TIDMHGV
RNS Number : 4156E
Hasgrove PLC
10 May 2013
10 May 2013
Hasgrove plc
GBP10.25m cash return by Tender Offer at 82p per share and
De-Listing
Hasgrove plc (AIM: HGV, 'Hasgrove', the 'Group' or the
'Company'), the digital and communications services group,
announces a cash return of up to GBP10.25m by a tender offer at 82
pence per share and a proposal to cancel its admission to AIM.
Headlines
-- Return up to GBP10.25m to Shareholders by way of a Tender Offer
-- Tender Offer at 82 pence per Ordinary Share, representing:
o 31% premium to the Closing Price of 62.5 pence per share on 8
March 2013, the last business day prior to the announcement of the
Amaze disposal and disclosure of the intention to return cash to
Shareholders
o 7.2% premium to the Closing Price of 76.5 pence per share on 9
May 2013
-- Conditional cancellation of trading in shares on AIM but
Shareholders will have the opportunity to keep their holdings in a
private company
-- The Group has also published its final results for the year
ended 31 December 2012 which include revenue of GBP24.9m, pre-tax
profit of GBP1.1m and basic EPS of 5.5 pence per share - see
separate statement.
Paul Sanders, Group Chief Executive, said:
"We are now providing all Shareholders with a cash return option
at 82 pence per share - a 31% premium to the share price when we
sold Amaze in March.
"The business is now not large enough to justify the costs nor
benefit from a listing and therefore the Board has decided to
delist the shares from AIM. However, Shareholders will have the
option to keep their shares in a private company."
Enquiries:
Hasgrove plc
Paul Sanders, Group Chief Executive 0161 927 3222
Peel Hunt LLP (Nominated adviser and
broker)
Richard Kauffer/Daniel Harris 020 7418 8900
College Hill
Adrian Duffield/Rozi Morris 020 7457 2020
Tender Offer by Peel Hunt to purchase Ordinary Shares at 82
pence per Ordinary Share
Cancellation of Reserves
Cancellation of Admission of Ordinary Shares to Trading on
AIM
Re-registration as a Private Limited Company
Introduction
On 11 March 2013 the Directors announced that they were
considering returning to Shareholders part of the proceeds of the
sale of Amaze. Completion of the sale of Amaze took place on 28
March 2013 and following such disposal the Company is now proposing
that:
-- the Company return a total of up to GBP10.25m to Shareholders by way of a Tender Offer to all Shareholders;
-- Peel Hunt purchase Ordinary Shares at a price of 82 pence per
Ordinary Share by way of Tender Offer (which will then be purchased
on market by the Company and cancelled);
-- the Company effect a Cancellation of Reserves so as to be able to implement the Tender Offer;
-- conditional on successful completion of the Tender Offer, the
Company cancel the admission of its Ordinary Shares to tradingon
AIM (expected to take place on 12 July 2013), re-register as a
private limitedcompany and adopt new Articles of Association.
The Board is returning the maximum amount of cash to Qualifying
Shareholders which the Board considers prudent whilst retaining
sufficient funds in the Group to allow for investment, to pay off
the Group's bank debt and to provide working capital to allow
remaining Shareholders to benefit from the future prospects of the
Group. Shareholders arenot obliged to tenderall or any of their
Ordinary Shares if they do not wish to do so.
The Company does not have the distributable reserves required to
effect the Tender Offer and therefore the Tender Offer is
conditional on the Cancellation of Reserves being approved by
Shareholders and confirmed by the Court so that the necessary
distributable reserves are created. In addition, the other
Proposals also require the approval of Shareholders.
Following completion of the Tender Offer, for the reasons set
out below, the Board believes that it is in the best interests of
the Company to cancel the admission of the Ordinary Shares to
tradingon AIM, re-registerthe Company as a private limitedcompany
and adopt the New Articles.
The Company has announced today its results for the year ended
31 December 2012, which are available on the Company's website
(www.hasgrove.com).
A circular ("the Circular") which sets out full details of the
Cancellation of Reserves, the Tender Offer, the proposed
cancellation of admission to trading on AIM, the Company's
re-registration as a private limited company and the adoption of
the New Articles and explains why the Board believes these
Proposals to be in the best interests of Shareholders as a whole,
is being sent to Shareholders today.
