect of Carpetright's limited research and
development activities.
10. Intentions with respect to Carpetright's management,
employees locations and pension schemes
Carpetright management is, as part of the ongoing CVA process,
continuously reviewing its UK property portfolio and it is
anticipated that this process will continue under MHL's ownership.
It is expected that stores will continue to close or relocate where
the rents are not supported by trading results. MHL also intends to
review options to turn around the currently loss-making business in
the Republic of Ireland, which may also involve some store closures
or relocations. Carpetright will continue to explore new store
openings where justified by trading prospects. Store closures will
impact current employees in those stores where no satisfactory
alternatives can be offered.
The Business Review process is also expected to identify
opportunities for continuous improvement initiatives within
Carpetright's operations, which may result in increases in
opportunity and employment in certain sections of the business and
reductions in others over time.
There are not expected to be material changes in headcount or
the balance of skills and functions of Carpetright management and
employees as a result of the Acquisition. However some changes in
employment, including redundancies in some cases, are expected to
continue to arise in relation to Carpetright's ongoing store
portfolio realignment in the UK and Republic of Ireland.
Neither MHL nor the Meditor Fund has entered into, or had
discussions on any proposal to enter into, any form of
incentivisation arrangements with members of Carpetright's
management.
Carpetright operates a number of pension schemes. MHL does not
currently intend to propose any changes to the terms of such
schemes or the level of employer contributions.
It is intended that Carpetright's Non-Executive Directors resign
from the Board with effect from the Scheme Effective Date.
MHL currently has no employees.
There is no current intention to change Carpetright's
headquarters location in Purfleet, Essex.
As part of Meditor Fund's ongoing strategy, MHL intends to grow
over time through other acquisitions of UK-based businesses, some
of which may be businesses related to that of Carpetright which may
offer synergy and employment opportunities.
No statements in paragraph 9 above or in this paragraph 10
constitute "post-offer undertakings" for the purposes of Rule 19.5
of the Code.
11. Share Option Schemes
The Scheme will extend to any Carpetright Shares which are
unconditionally allocated, issued or transferred to satisfy the
vesting or exercise of awards under the Share Option Schemes prior
to the Scheme Record Time.
Participants in the Share Option Schemes will be contacted
separately regarding the effect of the Scheme on their rights under
the Share Option Schemes and appropriate proposals will be made to
such participants in due course. Further details of the terms of
such proposals shall be included in the Scheme Document or separate
proposal documentation.
Any rights to acquire Scheme Shares under the Share Option
Schemes have not been taken into account in the calculation of the
fully diluted share capital of Carpetright in this announcement
because either: (i) the options have a higher exercise price than
the Acquisition Price (and therefore are not expected to be
exercised), (ii) any related performance conditions are not
expected to be achieved and/or (iii) the vested options will be
cash settled by Carpetright.
12. Structure of the Acquisition
It is intended that the Acquisition will be implemented by means
of the Scheme, which is a scheme of arrangement between Carpetright
and the Scheme Shareholders under Part 26 of the Companies Act,
requiring Court approval to become Effective. MHL reserves the
right to elect to implement the Acquisition by way of a Takeover
Offer (with the consent of the Panel).
The purpose of the Scheme is to provide for MHL to become the
holder of the issued and to be issued ordinary share capital of
Carpetright, save for the Excluded Shares. This is to be achieved
by the transfer of the Scheme Shares to MHL, in consideration for
which the holders of Scheme Shares will receive the cash
consideration on the basis set out in paragraph 2 of this
announcement. Meditor Fund's shareholding of 91,097,241 Carpetright
Shares will be Excluded Shares for the purposes of the Scheme.
In order to become Effective, the Scheme must be approved by a
majority in number of the holders of Scheme Shares voting at the
Court Meeting, either in person or by proxy, representing at least
75% in value of the Scheme Shares voted. In addition, the
Carpetright Resolution must be approved by the requisite majority
or majorities at the General Meeting. The General Meeting will be
held immediately after the Court Meeting.
The Scheme will also be subject to the Conditions and further
terms set out in Appendix 1 to this announcement and to be set out
in the Scheme Document.
Once the necessary approvals from Carpetright Shareholders have
been obtained and the other Conditions (which include the consent
of the FCA to the change of controller of Carpetright, in
connection with Carpetright's credit broking authorisations from
the FCA) have been satisfied or (where applicable) waived, the
Scheme requires sanction by the Court. The Scheme will only become
Effective upon delivery of the Scheme Court Order to the Registrar
of Companies for registration.
Upon the Scheme becoming Effective, it will be binding on all
Carpetright Shareholders, irrespective of whether or not they
attended or voted at the Court Meeting or the General Meeting, but
should the Scheme not become Effective by the Long-Stop Date, the
Scheme will lapse and the Acquisition will not occur.
If any dividend or other distribution is authorised, declared,
made or paid in respect of Scheme Shares on or after the date of
this announcement and before the Scheme Effective Date, MHL
reserves the right to reduce the Acquisition Price by the amount of
any such dividend or other distribution.
Further details of the Scheme, including an indicative timetable
for its implementation, will be set out in the Scheme Document,
which, together with the Forms of Proxy, is expected to be
despatched to Carpetright Shareholders as soon as practicable and,
in any event, within 28 days of this announcement.
13. De-listing and re-registration
If the Scheme is sanctioned by the Court, subject to any
applicable requirements of the London Stock Exchange, MHL intends
to procure that Carpetright will make an application to the FCA (in
its capacity as the UK Listing Authority) for cancellation of the
listing of Carpetright Shares on the Official List and to the
London Stock Exchange for cancellation of trading of Carpetright
Shares on the London Stock Exchange's main market for listed
securities, with effect from the Scheme Effective Date.
It is also intended that, following such de-listing and
cancellation, Carpetright will be re-registered as a private
company limited by shares under the relevant provisions of the
Companies Act.
The last day of dealings in and registration of transfers of
Carpetright Shares on the London Stock Exchange is expected to be
the Business Day prior to the Scheme Effective Date.
