TIDMFFI
RNS Number : 2627E
Lumiere Acquisitions Company LLC
02 July 2019
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN OR INTO ANY JURISDICTION WHERE TO
DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION.
For immediate release
2 July 2019
RECOMMED MANDATORY CASH OFFER
by
LUMIERE ACQUISITIONS COMPANY LLC ("Lumiere"), a wholly-owned
subsidiary of the 777 GROUP
for the entire issued and to be issued ordinary share capital
of
FFI HOLDINGS PLC ("FFI")
not already agreed to be acquired by Lumiere
Introduction
Today, Lumiere agreed to acquire 47,476,547 FFI Shares,
representing 30.1 per cent. of the Total FFI Shares, from Steven
Ransohoff, the CEO and executive director of FFI and The Crystal
Court Trust, a trust of which Steven Ransohoff and his immediate
family are the beneficiaries (the "Sellers"), at a price of 24.99
pence per FFI Share (the "Acquisition"). It is expected that the
Acquisition will complete on or around the date of this
Announcement.
Following completion of the Acquisition, Lumiere will hold
47,476,547 FFI Shares, representing 30.1 per cent. of the Total FFI
Shares and voting rights of FFI, and the Lumiere Concert Party (as
more particularly described below) will, in aggregate, hold
107,965,563 FFI Shares, representing 68.4 per cent. of the Total
FFI Shares and voting rights of FFI.
As a result of the Acquisition, under Rule 9 of the Takeover
Code, Lumiere is required to make a mandatory cash offer (the
"Offer") for the FFI Shares not already held or agreed to be
acquired by Lumiere, at a price of 25 pence per FFI Share (being
not less than the price per FFI Share being paid to the Sellers).
Members of the Lumiere Concert Party (other than Lumiere) have
undertaken not to accept the Offer (as more particularly described
below).
Lumiere will make the Offer through the publication and dispatch
of the Offer Document and Form of Acceptance, both of which will be
posted to FFI Shareholders as soon as reasonably practicable and,
in any event within 28 days after the date of this Announcement,
other than to FFI Shareholders resident in a Restricted
Jurisdiction. The Offer Document will contain the formal terms of
the Offer.
Summary of the Offer
-- Following Lumiere triggering the obligation to make
the Offer, the board of directors of Lumiere are pleased
to announce that the Independent FFI Directors intend
to recommend unanimously that FFI Shareholders accept
the Offer. The Offer will be made by way of a contractual
offer under the Takeover Code and within the meaning
of Part 28 of the Companies Act 2006.
-- Under the Offer, further terms of which are set out
in Appendix 1 of this Announcement and which will
be set out in full in the Offer Document and Form
of Acceptance, FFI Shareholders will receive:
25 pence in cash for each FFI Share held.
-- The Offer will extend to all issued FFI Shares which
are not held by Lumiere and any further FFI Shares
which are unconditionally allotted or issued and fully
paid before the Offer closes. The members of the Lumiere
Concert Party (other than Lumiere) have undertaken
not to accept the Offer.
-- As a result of the Acquisition, the Lumiere Concert
Party will, in aggregate, hold 107,965,563 FFI Shares,
representing 68.4 per cent. of the existing issued
share capital and voting rights of FFI.
-- Following completion of the Acquisition, the Offer
will be unconditional from the outset as the Lumiere
Concert Party will hold more than 50 per cent. of
the existing issued share capital of FFI. Accordingly,
the Offer will not be subject to any minimum acceptance
condition.
-- The Offer Price represents a premium of approximately:
o 28.2 per cent. to the Closing Price per FFI Share
of 19.50 pence on 1 July 2019 (being the last Business
Day prior to the date of this Announcement);
o 31.2 per cent. to the average Closing Price per
FFI Share of 19.06 pence since 2 June 2019 (being
the one-month period prior to the date of this
Announcement); and
o 38.4 per cent. to the average Closing Price per
FFI Share of 18.07 pence since 2 April 2019 (being
the three-month period prior to the date of this
Announcement).
-- The Offer values the entire issued and to be issued
share capital of FFI, at approximately GBP39.5 million.
-- FFI Shares will be acquired fully paid and free from
all liens, charges, equitable interests, encumbrances,
rights of pre-emption and other third party rights
or interests together with all rights attaching thereto
including, without limitation, the right to receive
all dividends and other distributions (if any) announced,
declared, made or paid thereafter.
-- Lumiere reserves the right to reduce the Offer consideration
by the amount of any dividend (or other distribution)
which is paid or becomes payable by FFI to the holders
of FFI Shares.
-- Lumiere will finance the Offer from its existing cash
resources.
-- Lumiere is a wholly-owned subsidiary of the 777 Group.
The 777 Group was founded in 2015 as the result of
a management buyout of SuttonPark Capital. The 777
Group is focused on a broad spectrum of financial
services businesses, asset originators, and financial
technology and service providers by combining proprietary
capital, underwriting expertise, and technology with
investments in human capital. The 777 Group applies
its collective experience through six primary business
lines: Insurance, Litigation Finance, Consumer Finance,
Software as a Service, Aviation and Energy & Infrastructure.
The 777 Group's portfolio companies have the additional
benefit of leveraging the management teams and market
knowledge of the platform's other businesses. The
777 Group manages approximately $1.9bn of assets across
more than 30 portfolio companies.
-- FFI is the holding company of Film Finances, Inc.,
a provider of production, financing, evaluation and
monitoring services to the entertainment industry.
Founded in 1950, FFI has been listed on AIM since
2017. FFI's primary focus has been the provision of
completion contracts, which guarantee the financiers
of films, television productions and, more recently,
streamed content that the productions will be completed
on time, on budget and to a basic pre-agreed specification.
Today, FFI's operations includes pre- and post-production
services, content investment, general risk insurance
and distribution.
-- The 777 Group has broad experience in the global insurance
sector and believes that the strong FFI brand, strong
market position and diversified revenue streams makes
FFI an attractive business that would fit well within
the 777 Group's portfolio of companies. The Lumiere
Directors believe in the underlying fundamentals of
FFI and believe that FFI would benefit from the 777
Group's relationship network, footprint, capital sources
and experience in transactions.
Recommendation of the Offer by Independent FFI Directors
The Independent FFI Directors, who have been so advised by
finnCap as to the financial terms of the Offer, consider the terms
of the Offer to be fair and reasonable and intend unanimously to
recommend the Offer. In providing its advice to the Independent FFI
Directors, finnCap has taken into account the commercial
assessments of the Independent FFI Directors. finnCap is providing
independent financial advice to the Independent FFI Directors for
the purposes of Rule 3 of the Takeover Code.
Further details of the recommendation and their intentions with
regard to the Offer are set out in paragraphs 4 and 5 below.
SPA and irrevocable undertakings
Lumiere and the Sellers entered into the SPA on 2 July 2019,
which commits Lumiere to buy, and the Sellers to sell, 47,476,547
FFI Shares, representing 30.1 per cent. of the Total FFI Shares, at
a price of 24.99 pence per FFI Share.
Under the terms of the Concert Party Agreement, the members of
the Lumiere Concert Party, in aggregate holding 107,965,563 FFI
Shares, representing 68.4 per cent. of the Total FFI Shares, have
undertaken irrevocably not to accept the Offer, and to vote in
favour of the proposed Delisting, Re-registration and adoption of
New Articles.
General
The Offer will remain open for acceptance, subject to the
provisions of Appendix 1 of this Announcement and the terms of the
Offer Document, until 1.00 p.m. on the 21st day after the date of
publication of the Offer Document or (if that day is a Saturday,
Sunday or a public holiday) on the next succeeding business
day.
The Offer Document and the Form of Acceptance will be posted to
FFI Shareholders as soon as reasonably practicable and, in any
event within 28 days after the date of this Announcement, other
than to FFI Shareholders resident in any Restricted
Jurisdiction.
The Offer Document and the Form of Acceptance will also be made
available to all FFI Shareholders, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, at no
charge to them on FFI's website at http://www.filmfinances.com/ and
Lumiere's website at https://www.lumiereacquisition.com/.
The full terms of and conditions to the Offer will be set out in
the Offer Document and the Form of Acceptance. In deciding whether
or not to accept the Offer, FFI Shareholders should rely solely on
the information contained in, and follow the procedures set out in,
the Offer Document and Form of Acceptance.
Regardless of the outcome of the Offer, the FFI Board has
separately and independently concluded that it would be in the best
interests of the Company to effect a Delisting and Re-registration.
Accordingly, at or around the same time as the Offer Document is
posted by Lumiere, FFI intends to send a circular to FFI
Shareholders convening a general meeting to put forward resolutions
to approve the Delisting, Re-registration and adoption of New
Articles as soon as reasonably practicable. Therefore, in deciding
whether or not to accept the Offer, FFI Shareholders should take
into account that there is a significant likelihood that the
admission to trading on AIM of FFI Shares will be cancelled
regardless of the outcome of the Offer, in particular, in light of
the fact that the members of the Lumiere Concert Party have all
undertaken to vote in favour of the Delisting, Re-registration and
adoption of New Articles, as set out further in paragraph 4
below.
Share Purchases
Lumiere may purchase or arrange to purchase FFI Shares otherwise
than under the Offer, at the Offer Price of 25 pence per FFI Share.
FFI Shareholders interested in selling their FFI Shares in cash
should contact Cantor Fitzgerald Europe on +44 20 7894 7590 who
have authority to make market purchases on behalf of Lumiere
(subject to normal settlement).
Comments
Commenting on the Offer, Julian Bartlett, Non-Executive Director
of FFI and Independent FFI Director, said:
"FFI's time on AIM has been blighted by a number of industry
specific headwinds which have largely been beyond our control; the
diversification strategy we have followed will, we believe, in the
longer term bear fruit though in the meantime it is pleasing to be
able to offer liquidity to those shareholders wanting to realise
value at a meaningful premium to the current share price and in
that respect we welcome the offer from Lumiere."
Commenting on the Offer, Josh Wander, Managing Partner and
Co-Founder of the 777 Group, said:
"We are very excited to partner with FFI. We believe they are a
highly attractive company with a strong brand and a rich history in
the entertainment industry. Their reputation as the entertainment
industry leader in providing innovative financial solutions,
primarily through completion contracts, is consistent with the 777
Group's approach to financial services.
