TIDMTPG
RNS Number : 9063K
TP Group PLC
07 September 2021
7 September 2021
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 OR REGULATIONS OF THAT
JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
TP Group plc
(the "Company", "TP Group" or the "Group")
Notice of Requisitioned GM and Unanimous Board Recommendation to
Vote Against All Resolutions
Following receipt of a notice from Science Group Plc ("Science
Group") requisitioning a general meeting of the Company's
shareholders, the Board of TP Group ("the Board") confirms that a
Circular (the "Circular") setting out the Notice of Requisitioned
General Meeting ("the Notice of Requisitioned GM") and Unanimous
Recommendation of the Board to Vote Against All Resolutions was
posted to shareholders yesterday (6 September 2021). The
requisitioned General Meeting (the "Requisitioned GM") will be held
at voco Hotel Reading, Madejski Stadium, Junction 11 M4, Reading
RG2 0FL at 10.30 a.m. on 1 October 2021.
This summary should be read in conjunction with the full text of
the Circular which can be found on the Company's website at
www.tpgroup.uk.com/investors . Unless otherwise defined,
capitalised terms shall have the same meaning as those defined
within the Circular.
The Board believes that Science Group's requisitioned GM and
proposed resolutions to remove two of TP Group's independent
Non-Executive Directors and replace them with Science Group
nominees (the "Requisitioned Resolutions") are wholly unacceptable
and not in the best interests of the Company and its Shareholders
as a whole.
The Board is concerned that Science Group is seeking to
destabilise the Company with a view to potentially making an offer
for the Company at an undervalue in the future.
The Board therefore unanimously recommends Shareholders vote
against all resolutions proposed at the Requisitioned GM, for the
following reasons:
-- The Board of TP Group is independent and acting in the interests of all Shareholders
-- The Company never received a firm offer from Science Group at any price
-- The Board never believed that Science Group would make a firm offer at 6.5p per Share
-- The Board is concerned that the purpose of the requisition is
a back-door attempt to take control of the Company by Science
Group, having failed to make an offer
-- The appointment of the Science Group nominees would erode the
independence of the Board - a threat to all Shareholders
-- The existing Board is well placed to increase Shareholder
value through the execution of its revised strategy
Andrew McCree, Non-Executive Chairman of TP Group, said:
"The Board strongly believes that Science Group never intended
to make a firm offer for the Company at a price of 6.5p per Share
and this is supported by Science Group's own announcement on 3
September 2021 which confirmed that it never had the cash resources
to acquire TP Group. We have communicated with Science Group since
receiving what was ultimately its final proposal, but it has not
constructively engaged with us in return. We were not at all
surprised to see the withdrawal of its 'possible offer' last
week.
"The requisitioning of a general meeting is a disingenuous
attempt to gain control of TP Group through the appointment of two
Science Group directors to the Board. We saw the same tactics
employed in relation to Science Group's acquisition of Frontier. In
both cases, Science Group acquired a significant stake, alongside
making announcements seeking to paint a negative picture of their
target, which in the case of TP Group are demonstrably incorrect
and misleading. In the case of Frontier, ultimately a merger
proceeded once Science Group directors had been appointed to the
Frontier board at a substantial 29% discount to the original price
of 35p per share offered by Science Group.
"We must not let the same happen to TP Group's shareholders and
most of our major shareholders agree as demonstrated by the
irrevocable undertakings we have received from them to vote against
all resolutions proposed in the Notice of Requisitioned GM. The
Board strongly and unanimously recommends that shareholders vote
against all resolutions at the Requisitioned GM. In doing so,
Shareholders will be backing TP Group's exciting future: we have
already delivered over 22% revenue growth in H1 2021 and our new
CEO is implementing a clear strategic plan and delivering
considerable cost savings to the business which are already driving
value for all our Shareholders. We look forward to presenting these
numbers to all our Shareholders when we publish our interim results
on 14 September 2021."
The Directors' Response to Science Group
The Board of TP Group believes that the requisitioning of a
general meeting and the resolutions proposed is part of Science
Group's attempts to undermine the value and reputation of the
Company. The Directors are pleased to report that they have
received irrevocable undertakings to vote against all Requisitioned
Resolutions from Shareholders representing approximately 25.40 per
cent. of the Company's issued share capital.
In the Company's announcement on 17 August 2021, and as referred
to in its further announcement on 23 August 2021, the Company
invited Shareholders to consider the acquisition of Frontier Smart
Technologies Group Limited ("Frontier") by Science Group. This
reference, far from being "ironic" as described by Science Group in
its announcement of 23 August 2021, was made because the Board
believes that the Frontier transaction illustrates the tactics that
Science Group is attempting to use to secure control of the
Company, with a view to potentially making an offer to all
Shareholders in the future at a reduced level to its now withdrawn
"possible offer".
