Science Group PLC Requisition of General Meeting of TP Group plc (1996Q)
26 Octubre 2021 - 01:00AM
UK Regulatory
TIDMSAG TIDMTPG
RNS Number : 1996Q
Science Group PLC
26 October 2021
26 October 2021
Science Group plc
Requisition of General Meeting of TP Group plc
During August, Science Group acquired a shareholding in TP Group
plc ("TP Group") which was progressively increased to its current
level of 211,225,890 shares, equivalent to approx. 27.1% of the
voting share capital. In parallel, Science Group sought to engage
with TP Group with a view to potentially making an offer at 6.5
pence per share or alternatively making a strategic investment. The
TP Group Board refused to engage in respect of an offer citing that
the approach was not fully funded. While Science Group believes
that this excuse had no objective merit, it had the effect of
avoiding the release of due diligence information which was a
necessary pre-condition for any potential offer to proceed. As a
result, Science Group terminated discussions in relation to its
potential offer on 3 September 2021 and TP Group shareholders were
denied a potential liquidity event at a substantial premium. The TP
Group share price has subsequently fallen significantly below the
potential offer price.
On 16 August 2021, Science Group requisitioned a general meeting
("General Meeting") of TP Group. This was held on 1 October 2021.
Despite a vociferous defence by the TP Group Board, supported by an
array of advisors effectively paid for by TP Group shareholders,
the outcome of the General Meeting was a clear 57/43% vote in
favour of the Science Group proposed resolutions and against the TP
Group Board. The Chairman and a non-executive director of TP Group
resigned. The two Science Group nominated directors should have
been appointed to the Board at the end of the General Meeting, in
accordance with the resolutions approved by a clear majority of
shareholder votes.
The remaining directors of TP Group appointed Mr Philip Holland
as Chairman on 30 September 2021, one day before the General
Meeting. Despite the unequivocal vote of TP Group shareholders, TP
Group then delayed confirming the appointment of the new directors
and implementing the legitimate conclusion of the General Meeting.
Ultimately, it took the preparation of legal proceedings by Science
Group's external counsel before TP Group belatedly complied with
the TP Group shareholder vote and appointed Mr Ratcliffe and Mr
Bertram as directors. Furthermore, the TP Group Board granted Deeds
of Indemnity to each director but did not offer the same to Mr
Ratcliffe and Mr Bertram until demanded. The appointments were
finally announced on 14 October, two weeks after the General
Meeting and only after instructing counsel to commence legal
action. Mr Ratcliffe and Mr Bertram have both waived all
remuneration from TP Group for the current financial year.
The TP Group Board defence was set out in the Shareholder
Circular posted to shareholders on 6 September 2021. The strategy
was summarised in Section 4. The TP Group strategy was stated to be
the creation of an independent, high margin, international
consultancy although the low profitability of the Sapienza business
(as reported in the 2021 Interim Results presentation) would appear
inconsistent with this model. The TP Group Board's intentions in
relation to TPG Maritime, one of the largest operations in TP
Group, were still unclear despite (i) the possible disposal
programme announced in January; (ii) the termination of that plan
in July; and (iii) the further reversal of intentions indicated on
17 August. The interim results in September also noted that the TP
Group Board was reviewing how to realise value from the Westek
business.
Science Group is not a fund manager. Science Group is a highly
profitable, cash generative business built around a leading
Cambridge science and technology consultancy. The Science Group
interim results released on 26 July 2021 reported adjusted
operating margins of 17.8% including corporate costs. Science Group
does not capitalise any R&D costs. Science Group has a strong
balance sheet with significant cash resources and freehold property
assets. The Science Group Board has a demonstrated track record of
delivering value to shareholders whilst also sharing the rewards of
success with employees in the Group. In statements released in
August, Science Group made it clear that its strategic investment
was undertaken to enable a collaborative model between Science
Group and TP Group, reinforced by an active management
involvement.
The General Meeting result was a clear rejection of the TP Group
Board's strategy. The Science Group strategy to create a
collaboration between the companies, built around Science Group's
strategic investment and the appointment of its two nominated
directors, was endorsed. TP Group shareholders gave a clear mandate
for the Science Group strategy which is anticipated to benefit both
organisations and their shareholders.
Unfortunately, it appears that the TP Group Board has been
reluctant to accept the clear majority vote of the Company's
shareholders and the legitimate result of the General Meeting. For
a business with documented financial challenges (prior to any
involvement by Science Group), this situation cannot be in the best
interests of TP Group, its employees, customers and shareholders.
The Company needs to have a positive forward-looking strategy
unencumbered by (i) the failure of the unsuccessful defence; (ii)
the historic poor performance of TP Group; and (iii) the historic
ineffective governance. As a result, Science Group requested that
Mr Holland step down as Chairman and a director.
Regrettably, and despite unsuccessful attempts by Science Group
over the weekend to try to engage in dialogue, on 24 October 2021
Mr Holland advised that he will not step down. Therefore, Science
Group has been left with no alternative but to requisition a
general meeting to remove Mr Holland as Chairman and director of
the Company. The general meeting notice also includes a resolution
that any director appointed between 21 October 2021 and the date of
the general meeting also be removed.
If shareholders approve the resolution(s), it is proposed that
two new independent non-executive directors, including at least one
female director, will be appointed. One of the new appointees will
become the Senior Independent Director. An appropriate search,
using an independent search consultancy, would be initiated
immediately after the general meeting to ensure that the Board
includes appropriate independent representation.
In summary, the challenging financial position of TP Group was
disclosed in the Company's results for 2020, released on 15 June
2021, and in the Company's Annual Report. Following that
announcement and the subsequent change in Chief Executive, a
significant number of TP Group former shareholders elected to sell
their shares in the open market. Accordingly, Science Group
acquired a substantial shareholding to become the largest
shareholder in TP Group with approx. 27.1% of the voting share
capital. It is a fundamental principle that the Board acts on
behalf of its shareholders. A democratic vote in accordance with
the Articles of the Company is an unequivocal demonstration of
shareholder wishes and implementation of such decisions by the
Board is a core principle of corporate governance. Directors do not
have the authority to ignore the result of a shareholder vote at a
General Meeting, however disappointed in the outcome they may be.
It is imperative that the TP Group Board executes the resolutions
and associated strategy approved by its shareholders at the General
Meeting and it is indefensible that further costs and disruption
are having to be incurred in order to implement the clear decision
of the Company's members.
End
Science Group plc
Tel: +44 (0) 1223 875
Martyn Ratcliffe, Chairman 200
Stifel Nicolaus Europe Limited (Nominated
Adviser and Joint Broker)
Tel: +44 (0) 20 7710
Nick Adams, Alex Price 7600
Liberum Capital Limited (Joint Broker)
Tel: +44 (0) 20 3100
Neil Patel, Cameron Duncan 2000
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCFEAFAIEFSELS
(END) Dow Jones Newswires
October 26, 2021 02:00 ET (06:00 GMT)
Tp (LSE:TPG)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Tp (LSE:TPG)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024