It should be noted that unless all the resolutions are approved
as special resolutions at the General Meeting and the Court
confirms the Cancellation of Reserves), the Tender Offer will not
take place and the De-Listing and Re-registration will not occur as
currently proposed.
Background to and reasons for the Proposals
Hasgrove acquired a number of digital businesses between 2007
and 2009 and has since completed the integration and restructuring
of these businesses. This resulted in Hasgrove owning two
divisions: digital and communication services, which included
Amaze, Interact and The Chase, and public affairs and strategic
communications, operating as Interel.
In July 2011, Interel, the public affairs and strategic
communications division was sold to its management team for a total
cash consideration of EUR9.55m (GBP8.45m).
On 28 March 2013, the Company completed the sale of Amaze to St
Ives Marketing Services Limited (a wholly owned subsidiary of St
Ives Plc). The consideration comprised GBP12,549,161 initial
consideration payable in cash on completion. In addition, Deferred
Consideration is payable by the purchaser in cash in an amount
equal to 7.5 times the profit of Amaze and its subsidiary entities
in the year ending 31 December 2013 less the sum of GBP15,279,172
and any deferred payment to be made by Amaze in respect of the
acquisition of the business and assets of Amaze (UK) LLP subject to
a maximum payment of GBP25.0m. In addition, Amaze agreed to repay
to the Company an intercompany debt of GBP1,780,007 and has also
made a payment of GBP950,004 to Amaze (UK) LLP in consideration for
the acquisition by Amaze of the business and assets of Amaze (UK)
LLP.
Following the Disposal of Amaze, the Group comprises three
trading subsidiaries: Interact, The Chase and Landmarks. As set out
in the Disposal Circular, for the year to 31 December 2012, the
Group generated a combined GBP7.5m in revenues and GBP0.5m of
operating profit (before central adjustments) and employed
approximately 95 staff. The Group has current debt of EUR2.03m.
The net proceeds of the Disposal (after expenses) has realised a
total of GBP13,743,695 in cash of which GBP1.6m is held in escrow
pursuant to the Amaze Sale Agreement as security for any warranty
or indemnity claim under the Amaze Sale Agreement. Further funds
may be received if any Deferred Consideration is paid.
The Board, in its review of strategic alternatives for the
Group, has taken into account the current financial position and
needs, prospects and size of the Group, the amount of net proceeds
of the Disposal and prospective deferred consideration and relative
benefits of operating as a private limited company compared to the
ongoing costs and demands of maintaining a listing on AIM.
The Board has also taken into account the views of the Company's
institutional Shareholders, as well as assessing the position of
the Shareholders as a whole. In particular, certain of the
Company's institutional Shareholders have explicitly expressed a
desire for a return of a substantial portion of the Company's
available cash to Shareholders.
Accordingly, the Board is proposing to return up to GBP10.25m to
Shareholders representing approximately 74.6 per cent of the net
proceeds of the Disposal with the balance to be used for investment
into the Group's business for expansion and working capital
requirements and EUR2.03m to fully repay the Group's bank
loans.
Tender Offer
The Board considers that the Tender Offer:
-- provides an opportunity for Qualifying Shareholders to tender
their Ordinary Shares prior to the De-Listing and
Re-registration;
-- provides Small Shareholders with the opportunity to liquidate
the entirety of their holding;
-- allows Qualifying Shareholders the opportunity to dispose of
Ordinary Shares in a tax efficient manner, free of dealing costsand
stamp duty (which will be borne by the Company);
-- gives Qualifying Shareholders the ability to tender all or
some Ordinary Shares held by them (but, in the case of Large
Shareholders, subject in either case to scaling-back in the event
that the Tender Offer is over-subscribed) or to tender none of
their Ordinary Shares, depending on their own liquidity
requirements and their view of the prospectsof the Group going
forward; and
-- provides a return of cash now, compared to the alternative of solely being exposed to the financialrisks of the ongoing operations of the Group, which could substantially diminish, or even eliminate, the remaining cash held by the Company following the Tender Offer.
