TIDMLETS
RNS Number : 9190N
Let's Explore Group PLC
28 September 2023
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28 September 2023
Let's Explore Group plc
("Let's Explore", the "Company" or the "Group")
Proposed acquisition of Huddled Group Limited, Authority to
issue Consideration Shares, Proposed Off-Market Buy Back,
Substantial Property Transaction, Rule 9 Waiver, Change of Name and
Notice of General Meeting
Let's Explore Group plc is pleased to announce it has entered
into a conditional sale and purchase agreement, for the acquisition
of the entire issued share capital of Huddled Group Limited, and
its wholly-owned Subsidiaries for a total consideration of
GBP3,950,000 (the "Proposed Transaction"). The Company will pay an
initial payment of GBP3,450,000 and a deferred payment, subject to
adjustment as provided in the Acquisition Agreement, of GBP500,000
due and payable around 30 April 2025. Both payments will be
satisfied by the allotment and issue of the Consideration Shares
for the entire share capital of Huddled and its Subsidiaries.
Highlights
-- Proposed Acquisition of the Huddled Group Limited ("Huddled"),
to create a new enlarged group focused on growing a portfolio
of e-commerce brands.
-- Significant opportunity for growth through Huddled's trading
business - Discount Dragon
- A fast-growing direct-to-consumer e-commerce business
focused on the sale of branded FMCG - predominantly
dry and tinned groceries, and beverages.
- Differentiated offering selling surplus, mis-packaged,
and items close to their best before date for significant
discounts to mainstream grocery market
- Strong track record of growth since founding in
2020, growing monthly revenues 500% over the period
from August 2022 to August 2023
- Enlarged group well positioned to capture market
share in a growing market segment: the market share
for discounters in the UK having increased more than
fourfold in the last 15 years
- Opportunity to optimise and grow the business through
investment into marketing, warehousing and provision
of deeper product offering in key categories
-- Group well-resourced for growth - cash resources of GBP6.8m
as at 30 June 2023 with additional cash due in February
2024 of approximately GBP1m pursuant to repayment of loan
note.
-- Proposed Rule 9 Waiver, subject to shareholder approval,
for the Concert Party who following the Acquisition and
Off-Market Buy Backs, will hold a maximum of 53.45% of
the Enlarged Share Capital.
-- Proposed change of name to Huddled Group plc.
Further details of the Proposed Transaction are set out
below.
Background to Acquisition
Following the sale of the Location Based Entertainment VR
business ("LBE"), and the conclusion of the Tender Offer, the
Company had, at 30 June 2023, approximately GBP6.8m of cash on hand
along with further cash of $1.25m receivable via a loan note issued
by the buyer of LBE, which is due for repayment in February
2024.
With a strong balance sheet, and the Home Based Entertainment
("HBE") business, the Company set about looking for acquisition
opportunities. Whilst there were discussions with several potential
targets, these have not been consummated for a variety of reasons,
including timing, valuation or alternative options available to
counterparties.
At the same time, Huddled, a company in which the executive team
of the Company already have an investment, was showing exciting
growth potential and was proposed to the Independent Directors as a
potential acquisition target.
Following a review and due diligence exercise, supported by the
Company's advisers, the Independent Directors concluded that this
business has significant growth potential and that the Company has
the cash resources, as well as the e-commerce and other management
skills and experience, to accelerate its growth. Accordingly, the
Company has agreed, subject to various shareholder approvals, to
acquire the business.
Pursuant to the Acquisition Agreement, the Company will pay an
initial payment of GBP3,450,000 and a deferred payment of
GBP500,000, subject to adjustment, payable within 5 business days
of on the date of filing of the consolidated financial statements
of the Group for the financial year ending on 31 December 2024.
Both payments will be satisfied by the allotment and issue of the
Consideration Shares for the entire share capital of Huddled and
its Subsidiaries. The Completion Consideration Shares will be
subject to a 12-month firm lock-in and 12-month orderly market
provisions thereafter. The Withheld Consideration Shares will be
subject to a 6-month orderly market lock in.
