TIDMSAG TIDMTPG
RNS Number : 1904L
Science Group PLC
09 September 2021
9 September 2021
SCIENCE GROUP PLC
('Science Group' or the 'Group')
TP Group General Meeting
Science Group notes that TP Group plc ("TP Group") has posted a
Circular (the "Circular") to its shareholders for the requisitioned
General Meeting in relation to the constitution of the TP Group
Board. The date of the meeting is 1 October 2021.
At close of business on 8 September 2021, Science Group owned
209, 388,987 shares in TP Group, equivalent to 26.9% of the issued
voting share capital. Science Group is the largest shareholder in
TP Group and owns more shares than the aggregate of the irrevocable
undertakings (25.4%) obtained by the Board of TP Group in relation
to the General Meeting.
The Board of TP Group make a number of statements which Science
Group considers to be misrepresentative. The TP Group Board also
notably avoids accepting any responsibility for the poor financial
performance of the business, the failure of corporate governance
and the destruction of shareholder value in recent years. Indeed,
the announcement by TP Group on 7 September and the shareholder
Circular allocate a disproportionate amount of commentary to wholly
unrelated matters to try to distract TP Group shareholders from the
failures of the TP Group Board.
Science Group also wishes to clarify that, contrary to the
perception portrayed by the TP Group Board, the General Meeting
requisitions are simply to replace two non-executive directors who
have presided over the substantial deterioration in shareholder
value and have failed to provide the corporate governance
reasonably expected of their role by TP Group shareholders. At no
time has Science Group indicated or inferred in any way that it
intends to remove the newly appointed Chief Executive or the
Finance Director.
The TP Group Board should cease the scaremongering and accept
their responsibility for the poor performance of TP group in recent
years. It is farcical to suggest that Science Group's investment
one month ago will "undermine the stability of TP Group's
businesses" after (i) the poor financial performance of TP Group
resulting in the going concern commentary in the TP Group 2020
Annual Report; (ii) the inconsistent strategy related to TPG
Maritime; and (iii) the abrupt departure of the former CEO.
Science Group believes that the honourable course of action of
any Chairman/director, who has presided over such a destruction in
value and failure of governance, is to resign and to effect a
smooth transition to a reconstituted Board, avoiding further costs
for the company and disruption for all TP Group stakeholders.
Science Group Withdrawn Offer for TP Group
The Board of TP Group also misrepresents the background to the
withdrawn potential offer by Science Group. Prior to acquiring any
shares, Science Group approached TP Group initially regarding a
strategic investment and later a possible merger/acquisition.
Following the initial purchase of shares in TP Group, Science Group
repeatedly tried to engage in dialogue with the TP Group Board.
Despite the poor track record of TP Group, and the potential
substantial premium of 67% (to the closing TP Group share price on
the trading day prior to Science Group investment), the Board of TP
Group, refused to engage in any meaningful dialogue.
The Science Group indicative offer was always subject to certain
pre-conditions including the receipt of satisfactory due diligence.
As previously announced, The TP Group Board were unwilling to
provide access to due diligence information unless certain
conditions were agreed which were unacceptable to Science Group. As
a result, the Science Group potential offer was withdrawn on 3
September 2021, denying TP Group shareholders a potential liquidity
event at a substantial premium.
Furthermore, the TP Group Board has incorrectly suggested that
Science Group would have been unable to fund the acquisition of TP
Group. It is quite normal that acquisition funding is arranged in
parallel with discussions between parties. In accordance with
standard practice, Science Group and its advisors provided TP Group
with customary assurances which the TP Group Board and its advisors
inexplicably rejected.
It is therefore noteworthy that following the withdrawal of the
indicative offer for TP Group, on 7 September 2021 Science Group
completed an over-subscribed placing ("Placing") of new shares to
raise approx. GBP 17.8 million , net of costs. The Placing was
completed at a premium to the Science Group closing share price, a
very strong message of confidence from institutional investors.
This Placing strengthened Science Group's existing cash resources,
which at 31 August 2021 were GBP17.2 million, at which time Science
Group already owned 24% of TP Group. In addition, as announced on 6
September 2021, Science Group is exploring extending its bank
facilities and, with a strong track record of profitability and
cash flow, additional facilities are anticipated to be available.