In the case of Frontier, Science Group acquired a substantial
shareholding in Frontier, whilst painting a picture of an
underperforming company. Having initially acquired a stake of 9 per
cent. of Frontier's shares in May 2019, Science Group subsequently
put forward a proposal to acquire Frontier's shares at 30p per
share. Following an announcement by Science Group that in its
opinion Frontier had "consistently tried to frustrate Science
Group's proposal", Science Group made a revised cash offer at 35p
per share, without prior consultation with Frontier. Science Group
continued to build its stake in Frontier following this offer. On
12 July 2019, Frontier announced that the parties had reached a
verbal agreement that Science Group would increase its offer price
to 37p per share conditional upon the board of Frontier agreeing to
recommend the offer. However, on the same day Science Group
announced that during the drafting stage, Frontier sought to
rescind key conditions, including the Frontier board structure and
that talks were therefore suspended. Science Group announced that
as the largest shareholder in Frontier, Science Group would
anticipate seeking changes to the board of Frontier. On 29 July
2019, Science Group sent an EGM requisition to Frontier seeking to
appoint Martyn Ratcliffe (the Executive Chairman and CEO and a
substantial shareholder in Science Group) and Sarah Cole (company
secretary and group legal counsel of Science Group) to the Frontier
board and to remove the non-executive directors of Frontier.
On 30 July 2019 Frontier announced that Martyn Ratcliffe and
Sarah Cole would join its board "subject to completion of standard
pre-appointment diligence checks by N+1 Singer as Nomad to Frontier
and completion of Science Group due diligence".
Science Group then announced that it had been given access to
information by Frontier and, citing financial and strategic
concerns, stated that Martyn Ratcliffe and Sarah Cole had advised
Frontier that they considered it would be imprudent to accept such
appointments unless or until certain strategic and financial
matters were addressed in advance of their appointments.
The EGM requisition was later withdrawn as the non-executive
directors resigned from the Frontier board. Following these
changes, Science Group acquired shares in Frontier at 25p per share
both in the market and by way of a subscription for new shares.
Ultimately, a merger between Frontier and Science Group
proceeded at 25p per Frontier share, a substantial discount
(approximately 29per cent.) to the price of 35p per share offered
by Science Group for Frontier's shares.
The Board believes the similarities between Science Group's
tactics in relation to Frontier and the Company are clear. As was
the case with Frontier, Science Group has acquired a significant
stake, alongside making announcements which seek to paint a
negative picture of the Company. This includes repeated references
to the "material uncertainty" detailed in the Company's 2020 annual
report and accounts (the "2020 Annual Report"), which are incorrect
and misleading. The Board believes this is designed to undermine
confidence in the Company. Once again, the Board of TP Group would
remind Shareholders that it received an unqualified audit opinion
from its auditor on its 2020 Annual Report.
Furthermore, the Board confirms that:
-- in response to Science Group's continued reference to the
going concern position of the Company, the Company's adjusted
EBITDA and cash are tracking in line with 2021 market expectations,
being adjusted EBITDA of GBP4.2 million and cash of GBP4.6 million
which provides sufficient liquidity and bank covenant compliance
throughout the period;
-- unaudited revenue for the six months ended 30 June 2021
increased 22.7 per cent. year on year to c. GBP33.8 million (2020
H1: c. GBP27.5 million); and
-- under the Company's new CEO, the Company has commenced a
significant central cost reduction programme. These cost savings
are not expected to adversely impact operational execution and
will, improve the current 2022 adjusted EBITDA market expectation
of GBP5.1 million by GBP1.0 million to GBP 6.1 million.
The Board is concerned that if the Requisitioned Resolutions are
passed and Science Group's directors are appointed to the Company's
Board, this will lead to Science Group bidding a much lower price
in 12 months' time, as it did in relation to its acquisition of
Frontier.
Science Group has not articulated a strategy for the future of
the Company. The two groups operate in different markets. Science
Group has failed to identify to the Board the synergies between
Science Group and the Company to which it refers. The Board of TP
Group believes the Requisitioned Resolutions, if approved, will
result in a non-executive representation on your Board with
conflicts of interest to the detriment of the Company and its
Shareholders. In contrast, the Board of TP Group believes the
Company has an exciting future with its revised strategy and new
CEO, as detailed further in the letter to the Shareholders
accompanying the Notice of Requisitioned GM.
Furthermore, the Board considers TP Group to be well regarded by
its clients. This is largely due to the skills and working
practices of TP Group's employees, who choose to stay at TP Group
in large part because of its culture. The aggressive approach taken
by Science Group to date has raised concerns amongst some of TP
Group's employees about the future of TP Group, which the Board
believes may undermine the stability of TP Group's businesses.
As set out in the Company's announcement of 23 August 2021, the
Company will consider any properly funded and constructed offers
for the Company at an appropriate valuation.
For further information, please contact:
TP Group plc Tel: 01753 285 810
Andrew McCree
www.tpgroup.uk.com
Cenkos Securities plc (Financial Adviser Tel: 020 7397 8980
to TP Group plc)
Stephen Keys / Mark Connelly / Callum Davidson
www.cenkos.com
SEC Newgate UK Tel: 020 3757 6882/ 07900248
213
Elisabeth Cowell/ Bob Huxford/ Richard Bicknell
www.secnewgate.co.uk
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END
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