TIDMFCCN
RNS Number : 8368N
MIP Holdings Limited
04 October 2021
FOR IMMEDIATE RELEASE
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 OF SUCH
JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
RECOMMED ACQUISITION
of
French Connection Group PLC ("French Connection" or the
"Company")
by
MIP Holdings Ltd ("MIP")
a newly incorporated entity directly owned and controlled by
Apinder Singh Ghura , Amarjit Singh Grewal and KJR Brothers
Limited
to be effected by way of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
-- Further to the strategic review and formal sale process
undertaken by the Company subsequent to the announcement on 2 March
2021, and further to the announcement released by French Connection
on 23 September 2021 regarding a possible offer for the Company,
the boards of MIP and French Connection are pleased to announce
that they have reached agreement on the terms and conditions of a
recommended acquisition under which MIP will acquire the entire
issued and to be issued ordinary share capital of French Connection
not currently owned by Apinder Singh Ghura. It is currently
intended that the Acquisition will be effected by means of a
Court--sanctioned scheme of arrangement under Part 26 of the
Companies Act.
-- Apinder Singh Ghura beneficially owns 24,518,465 French
Connection Shares (comprising approximately 25.4 per cent. of the
issued share capital of French Connection on 1 October 2021 (being
the last Business Day prior to the date of this Announcement)).
These French Connection Shares will be acquired by MIP pursuant to
the Conditional Sale Agreement at a price of 30 pence per French
Connection Share conditional upon the Acquisition becoming
Effective.
-- Under the terms of the Acquisition, each French Connection
Scheme Shareholder will be entitled to receive:
for each Scheme Share: 30 pence in cash
-- The Acquisition Price values the entire issued and to be
issued ordinary share capital of French Connection at approximately
GBP28.98 million, which represents a premium of approximately:
o 91.7 per cent. to the Closing Price of 15.7 pence per French
Connection Share on 4 February 2021 (being the last Business Day
prior to the commencement of the Offer Period); and
o 29.9 per cent. to the Closing Price of 23.1 pence per French
Connection Share on 22 September 2021 (being the last Business Day
prior to the date of the Possible Offer Announcement).
-- If any dividend or other distribution or return of value is
proposed, declared, made, paid or becomes payable by French
Connection in respect of the French Connection Shares on or after
the date of this Announcement and prior to the Scheme becoming
Effective, MIP reserves the right to reduce the value of the
consideration payable for each French Connection Share by up to the
amount per French Connection Share of such dividend, distribution
or return of value, in which case any reference in this
Announcement to the consideration payable will be deemed to be a
reference to the consideration as so reduced. Any exercise by MIP
of its rights referred to in this paragraph shall be the subject of
an announcement and, for the avoidance of doubt, shall not be
regarded as constituting any revision or variation of the terms of
the Acquisition. In such circumstances, French Connection
Shareholders would be entitled to retain any such dividend,
distribution or other return of capital declared, made or paid or
which becomes payable.
Recommendation
-- The French Connection Directors, who have been so advised by
WH Ireland as to the financial terms of the Acquisition,
unanimously consider the terms of the Acquisition to be fair and
reasonable. In providing advice to the French Connection Directors,
WH Ireland has taken into account the commercial assessments of the
French Connection Directors. WH Ireland is providing independent
financial advice to the French Connection Directors for the
purposes of Rule 3 of the Takeover Code.
-- Accordingly, the French Connection Directors intend to
recommend unanimously that French Connection Shareholders vote in
favour of the Scheme at the Court Meeting and the Resolution(s) at
the General Meeting (or, if (with the consent of the Panel and in
accordance with the terms of the Cooperation Agreement) MIP
exercises its right to implement the Acquisition by way of a
Takeover Offer, accept or procure acceptances of such Takeover
Offer). Stephen Marks, being the only French Connection Director
holding French Connection Shares, has irrevocably undertaken to
vote in favour of the Scheme and the Resolution(s) (or to accept a
Takeover Offer) in respect of his entire holding of French
Connection Shares, being a total of 37,812,690 French Connection
Shares (representing, in aggregate, approximately 39.1 per cent. of
the ordinary share capital of French Connection in issue on 1
October 2021 (being the last Business Day prior to the date of this
Announcement)).
Irrevocable undertakings
-- In total, including the irrevocable undertaking from Stephen
Marks, MIP has received irrevocable undertakings, as described
below, in respect of a total of 42,094,190 French Connection Shares
(representing, in aggregate, approximately 43.6 per cent. of the
ordinary share capital of French Connection in issue on 1 October
2021 (being the last Business Day prior to the date of this
Announcement)).
-- MIP has received an irrevocable undertaking from Nicole Farhi
to vote in favour of the Scheme at the Court Meeting and the
Resolution(s) at the General Meeting (or, if (with the consent of
the Panel and in accordance with the terms of the Cooperation
Agreement), MIP exercises its right to implement the Acquisition by
way of a Takeover Offer, accept or procure acceptances of such
Takeover Offer) in respect of 2,000,000 French Connection Shares
(representing, in aggregate, approximately 2.1 per cent. of the
ordinary share capital of French Connection in issue on 1 October
2021 (being the last Business Day prior to the date of this
Announcement)).
-- MIP has received an irrevocable undertaking from the trustees
of the discretionary trusts established for the benefit of certain
of Stephen Marks' children to vote in favour of the Scheme at the
Court Meeting and the Resolution(s) at the General Meeting (or, if
(with the consent of the Panel and in accordance with the terms of
the Cooperation Agreement), MIP exercises its right to implement
the Acquisition by way of a Takeover Offer, accept or procure
acceptances of such Takeover Offer) in respect of 1,506,500 French
Connection Shares (representing, in aggregate, approximately 1.6
per cent. of the ordinary share capital of French Connection in
issue on 1 October 2021 (being the last Business Day prior to the
date of this Announcement)).
-- MIP has received an irrevocable undertaking from Candice
Marks to vote in favour of the Scheme at the Court Meeting and the
Resolution(s) at the General Meeting (or, if (with the consent of
the Panel and in accordance with the terms of the Cooperation
Agreement), MIP exercises its right to implement the Acquisition by
way of a Takeover Offer, accept or procure acceptances of such
Takeover Offer) in respect of 775,000 French Connection Shares
(representing, in aggregate, approximately 0.8 per cent. of the
ordinary share capital of French Connection in issue on 1 October
2021 (being the last Business Day prior to the date of this
Announcement)).
-- Further details of these irrevocable undertakings and the
irrevocable undertaking from Stephen Marks (including the
circumstances in which they cease to be binding) are set out in
Appendix III to this Announcement.
Timetable and conditions
-- It is intended that the Acquisition will be implemented by
way of the Scheme (or, if (with the consent of the Panel and in
accordance with the terms of the Cooperation Agreement), MIP
exercises its right to implement the Acquisition by way of a
Takeover Offer). The purpose of the Scheme is to provide for MIP to
become the owner of the entire issued and to be issued ordinary
share capital of French Connection not already owned by Apinder
Singh Ghura. Ordinary shares in the capital of French Connection
owned by Apinder Singh Ghura are to be transferred to MIP pursuant
to the Conditional Sale Agreement with effect on and from the
completion of the Acquisition. The Scheme will be put to French
Connection Scheme Shareholders at the Court Meeting and at the
General Meeting. In order to become effective, the Scheme must be
approved by a majority in number of the French Connection Scheme
Shareholders voting at the Court Meeting, either in person or by
proxy, representing at least 75 per cent. in value of the Scheme
Shares voted. The approval of the Resolution(s) by the requisite
majority of the French Connection Shareholders at the General
Meeting (to be held directly after the Court Meeting) is also
required for the implementation of the Scheme together with the
sanction of the Scheme by the Court. French Connection Shares owned
by Apinder Singh Ghura will not be eligible to vote at the Court
Meeting.
-- The Scheme Document, containing further information about the
Acquisition and notices of the Court Meeting and the General
Meeting and which will be accompanied by the Forms of Proxy, will
be published as soon as practicable and, in any event, within 28
days of the date of this Announcement, unless MIP and French
Connection otherwise agree, and the Panel consents, to a later
date. The Scheme Document will specify the actions to be taken by
French Connection Scheme Shareholders and will contain an expected
timetable for the implementation of the Scheme.
-- The Scheme is expected to become Effective before the end of
Q4 2021, subject to the satisfaction or waiver of the Conditions
set out in Appendix I to this Announcement.
Commenting on the Acquisition, Apinder Singh Ghura, Director of
MIP said:
"We are pleased to have reached an agreement with the French
Connection Directors on this recommended acquisition. We are
looking forward to working with French Connection's management to
execute and implement MIP's strategic plans to facilitate the
future growth and profitability for the business."
Commenting on the Acquisition, Stephen Marks, Chairman of French
Connection, said:
"Over the last 5 years, French Connection has made significant
progress in its plans to rationalise the size of its store
portfolio and to return the French Connection Group to
profitability. It was always our intention to look at the most
appropriate ownership structure for the business once it was back
on track, and, having conducted a formal sale process, the French
Connection Board has concluded that the offer being made by MIP is
fair and reasonable.
The price we have negotiated is at a significant premium to the
share price prior to the commencement of the Offer Period and
demonstrates the potential offered by the French Connection brand.
The French Connection Board is unanimous in recommending the
Acquisition to shareholders.
When the transaction closes, I will retire from French
Connection. This is an appropriate time for me to step back from
the business that I founded in 1972, and I would like to take this
opportunity to thank all our people for their contribution to our
achievements over the years. I wish them all every success in the
future ."
This summary should be read in conjunction with and is subject
to the full text of this Announcement and its appendices.
The Acquisition shall be subject to the Conditions and further
terms that are set out in Appendix I to this Announcement and to
the full terms and conditions which will be set out in the Scheme
Document. Appendix II to this Announcement contains the sources of
information and bases of calculations set out in this Announcement.
Appendix III to this Announcement contains further details of the
irrevocable undertakings referred to in this Announcement. Appendix
IV to this Announcement contains definitions of certain terms used
in this summary and in this Announcement. The appendices form part
of this Announcement.
Enquiries:
MIP
Apinder Singh Ghura
via Walbrook PR (public relations adviser Tel: +44 (0) 20 7933
to MIP) 8787
Paul McManus
info@walbrookpr.com
French Connection Group PLC Tel: +44 (0) 20 7036
7063
Neil Williams, Chief Operating Officer
Lee Williams, Chief Financial Officer
WH Ireland (Financial Adviser and Corporate Tel: +44 (0) 20 7220
Broker to French Connection) 1666
Adrian Hadden
Ben Good
Paternoster Communications (public relations Tel: +44 (0) 20 3012
adviser to French Connection) 0241
Tom Buchanan
Shoosmiths LLP is acting as legal adviser to MIP. Clifford
Chance LLP is acting as legal adviser to French Connection.
IMPORTANT NOTICES:
Disclaimers
Singer Capital Markets is acting exclusively as financial
adviser to 1903 Partners, LLC and Aurelius Finance Company Limited
(lenders to MIP) and no-one else in connection with the Acquisition
and will not be responsible to anyone other than 1903 Partners, LLC
and Aurelius Finance Company Limited for providing the protections
offered to clients of Singer Capital Markets or for providing
advice in relation to the Acquisition, the contents of this
Announcement or any matter referred to in this Announcement. Singer
Capital Markets is authorised and regulated in the United Kingdom
by the Financial Conduct Authority in respect of regulated
activities. Singer Capital Markets can be contacted at its
principal office: One Bartholomew Lane, London EC2N 2AX. Singer
Capital Markets is also providing the cash confirmation statement
for the purposes of the Takeover Code as set out in paragraph 11 of
this Announcement.
WH Ireland, which is authorised and regulated in the UK by the
FCA, is acting as financial adviser and broker exclusively for
French Connection and no one else in connection with the matters
set out in this Announcement and will not regard any other person
as its client in relation to the matters in this Announcement and
will not be responsible to anyone other than French Connection for
providing the protections afforded to clients of WH Ireland, nor
for providing advice in relation to any matter referred to
herein.
This Announcement is for information purposes only and is not
intended to, and does not constitute, or form part of any offer,
invitation, inducement or the solicitation of an offer to purchase,
otherwise acquire, subscribe for, sell or otherwise dispose of or
exercise rights in respect of any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise. The Acquisition will be made solely
through the Scheme Document and the accompanying Forms of Proxy (or
by any other document by which the Acquisition is made), which will
together contain the full terms and conditions of the Acquisition
and the Scheme, including details of how to vote in respect of the
Acquisition and the Scheme. Any decision in respect of, or other
response to, the Acquisition should be made only on the basis of
the information contained in the Scheme Document or any document by
which the Acquisition is made.
In accordance with normal UK practice, MIP or its nominees, or
its brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase French Connection Shares,
other than pursuant to the Acquisition, until the date on which the
Scheme (or Takeover Offer, if applicable) becomes effective, lapses
or is otherwise withdrawn. These purchases may occur either in the
open market at prevailing prices or in private transactions at
negotiated prices. Any information about such purchases will be
disclosed as required in the UK and will be reported to a
regulatory information service and will be available on the London
Stock Exchange website at www.londonstockexchange.com
Overseas Shareholders
The availability of the Acquisition to Overseas Shareholders and
the distribution of this Announcement in, into or from
jurisdictions other than the United Kingdom may be restricted by
the laws of those jurisdictions and therefore persons into whose
possession this Announcement comes should inform themselves of, and
observe, any such restrictions. Any person (including without
limitation, nominees, trustees and custodians) who would, or
otherwise intends to, forward this Announcement, the Scheme
Document or any accompanying document to any jurisdiction outside
the United Kingdom should refrain from doing so and seek
appropriate professional advice before taking any action. If any
Overseas Shareholder remains in any doubt, it should consult an
appropriate independent professional adviser in its relevant
jurisdiction without delay. In particular, the ability of persons
who are not resident in the United Kingdom to vote their French
Connection Shares at the Court Meeting or the General Meeting or to
execute and deliver Forms of Proxy appointing another to vote their
French Connection Shares in respect of the Court Meeting or the
General Meeting on their behalf, may be affected by the laws of the
relevant jurisdiction in which they are located.
Failure to comply with any such restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and
persons involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person.
This Announcement has been prepared for the purposes of complying
with the law of England and Wales and the Takeover Code and the
information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance
with the laws of jurisdictions outside of England and Wales.
Additional Information for US Investors
The Acquisition is being made to acquire the securities of an
English company by means of a scheme of arrangement provided for
under the law of England and Wales. A transaction effected by means
of a scheme of arrangement is not subject to the tender offer or
proxy solicitation rules under the US Exchange Act of 1934 (the "US
Exchange Act"). Accordingly, the Scheme will be subject to
disclosure requirements and practices applicable in the United
Kingdom to schemes of arrangement, which are different from the
disclosure requirements of the US tender offer and proxy
solicitation rules. The financial information included in this
Announcement and the Scheme documentation has been or will have
been prepared in accordance with International Financial Reporting
Standards and thus may not be comparable to financial information
of US companies or companies whose financial statements are
prepared in accordance with US GAAP. US GAAP differs in certain
significant respects from the International Financial Reporting
Standards. None of the financial information in this Announcement
or the Scheme documentation has been audited in accordance with
auditing standards generally accepted in the US or the auditing
standards of the Public Company Accounting Oversight Board (United
States). If MIP were to elect to implement the Acquisition by means
of a Takeover Offer and determines to extend such Takeover Offer
into the US, such Takeover Offer would be made in compliance with
applicable US laws and regulations, including Section 14(e) of the
US Exchange Act and Regulation 14E thereunder. Such a Takeover
Offer would be made in the United States by MIP and no one
else.