As part of the transaction, the Company will discharge loans and
accrued interest which amounted, as at 31 July 2023, to
GBP612,500.
Huddled, founded in 2020, is focused on building a portfolio of
e-commerce brands. It has built a solid track record in digital
marketing and e-commerce. It is dedicated to delivering value and
great service, in the growing world of e-commerce.
In August 2022, Huddled acquired the business and assets of an
e-commerce retailer and rebranded it as "Discount Dragon". This has
become Huddled's sole trading business and for the time being has
incorporated the BeerMonster business.
Discount Dragon is a direct-to-consumer e-commerce business,
which focuses pre-dominantly on the sale of branded FMCG,
predominantly dry and tinned groceries and beverages. Its
particular focus is selling surplus, end of line, mispackaged, and
items close to best before dates at significant discounts versus
full retail prices, via the website
https://discountdragon.co.uk/.
In terms of marketing, the business engages regularly by email
with its growing database of customers with regular offers to
stimulate sales and operates an affiliate marketing programme,
through a network of websites. It has also run successful test
campaigns on both paid Google and Facebook marketing and will look
to use these and other channels as a means of scaling the customer
base. The cash held by the Group will allow for rapid scaling of
the marketing activity, along with deepening the product offering,
and the warehouse investment which will be needed in time.
Discount Dragon has seen significant growth in unaudited revenue
from a modest GBP75,000 in August 2022, the month of acquisition of
the related assets by Huddled, to over GBP450,000 in August 2023.
For the year ended 31 May 2022, Huddled recorded a loss before tax
of GBP160k on revenue of GBP465k. In the year to 31 July 2023,
Discount Dragon's unaudited results showed an EBITDA loss of
GBP0.7m on revenue of GBP3.3m. Net current liabilities of Huddled,
as at 31 July 2023, were circa GBP335,000 (after the shareholder
loans and accrued interest of GBP612,500).
During the past 12 months, Huddled has invested heavily in
Discount Dragon including a complete rebrand and new warehouse
management system. It has also invested in developing the product
range and strengthening supplier relationships, along with
providing all the working capital needed to support the
business.
This investment has allowed the business to begin to scale,
forming the foundations for future growth. The website has been
featured in numerous publications including exclusive features in
The Sun and The Daily Mirror. The business has also featured on
ITV's 'This Morning' -
https://www.itv.com/thismorning/articles/our-coupon-queens-weekly-deals.
Discount Dragon operates out of a third party owned warehouse in
Leigh, near Manchester. It takes all orders through its website,
which runs on a proven e-commerce platform. All orders are picked
and fulfilled in-house. It has 35 employees, split between 6
executive management and finance and 29 across all warehouse
functions. The directors believe that the current warehouse and
fixed cost operating structure in Leigh is scalable and can support
north of 1,000 orders per day.
Between 1 January and 31 August 2023, Discount Dragon's website
had circa 3m visits with 3.6% making a purchase, generating GBP2.9m
in revenue from 107,000 orders at an average basket value of over
GBP27. Discount Dragon has over 20,000 Trustpilot reviews, being
rated 'Excellent' by its customers. Average order value has
continued to improve with August 2023 reporting an average order
value of GBP32.46. Unaudited Revenue for the month was
GBP454,843.
The business currently has an active database of circa 72,000
users who have been active within the last 120 days. Of those, 12%
have purchased within the last 30 days, 20% in last 60 days, and
27% in last 90 days. In August 2023, it added 3,588 new customers
with very limited marketing expenditure.
On 8 September 2023, Huddled entered into agreements with
Motatos UK to acquire the entirety of its stock and for Motatos to
promote Discount Dragon to its database. Motatos was previously
Discount Dragon's main direct competitor.
To enable Huddled to move rapidly on the Motatos opportunity and
to provide additional working capital for the Discount Dragon
business, a further shareholder loan facility has been agreed of up
to GBP300k. This facility (to the extent drawn) and associated
interest will also be repaid at or around completion of the
acquisition of Huddled by the Company.