On the Scheme Effective Date entitlements held within the CREST
system will be cancelled and share certificates in respect of the
Scheme Shares will cease to be valid.
14. Disclosure of interests in Carpetright
Meditor Capital Management Limited made an Opening Position
Disclosure on behalf of Meditor Fund, setting out the details
required to be disclosed by it under Rule 8 of the Code, on 4
November 2019.
As at the close of business on the Latest Practicable Date,
Meditor Fund is the beneficial holder of the following Carpetright
Shares:
Number of Percentage
Ordinary of Issued
Entity Shares Held Share Capital
Meditor Fund 91,097,241 29.99
Save for (a) the irrevocable undertakings referred to in
paragraph 3 of this announcement and (b) the disclosures above in
this paragraph 14, neither MHL, nor any of its directors, nor, so
far as MHL is aware, any person acting in concert (within the
meaning of the Code) with it had:
i. any interest in or right to subscribe for any relevant securities
of Carpetright;
ii. any short positions in respect of relevant Carpetright Shares
(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;
iii. borrowed or lent any relevant Carpetright Shares (including,
for these purposes, any financial collateral arrangements of
the kind referred to in Note 4 on Rule 4.6 of the Code), save
for any borrowed shares which had been either on-lent or sold;
and/or
iv. entered into any dealing arrangement of the kind referred to
in Note 11 on the definition of acting in concert in the Code.
"interests in securities" for these purposes arise, in summary,
when a person has long economic exposure, whether absolute or
conditional, to changes in the price of securities (and a person
who only has a short position in securities is not treated as
interested in those securities). In particular, a person will be
treated as having an 'interest' by virtue of the ownership, voting
rights or control of securities, or by virtue of any agreement to
purchase, option in respect of, or derivative referenced to,
securities.
15. Overseas shareholders
The availability of the Acquisition to Carpetright Shareholders
who are not resident in and citizens of the UK may be affected by
the laws of the relevant jurisdictions in which they are located or
of which they are citizens. Persons who are not resident in the UK
should inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdictions. Further details in
relation to overseas shareholders will be contained in the Scheme
Document.
16. Takeover Offer
MHL reserves the right, with the consent of the Panel, to elect
to implement the acquisition of the Scheme Shares by way of a
Takeover Offer.
17. General
It is expected that the Scheme Document will be posted to
Carpetright Shareholders as soon as practicable and in any event
within 28 days of this announcement (save with the Panel's
consent). The Scheme is expected to become Effective in early
2020.
The Acquisition will be on the terms and subject to the
conditions set out herein and in Appendix 1 and to be set out in
the Scheme Document. A summary of the irrevocable undertakings and
letter of intent given in relation to the Acquisition is contained
in Appendix 2 to this announcement. Details of the sources and
bases of certain information set out in this announcement are
included in Appendix 3. Appendix 4 contains definitions of certain
terms used in this announcement.
The Acquisition will be governed by English law and will be
subject to the jurisdiction of the English courts.
Panmure Gordon (UK) Limited and Peel Hunt have each given and
not withdrawn their consent to the publication of this announcement
with the inclusion herein of the references to their names in the
form and context in which they appear.
18. Documents published on a website
Copies of the following documents will be published on
Carpetright's website (https:// www.carpetright.plc.uk/) by no
later than 12 noon on 18 November 2019:
(A) a copy of this announcement;
(B) the irrevocable undertakings and letter of intent referred to
in paragraph 3 of this announcement and summarised in Appendix
2 to this announcement; and
(C) offer-related arrangements or other agreements, arrangements
or commitments permitted under, or excluded from, Rule 21.2.
APPIX 1
Conditions and certain further terms of the Acquisition
1. Scheme Conditions
The Acquisition is conditional on the Scheme becoming
unconditional and being Effective, subject to the Code, on or
before the Long-Stop Date.
The Scheme will be conditional upon:
(A) its approval by a majority in number representing three fourths
or more in value of the holders of Scheme Shares, present and
voting, either in person or by proxy, at the Court Meeting;
(B) the Carpetright Resolution being duly passed by the requisite
majority or majorities of Carpetright Shareholders at the General
Meeting; and
(C) the sanction of the Scheme (with or without modification agreed
by Carpetright and MHL) by the Court and the delivery of a
certified copy of the Scheme Court Order to the Registrar of
Companies and the registration of such Scheme Court Order,
together with a copy of the Scheme Document and all documents
required to be annexed to it (if any), by the Registrar of
Companies.