The receipt of cash pursuant to the Acquisition by a US holder
as consideration for the transfer of its French Connection Shares
pursuant to the Scheme will likely be a taxable transaction for US
federal income tax purposes and under applicable US state and
local, as well as foreign and other, tax laws. Each French
Connection Shareholder is urged to consult his legal, tax and
financial advisers immediately regarding the tax consequences of
the Acquisition applicable to him/her, including under applicable
US state and local, as well as foreign and other, tax laws.
It may be difficult for US holders to enforce their rights and
claims arising out of the US federal securities laws in connection
with the Acquisition, since MIP and French Connection are located
in countries other than the United States, and some or all of their
officers and directors may be residents of countries other than the
United States. US holders may not be able to sue a non-US company
or its officers or directors in a non-US court for violations of US
securities laws. Further, it may be difficult to compel a non-US
company and its affiliates to subject themselves to a US court's
judgement.
In the event that the Acquisition is implemented by way of
Takeover Offer, in compliance with applicable UK laws, MIP, its
dealer manager (and their advisors or affiliates), or its nominees,
or its brokers (acting as agents), may from time to time make
certain purchases of, or arrangements to purchase, shares or other
securities of French Connection other than pursuant to such
Takeover Offer during the period in which such Takeover Offer would
remain open for acceptance. These purchases may occur either in the
open market at prevailing prices or in private transactions at
negotiated prices. Any information about such purchases or
arrangements to purchase will be disclosed as required in the
United Kingdom, will be reported to a Regulatory Information
Service and will be available on the London Stock Exchange website
at www.londonstockexchange.com .
Neither the Acquisition nor this Announcement have been approved
or disapproved by the US Securities and Exchange Commission, any
state securities commission in the United States or any other US
regulatory authority, nor have such authorities approved or
disapproved or passed judgement upon the fairness or the merits of
the Acquisition, or determined if the information contained in this
Announcement is adequate, accurate or complete. Any representation
to the contrary is a criminal offence in the United States.
Forward-Looking Statements
This Announcement (including any information that is
incorporated by reference into this Announcement) contains
statements about the Wider MIP Group and the Wider French
Connection Group that are or may be forward-looking statements
which are prospective in nature. All statements other than
statements of historical facts may be forward-looking statements.
Often, but not always, forward-looking statements can be identified
by the use of forward-looking words such as "targets", "plans",
"believes", "expects", "aims", "intends", "will", "should",
"could", "would", "may", "anticipates", "estimates", "synergy",
"cost-saving", "projects", "goal" or "strategy" or, words or terms
of similar substance or the negative thereof. Forward-looking
statements may include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects; (ii) business and
management strategies and the expansion and growth of the
operations of the Wider MIP Group or the Wider French Connection
Group and potential synergies resulting from the Acquisition; and
(iii) the effects of government regulation on the businesses of the
Wider MIP Group or the Wider French Connection Group.
These forward-looking statements are not guarantees of future
performance. Such forward-looking statements involve known and
unknown risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many
factors could cause actual results to differ materially from those
projected or implied in any forward-looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of
the date of this Announcement. All subsequent oral or written
forward-looking statements attributable to the Wider MIP Group or
the Wider French Connection Group or any of their respective
members, directors, officers or employees or any persons acting on
their behalf are expressly qualified in their entirety by the
cautionary statement above. MIP and French Connection disclaim any
obligation to update any forward-looking or other statements
contained in this Announcement, except as required by applicable
law.
No Profit Forecasts or Estimates
No statement in this Announcement is intended as a profit
forecast or estimate for any period and no statement in this
Announcement should be interpreted to mean that earnings or
earnings per share for French Connection for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per share for French Connection.
Disclosure Requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in 1 per cent. or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the offer period and, if later, following the
announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3:30 p.m. (London time) on the 10th Business
Day following the commencement of the offer period and, if
appropriate, by no later than 3:30 p.m. (London time) on the 10th
Business Day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or
becomes, interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3:30 p.m.
(London time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel .org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Right to switch to a Takeover Offer
MIP reserves the right, with the consent of the Panel and in
accordance with the terms of the Cooperation Agreement, to elect to
implement the Acquisition by means of a Takeover Offer for the
entire issued and to be issued share capital of French Connection
and to make appropriate amendments to the terms of the Acquisition
arising from the change of structure from a Scheme to a Takeover
Offer.
Information Relating to French Connection Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by French Connection Shareholders,
persons with information rights and other relevant persons for the
receipt of communications from French Connection may be provided to
MIP during the offer period as required under Section 4 of Appendix
4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Publication on Website and availability of Hard Copies
A copy of this Announcement will be available free of charge
(subject to any applicable restrictions with respect to persons
resident in Restricted Jurisdictions) on French Connection's
website ( http://www.frenchconnection.com ), by no later than 12
noon on 5 October 2021.
Neither the content of this website nor the content of any other
website accessible from hyperlinks on any such website is
incorporated into, or forms part of, this Announcement.
French Connection Shareholders may request a hard copy of this
Announcement (and any information incorporated by reference in this
Announcement), free of charge, by contacting Link Group during
business hours on 0371 664 0300 (local ) and +44 (0) 371 664 0300
or by submitting a request in writing to Link Group, 10(th) Floor,
Central Square, 29 Wellington Street, Leeds, LS1 4DL. Calls are
charged at the standard geographic rate and will vary by provider.
Calls outside the United Kingdom will be charged at the applicable
international rate. Lines will be open between 9:00 a.m. to 5:30
p.m., Monday to Friday excluding public holidays in England and
Wales. Unless French Connection Shareholders make such a request, a
hard copy of this Announcement and any such information
incorporated by reference in it will not be sent to French
Connection Shareholders. French Connection Shareholders may also
request that all future documents, announcements and information to
be sent to them in relation to the Acquisition be in hard copy
form.
If French Connection Shareholders are in any doubt about the
contents of this Announcement or what action they should take, they
are recommended to seek their own personal financial, tax and legal
advice immediately from their stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised
under the Financial Services and Markets Act 2000 (as amended) if
they are resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser in the
relevant jurisdiction.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Time
All times shown in this Announcement are London times, unless
otherwise stated.
FOR IMMEDIATE RELEASE
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 OF SUCH
JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
RECOMMED ACQUISITION
of
French Connection Group PLC ("French Connection" or the
"Company")
by
MIP Holdings Ltd ("MIP")
a newly incorporated entity directly owned and controlled by
Apinder Singh Ghura, Amarjit Singh Grewal and KJR Brothers
Limited
to be effected by way of a scheme of arrangement
under Part 26 of the Companies Act 2006
1. Introduction
Further to the strategic review and formal sale process
undertaken by the Company subsequent to the announcement on 2 March
2021, and further to the announcement released by French Connection
on 23 September 2021 regarding a possible offer for the Company,
the boards of MIP and French Connection are pleased to announce
that they have reached agreement on the terms and conditions of a
recommended acquisition under which MIP will acquire the entire
issued and to be issued ordinary share capital of French Connection
not currently owned by Apinder Singh Ghura. It is currently
intended that the Acquisition will be effected by means of a
Court--sanctioned scheme of arrangement under Part 26 of the
Companies Act.
Apinder Singh Ghura beneficially owns 24,518,465 French
Connection Shares (comprising approximately 25.4 per cent. of the
issued share capital of French Connection on 1 October 2021 (being
the last Business Day prior to the date of this Announcement)).
These French Connection Shares will be acquired by MIP pursuant to
the Conditional Sale Agreement at a price of 30 pence per French
Connection Share conditional upon the Acquisition becoming
Effective.
2. The Acquisition
In accordance with the terms of the Acquisition, which will be
subject to the Conditions and further terms set out below and in
Appendix I to this Announcement, and to be set out in the Scheme
Document, each French Connection Scheme Shareholder will be
entitled to receive:
for each Scheme Share: 30 pence in cash
-- The Acquisition Price values the entire issued and to be
issued ordinary share capital of French Connection at approximately
GBP28.98 million, which represents a premium of approximately:
o 91.7 per cent. to the Closing Price of 15.7 pence per French
Connection Share on 4 February 2021 (being the last Business Day
prior to the commencement of the Offer Period); and
o 29.9 per cent. to the Closing Price of 23.1 pence per French
Connection Share on 22 September 2021 (being the last Business Day
prior to the date of the Possible Offer Announcement).
If any dividend or other distribution or return of value is
proposed, declared, made, paid or becomes payable by French
Connection in respect of the French Connection Shares on or after
the date of this Announcement and prior to the Scheme becoming
Effective, MIP reserves the right to reduce the value of the
consideration payable for each French Connection Share by up to the
amount per French Connection Share of such dividend, distribution
or return of value, in which case any reference in this
Announcement to the consideration payable will be deemed to be a
reference to the consideration as so reduced. Any exercise by MIP
of its rights referred to in this paragraph shall be the subject of
an announcement and, for the avoidance of doubt, shall not be
regarded as constituting any revision or variation of the terms of
the Acquisition. In such circumstances, French Connection
Shareholders would be entitled to retain any such dividend,
distribution or other return of capital declared, made or paid or
which becomes payable.
It is expected that:
-- the Scheme Document will be published as soon as practicable
and, in any event, on or before 2 November 2021 (unless otherwise
agreed between French Connection and MIP with the consent of the
Panel);
-- the Court Meeting and the General Meeting will be held in Q4 2021; and
-- subject to the satisfaction or waiver of the Conditions set
out in Appendix I to this Announcement, the Scheme will become
Effective before the end of Q4 2021.
An expected timetable of events relating to the Acquisition will
be provided in the Scheme Document.
The Acquisition is conditional, amongst other things, on the
Scheme becoming Effective no later than the Long-Stop Date.
3. Background to and reasons for the Acquisition
The directors and shareholders of MIP believe French Connection
presents an opportunity to acquire a well-established fashion
brand. They are optimistic about the commercial future of the
French Connection brands, and intend to use the considerable
experience of MIP's investors and connected parties in fashion,
wholesaling and licensing to help guide French Connection's
management to execute and implement MIP's strategic plans, to
facilitate future growth and profitability for the business.
4. Background to and reasons for the recommendation
Founded in 1972, French Connection designs well made, stylish,
affordable clothing. The Company has developed that vision over the
years and management believes that the French Connection brand
remains synonymous with fashion and style, reflecting the Company's
ongoing focus on creating distinctive clothing through its focus on
design. The brand's strength lies in balancing new ideas with
quality and affordability and, in a world of "fast fashion", the
Company remains proud of its commitment to the creative
process.
In recent years, French Connection has been striving to
rationalise the business, especially its store portfolio, in the
face of a difficult macroeconomic environment and intense
competitive headwinds. Whilst good progress was being made towards
this goal, the Covid-19 pandemic created even greater challenges
for both the Company's trading and balance sheet. That the
management team negotiated these challenges is, in the views of the
French Connection Board, a significant achievement. Changes have
been implemented across all areas of the business to adapt to the
ever evolving markets in which it operates, however, those
challenges continue and in some respects have been accelerated by
the pandemic, whilst the Company's balance sheet flexibility has
been, and is likely to remain, constrained.
Whilst the French Connection Directors believe that the French
Connection Group's present strategy is capable of delivering
long-term growth and profitability, they believe the terms of the
Acquisition provide French Connection Shareholders with an
immediate, certain and attractive cash value. The French Connection
Directors believe the Acquisition appropriately recognises the
medium term prospects and growth potential of French Connection as
a standalone business, taking into account the dynamics of the
markets in which French Connection operates, and the competitive
landscape.
5. Recommendation
French Connection's Directors, who have been so advised by WH
Ireland as to the financial terms of the Acquisition, unanimously
consider the terms of the Acquisition to be fair and reasonable. In
providing their advice to the French Connection Directors, WH
Ireland has taken into account the commercial assessments of the
French Connection Directors. WH Ireland is providing independent
financial advice to the French Connection Directors for the
purposes of Rule 3 of the Takeover Code.
Accordingly, the French Connection Directors intend to recommend
unanimously that French Connection Shareholders vote in favour of
the Scheme at the Court Meeting and the Resolution(s) at the
General Meeting (or, if (with the consent of the Panel and in
accordance with the terms of the Cooperation Agreement) MIP
exercises its right to implement the Acquisition by way of a
Takeover Offer, accept or procure acceptances of such Takeover
Offer). Stephen Marks, being the only French Connection Director
holding French Connection Shares, has irrevocably undertaken to
vote in favour of the Scheme and the Resolution(s) (or to accept a
Takeover Offer to implement the Acquisition) in respect of his
entire holding of French Connection Shares, being a total of
37,812,690 French Connection Shares, (representing, in aggregate,
approximately 39.1 per cent. of the ordinary share capital of
French Connection in issue on 1 October 2021 (being the last
Business Day prior to the date of this Announcement)).
6. Information on MIP
MIP, incorporated on 28 October 2020 in England and Wales, was
formed for the purposes of implementing the Acquisition. MIP is a
company owned and controlled by Apinder Singh Ghura, Amarjit Singh
Grewal and KJR Brothers Limited (a company ultimately controlled by
Rafiq Daud Patel and Gafoor Daud Patel and their immediate
families, business partners of Apinder Singh Ghura and Amarjit
Singh Grewal, the directors of MIP).
As at the Effective Date, it is intended that MIP will be owned
in the following proportions: (a) Apinder Singh Ghura will own 38.9
per cent. of MIP (b) Amarjit Singh Grewal will own 38.9 per cent.
of MIP and (c) KJR Brothers Limited will own 22.2 per cent. of MIP.
Further, as part of the terms on which they are providing a secured
debt facility pursuant to the terms of the Facility Agreement
Gordon Brothers International LLC and Aurelius Finance Company
Limited have respectively subscribed for 101,430 and 43,470
non-voting preference shares of GBP0.1 each in MIP.
MIP has not traded since incorporation, nor has it entered into
any obligations other than the Conditional Sale Agreement, the
Facility Agreement and the KJR Loan Agreement and other than in
connection with implementation of the Acquisition. Further details
on MIP will be contained in the Scheme Document.
As MIP was incorporated on 28 October 2020, no financial
information is available or has been published in respect of MIP
and, there are no current ratings or outlooks publicly accorded to
MIP by ratings agencies.
MIP Shareholders' Agreement
On 4 October 2021 MIP, Amarjit Singh Grewal, Apinder Singh
Ghura, KJR Brothers Limited, Gordon Brothers International LLC and
Aurelius Finance Company Limited entered into a subscription and
shareholders' agreement in relation to MIP (the "MIP Shareholders'
Agreement").
