TIDMIME
RNS Number : 8213I
Immedia Group PLC
21 April 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
21 April 2022
Immedia Group Plc
("Immedia" or "the Company" or "the Group")
(to be renamed Immediate Acquisition Plc)
Disposal of Immedia Broadcast Limited
Change of Name and Notice of General Meeting
Introduction
Immedia announces the Disposal of its wholly owned subsidiary,
Immedia Broadcast Limited, which is subject, inter alia, to
Shareholders' approval at a General Meeting which is to be held at
10.00 a.m. on 9 May 2022 at the offices of Charles Russell
Speechlys LLP, 5 Fleet Place, London EC4M 7RD. In addition, the
Company is proposing to change its name to Immediate Acquisition
Plc with effect from Completion of the Disposal.
The Disposal will represent a fundamental change of business, as
well as a related party transaction, under the AIM Rules for
Companies following completion of which, the Company will become an
AIM Rule 15 cash shell.
The purpose of the Circular is to provide you with details of
the Proposals, to explain the background to and the reasons for the
Proposals and why the Independent Directors (in respect of the
Disposal) recommend that Shareholders vote in favour of Resolutions
1 and 2 and all Directors recommend that Shareholders vote in
favour of Resolution 3, all to be proposed at the General
Meeting.
The Circular, and notice of the General Meeting are available on
the Company's website: http://www.immediaplc.com/
Definitions
Definitions in this announcement have the same meaning as in the
Circular to Shareholders dated 21 April 2022.
For further information please contact:
Immedia Group Plc Tel: +44 (0) 1635 556200
Tim Hipperson, Non-executive Chairman
Ross Penney, Chief Executive
SPARK Advisory Partners Limited (Nomad) Tel: +44 (0) 203 368 3550
Mark Brady
Neil Baldwin
SP Angel Corporate Finance LLP (Broker) Tel: +44 (0) 207 470 0470
Abigail Wayne
Buchanan Communications Tel: +44 (0) 207 466 5000
Chris Lane
Background to and reasons for the Disposal
As announced previously, in the Directors' opinion, the Company
has experienced a challenging trading environment in the last few
years, due primarily to both Brexit and the impact of Covid-19. The
Company's core retail sector business, operated through Immedia
Broadcast Limited, has been challenged beyond expectations and,
although the Company sought to scale-up Immedia Broadcast's
operations via acquisition, prevailing circumstances made
undertaking such a transaction difficult.
For some time, the Directors have believed that Immedia
Broadcast Limited would trade more efficiently as a private
company, due in part to being able to save the significant costs of
being a quoted company, and to this end have been exploring
divestment options for the business. Whilst the Board received some
indications of interest from third parties, such indications were
not sufficiently certain or compelling and therefore the
Independent Directors have agreed to undertake the disposal to
Immedia Broadcast's management team.
Current Trading
As previously announced in the Trading Update on 21 December
2021, Immedia Broadcast Limited experienced a significantly
improved outlook for H2 2021, with September and October 2021 being
two of the best trading months in the Group's history, helped
hugely by the creative content and AV installation work done for
participants at COP26 in Glasgow.
Whilst the upturn in trade was significant and trading in Q1
2022 has been promising, the operations remain too small to readily
absorb the costs of being a PLC and generate a return for
investors. Accordingly, the Independent Directors believe that,
despite the UK's apparent recovery from the pandemic, there remains
significant uncertainties in the economy and the growth of the
Group would continue to be limited in the foreseeable future.
Details of the Disposal
The Company is proposing to dispose of its main trading
subsidiary, Immedia Broadcast Limited. Therefore, the Company has
entered into a conditional sale and purchase agreement with AVC
Immedia Limited, a company owned by Ross Penney, John Trevorrow,
Keith Robertson, Euan McMorrow and Mark Horrocks in relation to the
Disposal (the "Disposal Agreement").
Under the terms of the Disposal Agreement, AVC Immedia Limited
will acquire the entire issued capital of Immedia Broadcast Limited
for a total consideration of GBP2.0 million, of which GBP1.718
million will be paid on completion of the Disposal with the balance
of GBP282,000 payable in 12 equal monthly instalments, beginning
one month after Completion.
The Disposal will represent a fundamental change of business for
the Company, as well as a related party transaction under the AIM
Rules. This is because the proposed purchaser, AVC Immedia Limited,
is owned in part by Ross Penney, John Trevorrow and Mark Horrocks,
each of whom are Directors of the Company. Should the Disposal
complete, the Company will become an AIM Rule 15 cash shell.
