RNS Number:1784Q
Ultimate Leisure Group PLC
25 January 2007
ULTIMATE LEISURE GROUP PLC
FURTHER RE: #25M CONDITIONAL EQUITY RAISING AND WHITEWASH RESOLUTIONS
On 22 January 2007, Ultimate Leisure Group plc (the "Company"), the bar and
nightclub operator, announced that it intended to raise #25,000,000 by way of a
conditional issue of 14,792,900 new ordinary shares of a price of 169p per
share, representing a discount of approximately 5% to the closing price on
Friday 19 January 2007.
The Board now announces that the circular relating to this matter has been sent
to shareholders today and that it includes more details of how qualified
investors may take part in the equity raising which are reproduced in the
Appendices to this announcement.
The Further Investment
The Company's two largest investors, Reuben Brothers Limited ("Reuben Brothers")
and the Dawnay, Day group ("Dawnay, Day"), have undertaken to subscribe through
associated companies for all 14,792,900 shares, 7,761,985 and 7,030,915 shares
respectively, subject to the right of certain shareholders to be issued New
Ordinary Shares in proportion to their existing holdings (the "Further
Investment").
The Further Investment would increase the interests in relevant securities of
the Company of each of the Reuben Brothers and Dawnay, Day concert parties to
higher than 30 per cent., the level at which the Takeover Code normally requires
a general offer to be made to all shareholders. The Panel on Takeovers and
Mergers (the "Panel") has agreed to waive this requirement if shareholders
(other than the Reuben Brothers and Dawnay, Day Group concert parties) approve
on a poll the "whitewash" waivers at the EGM convened for 28 February 2007.
Reasons for the Further Investment
The Board believes that the Company has now reached the stage where more
substantial acquisitive growth may now be contemplated and it is reviewing a
number of acquisitions. In order to improve the Company's competitive position
to acquire such targets, the Company's two major investors, Reuben Brothers and
Dawnay, Day, have indicated that they would be prepared to support a new equity
issue.
The Board would prefer to invite all shareholders to participate in this equity
issue but reluctantly has concluded that the costs and complexities involved in
producing a Prospectus now necessary under securities laws would be
disproportionate to the benefit to be gained. The Board will, however, be
utilising the exemption from the requirements to produce a Prospectus in
relation to certain qualified investors who will be able to take part in the
Further Investment through a clawback mechanism. Further details of how
qualified investors can participate in the Further Investment and the procedure
for investing are set out in the circular.
Concert Parties
The Panel has confirmed the existence of two separate concert parties. The first
concert party is the Reuben Brothers Concert Party, comprising inter alia,
Reuben Brothers together with Jacob Lyons and Stephane Nahum (both of whom are
non-executive directors of the Company and advisers to Reuben Brothers). The
Reuben Brothers Concert Party has an interest in 7,480,475 Ordinary Shares
representing 29.88% of the Company's voting rights. On the assumption that all
of the proposed New Ordinary Shares are issued in accordance with the Further
Investment and no New Ordinary Shares are issued to any Qualified Investors, the
Reuben Brothers Concert Party will hold interests in 15,242,460 Ordinary Shares
representing 38.3% of the voting rights of the enlarged issued share capital of
the Company.
The second concert party is the Dawnay, Day Concert Party, comprising inter
alia, Dawnay, Day Properties Limited, Starlight Investments Limited, fellow
subsidiaries within the Dawnay, Day Group, and KC Wong and Alka Bali (who are
both non-executive directors of the Company and employees of the Dawnay, Day
Group). The Dawnay, Day Concert Party has an interest in 6,775,919 Ordinary
Shares representing 27.07% of the Company's voting rights. On the assumption
that all of the proposed New Ordinary Shares are issued in accordance with the
Further Investment and no New Ordinary Shares are issued to any Qualified
Investors, the Dawnay, Day Concert Party will hold 13,806,834 Ordinary Shares
representing 34.7% of the voting rights of the enlarged issued share capital of
the Company.