Pursuant to the MIP Shareholders' Agreement, which contains
customary warranties, each of Amarjit Singh Grewal and Apinder
Singh Ghura subscribed for a further 499,500 ordinary shares of
GBP0.1 each and KJR Brothers Limited subscribed for 285,714
ordinary shares of GBP0.1 each in MIP. Additionally, Gordon
Brothers International LLC subscribed for 101,430 non-voting
preference shares of GBP0.1 each and Aurelius Finance Company
Limited subscribed for 43,470 non-voting preference shares of
GBP0.1 each in MIP.
The MIP Shareholders' Agreement governs the terms of each
party's shareholding in MIP and the right and obligations of each
MIP shareholder in respect of the governance of MIP. Certain
customary decision can only be taken with the approval of ordinary
shareholders holding at least 70 per cent of the voting rights.
The MIP preference shares entitle a holder to appoint a board
observer (and in certain limited circumstances to appoint a
director for a temporary period) and to receive the same
information as ordinary shareholders in MIP. Decisions of MIP's
board or shareholders in respect of a further set of reserved
matters can only be taken with the approval of the holder of the
preference shares. Such decisions relate to the issue and
redemption of equity and debt and the direction and conduct of
MIP's business.
In accordance with the terms of the MIP Shareholders' Agreement,
and without MIP preference shareholder approval, MIP may only
declare and pay dividends in favour of the ordinary shareholders in
respect of financial years commencing after 31 December 2022
provided that certain EBITDA, cash and debt repayment criteria are
met. Where dividends exceed 35 per cent. of the EBITDA in any such
qualifying financial years, the holders of MIP preference shares
shall be entitled to receive a dividend equal to 11.12 per cent. of
the amount by which the total dividend exceeds 35 per cent. of that
EBITDA.
On an exit, being an IPO or sale of the Company, or a sale of
all or substantially all of the business and assets of MIP, the MIP
preference shares shall convert into 10 per cent. of the fully
diluted ordinary share capital of MIP. If an exit has not been
achieved by the seventh anniversary of the date of the MIP
Shareholders' Agreement the holders of the MIP preference shares
may require the commencement of a process to market the Company for
sale (and with ordinary shareholders in MIP having the right to
prevent that process by purchasing the MIP preference shares on an
agreed valuation formula).
Apinder Singh Ghura
Apinder Singh Ghura is a chartered accountant and a founding
director of Chan Commercial Limited. Apinder Singh Ghura has been a
supplier to the apparel and fashion industry for 33 years, and has
more recently invested in the sector, including the apparel brand,
Bench, by way of his shareholding in Wraith Holdings International
Limited.
Apinder Singh Ghura is also a director of Chan Property Group
Limited, Northumberland County Developments Ltd and Newport Lane
Estates Limited, through which he has been involved in the
development of properties, including hotels and care homes, in the
North of England. Apinder Singh Ghura is a director of Willow View
Care Limited, a residential care centre based in
Stockton-On-Tees.
Between 2 February and 5 February 2021, Apinder Singh Ghura
purchased 24,518,465 French Connection Shares (comprising
approximately 25.4 per cent of the issued share capital of French
Connection on 1 October 2021 (being the last Business Day prior to
the date of this Announcement)). These French Connection Shares
will be acquired by MIP pursuant to the Conditional Sale Agreement
upon the Acquisition becoming Effective.
Amarjit Singh Grewal
Amarjit Singh Grewal is a founding member and director of
apparel company, Boi Trading Company Limited. Boi Trading Company
Limited, based in Manchester, owns a collection of men's and ladies
apparel brands including Crosshatch, Juice Clothing, Lily Lane,
Duck and Cover, Gabicci and Ripstop.
Amarjit Singh Grewal is a director of apparel brands Ringspun
Apparel Limited, Indigo Raw Clothing Ltd, Original Brands Limited,
Money Industries Ltd, Apparel Brands Limited, NJK Clothing Ltd and
Bench (through his directorship of Wraith Holdings International
Limited), as well as Unimetal Ltd, a wholesaler of strut support
channel and associated products, fasteners and fixings.
KJR Brothers Limited
KJR Brothers Limited was incorporated on 13 July 2021 in England
and Wales. The ultimate shareholders are brothers Rafiq Daud Patel,
Gafoor Daud Patel and their immediate family members, via their
holdings in ZDK & Co Limited, ALGK & Co Limited and MRK
& Co Limited.
Rafiq Daud Patel has experience in the apparel and fashion
industry as a director of wholesale clothing company, NJK Clothing
Limited. In October 2019, Amarjit Singh Grewal was appointed as a
director of NJK Clothing Limited, a major supplier to retailers
such as NEXT, Matalan and Asda.
7. Information on French Connection
French Connection Group designs and produces branded fashion
clothing for men and women which is distributed to more than 50
countries globally via retail, wholesale and e-commerce channels.
The Company also licenses and franchises the brand to third party
retailers allowing them to sell French Connection branded products
and operate French Connection branded retail stores in Europe, the
Middle East, Asia and Australia.
Its eponymous brand, French Connection, was founded in 1972 and
is an internationally recognised British brand. The French
Connection brand accounts for 92 per cent. of the French Connection
Group's revenues and operates in the fashion-orientated market
place offering a fashion-forward range of quality products at
affordable prices.
In addition to French Connection, the French Connection Group
portfolio includes two other brands - Great Plains and You Must
Create (YMC) - each of which targets a different market segment and
has achieved high levels of consumer recognition in the relevant
segment.
8. French Connection current trading and outlook
Following French Connection's last update in the preliminary
results announcement on 28 April 2021, trading has continued to
improve in line with management's expectations. Wholesale in both
the UK and the US has performed well, with a good outcome in the
Summer season coupled with encouraging order books for the Winter
collections.
The Company achieved a stronger trading performance following
the reopening of stores in Q2 2021 compared to the post-lockdown
periods of 2020 and has additionally seen the benefit of the
closure of several non-contributing stores over the last 18 months.
In addition, the Company took a significantly less promotional
stance through the Summer season in stores and through e-commerce,
with increased full price sales. Consequently, margins improved,
however sales growth has remained restricted to some extent.
Licence income has generally returned to growth following the
Covid-19 period, with a particularly strong performance from
DFS.
The net debt/cash position is slightly ahead of management's
expectations following a period of tight cash control, and this
continues to be supported by credit facilities of GBP20 million
which are available to fund the Company's larger working capital
requirements during the second half of the year.
There still, however, remains a risk of disruption to trading
due to any future Covid-19 restrictions, particularly through the
Winter months, together with other macro-economic factors including
the current constraints in the global supply chain and the impact
on the availability of merchandise at the correct time.
Further details in respect of the Company's trading performance
will be provided in the upcoming interim results announcement due
to be published in mid-October 2021.
9. Management, employees and locations of business
MIP's primary motivation behind the Acquisition is to implement
a strategy, together with French Connection's management, which
recognises the importance of French Connection's established
network of suppliers and wholesale customers and develops French
Connection's brands to facilitate future growth and profitability
for the business.
Following completion of the Acquisition, MIP intends to carry
out a detailed review of the overheads of the French Connection
Group to ensure the business is operating efficiently.
MIP intends to analyse the existing product range and product
pricing structure, with a view to improving its commercial edge,
whilst remaining relevant to French Connection's loyal retail
customer base.
Intentions with Respect to French Connection Directors
Upon completion of the Acquisition, MIP intends that Neil
Williams, Chief Operating Officer and Lee Williams, Chief Financial
Officer will continue their employment with French Connection. The
current Chief Executive and Chairman of the group, Stephen Marks,
will retire from the French Connection Board. The non-executive
directors of the Company will each be expected to resign from his
or her office as a director of the Company upon completion of the
Acquisition. There are no share incentive arrangements in respect
of the French Connection directors.
Intentions with Respect to French Connection Retail Store
Locations
Following completion of the Acquisition and as soon as is
reasonably practicable, MIP intends to carry out a strategic review
of French Connection's retail division which MIP anticipates will
conclude within the first six months. In January 2018, French
Connection operated 53 stores globally and currently operates 24
stores, representing a material reduction in MIP's retail estate,
which has in turn, significantly reduced the fixed costs associated
with this area of the business. MIP fully supports this strategy
and intends to continue this process instigated by French
Connection and will continue to opportunistically close stores
broadly in-line with recent rates of shrinkage, for example, upon
store-lease expiration or those which are negatively contributing
to Group profits. Any decision to close individual stores will be
made following the strategic review. MIP's objective is to maintain
a balance between retaining a visible high street presence for
French Connection's brands, and the need to stem the current rate
of losses of underperforming retail units to ensure that they do
not continue to impact negatively on the overall performance of the
French Connection Group.
Beyond continuing rationalisation of the retail store portfolio,
there are no plans to change or redeploy the fixed assets of French
Connection.
By contrast, e-commerce represents a significant growth
opportunity for French Connection. MIP expects this to be a key
part of French Connection's business in the future and intends to
seek new alliances and strategic partnerships during the twelve
months following Completion in order to grow this area of the
business in the medium term.
Intentions with Respect to French Connection Employees
MIP intends that, following completion of the Acquisition, the
contractual and statutory employment rights of all French
Connection management and employees, including rights to pensions,
will be fully safeguarded in accordance with applicable law. French
Connection operates a group defined contribution scheme and
contributes towards a number of personal pension plans. The
Company's intention is to maintain current employer contributions
to existing pension arrangements for existing employees and to
continue to enrol new employees in the group defined contribution
scheme in accordance with applicable workplace pensions
legislation.
Following completion of the Acquisition, MIP intends to review
both the conditions of employment and the balance of skills
required and functions of French Connection employees, along with
the management incentive structure of French Connection, in each
case to reflect the change in French Connection's corporate status
from a public company to a private company.
No conversations have yet taken place in relation to any
proposed management incentive structure, whether by reference to
common practice in this area or in relation to the likely quantum
of any awards, no such conversations will take place and no
commitments will be entered into, in each case prior to completion
of the Acquisition. Thereafter MIP intends, subject to agreement
with the relevant individuals, to introduce individually tailored
incentive arrangements for key members of the French Connection
management team.
French Connection has reduced the overall size of its workforce
in recent years, in part due to store closures, from an average of
824 during the financial year 2020/21 to 591 as at 31 August 2021.
Staff are employed within the following broad functional areas:
Administration (78 employees); Design, Development and Production
Management (100 employees) and Selling, Distribution and Retail
(413 employees). Whilst acknowledging the Group structure is more
complex as a result of French Connection's overseas operations and
supply chain, following completion of the Acquisition MIP believes
there is as an opportunity to continue to rebalance headcount
between customer facing employees and support functions, in part to
reflect recent shrinkage in the retail estate. As stated above, MIP
will continue to opportunistically close stores in line with recent
rates of attrition, and would expect there to be a corresponding
reduction in headcount. At present, MIP does not anticipate
reductions in headcount for non-customer facing roles to be
material in the context of total headcount for the Wider French
Connection Group.
In addition, French Connection employs a small number of
personnel whose functions are directly associated with the running
of French Connection as a public company who MIP will seek to
redeploy, where possible, in order to minimise the headcount
reduction that would otherwise arise. MIP will carry out a review
of the relevant functions following completion of the Acquisition
and the precise number of employees actually affected will depend
on the outcome of this review. Any affected employees will be
treated in a fair and transparent manner and in accordance with
their employment rights and applicable law.
Intentions with respect to French Connection Headquarters and
Distribution Centre
Following completion of the Acquisition, MIP has no intention,
at least within the next 12 months, to relocate French Connection's
headquarters and headquarter functions from the existing office in
London.
Furthermore, the negotiation of an extension to the lease
relating to the French Connection distribution centre in Purfleet
is currently being finalised (the lease having expired almost 12
months ago). As a result, MIP does not intend to relocate French
Connection's distribution centre during the next 12 months.
Trading facility
French Connection Shares are currently listed on the Official
List and admitted to trading on the Main Market of the London Stock
Exchange. As set out in paragraph 16, it is MIP's intention to seek
the cancellation of the listing of French Connection Shares on the
Official List of the FCA and cancellation of trading of French
Connection Shares on the Main Market of the London Stock Exchange
from or shortly after completion of the Acquisition.
Other Items
Owing to the nature of the business, other than normal product
development French Connection has no research and development
function. MIP has no plans to change this.
Views of the French Connection Board
In evaluating the Acquisition, the French Connection Board has
taken account of the impact of the Acquisition on wider
stakeholders and has given due consideration to MIP's intention for
French Connection's management, employees and places of business.
Whilst the French Connection Board recognise that MIP may no longer
require a limited number of central PLC-related functions and that
MIP intends to continue the process of rationalising the retail
store portfolio, both of which could result in some headcount
reductions, the French Connection Directors are pleased to note
that MIP does not anticipate making any material changes to the
locations or functions of the business. The French Connection
Directors are also pleased to note MIP's confirmation that,
following the completion of the Acquisition, the existing
contractual and statutory employment rights, including in relation
to pensions, of all French Connection employees will be fully
safeguarded in accordance with applicable law.
None of the statements in this paragraph 9 are "post-offer
undertakings" for the purpose of Rule 19.5 of the Takeover
Code.
10. Irrevocable undertakings
In addition to the irrevocable undertaking received from Stephen
Marks referred to in paragraph 5 above, MIP has received
irrevocable undertakings from Nicole Farhi, Candice Marks and from
the trustees of the discretionary trusts established for the
benefit of certain of Stephen Marks' children to vote in favour of
the Scheme at the Court Meeting and the Resolution(s) at the
General Meeting, in respect of a total of 4,281,500 French
Connection Shares, representing approximately 4.4 per cent. of the
ordinary share capital of French Connection in issue on 1 October
2021 (being the last Business Day prior to the date of this
Announcement).
Accordingly, MIP has received in total irrevocable undertakings
in respect of 42,094,190 French Connection Shares in aggregate,
representing approximately 43.6 per cent. of the ordinary share
capital of French Connection in issue on 1 October 2021 (being the
last Business Day prior to the date of this Announcement).
Further details of these irrevocable undertakings are set out in
Appendix III to this Announcement.
11. Financing
The cash consideration payable by MIP under the terms of the
Acquisition will be funded through:
i. a secured term debt facility of up to GBP25.0 million from
Aurelius Finance Company Limited and 1903 Partners, LLC an
affiliate of Gordon Brothers International, LLC pursuant to the
terms of the Facility Agreement; and
ii. an unsecured loan of GBP5.17 million to MIP by KJR Brothers
Limited pursuant to the terms of the KJR Loan Agreement.
The balance of funds from the Facility Agreement and KJR Loan
Agreement will be used by MIP to implement its strategy and to
repay existing debt of French Connection.
Singer Capital Markets is satisfied that sufficient resources
are available to MIP to satisfy in full the cash consideration
payable to French Connection Shareholders under the terms of the
Acquisition.
12. Conditional Sale Agreement
On 4 October 2021 MIP and Apinder Singh Ghura entered into the
Conditional Sale Agreement, under which MIP has agreed to acquire
the French Connection Shares owned by Apinder Singh Ghura (being a
total of 24,518,465 French Connection Shares, representing
approximately 25.4 per cent. of the ordinary share capital of
French Connection in issue on 1 October 2021 (being the last
Business Day prior to the date of this Announcement)) for 30 pence
in cash per French Connection Share, with GBP5.05 million of the
consideration being left outstanding on the terms of the ASG Loan
Agreement and GBP2.2 million of the consideration being left
outstanding on the terms of the Amarjit Loan Agreement
respectively. Completion of the Conditional Sale Agreement is
conditional only on the Acquisition becoming Effective.