The Tender Offer Price represents:
-- a premium of 31 per cent. to the Closing Price of 62.5 pence
per share on 8 March 2013, the last Business Day prior to the
Company's announcement of the Disposal and disclosing the intended
return of cash to Shareholders; and
-- a premium of 7.2 per cent. to the Closing Price of 76.5 pence
per share on 9 May 2013, being the last Business Day prior to the
publication of the Circular.
Details of the Tender Offer
Qualifying Shareholders have the opportunity to tender some or
all of their Ordinary Shares for 82 pence in cash per Ordinary
Share. The Tender Offer will provide all Qualifying Shareholders
with an opportunity to tender part or all of the respective
shareholdings (subject to the maximum aggregate number of Ordinary
Shares which may be purchased in the Tender Offer of 12,500,000
Ordinary Shares) and to receive their respective share of the cash
which the Company is seeking to return to Shareholders.
The Ordinary Shares purchased under the Tender Offer will be
cancelled once purchased by the Company pursuant to the terms of
the Repurchase Agreement. The issued share capital of the Company
at 9 May 2013, being the last Business Day prior to the posting of
the Circular, was 23,719,141 Ordinary Shares.
In addition, in the event that Optionholders choose to exercise
outstanding options in full and become Qualifying Shareholders, the
Company will be required to issue up to a further 559,872 Ordinary
Shares to satisfy such options, which would result in there being a
total of 24,279,013 Ordinary Shares in issue and eligible for
participation in the Tender Offer. Details of the impact of those
options in the money at the Tender Offer Price are set out
below.
If the Tender Offer is fully taken up by Qualifying
Shareholders, resulting in the purchase of 12,500,000 Ordinary
Shares, there will be a reduction in the issued Ordinary Share
capital of the Company to 11,799,013 Ordinary Shares (if all
options have been exercised) and will be further reduced following
cancellation of the 1,163,149 Ordinary Shares on or after 14 July
in relation to the sale of Interel, details of which are set out
below.
Full details of the Tender Offer, including the terms and
conditions on which it is made, are set out in Part 2 of the
Circular.
Under the Tender Offer:
-- Peel Hunt will purchase all Ordinary Shares that are validly
tendered (up to a maximum number of 12,500,000 Ordinary Shares at
82 pence per Share (equivalent to an aggregate value of
approximately GBP10.25m));
-- all Qualifying Shareholders are being given the opportunity to participate;
-- Qualifying Shareholders can tender none, all or some of their
Ordinary Shares (subject, in the case of Large Shareholders, to
scalingback in the event that the Tender Offer is
over-subscribed);
-- all Ordinary Shares purchased by Peel Hunt will be purchased
at a price of 82 pence per Ordinary Share (subjectto rounding down
to the nearest penny) free of commissions and dealing charges;
-- all Ordinary Shares purchased by Peel Hunt under the Tender
Offer will be subsequently purchased bythe Company at a price of 82
pence per Ordinary Share under the terms of the Repurchase
Agreement;
-- if the Tender Offer is oversubscribed, all tenders from Small
Shareholders will be first accepted in full. Thereafter tenders
from Large Shareholders will be pro-rated. However, those Small
Shareholders who do not tender all their Ordinary Shares will be
pro-rated in the same manner as Large Shareholders; and
-- all Ordinary Shares purchased by the Company from Peel Hunt
under the terms of the RepurchaseAgreement will be cancelled and
willnot rank for any dividends declared after, or whose record date
is after, the date of the Circular.
Cancellation of Reserves
The Company does not currently have the distributable reserves
required to complete the Tender Offer. Therefore, in order to
create the distributable reserves required to enable the purchase
of Ordinary Shares by the Company underthe Tender Offer, it is
proposed that GBP8.0m of the amount standing to the credit of the
share premiumaccount of the Company as at 5p.m. on 9 May 2013
should be cancelled.