FFI will be able to leverage the 777 Group's significant M&A
experience and breadth of coverage in the global insurance industry
and will also have the benefit of leveraging the knowledge and
expertise of the management of the 777 Group's subsidiary
businesses.
Our investment in FFI is a clear sign of our belief in the
Company, its management and their strategy to diversify revenue and
grow through acquisition."
This summary should be read in conjunction with, and is subject
to, the full text of the following Announcement (including its
Appendices). The Offer will be subject to the further terms of the
Offer set out in Appendix 1 to this Announcement and to be set out
in the Offer Document. Appendix 2 sets out the sources of
information and bases of calculations used in this Announcement.
Appendix 3 contains the definitions of certain terms used in this
summary and in the full text of this Announcement.
Enquiries
Lumiere
Jorge Beruff +1 212 397 6102
Sidney Li +1 305 921 2801
Craven Street Capital Limited (financial adviser to Lumiere)
+44 20 3890 8687
Charles Lens
Donald Sinton
FFI Holdings plc
David Sasso (Head +1 310 275 7323 ext.
of Investor Relations 292
and Public Relations)
finnCap Ltd (financial adviser to FFI) +44 20 7220 0500
Henrik Persson
Julian Blunt
Simon Hicks
Norton Rose Fulbright LLP are retained as legal advisers to the
777 Group as to English law. Goodwin Procter (UK) LLP are retained
as legal advisers to FFI as to English law.
Important notices relating to the financial advisers
Craven Street Capital Limited, which is an appointed
representative of Resolution Compliance Limited, which is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting exclusively as financial adviser to
Lumiere and no-one else in connection with the Offer and other
matters described in this Announcement, and will not be responsible
to anyone other than Lumiere for providing the protections afforded
to clients of Craven Street Capital Limited or for providing advice
in relation to the Offer, the contents of this Announcement or any
other matter referred to in this Announcement. Craven Street
Capital Limited has given, and not withdrawn, its consent to the
inclusion in the Announcement of the references to its name in the
form and context in which it appears.
finnCap Ltd, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as financial adviser to FFI and no-one else in connection with the
Offer and other matters described in this Announcement, and will
not be responsible to anyone other than FFI for providing the
protections afforded to clients of finnCap Ltd or for providing
advice in relation to the Offer, the contents of this Announcement
or any other matter referred to herein. finnCap Ltd has given, and
not withdrawn, its consent to the inclusion in the Announcement of
the references to its name and the advice it has given to FFI in
the form and context in which they appear.
Further information
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT
INTED TO, AND DOES NOT, CONSTITUTE OR FORM ANY PART OF, AN OFFER TO
SELL OR AN INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES
OR THE SOLICITATION OF ANY VOTE OR APPROVAL IN ANY JURISDICTION,
NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE SECURITIES
REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN
CONTRAVENTION OF APPLICABLE LAW. THE OFFER WILL BE MADE SOLELY BY
MEANS OF THE OFFER DOCUMENT, WHICH WILL CONTAIN THE FULL TERMS OF
THE OFFER. ANY DECISION OR ACCEPTANCE IN RELATION TO THE OFFER
SHOULD BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN
THE OFFER DOCUMENT AND SUCH FORM OF ACCEPTANCE (IF APPLICABLE). FFI
SHAREHOLDERS ARE ADVISED TO READ THE OFFER DOCUMENT AND FORM OF
ACCEPTANCE (IF APPLICABLE) CAREFULLY, ONCE THEY HAVE BEEN
DISPATCHED, WHICH LUMIERE EXPECTS TO DO SHORTLY.
Forward looking statements
This Announcement (including information incorporated by
reference in this Announcement), oral statements made regarding the
Offer, the Lumiere Concert Party and other information published by
Lumiere and FFI may contain certain statements that are or may be
deemed to be forward looking with respect to the financial
condition, results of operation(s) and business of Lumiere and/or
FFI and certain plans and objectives of the Independent FFI
Directors and the Lumiere Directors with respect thereto. These
forward-looking statements can be identified by the fact that they
are prospective in nature and do not relate to historical or
current facts. Forward looking statements often, but not always,
use words such as "anticipate", "target", "expect", "estimate",
"budget", "scheduled", "forecasts", "intend", "plan", "goal",
"believe", "will", "may", "should", "would", "could" or other words
of a similar meaning. These estimates are based on assumptions and
assessments made by the Independent FFI Directors and/or the
Lumiere Directors in light of their experience and their perception
of historical trends, current conditions, expected future
developments and other factors they believe appropriate.
The statements contained in this Announcement are made as at the
date of this Announcement, unless some other time is specified in
relation to them, and publication of this Announcement shall not
give rise to any implication that there has been no change in the
facts set forth in this Announcement since such date. By their
nature, forward looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future and the factors described in the context of
such forward looking statements in this Announcement could cause
actual results or developments to differ materially from those
expressed or implied by such forward looking statements. Although
FFI and Lumiere believe that the expectations reflected in such
forward looking statements are reasonable, neither Lumiere nor FFI,
nor any of their respective associates or directors, officers or
advisers, or any person acting on the behalf of Lumiere or FFI
provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward
looking statements in this Announcement will actually occur. Other
than in accordance with their legal or regulatory obligations
(including under the AIM Rules and the Disclosure Guidance and
Transparency Rules of the FCA), none of Lumiere, FFI, any member of
the 777 Group, nor any Lumiere Director or FFI Director, nor any of
their respective advisers, associates, directors or officers is
under any obligation, and such persons expressly disclaim any
intention or obligation, to update or revise any forward looking
statements, whether as a result of new information, future events
or otherwise. No undue reliance should therefore be placed on these
forward-looking statements which speak only as at the date of this
Announcement.
Dealing 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 3.30pm (London time) on the 10th business day
following the commencement of the offer period and, if appropriate,
by no later than 3.30pm (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 3.30pm
(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 Takeover 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.
Information relating to FFI Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by FFI Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from FFI may be provided to Lumiere
during the Offer Period as required under Section 4 of Appendix 4
of the Takeover Code to comply with Rule 2.11(c).
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Takeover Code, FFI confirms
that, as at the date of this Announcement, it has 157,820,243
ordinary shares of 1p each in issue and admitted to trading on the
Main Market of the London Stock Exchange under the ISIN reference
GB00BF04DT64.
Purchases outside the Offer
Lumiere or its nominees or brokers (acting as agents) may
purchase FFI Shares otherwise than under the Offer, such as in the
open market or through privately negotiated purchases. Any such
purchases will comply with the Takeover Code and the rules of the
London Stock Exchange. Details about such purchases will be
disclosed in accordance with Rule 8 of the Takeover Code.
No profit forecasts or quantified financial benefits
statement
Other than the FY19 Profit Forecast, no statement in this
Announcement is intended as a profit forecast, profit estimate or
quantified financial benefits statement.
FFI Shareholders outside the United Kingdom
The availability of the Offer and the release, publication and
distribution of this Announcement in jurisdictions other than the
United Kingdom may be restricted by the laws of those jurisdictions
and therefore persons who are not resident in the United Kingdom
into whose possession this Announcement comes should inform
themselves about and observe any such restrictions.
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 Offer disclaim any responsibility or
liability for the violation of such restrictions by any person.
Accordingly, copies of this Announcement, the Offer Document, the
Form of Acceptance and any other related document will not be, and
must not be, directly or indirectly, mailed or otherwise
distributed or sent in or into any Restricted Jurisdiction and
persons in such Restricted Jurisdictions receiving such documents
(including custodians, nominees and trustees) must not distribute
or send them in, into or from such jurisdictions as doing so may
violate the laws of such jurisdictions and may make invalid any
purported acceptance of the Offer by persons in any such Restricted
Jurisdiction.
The receipt of cash pursuant to the Offer by FFI Shareholders
may be a taxable transaction under applicable national, state or
local, as well as foreign and other, tax laws. Each FFI Shareholder
is urged to consult its independent professional adviser regarding
the tax consequences of accepting the Offer.
This Announcement has been prepared for the purpose of complying
with English law, the rules of the London Stock Exchange 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
England and Wales.
The Offer will not be made, directly or indirectly, in or into,
or by use of the mails, or by any means or instrumentality
(including, without limitation, by means of telephone, facsimile,
telex, internet or other forms of electronic communication) of
interstate or foreign commerce of, or any facilities of a
securities exchange of any Restricted Jurisdiction and the Offer
will not be capable of acceptance by any such use, means,
instrumentality or facility or from within any Restricted
Jurisdiction. Accordingly, copies of this Announcement and any
other related document will not be, and must not be, directly or
indirectly, mailed or otherwise distributed or sent in or into any
Restricted Jurisdiction and persons receiving such documents
(including custodians, nominees and trustees) must not distribute
or send them in, into or from such jurisdictions as doing so may
violate the laws of such jurisdictions and may make invalid any
purported acceptance of the Offer by persons in any such Restricted
Jurisdiction.
Publication of this Announcement and availability of hard
copies
A copy of this Announcement and the display documents required
to be published pursuant to Rule 26.1 and Rule 26.2 of the Takeover
Code will be available, subject to certain restrictions relating to
persons resident in Restricted Jurisdictions, on FFI's website at
http://www.filmfinances.com/ and on Lumiere's website at
https://www.lumiereacquisition.com/ by no later than 12 noon
(London time) on 3 July 2019 until the end of the Offer Period.
Neither the content of Lumiere's nor FFI's websites nor the
content of any websites accessible from hyperlinks on such website
(or any other websites) are incorporated into, or form part of,
this Announcement nor, unless previously published by means of a
Regulatory Information Service, should any such content be relied
upon in reaching a decision regarding the matters referred to in
this Announcement.
In addition, in accordance with Rule 30 of the Takeover Code, a
hard copy of this Announcement and any information incorporated by
reference in this Announcement may be requested by contacting
finnCap on +44 (0) 20 7220 0500 or by writing to them at finnCap
Ltd, 60 New Broad Street, London, EC2M 1JJ, United Kingdom.