13. Offer-related arrangements
Confidentiality Agreement
On 25 February 2021, Apinder Singh Ghura and French Connection
entered into a confidentiality agreement (the "Confidentiality
Agreement") in relation to the Acquisition, pursuant to which,
amongst other things, Apinder Singh Ghura has undertaken to keep
confidential information relating to French Connection and to the
Acquisition and not to disclose it to third parties (with certain
exceptions). The provisions of the Confidentiality Agreement also
extend to cover MIP and its investors. These confidentiality
obligations will remain in force for 18 months following the date
of the Confidentiality Agreement. The Confidentiality Agreement
contains standstill provisions which restrict Apinder Singh Ghura
from acquiring or seeking to acquire interests in certain
securities of French Connection without the consent of French
Connection; with those restrictions ceasing to apply if a third
party announces a firm intention to make an offer for French
Connection. The Confidentiality Agreement contains provisions
pursuant to which Apinder Singh Ghura has agreed not to solicit
certain employees of French Connection's group, subject to
customary carve-outs, for a period of 12 months from the date of
the Confidentiality Agreement.
Cooperation Agreement
On 4 October 2021 MIP and French Connection entered into the
Cooperation Agreement, under which MIP and French Connection have
agreed, to the extent any Authorisations are required in connection
with the Acquisition, to cooperate and provide each other with
reasonable assistance, information and access in relation to
obtaining such Authorisations.
The Cooperation Agreement records the intention of MIP and
French Connection to implement the Acquisition pursuant to the
Scheme. However MIP may, with the consent of the Panel, elect to
implement the Acquisition by way of a Takeover Offer in certain
circumstances, including if:
-- French Connection provides its prior written consent; or
-- a third party announces a firm intention to make an offer for
all or part of the issued and to be issued share capital of French
Connection; or
-- the French Connection Board (i) does not include a
recommendation in the Scheme Document; or (ii) withdraws, qualifies
or modifies its unanimous and unconditional recommendation in
relation to the Acquisition.
The Cooperation Agreement will terminate (among other
circumstances):
-- if agreed between MIP and French Connection prior to the Effective Date;
-- upon written notice by MIP to French Connection if (i) prior
to the Long-Stop Date any Condition which has not been waived is
not satisfied or has become incapable of satisfaction; or (ii) the
French Connection Board withdraws, adversely qualifies or adversely
modifies the French Connection Board's unanimous and unconditional
recommendation of the Acquisition; or (iii) the Scheme Document
fails to contain a unanimous and unconditional recommendation of
the Acquisition from the French Connection Board; or (iv) a third
party announces a firm intention to make an offer or revised offer
for French Connection which is recommended by the French Connection
Board or which completes, becomes effective or becomes
unconditional in all respects; or
-- upon written notice by either party if (i) the Scheme is not
approved by the French Connection Shareholders at the Court Meeting
or the General Meeting or the Court refuses to sanction the Scheme;
or (ii) the Scheme has not been implemented by the Long-Stop Date
(unless MIP has exercised its right to switch to a Takeover Offer
or announces that it intends to implement the Acquisition by a
different offer or scheme on substantially the same or improved
terms); or (iii) the Scheme Document and notice of the Court
Meeting and the General Meeting are not published within 28 days of
the date of the Press Announcement; or (iv) the Court Meeting
and/or the General Meeting are/is not held on or before the later
of the 22(nd) day after the expected date of such meeting or such a
later date as may be agreed between the parties; or (v) the
Effective Date has not occurred by the Long-Stop Date.
14. Structure of the Acquisition
The Scheme
It is intended that the Acquisition will be effected by means of
a Court-sanctioned scheme of arrangement between French Connection
and the French Connection Scheme Shareholders under Part 26 of the
Companies Act, although MIP reserves the right to elect to
implement the offer by means of a Takeover Offer with the consent
of the Panel and in accordance with the terms of the Cooperation
Agreement.
The purpose of the Scheme is for MIP to become the holder of the
entire issued and to be issued ordinary share capital of French
Connection not currently owned by Apinder Singh Ghura. Following
the Scheme becoming Effective, the Scheme Shares will be
transferred to MIP, in consideration for which French Connection
Scheme Shareholders whose names appear on the register of members
of French Connection at the Scheme Record Time will receive 30
pence in cash.
The French Connection Shares held by Apinder Singh Ghura will be
acquired by MIP pursuant to the terms of the Conditional Sale
Agreement with effect from the Acquisition becoming Effective.
Conditions
Implementation of the Scheme will be subject to the Conditions
and further terms set out in Appendix I to this Announcement and to
be set out in the Scheme Document. The Acquisition is conditional
upon the Scheme becoming unconditional and Effective, subject to
the Takeover Code, on or before the Long-Stop Date or such later
date (if any) as MIP and French Connection may agree and the Panel
and the Court may allow. In summary, the Acquisition will be
conditional, amongst other things, upon:
-- the approval of the Scheme by a majority in number of the
French Connection Scheme Shareholders present and voting (and
entitled to vote), either in person or by proxy, at the Court
Meeting (or any adjournment thereof), representing not less than 75
per cent. in value of the Scheme Shares held by such French
Connection Scheme Shareholders and such Court Meeting being held on
or before the 22nd day after the expected date of the Court Meeting
to be set out in the Scheme Document (or such later date (if any)
as MIP and French Connection may agree);
-- the resolution(s) required to approve and implement the
Scheme, as set out in the notice of the General Meeting (including,
without limitation, the Resolution(s), being duly passed by the
requisite majorities of French Connection Shareholders at the
General Meeting (or at any adjournment thereof) and such General
Meeting being held on or before the 22nd day after the expected
date of the General Meeting to be set out in the Scheme Document
(or such later date (if any) as MIP and French Connection may
agree); and
-- the sanction of the Scheme by the Court (without modification
or with modification on terms acceptable to MIP and French
Connection) and the delivery of a copy of the Court Order to the
Registrar of Companies and the Court Hearing being held on or
before the 22nd day after the expected date of the Court Meeting to
be set out in the Scheme Document (or such later date (if any) as
MIP and French Connection may agree); and
-- the other conditions not otherwise identified above (but set
out in the Scheme Document) either being satisfied or, with the
exception of certain conditions which are not capable of waiver,
waived.
The deadlines for the timing of the Court Meeting, the General
Meeting and the Court Hearing to sanction the Scheme as set out
above may be waived by MIP, and the Long-Stop Date may be extended
by agreement between French Connection and MIP.
Once the necessary approvals from French Connection Shareholders
and the Court have been obtained and the other Conditions have been
satisfied or (where applicable) waived, the Scheme shall then
become effective upon delivery of the Court Order to the Registrar
of Companies.
As a result of his interest in the Offer, Apinder Singh Ghura
will not be entitled to vote at the Court Meeting in respect of the
Scheme and his relevant holding of French Connection Shares
(comprising approximately 25.4 per cent. of the issued share
capital of French Connection as at 1 October 2021) will not count
towards the majorities required to approve the Scheme. Apinder
Singh Ghura is however entitled to vote at the General Meeting.
In order that the Court can be satisfied that the votes cast
constitute a fair representation of the views of French Connection
Shareholders, it is important that as many votes as possible are
cast in person or by proxy at the Court Meeting.
It is expected that the Scheme Document will be dispatched to
French Connection Shareholders within 28 days of this Announcement
(unless otherwise agreed between French Connection and MIP with the
consent of the Panel). Subject to the satisfaction or waiver of the
Conditions set out in Appendix I to this Announcement, it is
expected that the Scheme will become effective before the end of Q4
2021.
If the Scheme is not effective by the Long-Stop Date (or such
later date (if any) as French Connection and MIP may, with the
consent of the Panel, agree and (if required) the Court may allow),
the Scheme will not be implemented and the Acquisition will not
proceed.
Upon the Scheme becoming Effective: (i) it shall be binding on
all French Connection Scheme Shareholders, irrespective of whether
or not they attended or voted at the Court Meeting or the General
Meeting (and if they attended and voted, whether or not they voted
in favour); and (ii) share certificates in respect of French
Connection Shares will cease to be valid and entitlements to French
Connection Shares held within the CREST system will be cancelled.
The consideration for the transfer of Scheme Shares to MIP will be
despatched to French Connection Scheme Shareholders no later than
14 days after the Effective Date.
The Scheme Document will include full details of the Scheme,
together with notices of the Court Meeting and the General Meeting.
The Scheme will be governed by English law and will be subject to
the jurisdiction of the Courts of England and Wales. The Scheme
will also be subject to the applicable requirements of the Takeover
Code, the Panel, the London Stock Exchange and the FCA.
Right to switch to a Takeover Offer
MIP reserves the right, with the consent of the Panel and in
accordance with the terms of the Cooperation Agreement, a summary
of which is set out in paragraph 13 above, to elect to implement
the Acquisition by means of a Takeover Offer for the entire issued
and to be issued share capital of French Connection and to make
appropriate amendments to the terms of the Acquisition arising from
the change of structure from a Scheme to a Takeover Offer. In such
event, the Acquisition will be implemented on the same terms as
those which would apply to the Scheme, subject to appropriate
amendments, so far as applicable, as those which would apply to the
Scheme, including (without limitation) an acceptance condition set
at 75 per cent. (or such percentage as is determined in accordance
with the Cooperation Agreement).
If the Acquisition is effected by way of a Takeover Offer and
such Takeover Offer becomes or is declared unconditional in all
respects and sufficient acceptances are received, MIP intends to:
(i) make a request to the UK Listing Authority to cancel the
listing of the French Connection Shares from the Official List;
(ii) make a request to the London Stock Exchange to cancel trading
in French Connection Shares on the Main Market; and (iii) exercise
its rights to apply the provisions of Chapter 3 of Part 28 of the
Companies Act to acquire compulsorily the remaining French
Connection Shares in respect of which the Takeover Offer has not
been accepted.
15. Disclosure of interests in French Connection
Apinder Singh Ghura a director and shareholder of MIP made a
public Opening Position Disclosure in respect of the interests in
the relevant securities of French Connection held by him on 5
February 2021 (the "ASG Opening Position Disclosure").
As set out in the ASG Opening Position Disclosure, 24,470,119
French Connection Shares were held by Apinder Singh Ghura as at the
opening of trading on 5 February 2021. On 5 February 2021, Apinder
Singh Ghura acquired (over a series of transactions) a further
306,846 French Connection Shares, and disposed of 258,500, bringing
his total shareholding to 24,518,465 French Connection Shares
(representing approximately 25.4 per cent. of the ordinary share
capital of French Connection in issue on 1 October 2021 (being the
last Business Day prior to the date of this Announcement)).
It is intended that the French Connection Shares held by Apinder
Singh Ghura will be acquired by MIP pursuant to the terms of the
Conditional Sale Agreement with effect from the Acquisition
becoming Effective.
Other than as disclosed above and except for the irrevocable
undertakings referred to in paragraph 10 above, as at the close of
business on 1 October 2021 (being the last Business Day prior to
the date of this Announcement), none of MIP or any MIP Directors
or, so far as MIP is aware, any person acting, or deemed to be
acting, in concert with MIP for the purposes of the
Acquisition:
-- had an interest in, or right to subscribe for, relevant securities of French Connection;
-- had any short position in (whether conditional or absolute
and whether in the money or otherwise), including any short
position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take
delivery of, relevant securities of French Connection;
-- had procured an irrevocable commitment or letter of intent to
accept the terms of the Acquisition in respect of relevant
securities of French Connection; or
-- had borrowed or lent any French Connection Shares.
Furthermore, save for the irrevocable undertakings described in
paragraph 10 above, no arrangement exists between MIP or French
Connection or a person acting in concert with MIP or French
Connection in relation to French Connection Shares. For these
purposes, an "arrangement" includes any indemnity or option
arrangement, any agreement or any understanding, formal or
informal, of whatever nature, relating to French Connection Shares
which may be an inducement to deal or refrain from dealing in such
securities.
16. Delisting and re-registration
The last day of dealings in French Connection Shares is expected
to be the Business Day prior to the Effective Date. Prior to the
Scheme becoming Effective, it is intended that an application will
be made to the UK Listing Authority and the London Stock Exchange
for the cancellation of the listing of the French Connection Shares
on the Official List and the trading of the French Connection
Shares on the premium segment of the Main Market of the London
Stock Exchange, such cancellation to be conditional on the Scheme
becoming Effective, and to take effect on and from or shortly after
the Effective Date.
On the Effective Date, share certificates in respect of French
Connection Shares will cease to be valid and entitlements to French
Connection Shares held within the CREST system will be cancelled or
transferred. It is also proposed that, as soon as reasonably
practicable following the Effective Date, French Connection will be
re-registered as a private limited company. A resolution to approve
the re-registration will be proposed at the General Meeting.
17. Overseas Shareholders
The ability of Overseas Shareholders to participate in the
Acquisition and the distribution of this Announcement in, into or
from jurisdictions other than the United Kingdom may be restricted
by the laws of those jurisdictions and therefore persons into whose
possession this Announcement comes should inform themselves of, and
observe, any such restrictions. Any person (including without
limitation, nominees, trustees and custodians) who would, or
otherwise intends to, forward this Announcement, the Scheme
Document, the Forms of Proxy or any accompanying document to any
jurisdiction outside the United Kingdom should refrain from doing
so and seek appropriate professional advice before taking any
action. If any Overseas Shareholder remains in any doubt, it should
consult an appropriate independent professional adviser in its
relevant jurisdiction without delay. In particular, the ability of
persons who are not resident in the United Kingdom to vote their
French Connection Shares at the Court Meeting or the General
Meeting or to execute and deliver Forms of Proxy appointing another
to vote their French Connection Shares in respect of the Court
Meeting or the General Meeting on their behalf, may be affected by
the laws of the relevant jurisdiction in which they are located.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
18. Documents published on website
Copies of the following documents will be made available on
French Connection's website at http://www.frenchconnection.com by
no later than 12 noon on 5 October 2021 (being the Business Day
following the date of this Announcement) until the end of the Offer
Period:
-- this Announcement;
-- the irrevocable undertakings referred to in paragraph 10 above;
-- the Confidentiality Agreement;
-- the Cooperation Agreement;
-- the Conditional Sale Agreement;
-- the MIP Shareholders' Agreement;
-- the Facility Agreement;
-- the ASG Loan Agreement;
-- the Amarjit Loan Agreement; and
-- the KJR Loan Agreement.
Neither the contents of French Connection's website, nor the
content of any other website accessible from hyperlinks on such
website, is incorporated into or forms part of, this
Announcement.
19. General
Singer Capital Markets and WH Ireland have each given and not
withdrawn their consent to the publication of this Announcement
with the inclusion herein of the references to their names in the
form and context in which they appear.
Shoosmiths LLP are acting as legal adviser to MIP.
WH Ireland is acting as financial adviser and corporate broker
to French Connection. Clifford Chance LLP is acting as legal
adviser to French Connection.
The terms and conditions contained in this Announcement are set
out in Appendix I to this Announcement. The sources of certain
financial information and bases of calculation contained in this
Announcement are set out in Appendix II to this Announcement.