The Disposal also requires approval by Shareholders under the
Companies Act 2006 as it constitutes a substantial property
transaction with a director, given Ross Penney and John Trevorrow
are Directors of both the Company and the acquiring entity, and
Mark Horrocks is a shareholder in the acquiring entity.
Summary of the Disposal Agreement
On 20 April 2022, the Company entered into the Disposal
Agreement, pursuant to which it has conditionally agreed to dispose
of the entire issued share capital of Immedia Broadcast Limited to
AVC Immedia Limited for an aggregate total consideration of
GBP2,000,000 to be satisfied as follows:
1. by the payment of GBP1,718,000, in cash, immediately
following completion of the Disposal ("Completion"); and
2. by the payment of deferred consideration of, in aggregate,
GBP282,000, which shall be payable in 12 equal monthly instalments
of GBP23,500 with the first such instalment to be paid on the date
falling one month after Completion and each of the remaining 11
instalments to be paid on the same date in each of the 11
subsequent months.
In addition, the Disposal Agreement includes a provision that,
in the event that AVC Immedia Limited disposes of some or all of
the shares or assets of Immedia Broadcast Limited or any of its or
its holding company's shares are admitted to trading on a
recognised investment exchange (each, a "Trigger Event") within 18
months of Completion, additional consideration (calculated by
reference to, as applicable, the consideration received, or value
of, the relevant Trigger Event) will become due and payable to the
Company.
The Disposal Agreement is conditional on the passing of the
Resolutions at the General Meeting and Completion occurring on or
before the date falling three months after the date of the Disposal
Agreement.
Due to the nature of the Disposal and the fact that Immedia
Broadcast Limited's existing management team control AVC Immedia
Limited, the Company has given only limited fundamental warranties
and a short form and limited tax covenant in the Disposal
Agreement, which are appropriate for a transaction of this
nature.
Residual Assets and Future Intentions
On Completion, the Company intends to adopt a capital growth
strategy through the monetisation of its remaining assets, in an
orderly manner, and the pursuit of an acquisition of a company in
the technology or fintech sectors.
Upon receipt of the initial Disposal proceeds the Company will
have a total cash balance of c. GBP1.718m less costs associated
with the Disposal. In addition to this amount the Company's assets
include the Sprift Loan of GBP1.05m and 84,200 Ordinary Shares in
Audioboom plc, which has a total value of c. GBP1.82m, as at close
of business on 20 April 2022, being the latest practicable date
prior to publication of the circular.
The Sprift Loan remains outstanding as at the date of the
circular and the intention is to dispose of this loan note, at face
value, for cash. In the meantime, the loan interest continues to be
received on a monthly basis.
Over and above the existing cash and investments the Company
also intends to utilise the shareholder support inherent in the
outstanding shareholder warrants. There are 12,000,000 warrants
outstanding with an exercise price of 35p with a warrant expiry
date of 30 June 2022. If exercised in full this could result in an
additional GBP4.2m of funding to finance any potential
acquisition.
Upon Completion, the Company will become an AIM Rule 15 cash
shell (see below) and will therefore be dependent upon the ability
of the Board to identify suitable acquisition targets. The
Directors have continued to investigate a number of potential
acquisitions in the technology and fintech sector; none of which
they have yet committed to pursue at this time. There is therefore
no guarantee that the Company will be able to acquire an identified
opportunity at an appropriate price, or at all. As a consequence,
the cash resources and management time may be expended on
investigative work and due diligence.
AIM Rule 15
In accordance with AIM Rule 15, the Disposal constitutes a
fundamental change of business of the Company. On Completion, the
Company will cease to own, control or conduct all or substantially
all, of its existing trading business, activities or assets, save
as set out in the paragraph headed "Residual Assets and Future
Intentions" above.
The Company will therefore become an AIM Rule 15 cash shell and,
as such, will be required to make an acquisition or acquisitions
which constitute(s) a reverse takeover under AIM Rule 14 (including
seeking re-admission as an investing company (as defined under the
AIM Rules)) on or before the date falling six months from
Completion or be re-admitted to trading on AIM as an investing
company under the AIM Rules (which requires the raising of at least
GBP6 million), failing which the Company's Ordinary Shares would
then be suspended from trading on AIM pursuant to AIM Rule 40.
Admission to trading on AIM would be cancelled six months from the
date of suspension should the reason for the suspension not be
rectified during that period.
Any failure in completing an acquisition or acquisitions which
constitute(s) a reverse takeover under AIM Rule 14, including
seeking re-admission as an investing company (as defined under the
AIM Rules), will result in the cancellation of the Company's
Ordinary Shares from trading on AIM.