FFI Shareholders may also request that all future documents,
announcements and information to be sent to them in relation to the
Offer should be in hard copy form.
The Offer is subject to the provisions of the Takeover Code.
Right to switch to a scheme of arrangement
Lumiere reserves the right to elect, with the consent of the
Panel and FFI, to implement the Offer by way of a court sanctioned
scheme of arrangement under Part 26 of the Companies Act 2006, as
an alternative to the Offer. In such an event, the Offer would be
implemented on the same terms or, if Lumiere so decides, on such
other terms being no less favourable, so far as applicable, as
those which would apply to the Offer, subject in each case to
appropriate amendments to reflect the change in method of effecting
the Offer.
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.
Inside information and Market Abuse Regulation ("MAR")
Certain FFI Shareholders were, with the consent of the Panel,
formally brought inside in order to discuss the Concert Party
Agreement. That inside information is set out in this Announcement
and has been disclosed as soon as possible in accordance with
paragraph 7 of article 17 of MAR. Therefore, those persons that
received inside information are no longer in possession of inside
information relating to FFI and its securities.
Status of Announcement
This Announcement does not constitute a prospectus or prospectus
equivalent document.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN OR INTO ANY JURISDICTION WHERE TO
DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION.
For immediate release
2 July 2019
RECOMMED MANDATORY CASH OFFER
by
LUMIERE ACQUISITIONS COMPANY LLC ("Lumiere"), a wholly-owned
subsidiary of the 777 GROUP
for the entire issued and to be issued ordinary share capital
of
FFI HOLDINGS PLC ("FFI")
not already agreed to be acquired by Lumiere
1. Introduction
Following Lumiere triggering the obligation under Rule 9 of the
Takeover Code to make the Offer (as described in the Introduction
above), the board of directors of Lumiere are pleased to announce
that the Independent FFI Directors intend to recommend the Offer.
The Offer will be made by way of a contractual offer under the
Takeover Code and within the meaning of Part 28 of the Companies
Act 2006.
2. The Offer
The Offer, which will be subject to the further terms set out in
Appendix 1 to this Announcement and to the full terms to be set out
in the Offer Document, will be made on the following basis:
25 pence in cash for each FFI Share held.
The Offer Price represents a premium of approximately:
-- 28.2 per cent. to the Closing Price per FFI Share
of 19.50 pence on 1 July 2019 (being the last Business
Day prior to the date of this Announcement);
-- 31.2 per cent. to the average Closing Price per FFI
Share of 19.06 pence since 2 June 2019 (being the
one-month period prior to the date of this Announcement);
and
-- 38.4 per cent. to the average Closing Price per FFI
Share of 18.07 pence since 2 April 2019 (being the
three-month period prior to the date of this Announcement).
The Offer values the entire issued and to be issued share
capital of FFI, at approximately GBP39.5 million.
The Lumiere Directors believe the Offer represents an attractive
opportunity for FFI Shareholders to realise their investment at a
substantial premium to FFI's current market value.
The Offer will extend to all issued FFI Shares which are not
held by Lumiere and any further FFI Shares which are
unconditionally allotted or issued and fully paid before the Offer
closes. Members of the Lumiere Concert Party (other than Lumiere)
have undertaken not to accept the Offer.
The Offer will remain open for acceptance, subject to the
provisions of Appendix 1 of this Announcement and the terms of the
Offer Document, until 1.00 p.m. on the 21st day after the date of
publication of the Offer Document or (if that day is a Saturday,
Sunday or a public holiday) on the next succeeding business
day.
FFI Shares will be acquired fully paid and free from all liens,
charges, equitable interests, encumbrances, rights of pre-emption
and other third party rights or interests together with all rights
attaching thereto including, without limitation, the right to
receive all dividends and other distributions (if any) announced,
declared, made or paid thereafter.
Lumiere reserves the right to make an equivalent reduction in
its Offer Price if FFI announces, declares or pays any dividend or
any other distribution to FFI Shareholders on or after the date of
this Announcement.
3. Background to and reasons for the Offer
As noted above, as a result of the Acquisition, under Rule 9 of
the Takeover Code, Lumiere is required to make the Offer at a price
of 25 pence per FFI Share, being not less than the price per FFI
Share being paid to the Sellers.
As set out in paragraph 8 below, FFI is a world leader in the
provision of completion contracts to the entertainment industry,
with a respected and trusted brand position, an extensive network
of industry relationships, and a demonstrated ability to leverage
its position and provide various ancillary services and products to
the makers of film and television productions.
Despite growing revenues and a proven track record of executing
strategic acquisitions, FFI has experienced a number of setbacks
predominantly in its original completion contracts business
including contract cancellations, delays in the timing of revenues
and smaller average production sizes. As a consequence, FFI has
experienced volatility in its reported earnings, something Lumiere
believes is more manageable under private ownership.
The earnings volatility, a concentration of FFI Shares in the
hands of a small group of investors and underlying issues within
the entertainment industry have resulted in poor FFI Share price
performance since admission of FFI Shares to trading on AIM on 30
June 2017 (the "Admission"). In the context of the significant FFI
Share price decline since IPO, Lumiere believes it will be
difficult for FFI to raise additional funding to support further
M&A. Lumiere is supportive of investing further capital into
FFI to support further M&A, subject to the completion of the
Offer and the Delisting.
As a consequence, the 777 Group decided to make the Acquisition
and the Offer and to support the proposed Delisting.
The 777 Group has broad experience in the global insurance
sector and believes that the strong FFI brand, strong market
position and diversified revenue streams makes FFI an attractive
business that would fit well within the 777 Group's portfolio of
companies and under private ownership. The Lumiere Directors
believe in the underlying fundamentals of FFI and believe that FFI
would benefit from the 777 Group's relationship network, footprint,
capital sources and experience in transactions.
The Lumiere Directors believe that the Offer represents an
attractive opportunity for FFI Shareholders to exit at a
substantial premium to the prevailing FFI Share price, as set out
in paragraph 2 above.
Further details on Lumiere's intentions in relation to FFI, its
management and employees are set out in paragraph 12 below.
4. Background to and reasons for the recommendation of the
Independent FFI Directors
The FFI Board is acutely aware that the price performance of FFI
Shares has been disappointing since Admission. Whilst acknowledging
that the Company has faced trading challenges in its original
completion contracts business, largely driven by factors beyond the
FFI Board's control, the Independent FFI Directors consider that
the value attributable to the acquisitions made since Admission and
the potential for recovery in the completion contracts business are
not currently reflected in the share price.
The FFI Board clearly laid out its strategy to expand and
diversify its ancillary business offerings at the time of Admission
and has been active in pursuing opportunities resulting in the
successful completion of a number of transactions:
-- In November 2017 the acquisition of EPS-Cineworks
Digital Studios was announced. Operating principally
in North America, EPS-Cineworks is a full service,
digital, post-editing machine rental business, servicing
numerous theatrical and television productions.
-- In December 2017 the Company completed the acquisitions
of Buff Dubs Pty. Ltd and Reel Media LLC. Buff Dubs
is an Australian post-production service company with
technology leadership in encoding, transcoding, media
duplication and mastering, whilst Reel Media is a
US-based entertainment insurance agency and specialty
brokerage that offers numerous insurance products
to the entertainment industry globally.
-- In January 2018 the Company announced the acquisition
of the motorsports entertainment insurance book of
business from All Risks Ltd, the largest U.S. independent
wholesale brokerage in the U.S. The motorsports entertainment
business provides specialty and commercial coverages
to race teams, racetracks, sanctioning bodies, associations,
road courses, and motorsports special events & activities.
-- In April 2018 the Company completed the acquisition
of Signature Entertainment UK one of the largest distributors
of films in the UK.
The FFI Board believes that these acquisitions have diversified
the FFI Group's earnings away from a reliance on completion
contracts, and that they will, in the longer term, generate value
for FFI Shareholders.
The adverse impact on the Company's share price has reduced the
FFI Board's ability to raise meaningful equity capital on
acceptable terms or to use new equity issuance as consideration for
acquisitions; both of these were clear ambitions of the FFI Board
at the time of Admission.
These factors, combined with the concentration of an
overwhelming majority of FFI Shares in the hands of a small group
of investors, has, in the FFI Board's opinion, led to very limited
liquidity in the trading of FFI Shares (i.e. a 30 day average daily
volume of approximately 62,789 shares representing approximately
GBP12,243.88 in value, based upon the Closing Price per FFI Share
of 19.5 pence on 1 July 2019 (being the last Business Day prior to
the date of this Announcement).
The Company is also subject to significant direct and indirect
costs associated with the maintenance of its AIM admission,
including annual fees payable to the London Stock Exchange, the
professional fees of its advisers and the costs of complying with
corporate governance and reporting requirements. The FFI Board
believes that the limited liquidity in FFI Shares indicates that
the burden of these costs may outweigh the benefits of the FFI
Shares being traded on AIM. A cancellation of admission to trading
on AIM would eliminate these costs, enabling management to focus
exclusively on the delivery of the FFI Board's strategy.
Consequently, regardless of the outcome of the Offer, the FFI
Board has separately and independently concluded that it would be
in the best interests of the Company to effect a Delisting and
Re-registration. Accordingly, at or around the same time as the
Offer Document is posted by Lumiere, FFI intends to send a circular
to FFI Shareholders convening a general meeting to put forward
resolutions to approve the Delisting, Re-registration and adoption
of New Articles as soon as reasonably practicable. The New Articles
will include drag along, tag along and certain pre-emption rights
on transfer which would apply to remaining FFI Shareholders going
forward. FFI Shareholders wishing to remain invested in the Company
may do so by electing not to accept the Offer, subject to the risks
set out below. Alternatively, the Offer provides existing FFI
Shareholders with an opportunity to realise value for their FFI
Shares at a meaningful premium to the current price per FFI Share,
before the Company is Delisted.
The Independent FFI Directors note that the Offer is
unconditional from the outset, and that while the Delisting,
Re-registration and adoption of New Articles requires votes in
favour from 75 per cent. of those FFI Shareholders present and
voting, the Delisting, Re-registration and adoption of New Articles
are highly likely to occur taking into account the aggregate
holding of the members of the Lumiere Concert Party (all of whom
have undertaken to vote in favour of the Delisting, Re-registration
and adoption of New Articles under the Concert Party Agreement)
before taking into account any acceptances under the Offer.
