TIDMTRA
RNS Number : 4659H
Tertre Rouge Assets PLC
27 July 2023
This announcement contains inside information as stipulated
under the UK version of the Market Abuse Regulation No 596/2014
which is part of English law by virtue of the European (Withdrawal)
Act 2018, as amended. On publication of this announcement via a
Regulatory Information Service, this information is considered to
be in the public domain.
27 July 2023
Tertre Rouge Assets PLC (the "Company" or "TRA")
Heads of Terms signed
Proposed Reverse Takeover
Suspension of Listing
The Company is pleased to announce that it today entered
non-binding heads of terms with several parties, to acquire:
(a) 100% of the issued share capital of The Run To Group Limited
("Run To") for a cash consideration of GBP4.6 million;
(b) a 1952 Ferrari Formula 2 for a cash consideration of GBP5.2 million;
(c) a 1963 Jaguar E-Type Lightweight for a cash consideration
amount of $US7.5 million (approximately GBP5.7 million);
(d) a 1971 Formula One Ferrari for a cash consideration of
EUR10.6 million (approximately GBP9.1 million);
(e) a 1969 Lamborghini Miura P400 SV for a cash consideration of
EUR3.25 million (approximately GBP2.8 million);
(f) a 1961 Ferrari 250 GT for a cash consideration of $US8
million (approximately GBP6.1 million); and
(g) a 1958 Mercedes-Benz 300 SL Roadster for a cash
consideration of EUR1.5 million (approximately GBP1.3 million),
((b) through (g), the "Car Assets");
subject to legal, financial and other due diligence and entry
into, in the case of Run To, a legally binding share purchase
agreement (the "SPA") and, in the case of the Car Assets, several
legally binding asset purchase agreements (each an "APA"),
(collectively, the "Proposed Acquisition"). As no binding
agreements have yet been reached, either in relation to Run To or
the Car Assets (or any one of them), the Company cannot guarantee
that the Proposed Acquisition (or any part of it) will
complete.
About Run To
Run To is an events company incorporated in England and Wales,
established to create the finest supercar adventures in the world.
Run To creates handpicked driving routes across the globe for its
clients, who drive their prestige supercars along the way.
En route, Run To's clients get to enjoy some of the finest
accommodation, staying at outstanding handpicked hotels, chosen for
their character and personality. Coupled with the driving and hotel
experiences, Run To also hosts incredible events and parties in
spectacular locations, which includes a host of performers,
musicians and artistes from around the world.
Each year, Run To's signature adventure is a handpicked route to
the Monaco Grand Prix, which earlier this year involved 58
supercars. Photographs from this event can be seen on Run To's
website at the following link: https://therunto.com/monaco/ .
About the Car Assets
As a broad group, the investment-grade collectible motorcar
sector has performed consistently well going back to 1993. Within
this group, certain assets have outperformed the market and the Car
Assets meet the Company's investment criteria for assets that ought
to continue to outperform the market - namely, that exceptional
value comes from a combination of rarity and exceptional
provenance. The Car Assets have been chosen based on their
importance and significance within the global classic motorcar
market, which presents the Company with a rare opportunity to
acquire these capital appreciating assets.
Background to the Proposed Acquisition
TRA was formed as a 'special purpose acquisition company' with a
specific focus on acquisitions of a target company, business or
asset(s) that are in or otherwise focused on or ancillary to the
collectible automobile sector, which could include physical
automobile assets and/or companies, businesses or assets with
technology and/or services relevant to the collectible automobile
sector, as outlined in the Company's prospectus published on 13
July 2022 (the "Prospectus"). A copy of the Prospectus can be found
on the Company's website at the following link:
https://tertrerougeassets.com/publications/
The Proposed Acquisition is in line with the Company's
acquisition strategy.
The Proposed Acquisition
The Company today entered non-binding heads of terms with three
selling shareholders, comprised of one corporate entity and two
individuals (the individuals, the "Founders"), for the acquisition
of 100% of the issued share capital of Run To for a cash
consideration of GBP4.6 million (the "Run To Purchase Price"). In
addition to the Run To Purchase Price, the Founders will
participate in an EBIT performance bonus of up to an aggregate GBP3
million, payable by the Company over three financial years (2024,
2025 and 2026) which is structured to reward them if the Target's
operating company, being The Run To Global Limited (the "OpCo"),
achieves forecast earnings before interest and tax ("EBIT") of
GBP900k (in 2024), GBP1.1 million (in 2025) and GBP1.3 million (in
2026) (the "EBIT Performance Bonus"). The EBIT Performance Bonus is
payable in equal amounts to each Founder and is payable, subject to
the relevant performance milestones being satisfied, in addition to
the Run To Purchase Price.