With the benefit of the Motatos stock, Discount Dragon will,
subject to ongoing sales, have aggregate stock at original
bought-in cost in excess of GBP1m, leaving it well invested for
growth. To date, there has been encouraging conversion of Motatos
customers making purchases at Discount Dragon.
The Directors believe that Discount Dragon has a very large
addressable market and is well placed with an attractive
proposition for consumers, and that there is an opportunity to
scale the business rapidly.
It is the intention of the Company to begin looking for a new
warehouse facility during the early part of 2024 allowing it to
scale further and to operate more efficiently on a 24/7 basis.
The market for discounters has, over the last few years, been
expanding significantly - Mintel research shows that 95% of all
consumers now shop, to some degree, at a discount retailer.
According to Nielsen, the market share of discounters in the UK has
increased more than fourfold in the last 15 years, from 4.6% in
2008 compared to 19.6% in 2022.
The Board has discussed the proposals with a number of its major
institutional investors who are supportive. Accordingly, it has
received irrevocable undertakings to vote in favour of the
proposals from Shareholders in respect of 67,533,832 Ordinary
Shares (35.39% of the Voting Share Capital) who can vote on
Resolutions 1-7 and 33,305,257 Ordinary Shares (17.45% of the
Voting Share Capital) who can vote on Resolution 8.
A brief summary of the key terms of the Acquisition Agreement is
set out in paragraph 8 of Part V of the Circular.
Rule 9 Waiver
Under presumption 10 of the definition of "acting in concert" of
the Takeover Code shareholders in a private company who sell their
shares for the issue of new shares in a company to which the
Takeover Code applies are considered to be "acting in concert" and
therefore constitute a concert party unless clear evidence has been
presented to the Takeover Panel to "break up" the concert
party.
The Existing Concert Party (which includes Martin Higginson,
Daniel Wortley, David Marks, and Megafone (UK) Limited Retirement
Benefit Scheme (being Martin Higginson's pension scheme)) have an
interest equating to, in aggregate, 19.75% of the Voting Share
Capital.
The Company has agreed with the Takeover Panel that the Existing
Concert Party shall be joined with the Huddled Concert Party as a
consequence of common participants. The Concert Party, upon
Completion of the Acquisition, will have an interest in 53.45% of
the Enlarged Share Capital. Further details of the Panel Waiver are
contained in paragraph 5 of the Circular.
Therefore, the Company is seeking approval of the Allotment
Resolution and the Rule 9 Waiver Resolution which will allow it to
proceed with the Acquisition without the Existing Concert Party
having to make a mandatory offer pursuant to Rule 9 of the Takeover
Code.
The Acquisition is also deemed a related party transaction under
AIM Rule 13 - see paragraph 7 of the Circular.
The Company will today post a circular to Shareholders regarding
the Proposed Transaction, which sets out a Notice of General
Meeting (the "Circular"), and a Form of Proxy for the proposed
resolutions. These documents will also be available on the
Company's website.
Business and prospects of the Company
Shareholders are referred to a separate announcement today in
which, the Company published its interim results for the six months
ended 30 June 2023.
On 28 February 2023, the Company completed the sale of its core
Location Based Entertainment ("LBE") business. The majority of the
sale proceeds were returned to Shareholders and the balance
retained to pursue acquisition opportunities.
Since the sale of the LBE business, and prior to any
acquisitions, the Group's only remaining trading activity has been
its Home Based Entertainment ("HBE") business, which is comprised
of the Let's Explore themed 'Immersive Learning' products, as well
as the 'Vodiac' VR headset, an affordable smartphone-powered VR
headset and companion app which provides the user with 75 different
virtual reality experiences to try across seven channels. These
products retail to consumers via a variety on channels including
QVC, Amazon as well as direct to consumer offering via Facebook and
other social media channels.
HBE is predominantly a Q4 focused business, with the first half
of the year being about investment into the development and
planning of new products.
During H1 the Group has developed three new Let's Explore
products to be launched in Q4 of this year: a revamped 'Let's
Explore Oceans' offering, as well as 'Let's Explore Space' and
'Let's Explore Wildlife' which are two completely new products.