2. General Conditions
The Acquisition is, subject as set out in paragraph 3 of this
Appendix 1 below and to the requirements of the Panel, conditional
on satisfaction of the following Conditions and accordingly the
Scheme will not become Effective unless such Conditions have been
satisfied or, where relevant, waived:
Notifications, Authorisations and waiting periods
(A) all notifications, filings or applications which are necessary
or reasonably considered appropriate or desirable by MHL having
been made in connection with the Acquisition and all necessary
waiting periods (including any extensions thereof) under any
applicable legislation or regulation of any jurisdiction having
expired, lapsed or been terminated (as appropriate) and all
statutory and regulatory obligations in any jurisdiction having
been complied with in each case in respect of the Acquisition
and its implementation and all Authorisations reasonably necessary
or appropriate for or in respect of the Acquisition and, except
pursuant to Chapter 3 of Part 28 of the Companies Act, the
acquisition of any shares or other securities in, or control
or management of, Carpetright or any other member of the Carpetright
Group by any member of the Meditor Group having been obtained
in terms and in a form reasonably satisfactory to MHL from
any appropriate Third Party or (without prejudice to the generality
of the foregoing) from any person or bodies with whom any member
of the Carpetright Group or member of the Meditor Group has
entered into contractual arrangements and all such Authorisations
necessary, appropriate or desirable to carry on the business
of any member of the Carpetright Group in any jurisdiction
having been obtained and all such Authorisations remaining
in full force and effect at the time at which the Acquisition
becomes otherwise wholly unconditional and there being no notice
or intimation of an intention to revoke, suspend, restrict,
modify or not to renew such Authorisations;
General antitrust and regulatory
(B) no Third Party having given notice of a decision to take, institute,
implement or threaten any action, proceeding, suit, investigation,
enquiry or reference (and in each case, not having withdrawn
the same), 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 published
practice (and in each case, not having withdrawn the same)
and there not continuing to be outstanding any statute, regulation,
decision or order which would or might reasonably be expected
to, in the context of the Acquisition:
i. require, prevent or delay the divestiture or alter the terms
envisaged for such divestiture by any member of the Meditor
Group or by any member of the Carpetright Group of all or
any part of its businesses, assets or property or impose
any limitation on the ability of all or any of them to conduct
their businesses (or any part thereof) or to own, control
or manage any of their assets or properties (or any part
thereof);
ii. except pursuant to Chapter 3 of Part 28 of the Companies
Act, require any member of the Meditor Group or member of
the Carpetright Group to acquire or offer to acquire any
shares, other securities (or the equivalent) or interest
in any member of the Carpetright Group or any asset owned
by any Third Party (other than in the implementation of
the Acquisition);
iii. impose any limitation on, or result in a delay in, the ability
of any member of the Meditor Group directly or indirectly
to acquire, hold or to exercise effectively all or any rights
of ownership in respect of shares or other securities in
Carpetright or on the ability of any member of the Carpetright
Group or any member of the Meditor Group directly or indirectly
to hold or exercise effectively 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 Meditor Group;
iv. otherwise adversely affect any or all of the business, assets,
profits or prospects of any member of the Carpetright Group
or any member of the Meditor Group;
v. result in any member of the Carpetright Group or any member
of the Meditor Group ceasing to be able to carry on business
under any name under which it presently carries on business;
vi. make the Acquisition, its implementation or the acquisition
of any shares or other securities in, or control or management
of, Carpetright by any member of the Meditor Group void,
unenforceable and/or illegal under the laws of any relevant
jurisdiction, or otherwise, directly or indirectly prevent
or prohibit, restrict, restrain, or delay or otherwise interfere
with the implementation of, or impose additional adverse
conditions or obligations with respect to, or otherwise
challenge, impede, interfere or require amendment of the
Acquisition or the acquisition of any shares or other securities
in, or control or management of, Carpetright by any member
of the Meditor Group;
vii. require, prevent or delay a divestiture by any member of
the Meditor Group of any shares or other securities (or
the equivalent) in any member of the Carpetright Group or
any member of the Meditor Group; or
viii. impose any limitation on the ability of any member of the
Meditor Group or any member of the Carpetright Group to
conduct, integrate or co-ordinate all or any part of its
business with all or any part of the business of any other
member of the Meditor Group and/or member of the Carpetright
Group,
and all applicable waiting and other time periods (including
any extensions thereof) during which any such antitrust regulator
or Third Party could decide to take, institute, implement or
threaten any such action, proceeding, suit, investigation,
enquiry or reference or take any other step under the laws
of any jurisdiction in respect of the Acquisition or the acquisition
of any Carpetright Shares or otherwise intervene having expired,
lapsed or been terminated;
FCA change of controller condition
(C) to the extent the Acquisition requires FCA approval for change
in control under section 178 of FSMA:
a) the FCA having given notice in writing to MHL under section
189(4) of FSMA of its approval of MHL acquiring control
(within the meaning of section 181 of FSMA, subject to Article
6A of FSMA 2000 (Controllers) (Exemption) Order 2009) of
Carpetright, and, if applicable, any other person acquiring
control (within the meaning of section 181 of FSMA, subject
to Article 6A of FSMA 2000 (Controllers) (Exemption) Order
2009) of Carpetright by virtue of the acquisition by MHL,
such approval being:
a. unconditional in all respects (save as to the period
within which the change of control must occur); or
b. subject to conditions (save as to the period within which
the change of control must occur) which, in the reasonable
opinion of MHL, do not have or are not reasonably foreseeable
as having in the future a material adverse effect (whether
in terms of actual or prospective financial, business
or regulatory capital position, of the manner in which
operations, affairs or functions are conducted, or of
compliance or of reporting requirements), on any member
of the Meditor Group or any member of the Carpetright
Group; or
b) the FCA being treated as having given such approval under
189(6) of FSMA, and any such approval being in full force
and effect.