Certain terms and expressions used in this Announcement are defined
in Appendix IV to this Announcement.
Enquiries:
MIP
Apinder Singh Ghura
via Walbrook PR (public relations adviser Tel: +44 (0) 20 7933
to MIP) 8787
Paul McManus
info@walbrookpr.com
French Connection Group PLC Tel: +44 (0) 20 7036
7063
Neil Williams, Chief Operating Officer
Lee Williams, Chief Financial Officer
WH Ireland (Financial Adviser and Corporate Tel: +44 (0) 20 7220
Broker to French Connection) 1666
Adrian Hadden
Ben Good
Paternoster Communications (public relations
adviser to French Connection)
Tom Buchanan Tel: +44 (0) 20 3012
0241
IMPORTANT NOTICES:
Disclaimers
Singer Capital Markets is acting exclusively as financial
adviser for to 1903 Partners, LLC and Aurelius Finance Company
Limited (lenders to MIP) and no-one else in connection with the
Acquisition and will not be responsible to anyone other than 1903
Partners, LLC and Aurelius Finance Company Limited for providing
the protections offered to clients of Singer Capital Markets or for
providing advice in relation to the Acquisition, the contents of
this Announcement or any matter referred to in this Announcement.
Singer Capital Markets is authorised and regulated in the United
Kingdom by the Financial Conduct Authority in respect of regulated
activities. Singer Capital Markets can be contacted at its
principal office: One Bartholomew Lane, London EC2N 2AX. Singer
Capital Markets is also providing the cash confirmation statement
for the purposes of the Takeover Code as set out in paragraph 11 of
this Announcement.
WH Ireland, which is authorised and regulated in the UK by the
FCA, is acting as financial adviser and broker exclusively for
French Connection and no one else in connection with the matters
set out in this Announcement and will not regard any other person
as its client in relation to the matters in this Announcement and
will not be responsible to anyone other than French Connection for
providing the protections afforded to clients of WH Ireland, nor
for providing advice in relation to any matter referred to
herein.
This Announcement is for information purposes only and is not
intended to, and does not constitute, or form part of any offer,
invitation, inducement or the solicitation of an offer to purchase,
otherwise acquire, subscribe for, sell or otherwise dispose of or
exercise rights in respect of any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise. The Acquisition will be made solely
through the Scheme Document and the accompanying Forms of Proxy (or
by any other document by which the Acquisition is made), which will
together contain the full terms and conditions of the Acquisition
and the Scheme, including details of how to vote in respect of the
Acquisition and the Scheme. Any decision in respect of, or other
response to, the Acquisition should be made only on the basis of
the information contained in the Scheme Document or any document by
which the Acquisition is made.
In accordance with normal UK practice, MIP or its nominees, or
its brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase French Connection Shares,
other than pursuant to the Acquisition, until the date on which the
Scheme (or Takeover Offer, if applicable) becomes effective, lapses
or is otherwise withdrawn. These purchases may occur either in the
open market at prevailing prices or in private transactions at
negotiated prices. Any information about such purchases will be
disclosed as required in the UK and will be reported to a
regulatory information service and will be available on the London
Stock Exchange website at www.londonstockexchange .com.
Overseas Shareholders
The availability of the Acquisition to Overseas Shareholders and
the distribution of this Announcement in, into or from
jurisdictions other than the United Kingdom may be restricted by
the laws of those jurisdictions and therefore persons into whose
possession this Announcement comes should inform themselves of, and
observe, any such restrictions. Any person (including without
limitation, nominees, trustees and custodians) who would, or
otherwise intends to, forward this Announcement, the Scheme
Document or any accompanying document to any jurisdiction outside
the United Kingdom should refrain from doing so and seek
appropriate professional advice before taking any action. If any
Overseas Shareholder remains in any doubt, it should consult an
appropriate independent professional adviser in its relevant
jurisdiction without delay. In particular, the ability of persons
who are not resident in the United Kingdom to vote their French
Connection Shares at the Court Meeting or the General Meeting or to
execute and deliver Forms of Proxy appointing another to vote their
French Connection Shares in respect of the Court Meeting or the
General Meeting on their behalf, may be affected by the laws of the
relevant jurisdiction in which they are located.
Failure to comply with any such restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and
persons involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person.
This Announcement has been prepared for the purposes of complying
with the law of England and Wales and the Takeover Code and the
information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance
with the laws of jurisdictions outside of England and Wales.
Additional Information for US Investors
The Acquisition is being made to acquire the securities of an
English company by means of a scheme of arrangement provided for
under the law of England and Wales. A transaction effected by means
of a scheme of arrangement is not subject to the tender offer or
proxy solicitation rules under the US Exchange Act of 1934 (the "US
Exchange Act"). Accordingly, the Scheme will be subject to
disclosure requirements and practices applicable in the United
Kingdom to schemes of arrangement, which are different from the
disclosure requirements of the US tender offer and proxy
solicitation rules. The financial information included in this
Announcement and the Scheme documentation has been or will have
been prepared in accordance with International Financial Reporting
Standards and thus may not be comparable to financial information
of US companies or companies whose financial statements are
prepared in accordance with US GAAP. US GAAP differs in certain
significant respects from the International Financial Reporting
Standards . None of the financial information in this Announcement
or the Scheme documentation has been audited in accordance with
auditing standards generally accepted in the US or the auditing
standards of the Public Company Accounting Oversight Board (United
States). If MIP were to elect to implement the Acquisition by means
of a Takeover Offer and determines to extend such Takeover Offer
into the US, such Takeover Offer would be made in compliance with
applicable US laws and regulations, including Section 14(e) of the
US Exchange Act and Regulation 14E thereunder. Such a Takeover
Offer would be made in the United States by MIP and no one
else.
The receipt of cash pursuant to the Acquisition by a US holder
as consideration for the transfer of its French Connection Shares
pursuant to the Scheme will likely be a taxable transaction for US
federal income tax purposes and under applicable US state and
local, as well as foreign and other, tax laws. Each French
Connection Shareholder is urged to consult his independent legal,
tax and financial advisers immediately regarding the tax
consequences of the Acquisition applicable to him/her, including
under applicable US state and local, as well as foreign and other,
tax laws.
It may be difficult for US holders to enforce their rights and
claims arising out of the US federal securities laws in connection
with the Acquisition, since MIP and French Connection are located
in countries other than the United States, and some or all of their
officers and directors may be residents of countries other than the
United States. US holders may not be able to sue a non-US company
or its officers or directors in a non-US court for violations of US
securities laws. Further, it may be difficult to compel a non-US
company and its affiliates to subject themselves to a US court's
judgement.
In the event that the Acquisition is implemented by way of
Takeover Offer, in compliance with applicable UK laws, MIP, its
dealer manager (and their advisors or affiliates), or its nominees,
or its brokers (acting as agents), may from time to time make
certain purchases of, or arrangements to purchase, shares or other
securities of French Connection other than pursuant to such
Takeover Offer during the period in which such Takeover Offer would
remain open for acceptance. These purchases may occur either in the
open market at prevailing prices or in private transactions at
negotiated prices. Any information about such purchases or
arrangements to purchase will be disclosed as required in the
United Kingdom, will be reported to a Regulatory Information
Service and will be available on the London Stock Exchange website
at www.londonstockexchange.com .
Neither the Acquisition nor this Announcement have been approved
or disapproved by the US Securities and Exchange Commission, any
state securities commission in the United States or any other US
regulatory authority, nor have such authorities approved or
disapproved or passed judgement upon the fairness or the merits of
the Acquisition, or determined if the information contained in this
Announcement is adequate, accurate or complete. Any representation
to the contrary is a criminal offence in the United States.
Forward-Looking Statements
This Announcement (including any information that is
incorporated by reference into this Announcement) contains
statements about the Wider MIP Group and the Wider French
Connection Group that are or may be forward-looking statements
which are prospective in nature. All statements other than
statements of historical facts may be forward-looking statements.
Often, but not always, forward-looking statements can be identified
by the use of forward-looking words such as "targets", "plans",
"believes", "expects", "aims", "intends", "will", "should",
"could", "would", "may", "anticipates", "estimates", "synergy",
"cost-saving", "projects", "goal" or "strategy" or, words or terms
of similar substance or the negative thereof. Forward-looking
statements may include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects; (ii) business and
management strategies and the expansion and growth of the
operations of the Wider MIP Group or the Wider French Connection
Group and potential synergies resulting from the Acquisition; and
(iii) the effects of government regulation on the businesses of the
Wider MIP Group or the Wider French Connection Group.
These forward-looking statements are not guarantees of future
performance. Such forward-looking statements involve known and
unknown risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many
factors could cause actual results to differ materially from those
projected or implied in any forward-looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of
the date of this Announcement. All subsequent oral or written
forward-looking statements attributable to the Wider MIP Group or
the Wider French Connection Group or any of their respective
members, directors, officers or employees or any persons acting on
their behalf are expressly qualified in their entirety by the
cautionary statement above. MIP and French Connection disclaim any
obligation to update any forward-looking or other statements
contained in this Announcement, except as required by applicable
law.
No Profit Forecasts or Estimates
No statement in this Announcement is intended as a profit
forecast or estimate for any period and no statement in this
Announcement should be interpreted to mean that earnings or
earnings per share for French Connection for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per share for French Connection.
Disclosure Requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in 1 per cent. or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the offer period and, if later, following the
announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3:30 p.m. (London time) on the 10th Business
Day following the commencement of the offer period and, if
appropriate, by no later than 3:30 p.m. (London time) on the 10th
Business Day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or
becomes, interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3:30 p.m.
(London time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel .org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Right to switch to a Takeover Offer
MIP reserves the right, with the consent of the Panel and in
accordance with the terms of the Cooperation Agreement, to elect to
implement the Acquisition by means of a Takeover Offer for the
entire issued and to be issued share capital of French Connection
and to make appropriate amendments to the terms of the Acquisition
arising from the change of structure from a Scheme to a Takeover
Offer.
Information Relating to French Connection Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by French Connection Shareholders,
persons with information rights and other relevant persons for the
receipt of communications from French Connection may be provided to
MIP during the offer period as required under Section 4 of Appendix
4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Publication on Website and availability of Hard Copies
A copy of this Announcement will be available free of charge
(subject to any applicable restrictions with respect to persons
resident in Restricted Jurisdictions) on French Connection's
website ( http://www.frenchconnection.com ), by no later than 12
noon on 5 October 2021.
Neither the content of this website nor the content of any other
website accessible from hyperlinks on any such website is
incorporated into, or forms part of, this Announcement.
French Connection Shareholders may request a hard copy of this
Announcement (and any information incorporated by reference in this
Announcement), free of charge, by contacting Link Group during
business hours on 0371 664 0300 (local ) and +44 (0) 371 664 0300
or by submitting a request in writing to Link Group, 10(th) Floor,
Central Square, 29 Wellington Street, Leeds, LS1 4DL. Calls are
charged at the standard geographic rate and will vary by provider.
Calls outside the United Kingdom will be charged at the applicable
international rate. Lines will be open between 9:00 a.m. to 5:30
p.m., Monday to Friday excluding public holidays in England and
Wales. Unless French Connection Shareholders make such a request, a
hard copy of this Announcement and any such information
incorporated by reference in it will not be sent to French
Connection Shareholders. French Connection Shareholders may also
request that all future documents, announcements and information to
be sent to them in relation to the Acquisition be in hard copy
form.
If French Connection Shareholders are in any doubt about the
contents of this Announcement or what action they should take, they
are recommended to seek their own personal financial, tax and legal
advice immediately from their stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised
under the Financial Services and Markets Act 2000 (as amended) if
they are resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser in the
relevant jurisdiction.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Time
All times shown in this Announcement are London times, unless
otherwise stated.
APPIX I
CONDITIONS AND FURTHER TERMS OF THE ACQUISITION AND THE
SCHEME
Part A: Conditions of the Acquisition and the Scheme
1. The Acquisition will be conditional upon the Scheme becoming
unconditional and Effective, subject to the Takeover Code, on or
before the Long-Stop Date.
2. The Scheme will be subject to the following conditions:
2.1 the approval of the Scheme by a majority in number of the
French Connection Scheme Shareholders at the Voting Record Time
present and voting (and entitled to vote), in person or by proxy,
at the Court Meeting and at any separate class meeting which the
Court may require (or, in either case, any adjournment thereof)
representing not less than 75 per cent. in value of the Scheme
Shares held by those French Connection Scheme Shareholders and such
Court Meeting being held on or before the 22(nd) day after the
expected date of the Court Meeting to be set out in the Scheme
Document (or such later date (if any) as may be agreed by MIP and
French Connection and, if required, the Court and the Panel may
allow);
2.2 the resolution(s) required to approve and implement the
Scheme being duly passed by French Connection Shareholders by the
requisite majority or majorities at the General Meeting (or any
adjournment thereof) and such General Meeting being held on or
before the 22(nd) day after the expected date of the General
Meeting to be set out in the Scheme Document (or such later date
(if any) as may be agreed by MIP and French Connection and, if
required, the Court and the Panel may allow);
2.3 the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms
acceptable to French Connection and MIP at the Court Hearing) and
such Court Hearing being held on or before the 22(nd) day after the
expected date of the Court Hearing to be set out in the Scheme
Document in due course (or such later date (if any) as may be
agreed between MIP and French Connection and, if required, the
Court and the Panel may allow); and
2.4 delivery of a copy of the Court Order to the Registrar of Companies.