Market conditions may also have a negative impact on the
Company's ability to make an acquisition or acquisitions which
constitute(s) a reverse takeover under AIM Rule 14. There is
therefore no guarantee that the Company will be successful meeting
the AIM Rule 15 deadline as described above.
Related Party Transaction
The Disposal constitutes a related party transaction under Rule
13 of the AIM Rules for Companies. Tim Hipperson and Simon
Leathers, the Independent Directors in respect of the Disposal,
consider, having consulted with SPARK, the Company's Nominated
Adviser, that the terms of the Disposal are fair and reasonable
insofar as the Company's Shareholders are concerned. The
Independent Directors in respect of the Disposal have taken into
account the following:
1. Immedia Broadcast Limited has experienced a challenging
trading environment in the last few years due primarily to Brexit
and Covid-19 and was forced to scale back the operations, whilst
the business has restored its financial stability there is no
immediate prospect of developing the scale of the operations to a
level that can adequately support the costs associated with being
admitted to trading on AIM; and
2. the Disposal, as it is a fundamental change of business, will
be subject to Shareholders' approval at the General Meeting.
The Independent Directors have also taken into account the
principal relevant considerations that they have identified in
relation to the Disposal, which are set out further in the
Circular.
Board Changes & New Company Secretary
Upon Completion, the Executive Directors, Ross Penney and John
Trevorrow, will step down from the Board and leave the three
Non-Executive Directors, Tim Hipperson, Simon Leathers, and Mark
Horrocks.
A new Company Secretary, AMBA Secretaries Limited, will also be
appointed at this time.
Change of Name and Registered Office
The Board has agreed with Immedia Broadcast Limited that the
Company's name will be changed to Immediate Acquisition Plc,
conditional on the passing of the Resolutions. Immedia Broadcast
Limited will continue to trade under that name following
Completion.
Under the Companies Act 2006, a change of name requires the
passing of a special resolution of Shareholders at a general
meeting. Shareholders' approval is therefore being sought for this
change of name pursuant to Resolution 3.
If Resolution 3 is approved, the change of name will be
effective once Companies House has issued a new certificate on the
change of name. The Company will announce once this has
occurred.
The Company will change its registered office to c/o Charles
Russell Speechlys LLP, 5 Fleet Place, London, EC4M 7RD with effect
from Completion.
The Company's TIDM, IME.L, will remain unchanged.
Shareholders' Approval
Set out at the end of the Circular is a notice convening the
General Meeting to be held on 9 May 2022 at 10.00 a.m. at the
offices of Charles Russell Speechlys LLP, 5 Fleet Place, London
EC4M 7RDat which the following Resolutions will be proposed:
1. That the sale by the Company of Immedia Broadcast Limited to
AVC Immedia Limited be approved for the purposes of Rule 15 of the
AIM Rules.
2. That the Disposal be approved for the purposes of section 190 of the Companies Act.
3. That the Change of Name be approved.
Resolutions 1 and 2 will be proposed as ordinary resolutions and
Resolution 3 will be proposed as a special resolution.
Action to be taken by Shareholders
Shareholders will find enclosed with the Circular a Form of
Proxy for use at the General Meeting. Shareholders are requested to
complete and return the Form of Proxy to Share Registrars, 3 The
Millennium Centre, Crosby Way, Farnham, Surrey, GU9 7XX in
accordance with the instructions printed thereon as soon as
possible but, in any event, to be received no later than 10.00 a.m.
on 5 May 2022 being 48 hours (excluding days that are not business
days) before the time of the General Meeting.
Recommendations
The Independent Directors believe that Resolutions 1 and 2 are
in the best interests of Shareholders and the Company as a whole
and accordingly recommend that the Shareholders vote in favour of
Resolutions 1 and 2.
The Independent Directors do not own any Ordinary Shares in the
Company and are therefore unable to vote on the Resolutions to be
proposed at the General Meeting.
Due to their position as owners of the proposed purchaser of
Immedia Broadcast Limited, Ross Penney, John Trevorrow and Mark
Horrocks as Directors of the Company are not considered to be
Independent Directors and are not able to consider Resolutions 1
and 2.
The Independent Directors have considered the alternatives to
the Disposal and have concluded that, out of the alternatives, the
Company carrying out the Disposal and becoming a cash shell is most
likely to represent the best value to the Shareholders in the long
term.
Conditional upon Resolutions 1 and 2 being passed, all of the
Directors unanimously recommend Shareholders to vote in favour of
Resolution 3 as they intend to do in respect of their own
beneficial shareholdings, which amount, in aggregate, to 9,313,026
Ordinary Shares, representing approximately 24.78% of the Company's
Ordinary Share capital.
Ends
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