De-Listing
The Board has also concluded that it would be in the best
interests of the Company to cancel trading in the Company's shares
on AIM. The Board believes that the costs and regulatory
requirements associated with maintaining the Company's listingare a
significant burden on the Company's financial resources. These
costs include fees paid to the Company's brokers and Registrars,
annual fees paid to the London Stock Exchange, costs relating to
public announcements, fees and expenses of Directors and fees and
expenses of accountants and lawyers engaged to provide services in
connection with the Ordinary Shares being admitted to AIM.
In addition tothe overheads involved in maintaining the
Company's listing:
-- the Company has seen limited trading volume in Ordinary
Shares, with an average daily volume of 16,989 Shares over the
last12 months;
-- the Board considersthat the Company's size (particularly
following the Disposal) and share price increase the difficulty of
raisingany further equity capital on AIM; and
-- given its relatively small size, Hasgrove is unlikely to
benefit from anynew institutional investors or additional analyst
interest in the secondary market.
Therefore, the Board believes that the costs of the Company's
current listing outweigh the benefits and that, accordingly, it
would be in the best interests of the Company and Shareholders as a
whole if the Company's admission to tradingon AIM were cancelled.
The Company will submit a notice to cancel the listing on AIM
shortly after the General Meeting(assuming that the relevant
Resolution is passed and the other conditions to the Tender Offer
are satisfied).
The principal effects that the De-Listing would have on
Shareholders areas follows:
-- there would no longer be a formal market mechanism enabling
Shareholders to trade their Ordinary Shares through the market.
Share transfers may still be effected after the date of De-Listing,
either through the CREST system or by depositing a duly executed
and stamped stock transfer form together with an appropriate share
certificate with the Company secretary at the registered office of
the Company. While the Ordinary Shares will remain freely
transferable, theymay be more difficult to sell compared to shares
of companies listed on AIM. It may also bemore difficult for
Shareholders to determine the market value of their stockholdings
in the Company at any given time;
-- the Company would not be bound to announce material events,
nor to announce interimor final results;
-- the Company would nolonger be required to comply with many of
thecorporate governance requirements applicable to UK-listed
companies;
-- the Company would no longer be subject to the Disclosure
Rules and Transparency Rules of the Financial Conduct Authority and
would therefore no longer be required to disclose major
shareholdings in the Company;
-- the Company would nolonger be subject to the AIM Rules.
Shareholders would therefore no longer be afforded the protections
given by the AIM Rules. Such protections include the requirement to
be notified of certain events including, amongst other things,
substantial transactions (the size of which results in a 10 per
cent. threshold being reached underany one of the class tests) and
related party transactions and the requirement toobtain shareholder
approval forreverse takeovers (the size of which results in a 100
per cent. threshold being reached under any one of the class tests)
and fundamental changes in the Company's business;
-- the cancellation might have either positive or negative
taxation consequences for Shareholders;
-- the Company would remain subject to English company law,
which mandates shareholder approval forcertain matters;and
-- the Company would remainsubject to the provisionsof the
Takeover Code for 10 years following De-Listing.
The Company will continue to communicate information about the
Company (including annual accounts and other financialinformation)
to its Shareholders.
Shareholders should be aware that if the De-Listing takes
effect, they will at that time cease to hold shares in a Company
whose shares are admitted to trading on AIM and the matters set out
above will automatically apply to the Company from the date of
De-Listing.
Re-registration
Following the De-Listing, the Board believes that the
requirements and associated costs of the Company maintaining its
public company status will be difficult to justifyand that the
Company will benefit from the more flexible requirements and lower
costs associated with private limited company status. It is
therefore proposed to re-registerthe Company as a private
limitedcompany.
Group Strategy post Completion
Following completion of the Proposals, Hasgrove will own three
trading subsidiaries Odyssey Interactive Limited (trading as
'Interact'), The Chase Creative Consultants Limited and Landmarks
SA. The Board believes that these businesses address key market
segments and offer growth potential. Some of the net Disposal
proceeds will be invested to accelerate the growth of Interact,
particularly outside of the UK.
Interact
As reported separately today in the Group's final results for
the year ended 31 December 2012, last year saw a substantial
increase in overall revenue with key increases in new business
software sales and recurring support revenue. This was due partly
to the launch of sales activity in the US market, early in
2012.
Interact is a leading supplier of intelligent intranet software.