The Independent FFI Directors acknowledge that the Offer Price,
whilst recommendable, may not fully recognise the potential
shareholder value which may (or may not) be generated in the longer
term following the integration of the acquisitions and the
execution of the FFI Board's strategy.
The Independent FFI Directors understand that the Lumiere
Concert Party, by entering into the Concert Party Agreement with
Lumiere and electing not to accept the Offer, has made a decision
based in part on its appraisal of the future commercial benefits
deliverable from the involvement and support of the 777 Group (as
more fully described in paragraph 12 below) and continuing to
execute the FFI Board's strategy away from the public markets. As
noted above, given that the Offer will be unconditional from the
outset, no competing offer could succeed and the Independent FFI
Directors have taken this into account when forming their views on
the Offer.
Assuming the Delisting, Re-registration and adoption of New
Articles proceed, not accepting the Offer would involve a number of
significant risks which include, but are not limited to:
-- the FFI Shares will not be listed or traded on AIM
or on any other exchange or market, and so there will
be limited or no opportunity for FFI Shareholders
to sell or buy FFI Shares;
-- on the assumption that a majority of the board of
directors of FFI remain resident outside of the United
Kingdom, FFI will not be subject to the Takeover Code,
the implications of which will be set out further
in the circular to be sent by FFI to FFI Shareholders
at or around the same time as Lumiere posts the Offer
Document, but in particular, Shareholders will not
receive the protections afforded by the Takeover Code
in the event that there is a subsequent offer to acquire
their FFI Shares or in relation to any other change
of control of FFI;
-- the Company will not be subject to the AIM Rules or
the QCA Corporate Governance Code or any similar rules
or regulations applying to companies with securities
admitted to or traded on AIM which may provide protections
for FFI Shareholders;
-- the Company will be controlled by the Lumiere Concert
Party under the terms of the Concert Party Agreement;
and
-- the adoption of the New Articles would incorporate
drag along, tagalong and certain pre-emption rights
on transfer, which would provide FFI Shareholders
with certain rights and also impose certain restrictions
and obligations, which are not contained in the Company's
current articles of association.
5. Recommendation of the Offer by Independent FFI Directors
The Independent FFI Directors, having been so advised by finnCap
as to the financial terms of the Offer, consider that the Offer is
fair and reasonable. Therefore, having carefully considered all of
the factors above and, in particular, that the Offer will be
unconditional from the outset and that no other exit opportunity is
likely to be available to FFI Shareholders in the short to medium
term, the Independent FFI Directors believe that accepting the
Offer is in the best interests of FFI Shareholders and the
Independent FFI Directors intend to recommend unanimously that FFI
Shareholders accept the Offer. In providing its advice to the
Independent FFI Directors, finnCap has taken into account the
commercial assessments of the Independent FFI Directors. finnCap is
providing independent financial advice for the purposes of Rule 3
of the Takeover Code to the Independent FFI Directors.
Notwithstanding the above advice to FFI Shareholders, the
Independent FFI Directors do however, in their personal capacity as
FFI Shareholders, continue to believe in the merit and longer term
potential of the Company's business and the FFI Board's strategy,
as more fully described in paragraph 8 and the prospect of
continuing to execute this away from the public markets in
conjunction with the 777 Group, as more fully described in
paragraph 12. Accordingly, the Independent FFI Directors are not
intending to accept the Offer in respect of their holdings of FFI
Shares, being 665,000 shares representing 0.4 per cent. of Total
FFI Shares in aggregate. In making this decision, in their personal
capacities as FFI Shareholders, and electing not to accept the
Offer each Independent FFI Director is fully aware of, and prepared
to accept, the associated risks described above.
If any FFI Shareholder, in light of its own investment
objectives and having taken independent advice appropriate to its
own financial circumstances, concludes that it is comfortable with
the risks and implications of maintaining a shareholding following
the Delisting, Re-registration and adoption of New Articles, it is
possible for that FFI Shareholder to take no action and not accept
the Offer, as the majority of the FFI Board and Lumiere Concert
Party intend to do.
6. Information relating to Lumiere and the 777 Group
Lumiere is a wholly-owned subsidiary of the 777 Group, owned 33
per cent. by 777 Partners LLC ("777") and 67 per cent. by 600
Partners LLC ("600"). The 777 Group is focused on six primary
business lines: Insurance, Litigation Finance, Consumer Finance,
Software as a Service, Aviation and Energy & Infrastructure,
combining proprietary capital, underwriting expertise, and
technology with investments in human capital. The 777 Group aims to
create long-term value for its stakeholders by combining the
deployment of proprietary capital, underwriting expertise in
alternative assets and a technology- and data-driven approach with
management-friendly structures.
777 was founded by Josh Wander and Steven W. Pasko in 2015 as
the result of a management buyout of SuttonPark Capital, LLC
("SuttonPark") from PennantPark Investment Corporation. SuttonPark
is a wholesale aggregator and servicer of structured settlements.
As 777 expanded into the additional business lines detailed above,
777's operations were restructured in 2017 such that 600 was
established alongside 777 as a legally separate and distinct sister
company, and a number of 777's portfolio companies were transferred
to 600, thereby forming the 777 Group (although in practice, as 777
is the main operational entity, "777 Partners" is the market facing
brand of the 777 Group).
777's investment professionals, under the supervision of Josh
Wander and Steven W. Pasko, assess, negotiate, and supervise all
acquisitions and portfolio companies across the 777 Group. The
accounts of 777 Group are prepared and audited on the basis of a
consolidation of 777 and 600 and as of 31 December 2018, the 777
Group has approximately $1.9bn of assets across more than 30
portfolio companies.
777 and 600, as the holding companies of the 777 Group, control
the 777 Group's portfolio companies. 777 and 600 are in turn
controlled by SuttonPark Acquisition LLC (SP) and SuttonPark
Acquisition II LLC (SPII) respectively, which are intermediate
holding companies under the control of Josh Wander and Steven W.
Pasko (in the case of SP) and Steven W. Pasko (in the case of
SPII), which have no material assets or operations other than their
respective holdings in 777 and 600.
Josh Wander and Steven W. Pasko are the Managing Partners of 777
and Steven W. Pasko is the Managing Partner of 600. Josh Wander and
Steven W. Pasko together drive asset origination across the 777
Group.
777's senior management team comprises industry veterans with
backgrounds in private equity, venture capital, investment banking,
financial technology, insurance, actuarial science, asset
management, structured-credit, asset-backed securities, risk
analytics, complex commercial litigation and computer science.
The 777 Group's portfolio companies have the additional benefit
of leveraging the management teams and market knowledge of the 777
Group's platform and other portfolio companies.
Further information on the 777 Group can be found on its website
at www.777part.com.
Steven W. Pasko
As noted above, Steven W. Pasko co-founded 777 in 2015 as part
of the management buyout of SuttonPark Capital from PennantPark.
Prior to joining PennantPark in 2008, he held Managing Director
positions at Natixis Capital Markets and Bankers Trust (now part of
Deutsche Bank) where he was responsible for asset securitizations,
mergers & acquisitions, financing and equity capital markets.
Mr. Pasko also held leadership positions pioneering specialty
finance at Salomon Brothers and Drexel Burnham Lambert. He has a
B.A. in Business Administration from Rutgers College and an M.B.A.
from the Wharton School of the University of Pennsylvania. Mr.
Pasko serves as CEO of SuttonPark and sits on the board of F3EA
Holdings.
Josh Wander
As noted above, Josh Wander co-founded 777 in 2015 as part of
the management buyout of SuttonPark Capital from PennantPark. Prior
to founding 777, he held executive roles at SuttonPark, First
Sustainable LLC, and Structured Asset Funding where he sourced,
structured, and financed alternative assets. Mr. Wander directs
strategy and investment at the 777 Group and sits on the boards of
F3EA Holdings, Signal Legal, and First Sustainable. He has a B.S.
in Finance from the University of Florida.
7. Information on the Lumiere Concert Party and the Concert Party Agreement
Following completion of the Acquisition, Lumiere will hold
47,476,547 FFI Shares, representing 30.1 per cent. of the Total FFI
Shares and voting rights of FFI, and the Lumiere Concert Party
will, in aggregate, hold 107,965,563 FFI Shares, representing 68.4
per cent. of the Total FFI Shares and voting rights of FFI.
The Lumiere Concert Party comprises Lumiere, Golden Sun, JDT,
James Terlizzi, the Trattner Trust, Antony Mitchell, Timothy
Trankina and Stephen Argent. The Offer is being made by
Lumiere.
Golden Sun is a Bahamas-based investment fund administered by
the Winterbotham Trust Company Limited. Golden Sun is FFI's largest
shareholder. David Haring, who has a history of working with other
members of the Lumiere Concert Party, is a significant investor in
Golden Sun.
JDT is a holding company through which James Terlizzi, the
Non-Executive Chairman of FFI, holds his FFI Shares.
The Trattner Trust is a trust, whose beneficiaries are Gregory
Trattner, a senior executive at FFI, and his family.
Antony Mitchell is the Chief Operating Officer and an executive
director of FFI.
Timothy Trankina was the Chief Financial Officer and an
executive director of FFI at the time of admission of FFI Shares to
trading on AIM. Timothy Trankina resigned from his roles with FFI
in October 2018.
Stephen Argent is a Non-Executive Director of FFI.
All of the members of the Lumiere Concert Party, apart from
Lumiere, were considered by the Panel to be acting in concert at
the time of admission of FFI Shares to trading on AIM. All of the
members of the Lumiere Concert Party have entered into the Concert
Party Agreement to formalise the agreement of its members to pursue
the implementation of the Offer, Delisting, Re-registration,
adoption of New Articles and consolidation of control in respect of
the Company.