In summary, it is, and always was, readily apparent that the
indicative offer could have been funded by Science Group if the TP
Group Board had cooperated and the due diligence was
satisfactory.
The Board of TP Group also makes a number of inferences which do
not reflect the protections inherent in the UK City Code on
Takeovers and Mergers (the "Code"). Despite the lengthy rhetoric in
the Circular, TP Group has failed to define any example where
Science Group has not complied with the provisions of the Code, as
applicable. The restrictions and exceptions related to any future
potential offer were set out in the Science Group announcements on
24 August 2021 and 3 September 2021.
In summary, for the avoidance of any doubt and contrary to the
inferences made by the TP Group Board, the General Meeting is not
related to any offer or potential offer for TP Group by Science
Group or any other party. The Science Group potential offer was
withdrawn on 3 September 2021. The General Meeting requisitions are
simply to replace two non-executive directors who have presided
over the substantial deterioration in TP Group shareholder value
and have failed to provide the appropriate level of corporate
governance reasonably expected of their role by TP Group
shareholders.
Science Group Strategic Investment and General Meeting
The strategic investment model formed the basis of the initial
approach to TP Group and on 16 August 2021, just one week after
making the initial investment, Science Group informed shareholders
of both companies that the strategic investment model was
increasingly likely and this scenario was consistently reiterated
in subsequent announcements.
As the largest shareholder in TP Group, the Science Group
strategy is to manage its investment in an active manner. To that
end, Science Group requisitioned the Board of TP Group to call a
general meeting of TP Group shareholders to consider the
constitution of the TP Group Board. Science Group again reiterates
that the General Meeting requisitions are simply to replace two
non-executive directors who have have failed to provide the
corporate governance expected of their role. At no time has Science
Group indicated or inferred in any way that it intends to remove
the newly appointed Chief Executive or the Finance Director and the
majority of the TP Group directors would remain unchanged.
With regard to the current incumbents who are proposed to be
replaced, Mr McCree was appointed a non-executive director on 1
October 2014 and Chairman on 1 January 2017. Mr Jeremy Warner-Allen
was appointed as a non-executive director on 2 March 2017. Since Mr
McCree's appointment as Chairman up to 6 August 2021 (the last
trading day prior to the Science Group investment), the TP Group
share price had declined by 64.6%. For reference the FTSE AIM
All-Share index increased by 49.3% during the same period. After
such destruction of value, the honourable course of action is for
Mr McCree and Mr Warner-Allen to resign and effect a smooth
transfer.
With regard to the nominated directors, Mr Ratcliffe was
appointed Chairman of Science Group plc (then called Sagentia plc)
on 15 April 2010. In contrast to the poor performance of TP Group,
(i) since Mr Ratcliffe's appointment in 2010, the Science Group
share price has increased by 1,163.9% and (ii) between 1 January
2017 and 6 August 2021 (ie the same reference points as above for
Mr McCree) the Science Group share price has increased by 179.9%.
Mr Ratcliffe and Mr Bertram are experienced directors of listed
companies who have a track record of delivering value to
shareholders. If appointed, the experience of Mr Ratcliffe and Mr
Bertram would add significant value to TP Group and benefit all TP
Group stakeholders.
Science Group, the largest shareholder in TP Group, encourages
all shareholders to vote in favour of the resolutions to (i) remove
Mr McCree and Mr Warner-Allen as directors of TP Group plc, and
(ii) appoint Mr Ratcliffe and Mr Bertram as directors of TP Group
plc.
Enquiries:
Science Group plc Tel: +44 (0) 1223 875 200
Martyn Ratcliffe, Chairman www.sciencegroup.com
Stifel Nicolaus Europe Limited (Nominated Adviser Tel: +44 (0)
20 7710 7600
and Joint Broker)
Nick Adams, Alex Price, Richard Short
Liberum Capital Limited (Joint Broker) Tel: +44 (0) 20 3100
2000
Neil Patel, Cameron Duncan
MHP Communications (PR Adviser to Science Group ) Tel: +44 (
0)20 3128 8793
Reg Hoare
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END
MSCUWRRRAKUKRUR
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September 09, 2021 02:00 ET (06:00 GMT)
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