Matters arising as a result of arrangements and agreements
(D) save as Disclosed, there being no provision of any arrangement,
agreement, licence, permit, franchise or other instrument to
which any member of the Carpetright Group is a party or by or
to which any such member or any of their assets is or are or
may be bound, entitled or subject or any circumstance which,
as a consequence of the making of the Acquisition or the acquisition
or proposed acquisition by any member of the Meditor Group of
some or all of the share capital or other securities in Carpetright
or because of a change in control or management of Carpetright
or otherwise, would or might reasonably be expected to result
in:
(i) any monies borrowed by or other indebtedness (actual or
contingent) of or grant available to, any member of the
Carpetright Group which is not already repayable on demand
being or becoming repayable or being capable of being declared
repayable immediately or prior to the stated maturity date
or repayment date or the ability of any such member to borrow
monies or incur any indebtedness being withdrawn or inhibited;
(ii) save in the ordinary course of business, the creation of
any mortgage, charge or other security interest over the
whole or any part of the business, property or assets of
any member of the Carpetright Group or any such security
(whenever arising or having arisen) becoming enforceable;
(iii) any such arrangement, agreement, lease, licence, permit,
franchise or other instrument, or the rights, liabilities,
obligations or interests of any member of the Carpetright
Group under any such arrangement, agreement, lease, licence,
permit, franchise or other instrument, being terminated
or adversely modified or adversely affected or any adverse
action being taken or any obligation arising thereunder;
(iv) the interests or business of any member of the Meditor Group
or member of the Carpetright Group in or with any person,
firm, company or body (or any arrangements relating to such
interests or business) being terminated or adversely modified
or affected;
(v) any member of the Carpetright Group ceasing to be able to
carry on business under any name under which it presently
does so;
(vi) the value of, or the financial or trading position or prospects
of, any member of the Carpetright Group being prejudiced
or adversely affected; or
(vii) the creation, assumption or acceleration of any liability,
actual or contingent, by any member of the Carpetright Group,
save for liabilities in the ordinary course of business
or to a member of the Meditor Group or in connection with
the Acquisition;
Certain events occurring since 27 April 2019
(E) except as Disclosed, no member of the Carpetright Group having
since 27 April 2019:
(i) issued, agreed or authorised or proposed the issue of additional
shares of any class, or securities convertible into, or
rights, warrants or options to subscribe for or acquire,
any such shares or convertible securities (save as between
Carpetright and its wholly-owned subsidiaries or as between
wholly-owned subsidiaries of Carpetright and save for shares
issued or options or other subscription rights granted
under the Share Option Schemes);
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution
other than to Carpetright or a wholly-owned subsidiary
of Carpetright;
(iii) other than pursuant to the Acquisition, and except for
transactions between Carpetright and a wholly-owned subsidiary
of Carpetright or between such wholly-owned subsidiaries,
merged or demerged with any body corporate or acquired
or disposed of, or transferred, mortgaged or charged or
created any security interest over, any assets or any right,
title or interest in any asset (including shares and trade
investments), or authorised, proposed or announced any
intention to propose any merger, demerger, acquisition,
disposal, transfer, mortgage, charge or security interest
(other than in the ordinary course of business);
(iv) other than a transaction between Carpetright and a wholly-owned
subsidiary of Carpetright and between such wholly-owned
subsidiaries issued, authorised or proposed the issue of
any debentures or incurred or increased any indebtedness
or contingent liability;
(v) save in connection with the Acquisition, and other than
a transaction between Carpetright and a wholly-owned subsidiary
of Carpetright and between such wholly-owned subsidiaries,
purchased, redeemed or repaid or announced any proposal
to purchase, redeem or repay any of its own shares or other
securities or redeemed or reduced or made any other change
to any part of its share capital;
(vi) entered into, or varied (other than in the ordinary course
and which of itself is not material), or authorised, proposed
or announced its intention to enter into or vary any contract,
transaction, arrangement or commitment (whether in respect
of capital expenditure or otherwise) which is of a long-term,
onerous or unusual nature or magnitude, or which involves
or is reasonably likely to involve an obligation of a material
nature or magnitude, save in relation to leases for stores
entered into in the ordinary course of business;
(vii) save for the Acquisition, implemented, authorised, proposed
or announced its intention to implement or enter into any
reconstruction, amalgamation, commitment, scheme or other
transaction or arrangement otherwise than in the ordinary
course of business;
(viii) entered into or made an offer (which remains open for acceptance)
to enter into or vary the terms of any service agreement
or any other agreement or arrangement with any directors
or senior executives or any person connected with any such
person (within the meaning of s.252 of the Companies Act);
(ix) waived or compromised any claim other than in the ordinary
course of business;
(x) 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
ceased or threatened to cease carrying on all or a substantial
part of its business;
(xi) except as between Carpetright and its wholly-owned subsidiaries
or between such wholly-owned subsidiaries, made or authorised
or proposed or announced an intention to propose any change
in its loan capital;
(xii) made any material alteration to its Articles of Association
or other incorporation documents;
(xiii) made or agreed or consented to any significant change to
the terms of the trust deeds constituting the pension schemes
established for directors, employees or dependants, or
the benefits accruing to the pensions payable thereunder,
or the basis on which qualification for accrual or entitlement
to such benefits or pensions are calculated or determined,
or the basis upon which the liabilities of such pension
schemes are funded or made;
(xiv) entered into or made an offer (which remains open for acceptance)
to enter into an agreement or commitment or passed any
resolution or announced or made any proposal with respect
to any of the transactions or events referred to in this
sub-paragraph (E); or
(xv) entered into any contract, transaction or arrangement which
is or is reasonably likely to be restrictive on the business
of any member of the Meditor Group or member of the Carpetright
Group;
No adverse changes etc
(F) save as Disclosed, since 27 April 2019:
(i) there having been no adverse change, and no other circumstance
having arisen which would or might be expected to result
in any adverse change, in the business, assets, financial
or trading position or profits or prospects of any member
of the Carpetright Group to an extent which is material
in the context of the Carpetright Group taken as a whole;
(ii) save for debt collection proceedings by a member of the
Carpetright Group, there not having been instituted or remaining
outstanding any litigation, arbitration proceedings, mediation
proceedings, prosecution or other legal proceedings to which
any member of the Carpetright Group is a party (whether
as claimant or defendant or otherwise) and no such proceedings
having been announced or threatened in writing against any
such member and no investigation by any government or governmental,
quasi-governmental, supranational, statutory, regulatory
or investigative body, authority or court (including any
anti-trust or merger control authority) against or in respect
of any such member or the business carried on by any such