In addition to the Run To Purchase Price and the EBIT
Performance Bonus, on completion of the Proposed Acquisition
("Completion"), the Company intends to allot and issue to each of
the Founders 150,000 ordinary shares in the capital of TRA ("TRA
Shares") and further intends to allot and issue to each of two
staff members of the OpCo 50,000 TRA Shares. The Founders will
remain employed by the OpCo following Completion and it is intended
that the two staff members remain employed by the OpCo following
Completion.
Also today, the Company entered non-binding heads of terms with
several vendors in relation to the Car Assets, for a total cash
consideration of approximately GBP30.2 million (the "Car Assets
Purchase Price").
In conjunction with the Proposed Acquisition, the Company will
undertake an equity financing to raise up to GBP50 million (the
"Placing") to pay the cash consideration of the Proposed
Acquisition, comprised of the Run To Purchase Price and the Car
Assets Purchase Price, and to fund the working capital requirements
of the enlarged group.
On Completion, it is the Company's intention to seek admission
of its ordinary share capital, as enlarged following Completion and
pursuant to the Placing, to the Standard Segment of the Official
List of the Financial Conduct Authority (the "FCA") and to trading
on the Main Market of the London Stock Exchange (together,
"Admission").
Following Completion, the current directors of the board of the
Company will remain in place.
The Proposed Acquisition is conditional on, amongst other
things:
-- obtaining the necessary regulatory approvals of the FCA;
-- the satisfactory completion, by each of the parties, of
legal, financial and commercial due diligence;
-- in the case of Run To, the parties agreeing, signing and
exchanging a legally binding SPA;
-- in the case of the Car Assets, the parties agreeing, signing
and exchanging legally binding APAs;
-- Admission; and
-- the Placing.
It is currently expected that should the Proposed Acquisition
proceed, the prospectus will be published, and the Proposed
Acquisition will complete, during Q4 2023.
The Company has engaged certain advisers, and will engage other
professionals, to rapidly progress the requisite due diligence and
the preparation of transaction documentation including the SPA, the
APAs and the prospectus.
At this stage, there can be no guarantee that the Proposed
Acquisition will complete nor as to the final terms of the Proposed
Acquisition. Further announcements and updates will be made in due
course.
Suspension of Listing
The Proposed Acquisition, if completed, would constitute a
reverse takeover under the Listing Rules. As the Company is
currently unable to provide full disclosure under Listing Rule
5.6.15, it has requested from the FCA, and been granted, a
suspension of listing in its shares with immediate effect pending
either the issue of an announcement providing further details on
the Proposed Acquisition, the publication of a prospectus, or an
announcement that the Proposed Acquisition is not proceeding. Any
restoration of the listing is subject to the approval of the
FCA.
There can be no certainty that the Proposed Acquisition will
take place and it remains subject, amongst other things, to final
terms being agreed.
Further announcements and updates will be made in due
course.
Steven Schapera, Chairman of TRA, commented:
"We are delighted to have agreed heads of terms relating to the
Proposed Acquisition. In the past year, we have reviewed a number
of opportunities spanning businesses operating in the collectible
motorcar sector, as well as physical assets comprised of
investment-grade collectible motorcars. Our review has confirmed
the Board's belief that this sector is a robust preserver of value
and presents several compelling acquisition opportunities.
Importantly, the Company is now in an enviable position to exploit
these opportunities to the benefit of its shareholders. The
Proposed Acquisition meets our stated objective of identifying what
can potentially be an extremely valuable investment opportunity in
this sector. A tremendous amount of work has been expended to
identify this high-quality portfolio of acquisition targets and we
look forward to completing this transformative transaction and
returning to the market as soon as possible. "
For further information, please contact:
Steven Schapera
Non-Executive Chairman & Co-Founder
T: +44 (0)7917 715533
E: steven@tertrerougeassets.com
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END
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July 27, 2023 10:42 ET (14:42 GMT)
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