The Concert Party Agreement provides, among other things, that
the members of the Lumiere Concert Party will vote together on
matters relating to FFI, including voting in favour of the proposed
Delisting, Re-registration and adoption of New Articles, that they
will not accept any other offer for FFI Shares from a third party
or otherwise sell their FFI Shares while the Offer remains open for
acceptance and includes certain pre-emption provisions where
members of the Lumiere Concert Party are interested in selling
their FFI Shares.
8. Information relating to FFI
FFI is the holding company of Film Finances, Inc., a provider of
production, financing, evaluation and monitoring services to the
entertainment industry. Founded in 1950, FFI has been listed on AIM
since 2017.
FFI is a world leader in the provision of completion contracts
to the entertainment industry for films, television, mini-series
and streaming product. With a respected and trusted brand position
at the centre of the independent film and television entertainment
industry and an extensive network of industry relationships with
producers and financiers involved in the production of films,
television and other content, the Company has been able to secure a
leading market share globally and a high level of repeat business
from existing clients in its completion contract business. As a
consequence of its role in the production life cycle, through the
issuance of completion contracts and monitoring of the entire
production process, FFI has been able to leverage its position and
provide various ancillary services and products to the makers of
film and television productions.
FFI's primary focus has been the provision of completion
contracts, which guarantee the financiers of films, television
productions and, more recently, streamed content that the
productions will be completed on time, on budget and to a basic
pre-agreed specification. Today, FFI's operations includes pre- and
post-production services, content investment, general risk
insurance and distribution.
The FFI Board is now implementing a threefold growth strategy
comprising:
-- Acquisitions of non-creative ancillary services businesses,
such as editing solutions, post-production accounting,
collection services, localisation, sound design and
visual effects, in order to diversify the Company
away from a reliance on completion contracts. The
FFI Board's acquisition strategy began shortly before
Admission, with the acquisition of Rainbow Production
Services, LLC, which trades as Pivotal Post, a leading
provider of post-production equipment rental to filmmakers
in North America and Europe and has continued since
Admission with a number of further acquisitions, referred
to in more detail in paragraph 4, which the FFI Board
believes will help FFI to benefit from the changing
market place for creators of both film and television
content. Each of these transactions have shared a
common objective, namely to ensure that FFI has importance
to producers of entertainment and content irrespective
of their need for completion contracts.
-- Expansion of its ongoing completion contract offering
into China. China's entertainment industry has experienced
unprecedented growth in recent years and is the fastest
growing film market in the world. China's box office
is expected to reach approximately $15 billion by
2020, exceeding North America as the world's largest
market in box office revenue. With well-developed
and robust streaming platforms in place and plans
to produce thousands of hours of new programming to
satisfy increased demands in these areas, the FFI
Board believes that China offers an exciting potential
market for FFI. To this end FFI has been building
its corporate presence in China, where it is a provider
of completion contracts to the entertainment market
and is also in the process of broadening its influence
to provide consulting services for entertainment insurance
and other services, via its relationship with the
People's Insurance Company of China.
-- Strategic low risk investment in content. The entertainment
industry is in a constant state of flux, evolving
and adapting with the development of new technologies,
new platforms and evolving consumer habits. Alongside
the growing consumption of content, driven by the
proliferation of streaming services and the evolution
of viewing habits through mobile devices and over-the-top
services, so too the type of content being consumed
and the manner in which it is produced, financed and
distributed is changing. Due to FFI's awareness of
projects at an early stage and its network within
the entertainment industry, FFI is occasionally asked
or is given the opportunity to invest in content,
where a predetermined sale to global distributors
can be identified on a profitable basis.
FFI operates through its 11 global offices in Los Angeles,
London, Stockholm, Toronto, New York, Cape Town, Cologne and
Shanghai.
FFI employed an average of 127 people and had annual turnover of
$58.9 million and made a profit before tax of $5.3 million in the
financial year ending 31 March 2018. For the six months to 30
September 2018, FFI had turnover of $45.6 million and made a profit
before tax of $4.7 million.
Further information on FFI can be found on its website at
http://www.filmfinances.com/.
9. Current Trading and Prospects
On 4 March 2019, FFI provided the following trading update:
"FFI Holdings PLC (AIM: FFI), a world-leading provider in the
provision of diversified services across the entertainment
industry, provides a trading update ahead of reporting its results
for the fiscal year ending 31 March 2019.
The Company's Completion Contract business has been experiencing
a significantly slower second half of fiscal 2019 primarily driven
by timing of closing current deals, a decrease in average
production size, lack of larger production titles and reserves for
possible claims, the details of which are still be [sic] worked
out. Additionally, the Company's Insurance Agency business has been
impacted by the delay in certain larger production titles which
were originally scheduled for calendar Q1 2019. These titles are
now expected to close in calendar Q2 2019. The combined impact is
expected to be approximately $6 million of EBIT. While there is
considerable uncertainty in the incidence and timing of a number of
items, the Board of Directors expects Underlying EBIT for the
fiscal year ending 2019 to be in the range of $7.5-$11.5 million."
(the "FY19 Profit Forecast")
The FY19 Profit Forecast was further refined in a trading update
issued on 17 May 2019 in which FFI stated:
"FFI Holdings PLC (AIM: FFI) FFI, the world leader in the
provision of completion contracts to the entertainment industry and
one of the largest providers of production services and equipment
to film makers, is pleased to confirm that it expects Underlying
EBIT will be within, but at the lower end of, the range of $7.5 to
$11.5m set out in its trading statement of 4 March 2019.
Other than completion contracts, which has been exposed to a
number of previously disclosed headwinds in the financial year, all
of the Company's divisions are expected to report trading in line
with or ahead of the Board's expectations."
Given that the FY19 Profit Forecast was originally published
before Lumiere made an approach with regard to a possible offer for
FFI, the requirements of Rule 28.1(c)(i) of the Takeover Code apply
in relation to the FY19 Profit Estimate.
Basis of Preparation of the FY19 Profit Forecast
The FY19 Profit Forecast has been prepared based on the
unaudited management accounts for the year ended 31 March 2019. The
FY19 Profit Forecast has been prepared on a basis consistent with
the accounting policies adopted by FFI for the year ended 31 March
2018 and those that will be applicable for the year ended 31 March
2019. These policies are in accordance with IFRS.
FFI Directors' confirmation
The FFI Directors have considered the FY19 Profit Forecast and
confirm that it remains valid as at the date of this announcement,
that the FY19 Profit Forecast has been properly compiled on a basis
of accounting that is consistent with FFI's accounting policies,
which are in accordance with IFRS and are those that FFI expects to
apply in preparing its annual report and accounts for the financial
year ending 31 March 2019.
10. SPA and irrevocable undertakings
The terms of the SPA commit Lumiere to buy, and the Sellers to
sell, 47,476,547 FFI Shares, representing 30.1 per cent. of the
Total FFI Shares, at a price of 24.99 pence per FFI Share. It is
expected that the Acquisition will complete on or around the date
of this Announcement.
Under the terms of the Concert Party Agreement, the members of
the Lumiere Concert Party (other than Lumiere), holding 60,489,016
FFI Shares, representing 38.3 per cent. of the Total FFI Shares,
have undertaken irrevocably not to accept the Offer, and to vote in
favour of the proposed Delisting, Re-registration and adoption of
New Articles.
The Lumiere Concert Party holds, in aggregate, 107,965,563 FFI
Shares, representing approximately 68.4 per cent. of the Total FFI
Shares.
11. Financing of the Offer
It is estimated that full acceptance of the Offer by holders of
the Outstanding FFI Shares will result in maximum cash
consideration payable by Lumiere of approximately GBP12.5 million.
The cash consideration payable under the terms of the Offer will be
financed from Lumiere's existing cash resources.
In accordance with Rule 2.7(d) of the Takeover Code, CSC, as
financial adviser to Lumiere, is satisfied that sufficient
resources are available to Lumiere to satisfy in full the maximum
cash consideration payable pursuant to the terms of the Offer.
12. Future intentions for FFI, its management and employees
The 777 Group notes FFI management's on-going efforts to broaden
its sales mix and diversify its revenue sources by growing the
businesses it has acquired since its IPO, and believes that the
management of FFI can increase revenue and earnings by continuing
to focus on maximizing synergies between its core completion
contract business and its other acquisitions and subsidiaries, to
generate more revenue across the broader entertainment landscape.
The 777 Group recognizes the importance of FFI's management team
and employees to achieving these goals and to the future success of
FFI more broadly. The 777 Group therefore expects to retain the
existing FFI management team and employees, other than as
highlighted below. The 777 Group does not expect any material
change in the conditions of employment or in the balance of the
skills and functions of the employees and management of FFI.
As set out in paragraph 4 above, the FFI Board intends to pursue
the Delisting irrespective of the outcome of the Offer. The 777
Group, together with the other members of the Lumiere Concert
Party, intend to vote in favour of the Delisting. Subject to the
Delisting being approved, FFI's functions related to its listing
will no longer be required. As a result, the 777 Group expects one
or two potential headcount reductions in FFI's public company and
investor relations functions, to the extent that these employees
are not redeployed.
Other than the above-referenced public company-related
functions, there are no specific identified potential cost savings
which would involve a reduction of employee headcount. The 777
Group, as a new owner of the business alongside the other members
of the Lumiere Concert Party, anticipates working with management
to optimise the operational performance of the business, including
identifying whether there are any further potential cost savings
opportunities. Identifying such improvements in operational
performance is not expected to result in a material headcount
reduction in the future.
The 777 Group is supportive of FFI's intention to initiate a
search for a replacement CEO to continue FFI's development into a
global, diversified entertainment services business following the
Offer. Steven Ransohoff, the current CEO of FFI, has agreed to
remain in his role as CEO until a replacement is identified, from
which time it is expected that he will remain with FFI in an
emeritus role. Steven has significant experience and deep
relationships in the completion contracts and insurance industry,
and the 777 Group believes that he will be a valuable asset to FFI
as it progresses into the next stage of its development. It is the
intention of the 777 Group to retain Steven in a strategic role at
FFI into the foreseeable future.
The 777 Group understands that FFI does not currently have a
material research and development function and does not intend to
have FFI establish one following the Offer.