3. Subject as stated in Part B below and to the requirements of
the Panel, the Acquisition will be conditional upon the following
Conditions and, accordingly, the Court Order will not be delivered
to the Registrar of Companies unless such Conditions (as amended if
appropriate) have been satisfied (where capable of satisfaction)
or, where relevant, waived:
Notifications, waiting periods and authorisations
3.1 all notifications, filings or applications in connection
with the Acquisition which are necessary or reasonably considered
appropriate by MIP having been made and all necessary waiting
periods (including any extensions thereof) under any applicable
legislation or regulation of any jurisdiction having expired,
lapsed or been terminated (as appropriate) and all applicable
statutory and regulatory obligations in any jurisdiction having
been complied with in respect of the Acquisition and the
acquisition or the proposed acquisition of any shares or other
securities in, or control or management of, French Connection or
any other member of the Wider French Connection Group by any member
of the Wider MIP Group, in each case where the direct consequence
of the absence of such notification, filing or application would
have a material adverse effect on the Wider French Connection Group
or the Wider MIP Group in each case taken as a whole, and all
Authorisations necessary in respect thereof having been obtained in
terms and in a form reasonably satisfactory to MIP from all
appropriate Third Parties or (without prejudice to the generality
of the foregoing) from any person or bodies with whom any member of
the Wider French Connection Group or the Wider MIP Group has
entered into contractual arrangements and all such Authorisations
necessary to carry on the business of any member of the Wider
French Connection Group in any jurisdiction having been obtained
and all such Authorisations remaining in full force and effect at
the time at which the Acquisition becomes Effective and there being
no notice of an intention to revoke, suspend, restrict, modify or
not to renew such Authorisations, in each case to an extent or in a
manner which is material in the context of the Acquisition;
Antitrust and regulatory
3.2 no antitrust regulator or Third Party having decided,
threatened or given notice in writing of a decision to take,
institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference (and in each case, not having
withdrawn the same), or having required any action to be taken or
otherwise having done anything, or having enacted, made or proposed
any statute, regulation, decision, order or change to published
practice (and in each case, not having withdrawn the same) and
there not continuing to be outstanding any statute, regulation,
decision or order which would or might reasonably be expected
to:
3.2.1 require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any
member of the Wider MIP Group or by any member of the Wider French
Connection Group of all or any material part of their respective
businesses, assets or property or impose any material limitation on
the ability of all or any of them to conduct their respective
businesses (or any part thereof) or to own, control or manage any
of their assets or properties (or any part thereof);
3.2.2 except pursuant to Chapter 3 of Part 28 of the Companies
Act and other than in connection with the implementation of the
Acquisition, require any member of the Wider MIP Group or the Wider
French Connection Group to acquire or offer to acquire any shares,
other securities (or the equivalent) or interest in any member of
the Wider French Connection Group or any asset owned by any third
party;
3.2.3 impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider MIP Group directly
or indirectly to acquire, hold or to exercise effectively all or
any rights of ownership in respect of shares or loans or securities
convertible into shares or other securities in the Wider French
Connection Group or on the ability of any member of the Wider
French Connection Group or any member of the Wider MIP Group
directly or indirectly to hold or exercise effectively all or any
rights of ownership in respect of shares or other securities (or
the equivalent) in, or to exercise voting or management control
over, any member of the Wider French Connection Group (in any case
to an extent or in a manner which is material in the context of the
Wider MIP Group or the Wider French Connection Group taken as a
whole or material in the context of the Acquisition);
3.2.4 otherwise adversely affect any or all of the business,
assets, liabilities, profits or prospects of any member of the
Wider French Connection Group to an extent which is material to the
Wider French Connection Group taken as a whole or material in the
context of the Acquisition;
3.2.5 result in any member of the Wider French Connection Group
ceasing to be able to carry on business under any name under which
it presently carries on business (the consequences of which are
material in the context of the Wider French Connection Group taken
as a whole);
3.2.6 require any member of the Wider French Connection Group to
relinquish, terminate or amend in any material way any material
contract to which any member of the Wider French Connection Group
is a party;
3.2.7 make the Acquisition, its implementation or the
acquisition or proposed acquisition of any shares or other
securities in, or control or management of, French Connection by
any member of the Wider MIP Group void, unenforceable and/or
illegal under the laws of any relevant jurisdiction, or otherwise,
directly or indirectly materially prevent or prohibit, restrict,
restrain or delay or otherwise materially interfere with the
implementation of, or impose material additional conditions or
obligations with respect to, or otherwise materially challenge,
impede, interfere with or require material adverse amendment of the
Acquisition or the acquisition or proposed acquisition of any
shares or other securities in, or control or management of, French
Connection by any member of the Wider MIP Group;
3.2.8 require, prevent or materially delay a divestiture by any
member of the Wider MIP Group of any shares or other securities (or
the equivalent) in or any of the assets of any member of the Wider
French Connection Group to the extent which is material in the
context of the Wider MIP Group or the Wider French Connection Group
taken as a whole or material in the context of the Acquisition;
or
3.2.9 impose any material limitation on the ability of any
member of the Wider MIP Group or any member of the Wider French
Connection Group to conduct, integrate or coordinate all or any
part of its business with all or any part of the business of any
other member of the Wider MIP Group and/or the Wider French
Connection Group to the extent which is material in the context of
the Wider MIP Group or the Wider French Connection Group taken as a
whole or material in the context of the Acquisition,
and all applicable waiting and other time periods (including any
extensions thereof) during which any such antitrust regulator or
Third Party could decide to take, institute, implement or threaten
any such action, proceeding, suit, investigation, enquiry or
reference or take any other step under the laws of any applicable
jurisdiction in respect of the Acquisition or the acquisition or
proposed acquisition of any French Connection Shares or otherwise
intervene having expired, lapsed or been terminated;
Certain matters arising as a result of any arrangement,
agreement, etc.
3.3 save as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Wider French Connection Group
is a party or by or to which any such member or any of its assets
is or may be bound, entitled or be subject or any event or
circumstance, which, as a consequence of the Acquisition or the
acquisition or the proposed acquisition by any member of the Wider
MIP Group of any shares or other securities (or the equivalent) in
French Connection or because of a change in the control or
management of any member of the Wider French Connection Group or
otherwise, might reasonably be expected to result in, to an extent
in any such case which is material and adverse in the context of
the Wider French Connection Group taken as a whole or material and
adverse in the context of the Acquisition:
3.3.1 any monies borrowed by, or any other indebtedness, actual
or contingent, of, or any grant available to, any member of the
Wider French Connection Group being or becoming repayable, or
capable of being declared repayable, immediately or prior to its or
their stated maturity date or repayment date, or the ability of any
such member to borrow monies or incur any indebtedness being
withdrawn or inhibited or being capable of becoming or being
withdrawn or inhibited;
3.3.2 the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any member of the Wider French Connection
Group or any such mortgage, charge or other security interest
(whenever created, arising or having arisen) becoming enforceable
or being enforced;
3.3.3 any assets or interests of any member of the Wider French
Connection Group being disposed of or charged, or any right arising
under which any such asset or interest could be required to be
disposed of or charged, in each case otherwise than in the ordinary
course of business;
3.3.4 any such arrangement, agreement, lease, licence,
franchise, permit or other instrument being terminated or the
rights, liabilities, obligations or interests of any member of the
Wider French Connection Group being adversely modified or adversely
affected or any onerous obligation or liability arising or any
adverse action being taken or arising thereunder;
3.3.5 any liability of any member of the Wider French Connection
Group to make any severance, termination, bonus or other payment to
any of its directors, or other officers;
3.3.6 any requirement on any member of the Wider French
Connection Group to acquire, subscribe, pay up or repay any shares
or other securities;
3.3.7 any member of the Wider French Connection Group ceasing to
be able to carry on business under any name under which it
presently carries on business;
3.3.8 the value of, or the financial or trading position of any
member of the Wider French Connection Group being prejudiced or
adversely affected; or
3.3.9 the creation (other than trade creditors or other
liabilities incurred in the ordinary course of business) or
acceleration of any liability (actual or contingent) by any member
of the Wider French Connection Group,
and no event having occurred which, under any provision of any
arrangement, agreement, licence, permit, franchise, lease or other
instrument to which any member of the Wider French Connection Group
is a party or by or to which any such member or any of its assets
are bound, entitled or subject, would or might reasonably be
expected to result in any of the events or circumstances as are
referred to in Conditions 3.3.1 to 3.3.9 , in each case to an
extent which is material in the context of the Wider French
Connection Group taken as a whole or material in the context of the
Acquisition;
Certain events occurring since 31 January 2021
3.4 since 31 January 2021, save as Disclosed, no member of the
Wider French Connection Group having:
3.4.1 issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue, of
additional shares of any class, or securities or securities
convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares, securities or
convertible securities or transferred or sold or agreed to transfer
or sell or authorised or proposed the transfer or sale of French
Connection Shares out of treasury (except, in each case, where
relevant, as between French Connection and wholly owned
subsidiaries of French Connection or between the wholly owned
subsidiaries of French Connection);
3.4.2 recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution (whether payable in cash or otherwise) other than
dividends (or other distributions whether payable in cash or
otherwise) lawfully paid or made by any subsidiary of French
Connection to French Connection or any of its subsidiaries;
3.4.3 other than pursuant to the Acquisition (and except for
transactions between French Connection and its wholly owned
subsidiaries or between the wholly owned subsidiaries of French
Connection) implemented, effected, authorised or proposed or
announced its intention to implement, effect or authorise or
propose any merger, demerger, reconstruction, amalgamation,
subdivision, scheme, commitment or acquisition or disposal or
transfer of assets (other than in the ordinary course of business),
or shares or loan capital (or the equivalent thereof) or other
equivalent transaction or arrangement in respect of itself or any
member of the Wider French Connection Group;
3.4.4 except for transactions between French Connection and its
wholly owned subsidiaries or between the wholly owned subsidiaries
of French Connection, and other than transactions in the ordinary
course of trading, disposed of, or transferred, mortgaged or
created any security interest over any asset or any right, title or
interest in any asset (including shares and trade investments) or
authorised, proposed or announced any intention to do so in each
case to an extent which in any case is material in the context of
the Wider French Connection Group taken as a whole or in the
context of the Acquisition;
3.4.5 except for transactions between French Connection and its
wholly owned subsidiaries or between the wholly owned subsidiaries
of French Connection, effected, authorised, proposed or announced
its intention to propose any change in its loan capital which in
any case is material and adverse in the context of the Wider French
Connection Group taken as a whole or material in the context of the
Acquisition;
3.4.6 issued, authorised or proposed or announced an intention
to authorise or propose the issue of or made any change in or to
the terms of any debentures or become subject to any contingent
liability or (other than trade credit incurred in the ordinary
course of business) incurred or increased any indebtedness except
as between French Connection and any of its wholly owned
subsidiaries or between such subsidiaries which in any case is
material in the context of the Wider French Connection Group taken
as a whole or material in the context of the Acquisition;
3.4.7 other than in the ordinary course of business, entered
into, terminated, varied, proposed or authorised or announced its
intention to enter into, terminate or vary any contract,
arrangement, agreement, transaction or commitment (whether in
respect of capital expenditure or otherwise) which is of a long
term, unusual or onerous nature or magnitude to an extent in any
such case which is material in the context of the Wider French
Connection Group taken as a whole or in the context of the
Acquisition;
3.4.8 entered into or varied the terms of, or made any offer
(which remains open for acceptance) to enter into or vary to a
material extent the terms of any contract, service agreement,
commitment or arrangement with any director or senior executive of
any member of the Wider French Connection Group, other than as
agreed by the Panel or agreed with MIP or Disclosed;
3.4.9 entered into, terminated or varied any agreement,
contract, transaction, arrangement or commitment or the terms of
any agreement or arrangement (other than in the ordinary course of
business) in a manner which has or might reasonably be expected to
have a material adverse effect on the financial position of the
Wider French Connection Group taken as a whole or material in the
context of the Acquisition;
3.4.10 entered into, implemented or authorised the entry into,
any joint venture, asset or profit sharing agreement, partnership
or merger of business or corporate entities (otherwise than in the
ordinary course of business);
3.4.11 save as agreed by the Panel or agreed with MIP or
Disclosed, proposed, agreed to provide or modified or announced any
proposal to modify the terms of, any share option scheme, incentive
scheme, pension scheme obligations, retirement, death or disability
benefit or any other employment related benefit (including, but not
limited to, bonuses, retention arrangements or share incentive
schemes or other benefit relating to the employment or termination
of employment of any director or employee of the Wider French
Connection Group) of or in respect of any of its directors,
employees, former directors or former employees which are material
in the context of the Wider French Connection Group taken as a
whole or material in the context of the Acquisition;
3.4.12 save as between French Connection and wholly owned
subsidiaries of French Connection or between the wholly owned
subsidiaries of French Connection purchased, redeemed or repaid or
announced any proposal to purchase, redeem or repay any of its own
shares or other securities or reduced or made any other change to
any part of its share capital (other than pursuant to the
implementation of the Acquisition) to an extent which (other than
in the case of French Connection), is material in the context of
the Wider French Connection Group taken as a whole;
3.4.13 entered into any contract, transaction or arrangement
which would be restrictive on the ability of any member of the
Wider French Connection Group to carry on its business as currently
carried on or to exploit any of its intellectual property rights or
which could involve obligations which would or might reasonably be
expected to be so restrictive in each case to an extent which in
any case is material in the context of the Wider French Connection
Group taken as a whole or in the context of the Acquisition;
3.4.14 (other than in respect of claims between French
Connection and any wholly owned subsidiaries of French Connection
or between wholly owned subsidiaries of French Connection) waived,
compromised or settled any claim which is material in the context
of the Wider French Connection Group taken as a whole or material
in the context of the Acquisition;
3.4.15 save as Disclosed or as envisaged in accordance with the
terms of the Acquisition, made any alteration to its memorandum or
articles of association or other incorporation documents;
3.4.16 except in relation to necessary and consequential changes
made or agreed as a result of, or arising from, changes to
legislation following the date of this Announcement, made or agreed
or consented to or procured any material change to or the custodian
or trustee of any scheme having made a change to the terms of the
governing documents, trust deeds and/or rules constituting the
pension scheme(s) established for its directors or employees or
former directors or employees or their respective dependants or to
the contributions payable to any such schemes or the benefits which
accrue, or to the pensions which are payable, thereunder, or to the
basis on which qualification for, or accrual or entitlement to,
such benefits or pensions are calculated or determined or to the
basis upon which the liabilities (including pensions) of such
pension schemes are funded or made, or agreed or consented to in a
manner which, in any such case or together, is material in the
context of the Wider French Connection Group taken as a whole or
material in the context of the Acquisition;
3.4.17 carried out any act which would or could reasonably be
expected to lead to the commencement of the winding up of any
pension scheme(s) established by any member of the Wider French
Connection Group for its directors, former directors, employees,
former employees or their dependants; which would or might
reasonably be expected to create a material debt owed by an
employer to any such plan; or which would or might reasonably be
expected to accelerate any obligation on any employer to fund or
pay additional contributions to any such plan;
3.4.18 been unable, or admitted in writing that it is unable, to
pay its debts as they fall due or commenced negotiations with one
or more of its creditors with a view to rescheduling or
restructuring any of its indebtedness, or having stopped or
suspended (or threatened to stop or suspend) payment of its debts
generally or ceased or threatened to cease carrying on all or a
substantial part of its business or proposed or entered into any
composition or voluntary arrangement with its creditors (or any
class of them) or the filing at court of documentation in order to
obtain a moratorium prior to a voluntary arrangement or, by reason
of actual or anticipated financial difficulties, commenced
negotiations with one or more of its creditors with a view to
rescheduling any of its indebtedness;
3.4.19 other than in respect of a member of the Wider French
Connection Group which is dormant and was solvent at the relevant
time, taken any steps, corporate action or had any legal
proceedings instituted or threatened in writing against it in
relation to the suspension of payments, a moratorium of any
indebtedness, its winding-up (voluntary or otherwise), dissolution,
striking-off, reorganisation or for the appointment of a receiver,
administrator, manager, administrative receiver, trustee or similar
officer of all or any material part of its assets or revenues or
any analogous or equivalent steps or proceedings in any
jurisdiction or appointed any analogous person in any jurisdiction
or had any such person appointed;
3.4.20 entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains
open for acceptance) with respect to or announced an intention to,
or to propose to, effect any of the transactions, matters or events
referred to in this Condition 3.4 ; or
3.4.21 save as provided for in the Cooperation Agreement, taken
(or agreed or proposed to take) any action which requires, or would
require, the consent of the Panel or the approval of French
Connection Shareholders in general meeting in accordance with, or
as contemplated by, Rule 21.1 of the Takeover Code.