Organisations using Interact Intranet report improved efficiency,
greater productivity, increased employee engagement, better
decision-making and cost savings.
In spite of the increased sales, operating profits were flat in
2012 due to a number of non-recurring items including:
-- Significant investment in product development resulting in
the launch of Interact Intranet 7 on 30 April, which is a SaaS
(Software as a Service) product which can be hosted in the
Cloud
-- A more conservative approach to the recognition of support
income which resulted in the amount of deferred income held on the
balance sheet increasing by GBP0.3m
-- The incremental write-off of intangible Research and
Development costs of GBP0.1m due to the new product launch
Interact has benefitted significantly from its entry into the US
market in early 2012. This, together with increased enterprise
sales in Europe and Australia has complemented its already strong
UK base. During the year, Interact added Age UK, Flight Centre,
Lease Plan, G4S Americas, Midland Co-op and Signet Trading to its
client list.
The Chase and Landmarks
The Chase is an award-winning creative design agency. In view of
the fact that one of the Chase's largest clients for the previous
three years stopped spending due to internal issues, the
performance of The Chase during the second half of 2012 has been
very encouraging particularly in light of new business wins.
The Chase has always placed highly in the annual Design Week
creative leagues tables. In 2012 it was named as the overall winner
for the first time, whilst also being placed first in the print and
branding categories.
Landmarks, which is based in Brussels, is a relatively small
design business that continues to contribute to profits.
Shareholder Considerations in relation to the Proposals
Following completion of the Tender Offer and the De-Listing,
those Shareholders who retain shares in the Company will be
Shareholders in an unlisted private limited company, the value of
which is uncertain.
In order to assist Shareholders in electing how many shares to
tender in the Tender Offer, the Board has made an estimate of the
value of a share in the context of the Proposals. This estimate is
based upon financial and commercial information available to Board
at the date of the Circular as well as a number of factors and
assumptions about the assets liabilities and performance of the
Hasgrove business following completion of the Proposals. The Board
has also applied certain theoretical valuation techniques which are
by their nature subject to interpretation and the Board's own
judgement about the most appropriate methodology to apply.
-- Existing Cash
Immediately following completion of the Proposals, the Company
is expected to have cash and cash equivalents of GBP4.8m after
repayment of existing debt, payment for the assets of Amaze (UK)
LLP and costs of the Disposal and the Proposals.
-- Retention
Of such GBP4.8m, a retention of GBP1.6m has been retained
against warranties and indemnities under the Amaze Sale Agreement.
Claims are capped at the purchase price and must be brought no
later than 30 September 2014 in relation to the warranties and by
28 March 2020 under the tax indemnity. As at the date of the
Circular, no claims have as yet been received. The balance of the
retention after deduction for any agreed claims (if any) will be
released on 1 October 2014
-- Amaze Deferred Consideration
Under the terms of the Amaze Sale Agreement, the buyer has
agreed to pay a deferred consideration to the Company in an amount
equal to a multiple of 7.5x group profit, defined as earnings
before interest, tax and depreciation, for Amaze for the year
ending 31 December 2013 less the gross proceeds of the Disposal
(being GBP15,279,168) and less other deferred payments made by
Amaze in respect of the acquisition of the business and assets of
Amaze (UK) LLP. The maximum amount payable under the agreement is
GBP25.0m.
Since the deferred payment is dependent on the future
profitability of a business which is inherently uncertain, and
given that the Board is no longer in control of Amaze following the
Disposal and does not have access to ongoing full financial
information about Amaze, it is difficult for the Board to give a
meaningful estimate of what the likely deferred consideration will
be. However, based upon performance of Amaze in previous years and
its expectations of the market and likely clients and costs of the
business going forward the Board believes that the Deferred
Consideration payable will be in range from GBP0 - 1.80m.
-- Interel Deferred Consideration
Under the terms of the disposal of Interel, the Company's former
public affairs and strategic communications division, announced on
15 July 2011, the Company is due to be paid EUR375k on the second
anniversary of completion, being 14 July 2013. In addition, under
the terms of the agreement, the Company was due to be paid
additional deferred consideration of EUR1,163,149 secured through a
charge over the buyer's holding of 1,163,149 Ordinary shares
("Consideration Shares"). The Company agreed that such payment be
satisfied by the return of the Consideration Shares which would
then be cancelled. This is expected to take place on or after 14
July 2013. As a result, the number of Ordinary Shares in issue
following such cancellation will be reduced accordingly.