Future Dealings
Following completion of the Further Investment, the Reuben Brothers Concert
Party will be interested in shares carrying 30% or more of the Company's voting
share capital but not more than 50% of such voting rights and (for so long as
they continue to be treated as acting in concert) any further increase in that
aggregate interest in shares will be subject to the provisions of Rule 9.
Following completion of the Further Investment, the Dawnay, Day Concert Party
will be interested in shares carrying 30% or more of the Company's voting share
capital but not more than 50% of such voting rights and (for so long as they
continue to be treated as acting in concert) any further increase in that
aggregate interest in shares will be subject to the provisions of Rule 9.
Principal terms of the Further Investment and use of Proceeds
The Company proposes to issue 14,792,900 New Ordinary Shares at 169p per share,
which will raise in aggregate #25,000,000 for the Company (before expenses). The
net proceeds of the Further Investment will be used to provide the Company with
the financial flexibility to make acquisitions of businesses and assets that the
Directors believe can add value to the Company. In the short term, the funds
will be held in interest bearing accounts or securities.
The Further Investment is subject to the terms of the Subscription Undertakings
by which Aldersgate (a member of the Reuben Brothers Concert Party) and
Starlight (a member of the Dawnay, Day Concert Party) have undertaken to
subscribe, conditionally, for New Ordinary Shares, including any New Ordinary
Shares not subscribed for by Qualified Investors who, as described in Part II of
this document, may apply to clawback their pro rata entitlement. According to
the terms of the Subscription Undertakings, any New Ordinary Shares that are not
subscribed for by Qualified Investors will be subscribed for by Reuben Brothers
and Dawnay, Day Group on a pro rata basis to their respective existing holding.
The New Ordinary Shares will, when issued and fully paid, rank pari passu in all
respects with the Existing Ordinary Shares and will, once allotted, rank in full
for all dividends and other distributions declared, made or paid on the Existing
Ordinary Shares in respect of the period after such allotment. The Further
Investment is conditional on both the passing of the EGM resolutions and
Admission. It is expected that dealings in the New Ordinary Shares will commence
on AIM on 6 March 2007 (or such later date as shall be determined by the Concert
Parties and the Company pursuant to the Subscription Undertakings, being not
later than 8a.m on 20 March 2007). If Admission has not so occurred by such
later date, application monies will be returned to the relevant Shareholders
without interest as soon thereafter as is practicable and in any event by 3
April 2007.
Executive share options
It is the Board's intention to consider the issue of further executive share
options once the Company is no longer in a Close Period under the AIM rules.
Extraordinary General Meeting
The EGM is to be held at 11a.m. on 28 February 2007 at Ward Hadaway, Sandgate
House, 102 Quayside, Newcastle upon Tyne, NE1 3DX.
25 January 2007
For further information please contact:
Ultimate Leisure
Mark Jones (Chairman) 0191 261 8800
Oriel Securities 020 7710 7600
David Arch
Luke Webster
Financial Dynamics
Ben Foster / Charles Watenphul 0207 831 3113
APPENDIX I
INFORMATION CONCERNING OFFER TO QUALIFIED INVESTORS
Introduction
Ultimate intends to raise #25,000,000 by way of the Further Investment.
Qualified Investors will be able to participate in the Further Investment as
they will have the opportunity to arrange, through Oriel Securities, to take up
some or all of the New Ordinary Shares attributable to their Shareholding on a
pro rata basis. This Further Investment is conditional upon the passing of the
Resolutions and on Admission. Should the Qualified Investors not take up all of
their entitlement Reuben Brothers and Dawnay, Day Group will subscribe for such
entitlement pro rata to their existing holding pursuant to the Subscription
Undertakings.