Each pack is focused on delivering immersive learning, coming
complete with the new and improved smartphone-powered VR headset, a
range of VR experiences, a holographic cube which unlocks a
selection of in-app augmented reality experiences, a full-colour
hardback fact book, a sticker book, a giant poster, and an
interactive model.
The Company has produced an initial run of 7,500 units of each
offering (22,500 units in total) in conjunction with a respected
publisher on a profit-sharing basis. The recommended retail price
of each pack will be GBP99, or $125. Sales will be focused around
the busy Q4 period and will, as in previous years, be offered via
either a direct sale, or through Amazon both in the UK and USA.
Following a successful TV airing in August 2023 on QVC USA, some
4,000 Vodiac headsets were sold. In addition, the Group has
received additional orders for circa 26,000 Vodiac units to be sold
predominantly through QVC USA, and UK, as well as two tests on QVC
Canada, and Australia, and a select number of retailers, all to be
fulfilled in Q4.
If the Acquisition is approved, the Directors believe the
Company will be well positioned to further develop and grow
Discount Dragon, as well as the Company's own Let's Explore and
Vodiac product ranges.
Related Party Transaction
Martin Higginson, Daniel Wortley, M Capital Investment
Properties Limited (a company controlled by Martin Higginson) and
Lanton Investments Limited (a company controlled by the family of
David Marks) as directors of the Company, and in the case of M
Capital Investment Properties Limited and Lanton Investments
Limited an associate of a director of the Company, are considered
to be related parties pursuant to Rule 13 of the AIM Rules as they
are also shareholders and Sellers in Huddled.
The participation in this Acquisition by Martin Higginson,
Lanton Investments Limited and Daniel Wortley is considered to
result in a related party transaction under AIM Rule 13 of the AIM
Rules due to these individuals being directors or associates of
directors of the Company. The Independent Directors of the Company,
having consulted with Cavendish Securities PLC, the Company's
Nominated Adviser, consider that the terms of the Acquisition are
fair and reasonable insofar as the Company's Shareholders are
concerned.
In addition, as a result of the interests held by Martin
Higginson and the MH Connected Persons (being approximately 21.63%)
in the Huddled Sale Shares, the Acquisition constitutes a
substantial property transaction for the purpose of section 190 of
the Act and, accordingly is also subject to shareholder approval at
the General Meeting.
The Company is therefore seeking approval of the SPT Resolution
at the General Meeting which will allow it to proceed with the
Acquisition.
The Proposals are being voted on by Shareholders at the
forthcoming General Meeting.
Change of Name
The Directors feel it makes sense to change the name of the plc
to Huddled Group plc to reflect its focus in building a group of
e-commerce brands.
The name change will therefore be put to shareholders at the
General Meeting on 16 October 2023.
Recommendation
The Independent Directors, who have been so advised by
Cavendish, consider that the Acquisition and the issue of the
Consideration Shares are fair and reasonable and in the best
interests of the Independent Shareholders and the Company as a
whole. In providing advice to the Independent Directors, Cavendish
has taken into account the Independent Directors' commercial
assessments.
The Independent Directors unanimously recommend that
Shareholders vote in favour of the Rule 9 Waiver Resolution, as
they have undertaken to do in respect of their own beneficial
Holdings of 219,360 Ordinary Shares, representing approximately
0.11 per cent. in aggregate of the Voting Share Capital. Martin
Higginson, David Marks and Daniel Wortley, who are members of the
Concert Party, are not deemed to be independent for the purpose of
this recommendation.
The Directors believe that the Resolutions (excluding the Rule 9
Waiver Resolution) to be considered at the General Meeting are in
the best interests of the Company and its shareholders as a whole
and unanimously recommend that Shareholders vote in favour of each
of the Resolutions, as the Directors who are Shareholders intend to
do in respect of their beneficial shareholders representing, in
aggregate, over 12.07 per cent. of the current issued share capital
of the Company.