member having been threatened in writing, announced, instituted
or remaining outstanding by, against or in respect of any
such member, in each case which is or might reasonably be
expected to be material in the context of the Carpetright
Group taken as a whole;
(iii) no receiver, administrative receiver or other encumbrancer
appointed over any of the assets of any member of the Carpetright
Group or any analogous proceedings or steps having taken
place under the laws of any jurisdiction and there having
been no petition presented or resolution passed for the
administration of any member of the Carpetright Group or
any analogous proceedings or steps having taken place under
the laws of any jurisdiction;
(iv) no contingent or other liability having arisen, become apparent
or having been incurred which would or might reasonably
be expected to adversely affect the business, assets, financial
or trading position or profits or prospects of any member
of the Carpetright Group to an extent which is material
in the context of the Carpetright Group, taken as a whole;
No discovery of certain matters
(G) save as Disclosed, MHL not having discovered that:
(i) any financial, business or other information concerning
any member of the Carpetright Group publicly disclosed at
any time is misleading, contains a misrepresentation of
fact or omits to state a fact necessary to make the information
contained therein not misleading; or
(ii) any member of the Carpetright Group is subject to any liability,
contingent or otherwise, existing at 27 April 2019, which
is not disclosed or reflected in the audited accounts of
Carpetright for the financial year ended on that date;
(H) save as Disclosed, MHL not having discovered that:
(i) any past or present member of the Carpetright Group has
not complied with all applicable legislation and regulations
of any jurisdiction, with regard to the use, storage, transport,
treatment, handling, disposal, discharge, spillage, release,
leak or emission of any waste or hazardous substance or
any substance likely to impair the environment or harm human
health or animal health or otherwise relating to environmental
matters, or that there has otherwise been any such disposal,
discharge, spillage, release, leak, or emission (whether
or not the same constituted a non-compliance by any person
with any such legislation or regulations and wherever the
same may have taken place) from any land or other asset
now or previously owned, occupied or made use of by any
past or present member of the Carpetright Group which would
be likely to give rise to any liability (whether actual
or contingent) on the part of any member of the Carpetright
Group and which is material in the context of the Carpetright
Group, taken as a whole;
(ii) there is, or is reasonably expected to be, any liability
(whether actual or contingent) to make good, repair, reinstate
or clean up any property or any controlled waters now or
previously owned, occupied, operated or made use of or controlled
by any past or present member of the Carpetright Group or
in which any such member may now or previously had an interest
under any environmental legislation, regulation, notice,
circular or order of any Third Party or otherwise; or
(iii) circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of
any product or process of manufacture or materials used
therein now or previously manufactured, sold or carried
out by any member of the Carpetright Group which claim or
claims would be likely materially and adversely to affect
any member of the Carpetright Group; and
Sanctions and anti-corruption
(I) no:
i. member of the Carpetright Group or any person that performs
or has performed services for or on behalf of any such company
is, or has at any time, engaged in any activity, practice
or conduct which would constitute an offence under the UK
Bribery Act 2010 or any other applicable anti-corruption
legislation;
ii. past or present member of the Carpetright Group has engaged
in any activity or business with, or made any investments
in, or made any payments to any government, entity or individual
covered by any of the economic sanctions administered by
the United Nations or the European Union (or any of their
respective member states) or the United States Office of
Foreign Assets Control or any other governmental or supranational
body or authority in any jurisdiction; or
iii. asset of any member of the Carpetright Group constitutes
criminal property as defined by section 340(3) of the Proceeds
of Crime Act 2002 (but disregarding paragraph (b) of that
definition).
3. Certain further terms of the Acquisition
3.1 The Acquisition will lapse if:
(a) the Acquisition or any matter arising from or relating to
the Scheme or Acquisition becomes subject to a Phase 2 CMA
Reference; or
(b) the European Commission either initiates proceedings under
Article 6(1)(c) of the EUMR or, following a referral by
the European Commission under Article 9(1) of the EUMR,
the Acquisition or any matter arising from or relating to
the Scheme or Acquisition therefrom becomes subject to a
Phase 2 CMA Reference,
in each case before the Court Meeting.
3.2 Subject to the requirements of the Panel, the Conditions in
2 above (with the exception of Condition 2(C)) may be waived
by MHL. The Conditions in 1 and 2(C) (inclusive) are not waivable.
Conditions 1(A) and 1(B) and Condition 2 must be fulfilled,
be determined by MHL to be or remain satisfied or, (if capable
of waiver) be waived by 0.00 am on the date of the Scheme Hearing.
3.3 If MHL is required by the Panel to make an offer for the Scheme
Shares under the provisions of Rule 9 of the Code, MHL may
make such alterations to any of the above Conditions and terms
of the Acquisition as are necessary to comply with the provisions
of that Rule.
3.4 MHL reserves the right, with the consent of the Panel, to elect
to implement the acquisition of the Scheme Shares by way of
a Takeover Offer as an alternative to the Scheme. In such events,
the offer will be implemented on the same terms (subject to
appropriate amendments), so far as applicable, as those which
will apply to the Scheme.
3.5 Under Rule 13.5(a) of the Code MHL may not invoke a Condition
unless the circumstances giving rise to the right to invoke
the Condition are of material significance to MHL. Conditions
1 and 2(C) (inclusive) are not subject to this provision of
the Code. Under Rule 13.6 of the Code, Carpetright may not
invoke or cause or permit MHL to invoke any condition unless
the circumstances which give rise to the right to invoke the
condition are of material significance to Carpetright Shareholders
in the context of the Acquisition.
3.6 The Acquisition and any dispute or claim arising out of or
in connection with it or its subject matter, whether of a contractual
or non-contractual nature, shall be governed by and construed
in accordance with the laws of England and Wales and subject
to the jurisdiction of the courts of England and Wales, and
to the Conditions set out in this announcement and in the Scheme
Document. The Acquisition will comply with the applicable rules
and regulations of the Code, the Panel, the Listing Rules,
the London Stock Exchange and the FCA.
3.7 Each of the Conditions will be regarded as a separate Condition
and will not be limited by reference to any other Condition.
APPIX 2
Irrevocable Undertakings and letter of intent
Irrevocable undertakings to vote in favour of the Scheme have
been given by the Directors and certain shareholders of Carpetright
in respect of 85,390,309 Scheme Shares. Together these represent
28.1% of the issued share capital of Carpetright.
Beneficial
holdings of Scheme
Name Shares
38,410,929 ordinary
Aberforth Partners LLP. shares.
20,020,440 ordinary
Majedie Asset Management shares.
11,311,773 ordinary
Investec Asset Management Limited. shares.
Jupiter Asset Management Limited, in its capacity
as discretionary investment manager in respect
of the Jupiter Absolute Return Fund, the Jupiter
Global Levered Absolute Return Fund and Jupiter 6,905,777 ordinary
Global Absolute Return Fund. shares.
7,985,666 ordinary
Soros Fund Management LLC. shares.
734,428 ordinary
Wilf Walsh. shares.
David Clifford. 21,296 ordinary shares.
85,390,309 ordinary
Total shares.