The 777 Group believes that FFI has an attractive proposition to
its customers and intends to support existing management on its
existing strategic growth objectives including further
acquisitions, licensing agreements and strategic partnerships (see
paragraph 8 for more detail). While no significant changes to core
strategic plans of FFI have been identified by the 777 Group, as a
new owner of the business alongside other members of the Lumiere
Concert Party, the 777 Group intends however to discuss with
management to seek to identify new potential future strategic
objectives.
Following completion of the Offer, the 777 Group does not expect
the locations of FFI's places of business (including its
headquarters) to change and does not expect the functions of its
headquarters to change, nor does the 777 Group intend to redeploy
any of FFI's fixed assets.
Following completion of the Offer, the 777 Group intends to
ensure that the existing contractual and statutory employment
rights of the management and employees of FFI, including any
pension rights, will be fully safeguarded. Existing accrued
benefits and employer contributions to defined contribution
pensions of FFI employees will remain unchanged as a result of the
Offer. FFI does not operate any defined benefit pension
schemes.
As set out in this Announcement, the 777 Group does not believe
that FFI's listing on AIM provides it with any material benefits,
and intends to vote in favour of the resolutions being put forward
to FFI Shareholders by the FFI Board to approve the Delisting,
Re-registration and adoption of New Articles in accordance with the
terms of the Concert Party Agreement. FFI does not currently
maintain any other existing trading facilities for securities in
FFI and the 777 Group confirms that it does not intend to establish
one.
Each of the Independent FFI Directors has confirmed that he has
agreed to resign from the FFI Board, conditional upon and with
effect from the cancellation of admission of FFI Shares to trading
on AIM. Further details of all these arrangements will be set out
in the Offer Document.
13. Executive Options
The Offer will impact upon the Executive Options. Anthony
Mitchell will be contacted regarding the effect of the Offer on his
Executive Options.
Whilst the Offer will extend to any FFI Shares which are
unconditionally allotted or issued as a result of the exercise of
any of the Executive Options, the Offer Price is lower than the
exercise price of the Executive Options, which means that the
amount that would be received for each FFI Share issued following
the exercise of the Executive Options would be lower than the
amount paid for the exercise thereof.
14. Cancellation of listing, re-registration and cessation of
application of the Takeover Code
As noted above, regardless of the outcome of the Offer, the FFI
Board has separately and independently concluded that it would be
in the best interests of the Company to effect a Delisting and
Re-registration. Accordingly, at or around the same time as the
Offer Document is posted by Lumiere, FFI intends to send a circular
to FFI Shareholders convening a general meeting to put forward
resolutions to approve the Delisting, Re-registration and adoption
of New Articles as soon as reasonably practicable. Such circular
will include details of the Delisting timetable, but Delisting
would be expected to occur not less than 5 business days after the
date of the general meeting of the Company, and in any event, not
before the Offer has closed to acceptances. Therefore, in deciding
whether or not to accept the Offer, FFI Shareholders should take
into account that there is a significant likelihood that the
admission to trading on AIM of FFI Shares will be cancelled
regardless of the outcome of the Offer, in particular, in light of
the fact that the members of the Lumiere Concert Party have all
undertaken to vote in favour of the Delisting, Re-registration and
adoption of New Articles, as further described in paragraph 4
above.
The cancellation of the trading in FFI Shares on AIM would
significantly reduce the liquidity and marketability of any FFI
Shares not acquired by Lumiere.
It is also intended that, following and assuming the
cancellation of trading of FFI Shares on AIM, FFI will be
re-registered as a private company and the terms of the
Relationship Agreements will no longer apply.
Moreover, as a majority of the board of directors of FFI are
resident outside of the United Kingdom, the Channel Islands or the
Isle of Man, the Takeover Panel has confirmed that it does not
consider FFI to have its central place of management in the United
Kingdom, the Channel Islands and the Isle of Man and therefore, for
so long as that remains the case, FFI will not be subject to the
Takeover Code following the cancellation of trading of FFI Shares
on AIM and re-registration of FFI as a private company. In such
circumstances, any holders of FFI Shares who have not accepted the
Offer should note that they will not receive the protections
afforded by the Takeover Code in the event that there is a
subsequent offer to acquire their FFI Shares or in relation to any
other change of control of FFI.
15. Share Purchases
Lumiere may purchase or arrange to purchase FFI Shares otherwise
than under the Offer, at the Offer Price of 25 pence per FFI Share.
FFI Shareholders interested in selling their FFI Shares in cash
should contact Cantor Fitzgerald Europe on +44 20 7894 7590 who
have authority to make market purchases on behalf of Lumiere
(subject to normal settlement).
16. Offer Document
The Offer will be subject to further terms set out or referred
to in Appendix 1 to this Announcement and in the Offer Document,
and subject to the further terms to be set out in full in the Offer
Document when issued.
The Offer Document and the Form of Acceptance will be posted to
FFI Shareholders as soon as reasonably practicable and, in any
event within 28 days after the date of this Announcement, other
than to FFI Shareholders in any Restricted Jurisdiction.
The Offer Document and the Form of Acceptance will be made
available to all FFI Shareholders, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, at no
charge to them on FFI's website at http://www.filmfinances.com/ and
Lumiere's website at https://www.lumiereacquisition.com/.
The Offer Document will contain important information on the
Offer and on how FFI Shareholders may accept it and, accordingly,
all FFI Shareholders are urged to read the Offer Document and the
accompanying Form of Acceptance when published and/or received.
17. FFI Shareholders outside the United Kingdom
The availability of the Offer to persons not resident in, and
not citizens of, the United Kingdom may be affected by the laws of
the relevant jurisdictions in which they are located or of which
they are citizens. Any persons who are subject to the laws of any
jurisdiction other than the UK should inform themselves about and
observe any applicable requirements.
Overseas FFI Shareholders who are in any doubt regarding such
matters should consult an appropriate independent professional
adviser in the relevant jurisdiction without delay.
18. Offer-related Arrangements
Confidentiality Agreement
On 4 April 2019, 777 and FFI entered into a confidentiality
agreement in relation to the Offer, pursuant to which, amongst
other things, they each undertook, subject to certain exceptions,
to keep information relating to the 777 Group and FFI confidential
and not to disclose it to third parties.
19. Disclosures of interests
As of the date of this Announcement, Lumiere holds an interest
in 47,476,547 FFI Shares, representing 30.1 per cent. of the Total
FFI Shares. Lumiere confirms that no other holding of FFI Shares is
required to be disclosed by it under Rule 8.1(a) of the Takeover
Code.
In aggregate, the Lumiere Concert Party holds an interest in
107,965,563 FFI Shares, representing 68.4 per cent. of the Total
FFI Shares. Details of the holdings in FFI Shares of each member of
the Lumiere Concert Party is as follows:
Name FFI Shares Percentage of FFI
Shares (%)
Golden Sun 47,953,951 30.4
------------------ ------------------------
Lumiere 47,476,547 30.1
------------------ ------------------------
JDT* 10,308,184 6.5
------------------ ------------------------
The Trattner Trust 1,244,144 0.8
------------------ ------------------------
Timothy Trankina 583,433 0.4
------------------ ------------------------
Antony Mitchell 399,304 0.3
------------------ ------------------------
James Terlizzi 0 0.0
------------------ ------------------------
Stephen Argent 0 0.0
------------------ ------------------------
Total 107,965,563 68.4
------------------ ------------------------
*JDT is a holding company through which James Terlizzi
holds his shares
Save for the interest of Lumiere and the Lumiere Concert Party
described above, as at the date of this Announcement, neither
Lumiere nor any of the Lumiere Directors, nor, so far as Lumiere is
aware, any person acting in concert with Lumiere, owns or controls
any FFI Shares or any securities convertible or exchangeable into
FFI Shares (including pursuant to any long exposure, whether
conditional or absolute, to changes in the prices of securities) or
any rights to subscribe for or purchase the same, or holds any
options (including traded options) in respect of, or has any option
to acquire, any FFI Shares or has entered into any derivatives
referenced to FFI Shares ("Relevant FFI Shares") which remain
outstanding, nor does any such person have any arrangement in
relation to Relevant FFI Shares. An "arrangement" for these
purposes also includes any indemnity or option arrangement, or any
agreement or understanding, formal or informal, of whatever nature,
relating to Relevant FFI Shares which may be an inducement to deal
or refrain from dealing in such securities.
Neither Lumiere, nor any Lumiere Directors, nor, so far as
Lumiere is aware, any person acting in concert with Lumiere, has
borrowed or lent any Relevant FFI Shares.
Save for the voting agreements and commitments contained in the
Concert Party Agreement referred to in paragraph 7 above, neither
Lumiere nor any persons acting in concert with it has procured any
irrevocable commitment or letter of intent in respect of any
Relevant FFI Shares.
20. Documents published on a website
A copy of the following documents will, by no later than 12 noon
(London time) on the Business Day following the date of this
Announcement, be published on FFI's website at
http://www.filmfinances.com/ and Lumiere's website at
https://www.lumiereacquisition.com/ and will be available for
inspection on such websites until the end of the Offer Period:
-- this Announcement (subject to any applicable restrictions
with respect to persons resident in Restricted Jurisdictions);
-- the Concert Party Agreement;
-- the SPA; and
-- the opening position disclosures of Lumiere and the
other members of the Lumiere Concert Party to be published
on 2 July 2019.
Copies of further announcements and other documents in
connection with the Offer will, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, be made
available on FFI's website and Lumiere's website by no later than
12 noon (London time) on the Business Day following the date of the
relevant announcement or document, pursuant to Rule 26.1 of the
Takeover Code.
The contents of the websites referred to in this Announcement
are not incorporated into, and do not form part of, this
Announcement.
21. General
The Offer will be subject to certain further terms set out in
Appendix 1 and the further terms set out in the Offer Document when
issued.
The bases and sources of certain financial information contained
in this Announcement are set out in Appendix 2. Certain terms used
in this Announcement are defined in Appendix 3.