No adverse change, litigation, regulatory enquiry or similar
3.5 save as Disclosed, since 31 January 2021:
3.5.1 no adverse change or deterioration having occurred and no
circumstances having arisen which would or might reasonably be
expected to result in any adverse change in the business, assets,
financial or trading position or profits of any member of the Wider
French Connection Group which is material in the context of the
Wider French Connection Group taken as a whole or material in the
context of the Acquisition;
3.5.2 no litigation, arbitration proceedings, prosecution or
other legal proceedings having been threatened, announced or
instituted by or against or remaining outstanding against or in
respect of, any member of the Wider French Connection Group or to
which any member of the Wider French Connection Group is or may
become a party (whether as claimant, defendant or otherwise) having
been threatened, announced, instituted or remaining outstanding by,
against or in respect of, any member of the Wider French Connection
Group, in each case which is material in the context of the Wider
French Connection Group taken as a whole or material in the context
of the Acquisition;
3.5.3 no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member
of the Wider French Connection Group having been threatened,
announced or instituted or remaining outstanding by, against or in
respect of any member of the Wider French Connection Group, in each
case which is material in the context of the Wider French
Connection Group taken as a whole or material in the context of the
Acquisition;
3.5.4 no amendment or termination of any joint venture or
partnership to which any member of the Wider French Connection
Group is a party having been agreed or permitted which is material
in the context of the Wider French Connection Group taken as a
whole or material in the context of the Acquisition;
3.5.5 no contingent or other liability in respect of any member
of the Wider French Connection Group (except between French
Connection and its wholly owned subsidiaries or between the wholly
owned subsidiaries of French Connection) having arisen or increased
other than in the ordinary course of business which is reasonably
likely to affect adversely the business, assets, financial or
trading position or profits or prospects of any member of the Wider
French Connection Group to an extent in any such case which is
material in the context of the Wider French Connection Group taken
as a whole or material in the context of the Acquisition; and
3.5.6 no steps having been taken and no omissions having been
made which are reasonably likely to result in the withdrawal,
cancellation, termination or modification of any licence held by
any member of the Wider French Connection Group which is necessary
for the proper carrying on of its business and the withdrawal,
cancellation, termination or modification of which might reasonably
be expected to have a material adverse effect on the Wider French
Connection Group taken as a whole or material in the context of the
Acquisition;
No discovery of certain matters regarding information,
liabilities, intellectual property and environmental issues
3.6 save as Disclosed, MIP not having discovered:
3.6.1 that any financial, business or other information
concerning the Wider French Connection Group as contained in the
information publicly announced prior to the date of this
Announcement or disclosed at any time to any member of the Wider
MIP Group by or on behalf of any member of the Wider French
Connection Group prior to the date of this Announcement and which
has not prior to the date of this Announcement been corrected by a
subsequent announcement or disclosure is materially misleading,
contains a material misrepresentation of any material fact, or
omits to state a fact necessary to make that information not
materially misleading (in any case to an extent which is material
in the context of the Wider French Connection Group taken as a
whole or material in the context of the Acquisition);
3.6.2 that no circumstance has arisen or event has occurred in
relation to any intellectual property owned or used by any member
of the Wider French Connection Group, which would have a material
adverse effect on the Wider French Connection Group taken as a
whole or material in the context of the Acquisition including:
3.6.2.1 any member of the Wider French Connection Group losing
its title to any of its intellectual property, or any intellectual
property owned by the Wider French Connection Group being revoked,
cancelled or declared invalid;
3.6.2.2 any claim being asserted or threatened by any person
challenging the ownership of any member of the Wider French
Connection Group to, or the validity or effectiveness of, any of
its intellectual property; or
3.6.2.3 any agreement regarding the use of any intellectual
property licensed to or by any member of the Wider French
Connection Group being terminated or varied;
3.6.3 that any member of the Wider French Connection Group is,
otherwise than in the ordinary course of business, subject to any
liability, contingent or otherwise and which is material in the
context of the Wider French Connection Group taken as a whole or
material in the context of the Acquisition;
3.6.4 in relation to any use, treatment, storage, carriage,
spillage, release, leak, emission, accumulation, discharge,
disposal or other fact or circumstance of any waste or hazardous
substance or any substance which has impaired or is likely to
impair the environment (including property) or harmed or is likely
to harm the health of humans, animals or other living organisms or
eco systems, that a past or present member of the Wider French
Connection Group, in a manner or to an extent which is material in
the context of the Wider French Connection Group, (i) has committed
any violation of any applicable laws, statutes, regulations,
Authorisations, notices or other requirements of any Third Party;
and/or (ii) has incurred or assumed any liability (whether actual
or contingent) to any Third Party; and/or (iii) has or is likely to
incur or assume any liability (whether actual or contingent), or
has or is likely to be required, to make good, remediate, repair,
re instate or clean up the environment (including any
property);
3.6.5 that there is or is reasonably likely to be any obligation
or liability (whether actual or contingent) or requirement to make
good, remediate, repair, reinstate or clean up any property, asset
or any controlled waters currently or previously owned, occupied,
operated or made use of or controlled by any past or present member
of the Wider French Connection Group (or on its behalf), or in
which any such member may have or previously have had or be deemed
to have had an interest, under any environmental legislation,
common law, regulation, notice, circular, Authorisation or order of
any Third Party or any other person or body in any jurisdiction or
to contribute to the cost thereof or associated therewith or
indemnify any person in relation thereto which is material in the
context of the Wider French Connection Group taken as a whole or
material in the context of the Acquisition;
3.6.6 that circumstances exist (whether as a result of the
Acquisition or otherwise) which would be reasonably likely to lead
to any Third Party instituting, or whereby any past or present
member of the Wider French Connection Group would be likely to be
required to institute, an environmental audit or take any other
steps which would in any such case be reasonably likely to result
in any liability (whether actual or contingent) to improve, modify
existing or install new plant, machinery or equipment or carry out
changes in the processes currently carried out or make good,
remediate, repair, re-instate or clean up any land or other asset
currently or previously owned, occupied or made use of by any past
or present member of the Wider French Connection Group (or on its
behalf) or by any person for which a member of the Wider French
Connection Group is or has been responsible, or in which any such
member may have or previously have had or be deemed to have had an
interest which is material in the context of the Wider French
Connection Group taken as a whole in the context of the
Acquisition;
3.6.7 any information which affects the import of any
information Disclosed at any time by or on behalf of any member of
the Wider French Connection Group which is material in the context
of the Wider French Connection Group taken as a whole in the
context of the Acquisition;
3.6.8 circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of any
product or process of manufacture or materials used therein
currently or previously manufactured, sold or carried out by any
past or present member of the Wider French Connection Group which
claim or claims would be likely, materially and adversely, to
affect any member of the Wider French Connection Group and which is
material in the context of the Wider French Connection Group taken
as a whole or the Acquisition;
Anti-corruption and criminal property
3.7 save as Disclosed, MIP not having discovered:
3.7.1 any past or present member or director of the Wider French
Connection Group or any person that performs or has performed
services for or on behalf of any such company is or has, at any
time during the course of such person's performance of services for
or on behalf of any member of the Wider French Connection Group,
engaged in any activity, practice or conduct which would constitute
an offence under the Bribery Act 2010, Foreign Corrupt Practices
Act 1977 (as amended) or any other applicable anti-corruption
legislation; or
3.7.2 any past or present member or director of the Wider French
Connection Group or any person that performs or has performed
services for or on behalf of any such company is or has, at any
time during the course of such person's performance of services for
or on behalf of any member of the Wider French Connection Group,
engaged in any activity or business with, or made any investments
in, or made any payments to any government, entity or individual
covered by any of the economic sanctions administered by the United
Nations or the European Union (or any of their respective member
states) or the United States Office of Foreign Assets Control or
any other government or supranational body or authority in any
jurisdiction; or
3.7.3 to an extent which is or would reasonably be expected to
be material in the context of the Wider French Connection Group
taken as a whole, any asset of any member of the Wider French
Connection Group constitutes criminal property as defined by
section 340(3) of the Proceeds of Crime Act 2002 (but disregarding
paragraph (b) of that definition);
French Connection Shareholder resolution
3.8 except with the consent or the agreement of MIP, no
resolution of French Connection Shareholders in relation to any
acquisition or disposal of assets or shares (or the equivalent
thereof) in any undertaking or undertakings (or in relation to any
merger, demerger, consolidation, reconstruction, amalgamation or
scheme) being passed at a meeting of French Connection Shareholders
other than in relation to the Acquisition or the Scheme and, other
than with the consent or the agreement of MIP, no member of the
Wider French Connection Group having taken (or agreed or proposed
to take) any action that requires, or would require, the consent of
the Panel or the approval of French Connection Shareholders in
accordance with, or as contemplated by, Rule 21.1 of the Takeover
Code.
Part B: Further terms of the Acquisition
Each of the Conditions shall be regarded as a separate Condition
and shall not be limited by reference to any other Condition.
To the extent permitted by law and subject to the requirements
of the Panel, MIP reserves the right (in its sole discretion) to
waive:
-- the deadline set out in the Condition in paragraph 1 of Part
A and any of the deadlines set out in the Conditions in paragraph 2
of Part A for the timing of the Court Meeting and General Meeting.
If any such deadline is not met, MIP will make an announcement by
8:00 a.m. on the Business Day following such deadline confirming
whether it has invoked or waived the relevant Condition or agreed
with French Connection to extend the deadline in relation to the
relevant Condition; and
-- in whole or in part, all or any of the Conditions in
paragraphs 3.1 to 3.8 (inclusive) of Part A.
MIP shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as
fulfilled any of Conditions by a date earlier than the latest date
for the fulfilment of that Condition notwithstanding that the other
Conditions may at such earlier date have been waived or fulfilled
and that there are at such earlier date no circumstances indicating
that any of such Conditions may not be capable of fulfilment.
If MIP is required by the Panel to make an offer for French
Connection Shares under the provisions of Rule 9 of the Takeover
Code, MIP may make such alterations to any of the above Conditions
and terms of the Acquisition as are necessary to comply with the
provisions of that Rule.
MIP reserves the right to elect, with the consent of the Panel
and in accordance with the terms of the Cooperation Agreement, to
implement the Acquisition by way of a Takeover Offer as an
alternative to the Scheme. In such event, the Acquisition will be
implemented on the same terms as those which would apply to the
Scheme, subject to appropriate amendments, so far as applicable, as
those which would apply to the Scheme, including (without
limitation) an acceptance condition set at 75 per cent. (or such
percentage as is determined in accordance with the Cooperation
Agreement).
(i) in nominal value of the shares to which such offer relates; and
(ii) of the voting rights attached to those shares,
("Takeover Offer Acceptance Condition"), provided that the
Takeover Offer Acceptance Condition will not be satisfied unless
any member of the Wider MIP Group shall have acquired or agreed to
acquire, whether pursuant to the Takeover Offer or otherwise,
French Connection Shares carrying in aggregate more than 50 per
cent. of the voting rights normally exercisable at a general
meeting of French Connection, including, for this purpose, any such
voting rights attaching to French Connection Shares that are
unconditionally allotted or issued before the Takeover Offer
becomes or is declared unconditional as to acceptances, whether
pursuant to the exercise of any outstanding subscription or
conversion rights or otherwise.
The ability of Overseas Shareholders to participate in the
Acquisition and the distribution of this document in, into or from
jurisdictions other than the United Kingdom may be restricted by
the laws of those jurisdictions and therefore persons into whose
possession this document comes should inform themselves of, and
observe, any such restrictions.
Unless otherwise determined by MIP or required by the Takeover
Code and permitted by applicable law and regulation, the
Acquisition is not being, and will not be, made, directly or
indirectly, in or into or from or by use of the mails of, or by any
other means or instrumentality (including, without limitation,
facsimile transmission, telex, telephone, internet, e-mail or other
forms of electronic transmission) of interstate or foreign commerce
of, or any facility of a national, state or other securities
exchange of, any jurisdiction where to do so would violate the laws
of that jurisdiction and will not be capable of acceptance by any
such use, means, instrumentality or facility or from within any
jurisdiction where to do so would violate the laws of that
jurisdiction.
Under Rule 13.5(a) of the Takeover Code, MIP may not invoke a
condition to the Acquisition so as to cause the Acquisition not to
proceed, to lapse or to be withdrawn unless the circumstances which
give rise to the right to invoke the condition are of material
significance to MIP in the context of the Acquisition. The
Conditions contained in paragraphs 1 and 2 of Part A and, if
applicable, the Takeover Offer Acceptance Condition set out in this
Part B are not subject to this provision of the Takeover Code. MIP
may only invoke a Condition that is subject to Rule 13.5(a) of the
Takeover Code with the consent of the Panel and any Condition that
is subject to Rule 13.5(a) of the Takeover Code may be waived by
MIP.
MIP reserves the right, without prejudice to any right of MIP,
with the consent of the Panel, to invoke Condition 3.4.2 of Part A,
to reduce the consideration payable under the Acquisition by the
amount of any dividend (or other distribution) which is paid or
becomes payable by French Connection to French Connection
Shareholders on or after the date of this Announcement and on or
prior to the Effective Date. If MIP exercises its right to reduce
the offer consideration by all or part of the amount of a dividend
(or other distribution) that has not been paid, French Connection
Shareholders will be entitled to receive and retain that dividend
(or other distribution) ("Subsequent Dividend"). If any such
Subsequent Dividend is paid or made before the Effective Date, if
MIP exercises its rights described in this paragraph, any reference
in this Announcement to the consideration payable under the Scheme
or pursuant to the Acquisition shall be deemed to be a reference to
the consideration as so reduced. Any exercise by MIP of its rights
referred to in this paragraph shall be the subject of an
announcement and, for the avoidance of doubt, shall not be regarded
as constituting any revision or variation of the terms of the
Scheme.
The French Connection Shares which will be acquired under the
Acquisition will be acquired with full title guarantee, fully paid
and free from all liens, equities, charges, encumbrances, options,
rights of pre-emption and any other third party rights and
interests of any nature and together with all rights as at the date
of this Announcement or hereafter attaching or accruing to them,
including voting rights and the right to receive and retain in full
all dividends and other distributions (if any), and any other
return of capital (whether by way of reduction of share capital or
share premium account or otherwise), declared, made or paid on or
after the date of this Announcement.
The Acquisition will be governed by the law of England and Wales
and will be subject to the jurisdiction of the English courts. The
Acquisition will be made on and subject to the conditions and
further terms set out in this Appendix I and to be set out in the
Scheme Document. The Acquisition will be subject to the applicable
requirements of the Takeover Code, the Panel and the London Stock
Exchange.
APPIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
The value of French Connection as implied by the Acquisition
Price stated in paragraph 2 of this Announcement is based on the
issued and to be issued ordinary share capital as at 1 October 2021
(the last Business Day prior to the date of this Announcement).
Further sources of information regarding premia and other data
reported in this Announcement are as follows:
-- the Closing Price per French Connection Share of 15.7 pence
on 4 February 2021 (being the last Business Day prior to the
commencement of the Offer Period) is the closing middle market
price derived from the Daily Official List of the London Stock
Exchange;
-- the Closing Price per French Connection Share of 23.1 pence
on 22 September 2021 (being the last Business Day prior to the date
of the Possible Offer Announcement) is the closing middle market
price derived from the Daily Official List of the London Stock
Exchange; and
-- unless otherwise stated, the financial information relating
to French Connection is extracted from the audited consolidated
financial statements of French Connection for the financial year
ended 31 January 2021.