In the case of the irrevocable undertaking from Aberforth
Partners LLP, ("Aberforth"), Aberforth may transfer Scheme Shares
in certain circumstances and the irrevocable undertaking ceases to
bind any of the Scheme Shares to which it is subject to the extent
that such Scheme Shares are transferred by Aberforth as a result of
(i) a distribution to an investor in funds managed by Aberforth by
way of redemption in specie; (ii) a termination or amendment of
Aberforth's discretion to manage the assets of the relevant
investor; (iii) disposal at a price of 8 pence or higher, or (iv)
the shares being subject to stock lending (save that Aberforth has
agreed to endeavour to recall such Scheme Shares). The irrevocable
undertaking will cease to be binding if the Scheme Document has not
been posted within 28 days of this announcement, or the Scheme does
not become Effective or is withdrawn or an announcement is made
under Rule 2.7 of the Code in respect of a competing offer which
represents a value of 8 pence per Scheme Share or more.
On 31 October 2019, it was announced that Carpetright had
received a letter of intent from Majedie Asset Management Limited
("Majedie") to vote in favour of the Scheme. Majedie have now
entered into an irrevocable undertaking in respect of their Scheme
Shares. Majedie may transfer Scheme Shares in certain circumstances
and the irrevocable undertaking ceases to bind any Scheme Shares
which are so transferred. The irrevocable undertaking will cease to
be binding if: (i) the Scheme Document is not published within 28
days of this announcement; (ii) the Scheme does not become
Effective and in the event MHL does not announce that it intends to
implement the Acquisition by way of a Takeover Offer; or (iii) a
third party (that is, not MHL or any person acting in concert with
it) announces (in accordance with the Code) an offer which
represents an improvement of 25 (twenty-five) per cent. or more in
value of the price per Scheme Share specified in this announcement
(or in any improved subsequent offer made by MHL or any person
acting in concert with it).
On 6 November 2019, it was announced that Carpetright had
received a letter of intent from Investec Asset Management Limited
("Investec") to vote in favour of the Scheme. Investec have now
entered into an irrevocable undertaking in respect of their Scheme
Shares. Investec may transfer Scheme Shares in certain
circumstances and the irrevocable undertaking ceases to bind such
Scheme Shares which are transferred. The irrevocable undertaking
will cease to be binding if: (i) the Scheme Document is not
published within 28 days of this announcement; (ii) the Scheme does
not become Effective and MHL not having announced that it intends
to implement the Acquisition by way of a Takeover Offer; (iii) the
Carpetright Resolution is not passed; or (iv) there is a material
amendment to, or omission from, the Scheme Document.
In the case of the irrevocable undertaking from Jupiter Asset
Management Limited, in its capacity as discretionary investment
manager in respect of the Jupiter Absolute Return Fund, the Jupiter
Global Levered Absolute Return Fund and Jupiter Global Absolute
Return Fund ("Jupiter"), the irrevocable undertaking ceases to be
binding if: (i) if the Scheme Document is not published within 14
days of this announcement; (ii) a third party (that is, not MHL, a
Parent Undertaking or subsidiary undertaking or any person acting
in concert with it) announces (in accordance with the Code) an
offer to acquire all of the Scheme Shares which represents an
improvement of 10 (ten) per cent. or more in value of the price per
Scheme Share specified in this announcement; (iii) MHL announces it
does not intend to proceed with the Acquisition; (iv) the Scheme
does not become Effective by 17:00 (London time) on the Long-Stop
Date (or such later time as MHL and Carpetright (with the consent
of the Panel) agree; (v) there is a material change to the terms of
the Scheme; (vi) Jupiter's discretionary investment mandate in
respect of certain of its Scheme Shares is revoked or terminated
(in which case the irrevocable undertaking will continue to be
binding in respect of the remaining Scheme Shares); or (vii) the
Scheme not becoming Effective in circumstances where MHL has not
announced that it intends to implement the Acquisition by way of a
Takeover Offer.
On 31 October 2019, it was announced that Carpetright had
received a letter of intent from Soros Fund Management LLC
("Soros") to vote in favour of the Scheme. Soros have now entered
into an irrevocable undertaking in respect of their Scheme Shares.
Soros may transfer Scheme Shares in certain circumstances and the
irrevocable undertaking ceases to bind any of the Scheme Shares to
which it is subject to the extent that such Scheme Shares are
transferred by Soros. The irrevocable undertaking will cease to be
binding if: (i) the Scheme Document not being posted and the
General Meeting not convened within 28 days of this announcement;
or (ii) in the event of a higher competing offer at not less than 8
pence per Share or the Scheme is withdrawn or does not become
effective.
In the case of the irrevocable undertakings from Wilf Walsh and
David Clifford, the irrevocable undertakings will cease to be
binding if: (i) the Scheme Document has not been posted within 28
days of this announcement, or if MHL announces that it intends to
implement the Acquisition by way of a Takeover Offer, if an offer
document in respect of such Takeover Offer is not posted within 28
days of that announcement, or (ii) the Scheme does not become
Effective.
A letter of intent to accept the Acquisition has also been given
by Countrywide Developments Limited in respect of further Scheme
Shares. Together these Scheme Shares total 6,534,159, representing
2.2% of the issued share capital of Carpetright.
APPIX 3
Sources and Bases of Information
In this announcement, unless otherwise stated or the context
otherwise requires, the following bases and sources have been
used:
1. Historic share prices are sourced from the Daily Official List
and represent closing middle market prices for Carpetright Shares
on the relevant dates.
2. The value of the Acquisition has been calculated on the basis
of 303,787,164 Carpetright Shares in issue on 14 November 2019.
Any rights to acquire Scheme Shares under the Share Option Schemes
have not been taken into account in the calculation of the fully
diluted share capital of Carpetright because either: (i) the
options have a higher exercise price than the Acquisition Price
(and therefore are not expected to be exercised), (ii) any related
performance conditions are not expected to be achieved and/or
(iii) the vested options will be cash settled by Carpetright.