-- Dividend Payment
As announced today, the Company is proposing a dividend of 2.0p
per share payable on 30 August to all Shareholders on the register
at 2 August 2013 subject to approval at the AGM of the Company.
-- Option Exercise
Prior to this announcement, the Company had in issue options
over a total of 559,972 Ordinary Shares at exercise prices ranging
from GBP0.10 to GBP1.425. At exercise prices ranging from GBP0.10
to GBP0.78 and to the extent that all 469,872 options which are in
the money at the Tender Offer price are exercised, an additional
GBP0.2m of cash may be received by the Company on exercise.
-- Value of Retained Businesses
The financial position of each of the remaining businesses:
Interact, the Chase and Landmark is set out below based upon the
information set out in Final Results announced today relating to
the 12 month period ended 31 December 2012.
Business Revenues (GBPm) % Total Operating % Total
revenues Profit* Operating
Profit
----------- ---------------- ---------- ---------- -----------
Interact 3.4 45.9 0.5 83.3
----------- ---------------- ---------- ---------- -----------
The Chase 2.6 35.1 0.0 0.0
----------- ---------------- ---------- ---------- -----------
Landmarks 1.4 19.0 0.1 16.7
----------- ---------------- ---------- ---------- -----------
Total 7.4 100 0.6 100
----------- ---------------- ---------- ---------- -----------
*excludes central costs
Based upon the Board's reasonable expectations of the
performance and earnings of the Group's businesses going forward
and applying theoretical valuation techniques, the Board estimates
that the value of the remaining share capital of the Company at
between GBP8.0-8.5m, assuming the Tender Offer is taken up in
full.
As a result,the value of an Ordinary Share immediately following
the Tender Offer (assumingthe maximum number ofOrdinary Shares of
12,500,000 OrdinaryShares is tendered and therefore available for
cancellation) is approximately 82 pence per Ordinary Share,
calculated by dividing Board's valuation of the Company by the
11,779,013 Ordinary Shares that would remain in issue at that time
(assuming the allotment of the maximum number of Ordinary Shares to
Optionholders).
As mentioned above the Board has made a number of assumptions
about the valuation of the Company. These are based upon
expectations of future outcomes which are by their nature
uncertain. If the assumptions made by the Board prove too
optimistic in valuing the business, it is possible that the actual
value of Hasgrove will be less than the impliedvalue. Similarly if
the assumptions prove too pessimistic the actual value of Hasgrove
mayexceed the impliedvalue.
Accordingly, as well as considering the benefits of holding
Ordinary Shares in the Company following the Tender Offer,
Shareholders should also consider the risks associated with
non-acceptance and retaining a larger proportionate holding in the
Company. These will include:
-- Whether the deferred consideration is higher or lower than
expected which is dependent a number of factors which impact the
likely amount receivable.
-- The possibility of any claims being made for breach of
warranty or indemnity under the Amaze Sale Agreement, although the
Board is not currently aware of any circumstances that could lead
to a breach of the warranties or indemnities under the Amaze Sale
Agreement. Whilst the Board will vigorously defend any such claims
as necessary, there is no certainty the Company will be successful
and the defence of such claims may be costly.
-- The performance of the retained business continuing to be in
line with the Board's expectations forming the basis of the
valuation of the business.
-- Following the De-Listing, Shareholders will hold shares in an
unlisted entity and therefore there will no longer be a market for
such shares. Accordingly, as set out above it may be difficult to
sell Ordinary Shares following the De-Listing. However, in order to
mitigate the impact of the loss of liquidity following the
De-listing, the Company has appointed James Sharp & Co to
operate a matched bargain facility as a trading mechanism for the
Company's shares. Further details are set out below.
-- Although the Company will be subject to the Takeover Code for
a period of 10 years following the De-listing, the Company will not
be subject to the disclosure, corporate governance and shareholder
protection requirements of an exchange such as AIM.