22. Enquiries
Lumiere
Jorge Beruff +1 212 397 6102
Sidney Li +1 305 921 2801
Craven Street Capital Limited (financial adviser to Lumiere)
+44 20 3890 8687
Charles Lens
Donald Sinton
FFI
David Sasso (Head +1 310 275 7323 ext.
of Investor Relations 292
and Public Relations)
finnCap Ltd (financial adviser to FFI) +44 20 7220 0500
Henrik Persson
Julian Blunt
Simon Hicks
Norton Rose Fulbright LLP are retained as legal advisers to the
777 Group as to English law. Goodwin Procter (UK) LLP are retained
as legal advisers to FFI as to English law.
Important notices relating to the financial advisers
Craven Street Capital Limited, which is an appointed
representative of Resolution Compliance Limited, which is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting exclusively as financial adviser to
Lumiere and no-one else in connection with the Offer and other
matters described in this Announcement, and will not be responsible
to anyone other than Lumiere for providing the protections afforded
to clients of Craven Street Capital Limited or for providing advice
in relation to the Offer, the contents of this Announcement or any
other matter referred to in this Announcement. Craven Street
Capital Limited has given, and not withdrawn, its consent to the
inclusion in the Announcement of the references to its name in the
form and context in which it appears.
finnCap Ltd, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as financial adviser to FFI and no-one else in connection with the
Offer and other matters described in this Announcement, and will
not be responsible to anyone other than FFI for providing the
protections afforded to clients of finnCap Ltd or for providing
advice in relation to the Offer, the contents of this Announcement
or any other matter referred to herein. finnCap Ltd has given, and
not withdrawn, its consent to the inclusion in the Announcement of
the references to its name and the advice it has given to FFI in
the form and context in which they appear.
Further information
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT
INTED TO, AND DOES NOT, CONSTITUTE OR FORM ANY PART OF, AN OFFER TO
SELL OR AN INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES
OR THE SOLICITATION OF ANY VOTE OR APPROVAL IN ANY JURISDICTION,
NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE SECURITIES
REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN
CONTRAVENTION OF APPLICABLE LAW. THE OFFER WILL BE MADE SOLELY BY
MEANS OF THE OFFER DOCUMENT, WHICH WILL CONTAIN THE FULL TERMS OF
THE OFFER. ANY DECISION OR ACCEPTANCE IN RELATION TO THE OFFER
SHOULD BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN
THE OFFER DOCUMENT AND SUCH FORM OF ACCEPTANCE (IF APPLICABLE). FFI
SHAREHOLDERS ARE ADVISED TO READ THE OFFER DOCUMENT AND FORM OF
ACCEPTANCE (IF APPLICABLE) CAREFULLY, ONCE THEY HAVE BEEN
DISPATCHED, WHICH LUMIERE EXPECTS TO DO SHORTLY.
Forward looking statements
This Announcement (including information incorporated by
reference in this Announcement), oral statements made regarding the
Offer, the Lumiere Concert Party and other information published by
Lumiere and FFI may contain certain statements that are or may be
deemed to be forward looking with respect to the financial
condition, results of operation(s) and business of Lumiere and/or
FFI and certain plans and objectives of the Independent FFI
Directors and the Lumiere Directors with respect thereto. These
forward looking statements can be identified by the fact that they
are prospective in nature and do not relate to historical or
current facts. Forward looking statements often, but not always,
use words such as "anticipate", "target", "expect", "estimate",
"budget", "scheduled", "forecasts", "intend", "plan", "goal",
"believe", "will", "may", "should", "would", "could" or other words
of a similar meaning. These estimates are based on assumptions and
assessments made by the Independent FFI Directors and/or the
Lumiere Directors in light of their experience and their perception
of historical trends, current conditions, expected future
developments and other factors they believe appropriate.
The statements contained in this Announcement are made as at the
date of this Announcement, unless some other time is specified in
relation to them, and publication of this Announcement shall not
give rise to any implication that there has been no change in the
facts set forth in this Announcement since such date. By their
nature, forward looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future and the factors described in the context of
such forward looking statements in this Announcement could cause
actual results or developments to differ materially from those
expressed or implied by such forward looking statements. Although
FFI and Lumiere believe that the expectations reflected in such
forward looking statements are reasonable, neither Lumiere nor FFI,
nor any of their respective associates or directors, officers or
advisers, or any person acting on the behalf of Lumiere or FFI
provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward
looking statements in this Announcement will actually occur. Other
than in accordance with their legal or regulatory obligations
(including under the AIM Rules and the Disclosure Guidance and
Transparency Rules of the FCA), none of Lumiere, FFI, any member of
the 777 Group, nor any Lumiere Director or FFI Director, nor any of
their respective advisers, associates, directors or officers is
under any obligation, and such persons expressly disclaim any
intention or obligation, to update or revise any forward looking
statements, whether as a result of new information, future events
or otherwise. No undue reliance should therefore be placed on these
forward looking statements which speak only as at the date of this
Announcement.
Dealing disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in one 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 one 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 Takeover 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.
Information relating to FFI Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by FFI Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from FFI may be provided to Lumiere
during the Offer Period as required under Section 4 of Appendix 4
of the Takeover Code to comply with Rule 2.11(c).
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Takeover Code, FFI confirms
that, as at the date of this Announcement, it has 157,820,243
ordinary shares of 1p each in issue and admitted to trading on the
Main Market of the London Stock Exchange under the ISIN reference
GB00BF04DT64.
Purchases outside the Offer
Lumiere or its nominees or brokers (acting as agents) may
purchase FFI Shares otherwise than under the Offer, such as in the
open market or through privately negotiated purchases. Any such
purchases will comply with the Takeover Code and the rules of the
London Stock Exchange. Details about such purchases will be
disclosed in accordance with Rule 8 of the Takeover Code.
No profit forecasts or quantified financial benefits
statement
Other than the FY19 Profit Forecast, no statement in this
Announcement is intended as a profit forecast, profit estimate or
quantified financial benefits statement.
FFI Shareholders outside the United Kingdom
The availability of the Offer and the release, publication and
distribution of this Announcement in jurisdictions other than the
United Kingdom may be restricted by the laws of those jurisdictions
and therefore persons who are not resident in the United Kingdom
into whose possession this Announcement comes should inform
themselves about and observe any such restrictions.
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 Offer disclaim any responsibility or
liability for the violation of such restrictions by any person.
Accordingly, copies of this Announcement, the Offer Document, the
Form of Acceptance and any other related document will not be, and
must not be, directly or indirectly, mailed or otherwise
distributed or sent in or into any Restricted Jurisdiction and
persons in such Restricted Jurisdictions receiving such documents
(including custodians, nominees and trustees) must not distribute
or send them in, into or from such jurisdictions as doing so may
violate the laws of such jurisdictions and may make invalid any
purported acceptance of the Offer by persons in any such Restricted
Jurisdiction. This Announcement has been prepared for the purpose
of complying with English law, the rules of the London Stock
Exchange 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 the United Kingdom.
The Offer will not be made, directly or indirectly, in or into,
or by use of the mails, or by any means or instrumentality
(including, without limitation, by means of telephone, facsimile,
telex, internet or other forms of electronic communication) of
interstate or foreign commerce of, or any facilities of a
securities exchange of any Restricted Jurisdiction and the Offer
will not be capable of acceptance by any such use, means,
instrumentality or facility or from within any Restricted
Jurisdiction. Accordingly, copies of this Announcement and any
other related document will not be, and must not be, directly or
indirectly, mailed or otherwise distributed or sent in or into any
Restricted Jurisdiction and persons receiving such documents
(including custodians, nominees and trustees) must not distribute
or send them in, into or from such jurisdictions as doing so may
violate the laws of such jurisdictions and may make invalid any
purported acceptance of the Offer by persons in any such Restricted
Jurisdiction.
Publication of this Announcement and availability of hard
copies
A copy of this Announcement and the display documents required
to be published pursuant to Rule 26.1 and Rule 26.2 of the Takeover
Code will be available, subject to certain restrictions relating to
persons resident in Restricted Jurisdictions, on FFI's website at
http://www.filmfinances.com/ and on Lumiere's website at
https://www.lumiereacquisition.com/ by no later than 12 noon
(London time) on 3 July 2019 until the end of the Offer Period.
Neither the content of Lumiere's nor FFI's websites nor the
content of any websites accessible from hyperlinks on such website
(or any other websites) are incorporated into, or form part of,
this Announcement nor, unless previously published by means of a
Regulatory Information Service, should any such content be relied
upon in reaching a decision regarding the matters referred to in
this Announcement.
In addition, in accordance with Rule 30 of the Takeover Code, a
hard copy of this Announcement and any information incorporated by
reference in this Announcement may be requested by contacting
finnCap on +44 (0) 20 7220 0500 or by writing to them at finnCap
Ltd, 60 New Broad Street, London, EC2M 1JJ, United Kingdom.
FFI Shareholders may also request that all future documents,
announcements and information to be sent to them in relation to the
Offer should be in hard copy form.
The Offer is subject to the provisions of the Takeover Code.
Right to switch to a scheme of arrangement
Lumiere reserves the right to elect, with the consent of the
Panel and FFI, to implement the Offer by way of a court sanctioned
scheme of arrangement under Part 26 of the Companies Act 2006, as
an alternative to the Offer. In such an event, the Offer would be
implemented on the same terms or, if Lumiere so decides, on such
other terms being no less favourable, so far as applicable, as
those which would apply to the Offer, subject in each case to
appropriate amendments to reflect the change in method of effecting
the Offer.
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.
Inside information and Market Abuse Regulation ("MAR")
Certain FFI Shareholders were, with the consent of the Panel,
formally brought inside in order to discuss entering into
conditional sale agreements. That inside information is set out in
this Announcement and has been disclosed as soon as possible in
accordance with paragraph 7 of article 17 of MAR. Therefore, those
persons that received inside information are no longer in
possession of inside information relating to FFI and its
securities.
Status of Announcement
This Announcement does not constitute a prospectus or prospectus
equivalent document.
Appendix 1
Certain Further Terms of the Offer
The Offer will be made on the terms set out in this Appendix and
to be set out in the Offer Document and the Form of Acceptance.
1. The Offer will be unconditional from the outset and
not subject to any minimum acceptance condition.
2. The Offer will extend to all issued FFI Shares not
already held by Lumiere and any further FFI Shares
which are unconditionally allotted or issued and fully
paid before the Offer closes.