Commenting, Martin Higginson, CEO of Let's Explore, said:
"We believe the acquisition of Huddled will be transformational
for the Group and further strengthens our e-commerce position. The
growth in Discount Dragon, over the last 12 months has been
exciting and we can see with additional capital, the opportunity to
drive growth quickly and a clear route to profitably.
"The market for discounted groceries has never been more
relevant and we're excited as to what the future holds and are
confident that we can drive value for shareholders."
Enquiries:
For further information please visit www. LetsExploreGroup.com ,
or contact:
Let's Explore Group Martin Higginson investors@letsexplore.com
plc David Marks
Dan Wortley
Cavendish Securities Adrian Hadden Tel + 44 (0) 207 7397 8900
plc Charlie Combe
(Nomad and Sole Broker)
Alma Rebecca Sanders-Hewett Tel: +44 (0) 20 3405 0205
(Financial PR) Sam Modlin letsexplore@almapr.co.uk
Kieran Breheny
Introduction
After the conclusion of the Tender Offer, the Company announced
on 29 June 2023 that it had entered preliminary due diligence on a
possible target. The Board is pleased to report that the initial
discussions have progressed and that the Company has entered into a
conditional sale and purchase agreement, for the acquisition of the
entire issued share capital of Huddled Group Limited, and its
wholly-owned Subsidiaries.
The proposed Acquisition requires certain approvals from
Shareholders which are dealt with in the Proposals.
The purpose of the Circular is to provide you with information
about the Proposals and to explain why the Board considers the
Proposals to be in the best interests of the Company and its
Shareholders as a whole. The Board is making no recommendation to
Shareholders in respect of the Proposals but the Independent
Directors unanimously recommend that you vote in favour of the
Resolutions to be proposed at the General Meeting. Shareholders
should note that, unless the Resolutions are approved at the
General Meeting, the Consideration Shares Issue, the Acquisition,
the Off-Market Buy Backs, the Panel Waiver, the Substantial
Property Transaction and the Change of Name will not take
place.
The General Meeting that will be held at the offices of
Cavendish at 1 Bartholomew Close, London EC1A 7BL at 2 p.m. on 16
October 2023 to consider the Resolutions that will be put to
Shareholders to approve them.
Part II of the Circular contains definitions of words and terms
that have been used throughout it. Please refer to Part II as you
review the Circular.
Background to the Acquisition and the Panel Waiver
Following the sale of the Location Based Entertainment VR
business ("LBE"), and the conclusion of the Tender Offer, the
Company had, as at 30 June 2023, approximately GBP6.8m of cash on
hand along with further cash of $1.25m receivable via a loan note
issued by the buyer of LBE, which is due for repayment in February
2024.
With a strong balance sheet, and the Home Based Entertainment
("HBE") business, the Company set about looking for acquisition
opportunities. Whilst there were discussions with several potential
targets, these have not been consummated for a variety of reasons,
including timing, valuation or alternative options available to
counterparties.
At the same time, a company in which the executive team of the
Company already have an investment, Huddled, was showing exciting
growth potential and was proposed to the Independent Directors as a
potential acquisition target.
Following a review and due diligence exercise, supported by the
Company's advisers, the Independent Directors concluded that this
business has significant growth potential and that the Company has
the cash resources, as well as the e-commerce and other management
skills and experience, to accelerate its growth. Accordingly, the
Company has agreed, subject to various shareholder approvals, to
acquire the business.
Pursuant to the Acquisition Agreement, the Company will pay an
initial payment of GBP3,450,000 and a deferred payment of
GBP500,000 subject to adjustment, payable within 5 business days of
the date of filing of the consolidated financial statements of the
Group for the financial year ending on 31 December 2024. Both
payments will be satisfied by the allotment and issue of the
Consideration Shares for the entire share capital of Huddled and
its Subsidiaries. The Completion Consideration Shares will be
subject to a 12-month firm lock-in and 12-month orderly market
provisions thereafter. The Withheld Consideration Shares will be
subject to a 6-month orderly market lock in.
As part of the transaction, the Company will discharge loans and
accrued interest which amounted, as at 31 July 2023, to
GBP612,500.