Further Investment
A Shareholder who satisfies Oriel Securities, on behalf of Ultimate, that they
are a Qualified Investor at the Record Date will be invited to subscribe for New
Ordinary Shares under the Further Investment on the terms set out below. New
Ordinary Shares are not being offered to the public because, subject to
exceptions, it is unlawful to offer transferable securities for sale or
subscription to the public in the United Kingdom unless a prospectus prepared
and approved in accordance with the requirements of the Financial Services and
Markets Act 2000 (as amended) ("FSMA") has been made available to the public
before the offer is made; the Directors consider the costs and timing delays
involved in the preparation and approval of a prospectus would be
disproportionate to the benefits for a company of the size of Ultimate. Ultimate
has made arrangements with Oriel Securities to enable Shareholders at the Record
Date to be offered the right to subscribe for New Ordinary Shares issued
pursuant to the Further Investment if they:
(a) can satisfy Oriel Securities, on behalf of Ultimate, that they fulfil the
criteria for approval as a Qualified Investor explained below; and
(b) pay Oriel Securities in cleared funds, in accordance with the requirements
and procedure explained below.
Criteria for approval as a Qualified Investor
To be approved as a Qualified Investor a Shareholder must satisfy Oriel
Securities, on behalf of Ultimate, in their absolute discretion, that they are
persons in the United Kingdom who are (i) a"qualified investor" within the
meaning of section 86(7) of the FSMA and (ii) within the categories of persons
referred to in article 19 (Investment professionals) or article 49 (High net
worth companies, unincorporated associations, etc.) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 ("FPO").
The definitions of "qualified investor," within the meaning of section 86(7) of
the FSMA, and of the categories of persons referred to in articles 19 and 49 of
the FPO are set out in Appendix II. New Ordinary Shares issued in consequence of
the Further Investment are only available to, and any invitation, offer or
agreement to subscribe, purchase or otherwise acquire such securities will be
engaged in only with, Qualified Investors on the register at the Record Date.
Any person who is not a Qualified Investor should not act or rely on this letter
or any of its contents for the purposes of participating in the Further
Investment.
Procedure for Qualified Investors to participate in the Further Investment
If you are a Qualified Investor on the register at the Record Date of 26 January
2007 and are considering participating in the Further Investment you should
contact Luke Webster at Oriel Securities Limited, 125 Wood Street, London, EC2V
7AN (020 7710 7600) to request an Application Form. Any such Application Form
once received, should be returned as soon as possible to Luke Webster at Oriel
Securities Limited, 125 Wood Street, London EC2V 7AN so as to allow sufficient
time for your request to be considered, any questions resolved and for payment
to be received by Oriel in cleared funds no later than 5p.m. on 2 March 2007.
The application form provides that you can elect to receive New Ordinary
Shareseither in CREST or in certificated form. Once Oriel Securities and
Ultimate are satisfied that you are a Qualified Investor and you have submitted
a valid Application Form, you will need to pay cleared funds to Oriel Securities
for the amount payable in respect of the New Ordinary Shares at the Issue Price
by no later than 5p.m. on 2 March 2007.
If you are not a Qualified Investor or, if you are a Qualified Investor but you
do not wish to participate in the Further Investment, you do not need to take
any further action.
Payment arrangements
Payment for any New Ordinary Shares by a Qualified Investor must be made in full
by cheque or banker's draft in pounds sterling or by electronic transfer to
Pershing Securities Limited client hub account; Sort code 16-04-00; Account
Number: 31266302 Swift code RBOSGB2LXXX; IBAN GB27RBOS16640031266302; reference
Oriel Securities/ULG/(shareholder name). Oriel Securities must receive payment
no later than 5p.m. on 2 March. Cheques must be drawn on a personal account
where you have sole or joint title to the funds, and should be made payable to "
Oriel Securities Limited re: Ultimate Leisure Group plc". Third Party cheques,
other than building society cheques or banker's drafts where the society or bank
has confirmed that you have title to the underlying funds, will not be accepted.
Payments must be made by cheque, banker's draft or electronic transfer in pounds
sterling drawn on a branch in the United Kingdom of a bank or building society
which is either a settlement member of the Cheque and Credit Clearing Company
Limited or the CHAPS Clearing Company Limited or which has arranged for its
cheques to be cleared through the facilities provided for the members of any of
those companies and must bear the appropriate sort code in the top right-hand
corner. Cheques may be cashed immediately upon receipt. Post-dated cheques will
not be accepted. Oriel Securities and Ultimate reserve the right to seek special
clearance of cheques and banker's drafts to allow Ultimate to obtain value for
remittances at the earliest opportunity. No interest will be allowed on payments
made before they are due. It is a term of these arrangements that cheques will
be honoured at first presentation, and Oriel Securities and Ultimate may elect
to treat as invalid, instructions to Oriel Securities in respect of which
cheques are not so honoured.