However, Hasgrove Shareholders by tendering their Ordinary
Shares in full will have no future equity participation in the
Company. To the extent that there is any payout in respect of the
Deferred Consideration, Shareholders who tender all their Ordinary
Shares will have no participation in such Deferred Consideration.
They will also not receive the dividend of 2.0p per share as
announced today. In addition they will have no benefit of the
growth, profitability or dividends generated by the Company
following completion of the Proposals.
Board Changes following De-Listing
As the Company will be an unlisted company, the Board considers
that the services of Peter Cookson and Jean Leopold-Schuybroek as
Non-Executive Directors will no longer be appropriate. Therefore,
both will resign as a Directors when the De-Listing takes effect.
Godfrey Taylor will remain as Non-Executive Chairman and Paul
Sanders will continue leading the Company as Chief Executive.
Trading Mechanism Post Cancellation
In order to allow the continuation of trading in Hasgrove shares
following the De-Listing, James Sharp & Co has been appointed
by the Company to operate a matched bargain facility.
Current trading and prospects
Interact, The Chase and Landmarks have traded steadily since the
end of the last financial year and the good sales performance of
Interact last year has continued into the first quarter. Following
the successful launch of Interact Intranet 7, which can be hosted
in the Cloud, on 30 April the Board are optimistic about the future
prospects.
Directors' intentionsin relation to the Tender Offer
Each of the Directors are proposing to tender their shares in
the amounts and with the resulting proportionate holding in the
Company post Tender Offer set out below.
Director Number of % Number of Number of Ordinary %*
Ordinary Shares Ordinary Shares after
prior to the Shares to the Tender
Tender Offer be tendered Offer*
---------------- ----------------- ----- ------------- ------------------- -----
Godfrey Taylor 2,630,000 11.2 630,000 2,000,000 17.0
---------------- ----------------- ----- ------------- ------------------- -----
Jean Leopold
Schuybroek 1,030,000 4.4 1,030,000 Nil Nil
---------------- ----------------- ----- ------------- ------------------- -----
Paul Sanders 171,000 0.7 71,000 100,000 0.9
---------------- ----------------- ----- ------------- ------------------- -----
Peter Cookson 537,246 2.3 537,246 Nil Nil
---------------- ----------------- ----- ------------- ------------------- -----
*assumes no scaling back of the amount tendered.
Irrevocable Undertakings
The Directors and other Shareholders have given undertakings to
vote in favour of the Resolutions to approve the Proposals at the
General Meeting, in respect of 11,718,679 Ordinary Shares,
constituting 49.4% of the issued ordinary share capital of the
Company. The Directors have given the following undertakings that
amount to 4,368,246 shares (18.4%):
Shareholder Number Percentage
of Ordinary of issued
Shares share capital
---------------------------------------- ------------- ---------------
Godfrey Taylor, Non-Executive Chairman
(Held in Pension Fund) 2,630,000 11.1%
---------------------------------------- ------------- ---------------
Jean Leopold Schuybroek, Non Executive
Director 1,030,000 4.3%
---------------------------------------- ------------- ---------------
Paul Sanders, Chief Executive 171,000 0.7%
---------------------------------------- ------------- ---------------
Peter Cookson, Non-Executive Director 537,246 2.2%
---------------------------------------- ------------- ---------------
Recommendation
The Directors consider that the Proposals are in the best
interests of the Company and the Shareholders as a whole.
Accordingly, the Directors unanimously recommend that Shareholders
vote in favour of the Resolutions as they intend to do in respect
of the 4,368,246 Ordinary Shares currently beneficially owned or
controlled by them in aggregate, which represent approximately 18.4
per cent of the existing issued share capital of the Company.
The Directors are making no recommendation to Qualifying
Shareholders in relation to participation in the Tender Offer
itself.