3. The availability of the Offer to persons not resident
in the United Kingdom may be affected by the laws
of the relevant jurisdictions. Persons who are not
resident in the United Kingdom should inform themselves
about and observe any applicable requirements. The
Offer is not being made, directly or indirectly, in
or into, any Restricted Jurisdiction.
4. The Offer will remain open for acceptance until 1.00
p.m. on the 21st day after the date of publication
of the Offer Document or (if that day is a Saturday,
Sunday or a public holiday) on the next succeeding
business day.
5. FFI Shares will be acquired fully paid and free from
all liens, charges, equitable interests, encumbrances,
rights of pre-emption and other third party rights
or interests together with all rights attaching thereto,
including without limitation the right to receive
all dividends and other distributions (if any) announced,
declared, made or paid thereafter.
6. Lumiere reserves the right to reduce the Offer consideration
by the amount of any dividend (or other distribution)
which is paid or becomes payable by FFI to the holders
of FFI Shares.
7. The Offer is subject to the applicable requirements
of the Takeover Code. The Offer and any acceptances
under the Offer will be governed by English law and
will be subject to the jurisdiction of the courts
of England.
Appendix 2
Sources of information and bases of calculation
In this Announcement, unless otherwise stated, or the context
otherwise requires, the following bases and sources have been
used:
(a) the financial information relating to FFI has been
extracted or derived, without material adjustment,
from FFI's audited consolidated financial statements
for the year ended 31 March 2018 and FFI's unaudited
interim results of the six months ended 30 September
2018 as announced on 19 December 2018;
(b) the value attributed to the existing issued FFI Shares
is based upon the Offer Price of 25 pence for each
FFI Share and 157,820,243 FFI Shares being in issue
on 1 July 2019 (being the last Business Day prior
to the date of this Announcement);
(c) prices quoted for FFI Shares are closing middle market
prices on the relevant date, derived from the Daily
Official List;
(d) the 30 day average daily volume of FFI Shares traded
is derived from Factset as of 1 July 2019 (being the
last Business Day prior to the date of this Announcement);
(e) other information relating to FFI has been extracted
or derived, without material adjustment, from public
sources; and
(f) unless otherwise stated, the financial information
on FFI has been converted to GBP based on the exchange
rates utilised by FFI in its publication thereof.
Appendix 3
Definitions
The following definitions apply throughout this Announcement
unless the context requires otherwise.
"600" means 600 Partners LLC, a limited
liability company incorporated and
registered in Delaware with registered
number 6269759
"777" means 777 Partners LLC, a limited
liability company incorporated and
registered in Delaware with registered
number 5752556
"777 Group" means together, 777 and 600, and
their subsidiaries
"Act" or "Companies means the Companies Act 2006 (as
Act 2006" amended from time to time)
"Acquisition" means the acquisition by Lumiere
of 47,476,547 FFI Shares from the
Sellers in accordance with the SPA
"Admission" means the admission of FFI Shares
to trading on AIM on 30 June 2017
"Admission Document" means the final admission document
in connection with the placing of
39,370,078 ordinary FFI Shares at
a price of 150 pence per share and
the admission of FFI Shares to trading
on AIM on 30 June 2017, available
on FFI's website at http://www.filmfinances.com/
"AIM" means the AIM Market operated by
London Stock Exchange plc
"AIM Rules" means the rules published by the
London Stock Exchange entitled "AIM
Rules for Companies"
"Business Day" means any day (not being a Saturday
or Sunday nor any other day which
is a public holiday in England and
Wales) during which banks in London
are open for normal business
"Cantor Fitzgerald Europe" means Cantor Fitzgerald Europe, a
company incorporated in England and
Wales with registered number 02505767
"Closing Price" means the middle market price of
a FFI Share at the close of business
on the day to which such price relates,
as derived from the Daily Official
List
"Concert Party Agreement" means the agreement entered into
between the members of the Lumiere
Concert Party on 2 July 2019
"CSC" means Craven Street Capital Limited,
a company incorporated and registered
in England and Wales with registered
number 05911606 and financial adviser
to Lumiere
"Daily Official List" means AIM appendix of the daily official
list of the London Stock Exchange
"Dealing Disclosure" has the same meaning as in Rule 8
of the Takeover Code
"Delisting" means the cancellation of admission
to trading on AIM of FFI Shares
"Disclosure Guidance means the Disclosure Guidance and
and Transparency Rules" Transparency Rules published by the
FCA
"EBITDA" means earnings before interest, tax,
depreciation and amortisation
"Executive Options" means the options granted to Anthony
Mitchell pursuant to an agreement
with FFI dated 23 June 2017
"FFI" or the "Company" means FFI Holdings plc, a company
incorporated and registered in England
and Wales with registered number
10793426
FFI Board means the board of directors of FFI
FFI Group means FFI and its subsidiary undertakings
from time to time and "member of
the FFI Group" shall be construed
accordingly
"FFI Share(s)" means the existing issued or unconditionally
allotted and paid (or credited as
fully paid) ordinary shares of 1
pence each in the capital of FFI
and, where the context so permits,
any further shares which are unconditionally
allotted or issued fully paid (or
credited as fully paid) on or prior
to the date on which the Offer closes
(excluding, for the avoidance of
doubt, treasury shares)
"FFI Shareholders" means the holders of FFI Shares
"FCA" means the Financial Conduct Authority
"finnCap" means finnCap Limited, a company
incorporated and registered in England
and Wales with registered number
06198898 and financial adviser to
FFI
"Form of Acceptance" means the form of acceptance and
authority relating to the Offer which
will accompany the Offer Document
"FY19 Profit Forecast" has the meaning given in paragraph
9 of this Announcement
"Golden Sun" means Golden Sun Emerging Fund Limited,
a company incorporated and registered
in the Bahamas with registered number
160927
"IFRS" means the International Financial
Reporting Standards
"Independent FFI Directors" means the independent non-executive
directors of FFI, being Julian Bartlett
and Simon Ingram
"IPO" means initial public offering
"JDT" means JDT Holdings LLC, a company
incorporated and registered in Florida
with registered number 65-1180707
"London Stock Exchange" means London Stock Exchange plc or
its successor
"Lumiere Concert Party" means, together, Lumiere, Golden
Sun, JDT, James Terlizzi, the Trattner
Trust, Antony Mitchell, Timothy Trankina
and Stephen Argent (who for the purposes
of the Takeover Code are considered
to be acting in concert)
"Lumiere Directors" means Steven W. Pasko and Jorge Beruff
"New Articles" means the articles of association
to be adopted with effect from Re-registration
in replacement of the existing articles
of association conditional upon the
passing of a shareholders' resolution
approving the same at a general meeting
of FFI
"Offer" means the recommended mandatory cash
offer by Lumiere to acquire all the
FFI Shares not already held by Lumiere
on the terms set out in Appendix
1 of this Announcement, the Offer
Document and the Form of Acceptance
and, where the context permits, any
subsequent revision or variation
of such offer or any extension or
renewal thereof
"Offer Document" means the formal document to be sent
to FFI Shareholders setting out the
full terms of the Offer
"Offer Period" means the period commencing on 2
July 2019 (being the date of this
Announcement) and ending on the 21st
day after the date of publication
of the Offer Document or (if that
day is a Saturday, Sunday or a public
holiday) on the next succeeding Business
Day (or such other date as the Panel
may decide)
"Offer Price" means 25 pence per FFI Share
"Outstanding FFI Shares" means 49,854,680 FFI Shares, being
the Total FFI Shares in issue as
at the date of this Announcement,
excluding the 107,965,563 FFI Shares
already held or agreed to be acquired
by Lumiere and the other members
of the Lumiere Concert Party
"Panel" means the Panel on Takeovers and
Mergers
"person" means a person (including an individual,
partnership, unincorporated syndicate,
limited liability company, unincorporated
organisation, trust, trustee, executor,
administrator, or other legal representative)
"Pound Sterling" or means the lawful currency of the
"GBP" UK (and references to "pence" shall
be construed accordingly)
"Relationship Agreements" means the agreements entered into
between FFI and each of i) Golden
Sun and ii) Steven Ransohoff and
the Ransohoff Trust immediately prior
to the date of admission of FFI Shares
to trading, as set out in the Admission
Document
"Relevant FFI Shares" has the meaning given in paragraph
19 of this Announcement
"Re-registration" means the re-registration of FFI
as a private limited company under
the Act
"Restricted Jurisdiction" means, subject always to the requirements
of Rule 23.2 of the Takeover Code
in relation to the distribution of
offer documentation to jurisdictions
outside the UK, any jurisdiction
where availability of the Offer would
violate the law of that jurisdiction
"Sellers" means Steven Ransohoff and The Crystal
Court Trust
"SPA" means the share sale and purchase
agreement entered into between Lumiere,
Steven Ransohoff and The Crystal
Court Trust in respect of, in aggregate,
47,476,547 FFI Shares, entered into
on 2 July 2019
"SuttonPark" means SuttonPark Capital, LLC, a
limited liability company incorporated
and registered in Delaware
"Takeover Code" means the City Code on Takeovers
and Mergers
"The Crystal Court Trust" means The Crystal Court Trust UDT,
the beneficiaries of which are Steven
Ransohoff and members of his immediate
family
"The Trattner Trust" means the Trattner Family Trust
"Total FFI Shares" means the 157,820,243 FFI Shares
of 1p each in issue at the close
of business on 1 July 2019, being
the last Business Day before the
date of this Announcement
"United Kingdom" or means the United Kingdom of Great
"UK" Britain and Northern Ireland and
its dependent territories
"United States", "US" means the United States of America,
or "USA" its territories and possessions,
any state of the United States of
America, the District of Columbia
and all other areas subject to its
jurisdiction and any political subdivision
thereof
"US dollar" or "$" means the lawful currency of the
United States (and references to
"cent" shall be construed accordingly)
For the purposes of this Announcement, "subsidiary", "subsidiary
undertaking", "undertaking", "associated undertaking" have the
meanings given by the Act.
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.
END
OUPEASXAELFNEFF
(END) Dow Jones Newswires
July 02, 2019 12:10 ET (16:10 GMT)
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