3. Unless otherwise stated, the financial information relating
to Carpetright contained in this announcement is extracted from
the audited published consolidated accounts of Carpetright for
the year ended 27 April 2019.
4. Certain figures included in this announcement have been subject
to rounding adjustments.
APPIX 4
Definitions
The following definitions apply throughout this announcement, unless
the context requires otherwise:
"Acquisition" the direct or indirect acquisition by MHL of
the entire issued and to be issued share capital
of Carpetright (save for the Excluded Shares),
to be implemented by means of the Scheme (or
by way of a Takeover Offer under certain circumstances
described in this announcement) and, where the
context requires, any subsequent revision, variation,
extension or renewal thereof.
"Acquisition Price" 5p in cash per Scheme Share.
"Articles of Association" the articles of association of Carpetright,
as amended from time to time.
"associated undertaking" has the meaning given to it by the Companies
Act.
"Authorisations" authorisations, orders, recognitions, grants,
consents, clearances, confirmations, certificates,
licences, permissions or approvals.
"Board" of directors of Directors.
"Brexit" has the meaning given to it in paragraph 4 of
this announcement.
"Business Day" any day (other than a Saturday or Sunday) on
which banks are open for business in London.
"Business Review" has the meaning given to it in paragraph 9 of
this announcement.
"Capital Injection" has the meaning given to it in paragraph 4 of
this announcement.
"Carpetright" Carpetright plc.
"Carpetright Group" Carpetright and its subsidiaries, subsidiary
undertakings and associated undertakings and
any other undertaking in which Carpetright and/or
any such undertakings (aggregating their interests)
have a significant interest.
"Carpetright Resolution" such shareholder resolution(s) of Carpetright
as is necessary to approve, implement and effect
the Scheme and the Acquisition, including (without
limitation) a resolution to amend the Articles
of Association by the adoption of a new article
(in terms approved by MHL) under which any Scheme
Shares issued or transferred after the General
Meeting shall either be subject to the Scheme
or (after the Scheme Effective Date) shall be
immediately transferred to MHL (or as it may
direct) in exchange for the same consideration
as is due under the Scheme.
"Carpetright Shareholders" holders of Carpetright Shares.
"Carpetright Shares" 303,787,164 ordinary shares of GBP0.01 each
in the capital of Carpetright.
"CMA" the Competition and Markets Authority, a UK
statutory body established under the Enterprise
and Regulatory Reform Act 2013.
"Code" the City Code on Takeovers and Mergers.
"Companies Act" the Companies Act 2006, as amended.
"Conditions" the conditions to the implementation of the
Acquisition, as set out in Appendix 1 to this
announcement and to be set out in the Scheme
Document.
"Court" the High Court of Justice in England and Wales.
"Court Meeting" the meeting of Carpetright Shareholders to be
convened pursuant to an order of the Court under
the Companies Act, notice of which will be set
out in the Scheme Document, for the purpose
of considering, and if thought fit, approving
the Scheme (with or without amendment), and
any adjournment, postponement or reconvening
of such meeting.
"CREST" the system for the paperless settlement of trades
in securities and the holding of uncertificated
securities operated by Euroclear.
"CVA" has the meaning given to it in paragraph 4 of
this announcement.
"Daily Official List" the Daily Official List published by the London
Stock Exchange.
"Debt Facilities" has the meaning given to it in paragraph 4 of
this announcement.
"Directors" the Executive Directors and the Non-Executive
Directors.
"Disclosed" the information fairly disclosed by, or on behalf
of, Carpetright: (i) in the annual report and
accounts of Carpetright for the financial year
ended 27 April 2019; (ii) in this announcement;
(iii) in any other announcement to a Regulatory
Information Service by, or on behalf of Carpetright
before the publication of this announcement;
or (iv) as otherwise fairly disclosed to Meditor
Fund or MHL (or their respective officers, employees,
agents or advisers) before the date of this
announcement.
"Disclosure Guidance the disclosure guidance and transparency rules
and Transparency published by the FCA.
Rules"
"EUMR" Council Regulation (EC) no. 139/2004.
"Euroclear" Euroclear UK and Ireland Limited.
"Excluded Shares" the 91,097,241 Carpetright Shares beneficially
owned by Meditor Fund as at the date of this
announcement (which for the avoidance of doubt
are not Scheme Shares).
"Executive Directors" Wilf Walsh and Jeremy Simpson.
"FCA" the Financial Conduct Authority acting in its
capacity as the competent authority for the
purposes of Part VI of the FSMA, or any successor
regulatory body.
"Forms of Proxy" the forms of proxy in connection with each of
the Court Meeting and General Meeting which
will accompany the Scheme Document.
"FSMA" the UK Financial Services and Markets Act 2000.
"FY" financial year.
"FY2018" has the meaning given to it in paragraph 4 of
this announcement.
"FY2019" has the meaning given to it in paragraph 4 of
this announcement.
"General Meeting" the general meeting of Carpetright Shareholders
(and any adjournment of it) to be convened in
connection with the Scheme to consider the Carpetright
Resolution, notice of which will be set out
in the Scheme Document.
"Latest Practicable 14 November 2019, being the last dealing day
Date" before the date of this announcement.
"Listing Rules" the listing rules and regulations made by the
FCA under FSMA, as amended from time to time.
"London Stock Exchange" London Stock Exchange plc.
"Long-Stop Date" 01 March 2020 or, in the event that the Scheme
has not become Effective on or prior to 01 March
2020 but the Conditions set out in paragraphs
1(A) and 1(B) of Appendix 1 have been satisfied
and the Conditions set out in paragraph (2)
of Appendix 1 have been satisfied (or waived
as applicable) or have not become incapable
of satisfaction, 31 March 2020 (or such later
date as may be agreed by Carpetright and MHL
(with the Panel's consent and, if required,
the Court's approval)).
"MAR" the European Union Market Abuse Regulation (Regulation
596/2014).
"Meditor Fund" Meditor European Master Fund Limited, a private
limited company incorporated in Bermuda under
number 25157.