Definitions
"AIM" AIM, a market operated by the London
Stock Exchange
"AIM Rules" the AIM rules for companies published
by the London Stock Exchange from time
to time
"Amaze" Amaze Plc, former wholly owned subsidiary
of the Company and sold to St Ives Marketing
Services Limited by the Company on 28
March 2013
"Amaze Sale Agreement" Amaze Plc, former wholly owned subsidiary
of the Company and sold to St Ives Marketing
Services Limited by the Company on 28
March 2013
"Board" or "Directors" the directors of the Company
"Cancellation of Reserves" the proposed cancellation of GBP8.0m
of the amount standing to the credit
of the Company's share premium account
as more particularly described in Part
1 of the Circular
"Circular" the Circular sent to Shareholders today
in relation to the Proposals
"Closing Price" means middle market closing price of
an Ordinary Share as derived from the
AIM supplement to the Daily Official
List
"Court" the High Court of Justice in England
and Wales
"Deferred Consideration" the additional consideration payable
in relation to the Disposal on the basis
of certain performance criteria in the
terms and manner set out in the paragraph
headed "Background to and reasons for
the Proposals" in Part 1 of the Circular.
"De-Listing" the cancellation of admission of the
Ordinary Shares to trading on AIM
"Disposal" the sale of the entire issued share
capital of Amaze to St Ives Marketing
Services Limited on 28 March 2013
"Disposal Circular" the circular to Shareholders in relation
to the Disposal dated 11 March 2013
"General Meeting" the General Meeting of the Company convened
for 11.00 a.m. on 28 May 2013 and any
adjournment thereof
"Group" Hasgrove and its subsidiaries
"Large Shareholder" a Qualifying Shareholder who is not
a Small Shareholder
"London Stock Exchange" London Stock Exchange plc
"New Articles" the new articles of association of the
Company, proposed to be adopted pursuant
to resolution 3(b) of the Resolutions
"Optionholders" those who hold options to acquire Ordinary
Shares
"Ordinary Share Capital" existing issued ordinary shares in the
or "Ordinary Shares" capital of the Company having a nominal
value of 10 pence each
"Peel Hunt" Peel Hunt LLP
"Proposals" the Tender Offer, Cancellation of Reserves,
De-Listing, Re-registration and adoption
of the New Articles
Shareholders who are entitled to participate
"Qualifying Shareholders" in the Tender Offer, being Shareholders
on the Register at the Tender Offer
Record Date who are not Restricted Shareholders
"Register" the register of members of the Company
"Registrar" or "Receiving Capital Registrars, a trading name of
Agent" or "Capita Registrars" Capita Registrars Limited of 34 Beckenham
Road, Beckenham, BR3 4TU
"Repurchase Agreement" the agreement dated 9 May 2013 between
the Company and Peel Hunt for the repurchase
by the Company of the Ordinary Shares
purchased by Peel Hunt pursuant to the
Tender Offer as described in the Circular
"Repurchase Price" the price of 82 pence per Ordinary Share,
being the price at which the Company
is to purchase Ordinary Shares from
Peel Hunt under the Repurchase Agreement
"Re-registration" the re-registration of Helium as a private
limited company and the consequential
adoption of the New Articles
"Resolutions" the resolutions set out in the Notice
of General Meeting
"Restricted Jurisdictions" the United States, Canada, Australia,
New Zealand, South Africa or Japan or
any other jurisdiction where the mailing
of the Circular into or inside or from
such jurisdiction would constitute a
violation of the laws of such jurisdiction
"Restricted Shareholder" a Shareholder who is resident in a Restricted
Jurisdiction
"Shareholders" holders of Ordinary Shares
"Small Shareholder" a Qualifying Shareholder who holds on
the Tender Offer Record Date not more
than 50,000 Ordinary Shares
"Takeover Code" the City Code on Takeovers and Mergers
"tender" and "tendered" refers to the tenders by Shareholders
of Ordinary Shares pursuant to the Tender
Offer
"Tender Offer" the invitation by Peel Hunt to Qualifying
Shareholders to tender Ordinary Shares
for sale to Peel Hunt on the terms and
subject to the conditions set out in
the Circular
the price of 82 pence per Ordinary Share,
"Tender Offer Price" being the price at which Peel Hunt is
to purchase Ordinary Shares under the
Tender Offer
"Tender Offer Record the record date for the Tender Offer,
Date" being 5.00p.m. on 19 June 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
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