APPENDIX II
DEFINITION OF QUALIFIED INVESTOR
The definition of "qualified investor" within the meaning of section 86(7) FSMA
is:
(a) an entity falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus
Directive (see below);
(b) an investor registered on the register maintained by the competent authority
under section 87R FSMA;
(c) an investor authorised by an EEA State other than the United Kingdom to be
considered as a qualified investor for the purposes of the Prospectus Directive.
Article 2.1(e)(i), (ii) and (iii) of the Prospectus Directive
"qualified investors" means:
(i) Legal entities which are authorised or regulated to operate in the financial
markets, including: credit institutions, investment firms, other authorised or
regulated financial institutions, insurance companies, collective investment
schemes and their management companies, pension funds and their management
companies, commodity dealers, as well as entities not so authorised or regulated
whose corporate purpose is solely to invest in securities;
(ii) National and regional governments, central banks, international and
supranational institutions such as the International Monetary Fund, the European
Central Bank, the European Investment Bank and other similar international
organisations;
(iii) Other legal entities which do not meet two of the three criteria set out
in paragraph 2.1 (f) below.
Article 2.1(f)
The legal entities referred to in (iii) above means companies, which, according
to their last annual or consolidated accounts, do not meet at least two of the
following three criteria: (1) an average number of employees during the
financial year of less than 250; (2) a total balance sheet not exceeding EUR
43,000,000; and (3) an annual net turnover not exceeding EUR 50,000,000.
The categories of persons referred to in article 19 (Investment professionals)
and article 49 (High net worth companies, unincorporated associations, etc.) of
the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 are
as follows:
Article 19
Investment professionals
1. "Investment professionals" means-
(a) an authorised person;
(b) an exempt person where the communication relates to a controlled activity
which is a regulated activity in relation to which the person is exempt;
(c) any other person-
(i) whose ordinary activities involve him in carrying on the controlled activity
to which the communication relates for the purpose of a business carried on by
him; or
(ii) who it is reasonable to expect will carry on such activity for the purposes
of a business carried on by him;
(d) a government, local authority (whether in the United Kingdom or elsewhere)
or an international organisation;
(e) a person ("A") who is a director, officer or employee of a person ("B")
falling within any of sub-paragraphs (a) to (d) where the communication is made
to A in that capacity and where A's responsibilities when acting in that
capacity involve him in the carrying on by B of controlled activities.
Article 49
High net worth companies, unincorporated associations etc
(a) any body corporate which has, or which is a member of the same group as an
undertaking which has, a called-up share capital or net assets of not less than-
(i) if the body corporate has more than 20 members or is a subsidiary
undertaking of an undertaking which has more than 20 members, #500,000;
(ii) otherwise, #5 million;
(b) any unincorporated association or partnership which has net assets of not
less than #5 million;
(c) the trustee of a high value trust;
(d) any person ("A") whilst acting in the capacity of director, officer or
employee of a person ("B") falling within any of sub-paragraphs (a) to (c) where
A's responsibilities, when acting in that capacity, involve him in B's engaging
in investment activity;
(e) any person to whom the communication may otherwise lawfully be made. "
Called-up share capital" has the meaning given in the Companies Act 1985 ("the
1985 Act") or in theCompanies (Northern Ireland) Order 1986 ("the 1986 Order").
"High value trust" means a trust where the aggregate value of the cash and
investments which form part of the trust's assets (before deducting the amount
of its liabilities):-
(i) is #10 million or more; or
(ii) has been #10 million or more at anytime during the year immediately
preceding the date on which the communication in question was first made or
directed. "Net assets" has the meaning given by section 264 of the 1985 Act or
the equivalent provision of the 1986 Order.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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