APPIX III
IRREVOCABLE UNDERTAKINGS
PART A - Director shareholder irrevocable undertakings
Stephen Marks, being the only French Connection Director holding
French Connection Shares, has given an irrevocable undertaking in
respect of his own beneficial holding of French Connection Shares
to vote in favour of the Scheme at the Court Meeting and the
Resolution(s) at the General Meeting (or to accept a Takeover Offer
to implement the Acquisition) as set out below:
Name Number of French Connection Shares % of French Connection Shares in issue
Stephen Anthony Marks 37,812,690 39.14
TOTAL 37,812,690 39.14
The undertaking detailed in this Part A ceases to be binding
only if:
(i) MIP announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement scheme or offer is
announced in accordance with Rule 2.7 of the Takeover Code at the
same time;
(ii) the Scheme Document is not published within 28 days of this
Announcement being released (or such later date as agreed with the
Panel but in any event not being longer than six weeks);
(iii) the Acquisition lapses or is withdrawn; and
(iv) the Acquisition has not become Effective by 11:59 p.m. on the Long-Stop Date.
The irrevocable undertaking remains binding in the event of a
competing offer.
PART B - Non-director shareholder irrevocable undertakings
MIP has also received irrevocable undertakings from Nicole
Farhi, Candice Marks and from the trustees of the discretionary
trusts established for the benefit of certain of Stephen Marks'
children to vote in favour of the Scheme at the Court Meeting and
the Resolution(s) at the General Meeting (or to accept a Takeover
Offer to implement the Acquisition) as set out below:
Name Number of French Connection Shares % of French Connection Shares in issue
Nicole Farhi 2,000,000 2.07
David Convisser and Stephen Anthony
Marks as the trustees of the
discretionary trusts for
the benefit of certain of Stephen
Marks' children 1,506,500 1.56
Candice Marks 775,000 0.80
TOTAL 4,281,500 4.43
The undertakings detailed in this Part B ceases to be binding
only if:
(i) MIP announces that it does not intend to proceed with the
Acquisition and no new, revised or replacement scheme or offer is
announced in accordance with Rule 2.7 of the Takeover Code at the
same time;
(ii) the Scheme Document is not published within 28 days of this
Announcement being released (or such later date as agreed with the
Panel but in any event not being longer than six weeks);
(iii) the Acquisition lapses or is withdrawn; and
(iv) the Acquisition has not become Effective by 11:59 p.m. on the Long-Stop Date.
The irrevocable undertakings remain binding in the event of a
competing offer.
APPIX IV
DEFINITIONS
The following definitions apply throughout this Announcement
unless the context requires otherwise.
"GBP", or "pence" the lawful currency of the United Kingdom;
"Acquisition" the recommended acquisition by MIP of
the entire issued and to be issued ordinary
share capital of French Connection not
currently owned by Apinder Singh Ghura
at the Acquisition Price to be effected
by means of the Scheme or (should MIP
so elect, subject to the consent of
the Panel and in accordance with the
terms of the Cooperation Agreement)
by means of a Takeover Offer and, in
either case, where the context admits,
any subsequent variation, revision,
extension or renewal thereof;
"Acquisition Price" 30 pence in cash per French Connection
Share;
"agreed form" is a reference to a document in the
form approved and for the purposes of
identification initialled by or on behalf
of the Company and MIP at the date of
this Announcement;
"Amarjit Loan Agreement" the unsecured shareholder term loan
agreement dated 4 October 2021 between
MIP and Amarjit Singh Grewal;
"Announcement" this announcement;
"ASG Loan Agreement" the unsecured shareholder term loan
agreement dated 4 October 2021 between
MIP and Apinder Singh Ghura;
"Authorisations" regulatory authorisations, orders, recognitions,
grants, determinations, consents, clearances,
confirmations, certificates, licences,
permissions, exemptions or approvals;
"Business Day" a day (other than Saturdays, Sundays
and public holidays) on which banks
are open for normal business in London;
"Closing Price" the middle market price of a French
Connection Share at the close of business
on the day to which such price relates,
as derived from the Daily Official List
of the London Stock Exchange for that
day;
"Companies Act" the Companies Act 2006, as amended from
time to time;
"Conditional Sale Agreement" the agreement between MIP and Apinder
Singh Ghura entered into on 4 October
2021 pursuant to which Apinder Singh
Ghura will sell the French Connection
Shares that he owns to MIP conditional
upon the Acquisition becoming Effective,
with part of the consideration to be
left outstanding on the terms of the
ASG Loan Agreement and the Amarjit Loan
Agreement respectively;
"Conditions" the conditions to the Acquisition and
the Scheme, as set out in Appendix I
of this Announcement and to be set out
in the Scheme Document;
"Cooperation Agreement" the agreement between French Connection
and MIP entered into on 4 October 2021
regulating the conduct of the parties
in respect of the Acquisition;
"Court" the High Court of Justice in England
and Wales;
"Court Hearing" the hearing of the Court to sanction
the Scheme under section 899 of the
Companies Act and, if such hearing is
adjourned, postponed or reconvened,
reference to commencement of any such
hearing shall mean the commencement
of the final hearing thereof;
"Court Meeting" the meeting of French Connection Shareholders
to be convened pursuant to an order
of the Court under section 896 of the
Companies Act for the purposes of considering
and, if thought fit, approving the Scheme
(with or without amendment) including
any adjournment thereof, notice of which
is to be contained in the Scheme Document;
"Court Order" the order of the Court sanctioning the
Scheme under section 899 of the Companies
Act;
"CREST" the relevant system (as defined in the
Regulations) in respect of which Euroclear
UK & Ireland Limited is the Operator
(as defined in the Regulations);
"Dealing Disclosure" has the meaning given by Rule 8 of the
Takeover Code;
"Disclosed" the information fairly disclosed by,
or on behalf of, French Connection:
(a) in the French Connection annual
report and accounts in respect of the
financial year ended 31 January 2021;
(b) in this Announcement;
(c) to MIP in writing (or its respective
officers, employees, agents or advisers
in their capacity as such) (including
in the electronic data room maintained
by French Connection in respect of the
Acquisition) on or before 5:00 p.m.
on the Business Day prior the date of
this Announcement; or
(d) in any public announcement by French
Connection to a Regulatory Information
Service prior to the date of this Announcement;
"Effective" in the context of the Acquisition:
(a) if the Acquisition is implemented
by way of the Scheme, the Scheme having
become effective in accordance with
its terms, upon the delivery of the
Court Order to the Registrar of Companies;
or
(b) if the Acquisition is implemented
by way of a Takeover Offer, the Takeover
Offer having been declared or become
unconditional in all respects in accordance
with the requirements of the Takeover
Code;
"Effective Date" the date on which:
(a) the Scheme becomes Effective; or
(b) if the Acquisition is implemented
by way of a Takeover Offer, the Takeover
Offer becomes Effective;
"Excluded Shares" any French Connection Shares:
(a) registered in the name of, or beneficially
owned by, MIP (if any);
(b) registered in the name of, or beneficially
owned by, Apinder Singh Ghura;
(c) registered in the name of, or beneficially
owned by, Amarjit Singh Grewal; or
(d) registered in the name of, or beneficially
owned by, KJR Brothers Limited;
"Facility Agreement" the GBP25.0 million term facility agreement
dated 4 October 2021 between MIP, 1903
Partners, LLC and Aurelius Finance Company
Limited (as lenders) and GB Europe Management
Services Limited (as agent and security
agent);
"FCA" or "Financial Conduct the UK Financial Conduct Authority or
Authority" its successor from time to time;
"Forms of Proxy" the forms of proxy for use at the Court
Meeting and the General Meeting which
will accompany the Scheme Document;
"French Connection" or French Connection Group PLC, a public
"Company" limited company incorporated in England
and Wales, with registered number 01410568,
whose registered office is at First
Floor, Centro 1, 39 Plender Street,
London, NW1 0DT;
"French Connection Board" the directors of French Connection as
or "French Connection at the date of this Announcement or,
Directors" where the context so requires, the board
of directors of French Connection from
time to time;
"French Connection Group" French Connection and its subsidiary
undertakings and where the context permits,
each of them;
"French Connection Scheme the holders of Scheme Shares as shown
Shareholders" on the register of members at any relevant
date or time;
"French Connection Shares" the ordinary shares of one penny each
in the capital of French Connection;
"French Connection Shareholders" the holders of French Connection Shares;
or "Shareholders"
"FSMA" the Financial Services and Markets Act
2000;
"General Meeting" the general meeting of French Connection
Shareholders (and any adjournment thereof)
to be convened in connection with the
Scheme, notice of which is to be contained
in the Scheme Document;
"KJR Loan Agreement" the unsecured shareholder term loan
agreement dated 4 October 2021 between
MIP and KJR Brothers Limited;
"London Stock Exchange" London Stock Exchange plc or its successor;
"Long-Stop Date" 11:59 p.m. on 28 February 2022, or such
later date, if any, as MIP and French
Connection may agree and, if required,
the Court and the Panel may allow;
"Main Market" the main market operated by the London
Stock Exchange;
"MIP" MIP Holdings Ltd, a private company
incorporated in England and Wales, with
registered number 12981062, whose registered
office is at Units 1-10 116-118 Bury
New Road, Manchester, United Kingdom,
M8 8EB;
"MIP Directors" the directors of MIP, being Apinder
Singh Ghura and Amarjit Singh Grewal;
"MIP Shareholders' Agreement" the subscription and shareholders' agreement
entered into by Amarjit Singh Grewal,
Apinder Singh Ghura, KJR Brothers Limited,
Gordon Brothers International LLC, Aurelius
Finance Company Limited and MIP on 4
October 2021;
"Offer Period" the offer period (as defined by the
Takeover Code) relating to French Connection,
which commenced on 5 February 2021;
"Official List" the official list of the FCA;
"Opening Position Disclosure" has the meaning given by Rule 8 of the
Takeover Code;
"Overseas Shareholders" French Connection Shareholders (or nominees,
custodians or trustees of French Connection
Shareholders) who are resident in, or
nationals or citizens of jurisdictions
outside of the UK or who are citizens
or residents of countries other than
the UK;
"Panel" the Panel on Takeovers and Mergers;
"Possible Offer Announcement" the announcement relating to the possible
offer for French Connection by a consortium
of bidders including Apinder Singh Ghura,
Amarjit Singh Grewal and KRJ Brothers
Limited, released by French Connection
on 23 September 2021;
"Registrar of Companies" the Registrar of Companies in England
and Wales;
"Regulations" the Uncertificated Securities Regulations
2001 (SI 2001 No. 3755), as amended
from time to time;
"Regulatory Information any information service authorised from
Service" time to time by the FCA for the purpose
of disseminating regulatory announcements;
"Resolution(s)" the resolution(s) to be proposed at
the General Meeting in connection with,
amongst other things, the approval of
the Scheme and such other matters as
may be necessary to implement the Acquisition;
"Restricted Jurisdiction" any jurisdiction where the making of
the Acquisition may:
(a) constitute a violation of the relevant
laws and regulations of such jurisdiction;
or
(b) result in a requirement to comply
with any governmental or other consent
or any registration, filing or other
formality which MIP or French Connection
regards as unduly onerous; or
(c) result in significant risk or civil,
regulatory or criminal exposure if the
Acquisition is extended or made available
in that jurisdiction or if information
concerning the Acquisition is sent or
made available in that jurisdiction;
"Scheme" the proposed scheme of arrangement under
Part 26 of the Companies Act between
French Connection and French Connection
Scheme Shareholders in connection with
the Acquisition, the full terms and
conditions of which will be set out
in the Scheme Document, with or subject
to any modification, addition or condition
approved or imposed by the Court and
agreed by French Connection and MIP;
"Scheme Document" the document to be sent to, among others,
French Connection Shareholders, containing
and setting out, among other things,
the Scheme, the notices convening the
Court Meeting, the General Meeting and
the further particulars required by
Part 26 of the Companies Act;
"Scheme Record Time" the time and date specified in the Scheme
Document as being the record time for
the Scheme;
"Scheme Shares" the French Connection Shares:
(a) in issue at 6:00 p.m. on the date
of the Scheme Document;
(b) (if any) issued after 6:00 p.m.
on the date of the Scheme Document and
prior to the Voting Record Time; and
(c) (if any) issued on or after the
Voting Record Time and on or prior to
the Scheme Record Time either on terms
that the original or any subsequent
holders thereof shall be bound by the
Scheme, or in respect of which the holders
thereof shall have agreed in writing
to be bound by the Scheme,
and in each case remaining in issue
at the Scheme Record Time, but excluding
any Excluded Shares;
"Singer Capital Markets" Singer Capital Markets Advisory LLP,
the financial adviser to 1903 Partners,
LLC and Aurelius Finance Company Limited
(the lenders to MIP) in relation to
the Acquisition;
"Substantial Interest" in relation to an undertaking, a direct
or indirect interest of 20 per cent.
or more of the total voting rights conferred
by the equity share capital (as defined
in section 548 of the Companies Act)
of such undertaking;
"Takeover Code" the City Code on Takeovers and Mergers
as issued from time to time by or on
behalf of the Panel;
"Takeover Offer" a takeover offer as defined in section
974 of the Companies Act;
"Third Party" each of a central bank, government or
governmental, quasi-governmental, supranational,
statutory, regulatory, environmental,
administrative, fiscal or investigative
body, court, trade agency, association,
institution, environmental body, employee
representative body, or any other body
or person whatsoever in any jurisdiction;
"UK Listing Authority" the UK Listing Authority, being the
Financial Conduct Authority acting in
its capacity as the competent authority
for the purposes of Part VI of the FSMA;
"United Kingdom" or "UK" the United Kingdom of Great Britain
and Northern Ireland;
"United States" or "US" the United States of America, its territories
and possessions, any state of the United
States of America and the District of
Columbia and all other areas subject
to its jurisdiction;
"US Exchange Act" US Securities Exchange Act of 1934 (as
amended), and the rules and regulations
promulgated thereunder;
"US GAAP" generally accepted accounting principles
in the US;
"Voting Record Time" the time and date specified in the Scheme
Document as being the record time for
voting at the Court Meeting;
"WH Ireland" WH Ireland Limited with registered office
at 24 Martin Lane, London EC4R 0DR;
"Wider MIP Group" MIP, its parent undertakings, its subsidiary
undertakings, associated undertakings
and any other undertakings in which
that company and such undertakings (aggregating
their interests) have a Substantial
Interest; and
"Wider French Connection French Connection, its subsidiary undertakings,
Group" associated undertakings and any other
undertakings in which that company and
such undertakings (aggregating their
interests) have a Substantial Interest.
For the purposes of this Announcement, "associated undertaking",
"parent undertaking", "subsidiary undertaking" and "undertaking"
have the respective meanings given thereto by the Companies
Act.
References to an enactment include references to that enactment
as amended, replaced, consolidated or re-enacted by or under any
other enactment before or after the date of this Announcement.
All the times referred to in this Announcement are London times
unless otherwise stated.
References to the singular include the plural and vice
versa.
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.
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END
SOAFSUEEDEFSEES
(END) Dow Jones Newswires
October 04, 2021 02:00 ET (06:00 GMT)
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