"Meditor Group" Meditor Fund and MHL and their respective Parent
Undertakings, subsidiaries, subsidiary undertakings,
associated undertakings and any other undertaking
in which MHL or Meditor Fund and/or any such
undertakings (aggregating their interests) have
a significant interest.
"MHL" Meditor Holdings Limited, a private limited
company incorporated in England and Wales under
number 12306373 and having its registered office
at Prince Albert House, 18A King Street, Maidenhead,
Berkshire SL6 1EF.
"Non-Executive Directors" Bob Ivell, Pauline Best, Jemima Bird and David
Clifford.
"Official List" the Official List maintained by the FCA in its
capacity as the UK's listing authority.
"Opening Position has the same meaning as in Rule 8 of the Code.
Disclosure"
"Option Holders" holders of options under the Share Option Schemes.
"Overdraft Facilities" has the meaning given to it in paragraph 4 of
this announcement.
"Overseas Shareholders" Shareholders (or nominees of, or custodians,
trustees or guardians for Carpetright Shareholders)
resident in, or nationals or citizens of, a
jurisdiction outside the UK.
"Panel" the Panel on Takeovers and Mergers.
"Parent Undertaking" a parent undertaking as defined in section 1162
of the Companies Act.
"Phase 2 CMA Reference" a decision by the CMA to refer the Acquisition
or any part of it under section 33 of the Enterprise
Act 2002 (as amended).
"Placing and Open has the meaning given to it in paragraph 4 of
Offer" this announcement.
"RCF" has the meaning given to it in paragraph 4 of
this announcement.
"Refinancing" has the meaning given to it in paragraph 4 of
this announcement.
"Registrar of Companies" the Registrar of Companies in England and Wales.
"Regulatory Information any of the services set out in Appendix 1 to
Service" the Listing Rules.
"Restricted Jurisdiction" any jurisdiction where extension or acceptance
of the Acquisition would violate the law of
that jurisdiction.
"Restructuring" has the meaning given to it in paragraph 4 of
this announcement.
"Scheme" the proposed scheme of arrangement under Part
26 of the Companies Act between Carpetright
and Scheme Shareholders to effect the Acquisition
(with or subject to any modification, addition
or condition approved or imposed by the Court
and agreed by Carpetright and MHL).
"Scheme Court Order" the order of the Court sanctioning the Scheme.
"Scheme Document" the document proposed to be sent to Carpetright
Shareholders and Option Holders (for information
purposes) containing, amongst other things,
the terms and conditions of the Acquisition
(including the Scheme) and certain information
about MHL and Carpetright.
"Scheme Effective the date on which either: (i) the Scheme becomes
Date" effective in accordance with its terms; or (ii)
(if MHL elects to implement the Acquisition
by way of a Takeover Offer), the date on which
such Takeover Offer becomes or is declared unconditional
in all respects in accordance with the requirements
of the Code, and "Effective" shall be construed
accordingly.
"Scheme Hearing" means the hearing of the Court to sanction the
Scheme under s899 of the Companies Act.
"Scheme Record Time" the date and time specified in the Scheme Document
as the Scheme Record Time, expected to be 6.00
pm on the Business Day immediately preceding
the Scheme Effective Date.
"Scheme Shareholder" a holder of Scheme Shares.
"Scheme Shares" all Carpetright Shares which remain in issue
at the Scheme Record Time and are:
(i) in issue at the date of the Scheme Document;
(ii) issued (if any) after the date of the Scheme
Document and before the Voting Record Time;
or
(iii) issued (if any) at or after the Voting Record
Time but at or before the Scheme Record Time
on terms that the holder thereof shall be
bound by the Scheme or in respect of which
the original or any subsequent holders
thereof
are, or have agreed in writing to be, bound
by the Scheme,
excluding, in each case, the Excluded Shares.
"Share Option Schemes" the Carpetright Long Term Incentive Plan 2013
and the Carpetright Sharesave Plan 2013.
"significant interest" in relation to an undertaking, a direct or indirect
interest of 20%, 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.
"subsidiary", "subsidiary the respective meanings given to them by the
undertaking", "undertaking" Companies Act.
"Takeover Offer" a takeover offer as defined in Chapter 3 of
Part 28 of the Companies Act.
"Third Party" each of a central bank, government or governmental,
quasi-governmental, supranational, statutory,
regulatory, environmental, administrative, fiscal
or investigative body, court, trade agency,
association, institution, environmental body,
employee representative body or any other body
or person whatsoever in any jurisdiction (save
for the avoidance of doubt any member of the
Carpetright Group).
"UK" the United Kingdom of Great Britain and Northern
Ireland.
"United States" or the United States of America, its territories
"US" and possessions, any state of the United States
of America and the District of Columbia and
all other areas subject to its jurisdiction
and any political sub-division thereof.
"US Exchange Act" the United States Securities Exchange Act of
1933, and the rules and regulations promulgated
thereunder.
"Voting Record Time" the date and time specified in the Scheme Document
by reference to which entitlement to vote at
the Court Meeting will be determined, expected
to be 6.00 pm on the day which is two days before
the Court Meeting or, if the Court Meeting is
adjourned, 6.00 pm on the day which is two days
before the date of such adjourned Court Meeting.
All references to "pounds", "pounds Sterling", "Sterling",
"GBP", "pence", "penny" and "p" are to the lawful currency of the
UK.
All the times referred to in this announcement are London times
unless otherwise stated.
References to the singular include the plural and vice
versa.
Black&Callow - c115942
1 Note: please refer to paragraph 2 of Appendix 3 (Sources and
Bases of Information) to this announcement.
3 "normal commercial terms" within the meaning in Chapter 11 of
the Listing Rules.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
OUPFFSSMIFUSELF
(END) Dow Jones Newswires
November 15, 2019 02:00 ET (07:00 GMT)
Carpetright (LSE:CPR)
Gráfica de Acción Histórica
De Nov 2024 a Dic 2024
Carpetright (LSE:CPR)
Gráfica de Acción Histórica
De Dic 2023 a Dic 2024