Huddled, founded in 2020, is focused on building a portfolio of
e-commerce brands. It has built a solid track record in digital
marketing and e-commerce. It is dedicated to delivering value and
great service, in the growing world of e-commerce.
In August 2022, Huddled acquired the business and assets of an
e-commerce retailer and rebranded it as "Discount Dragon". This has
become Huddled's sole trading business and for the time being has
incorporated the BeerMonster business.
Discount Dragon is a direct-to-consumer e-commerce business,
which focuses pre-dominantly on the sale of branded FMCG,
predominantly dry and tinned groceries and beverages. Its
particular focus is selling surplus, end of line, mispackaged, and
items close to best before dates at significant discounts versus
full retail prices, via the website
https://discountdragon.co.uk/.
In terms of marketing, the business engages regularly by email
with its growing database of customers with regular offers to
stimulate sales and operates an affiliate marketing programme,
through a network of websites. It has also run successful test
campaigns on both paid Google and Facebook marketing and will look
to use these and other channels as a means of scaling the customer
base. The cash held by the Group will allow for rapid scaling of
the marketing activity, along with deepening the product offering,
and the warehouse investment which will be needed in time.
Discount Dragon has seen significant growth in unaudited revenue
from a modest GBP75,000 in August 2022, the month of acquisition of
the related assets by Huddled, to over GBP450,000 in August 2023.
For the year ended 31 May 2022, Huddled recorded a loss before tax
of GBP160k on revenue of GBP465k. In the year to 31 July 2023,
Discount Dragon's unaudited results showed an EBITDA loss of
GBP0.7m on revenue of GBP3.3m. Net current liabilities of Huddled,
as at 31 July 2023, were circa GBP335,000 (after the shareholder
loans and accrued interest of GBP612,500).
During the past 12 months, Huddled has invested heavily in
Discount Dragon including a complete rebrand and new warehouse
management system. It has also invested in developing the product
range and strengthening supplier relationships, along with
providing all the working capital needed to support the
business.
This investment has allowed the business to begin to scale,
forming the foundations for future growth. The website has been
featured in numerous publications including exclusive features in
The Sun and The Daily Mirror. The business has also featured on
ITV's 'This Morning' -
https://www.itv.com/thismorning/articles/our-coupon-queens-weekly-deals.
Discount Dragon operates out of a third party owned warehouse in
Leigh, near Manchester. It takes all orders through its website,
which runs on a proven e-commerce platform. All orders are picked
and fulfilled in-house. It has 35 employees, split between 6
executive management and finance and 29 across all warehouse
functions. The directors believe that the current warehouse and
fixed cost operating structure in Leigh is scalable and can support
north of 1,000 orders per day.
Between 1 January and 31 August 2023, Discount Dragon's website
had circa 3m visits with 3.6% making a purchase, generating GBP2.9m
in revenue from 107,000 orders at an average basket value of over
GBP27. Discount Dragon has over 20,000 Trustpilot reviews, being
rated 'Excellent' by its customers. Average order value has
continued to improve with August 2023 reporting an average order
value of GBP32.46. Unaudited Revenue for the month was
GBP454,843.
The business currently has an active database of circa 72,000
users who have been active within the last 120 days. Of those, 12%
have purchased within the last 30 days, 20% in last 60 days, and
27% in last 90 days. In August 2023, it added 3,588 new customers
with very limited marketing expenditure.
On 8 September 2023, Huddled entered into agreements with
Motatos UK to acquire the entirety of its stock and for Motatos to
promote Discount Dragon to its database. Motatos was previously
Discount Dragon's main direct competitor.
To enable Huddled to move rapidly on the Motatos opportunity and
to provide additional working capital for the Discount Dragon
business a further shareholder loan facility has been agreed of up
to GBP300k. This facility (to the extent drawn) and associated
interest will also be repaid at or around completion of the
acquisition of Huddled by the Company. The total amount to be
repaid under the initial loan and the additional working capital
loan will not exceed GBP936,500 including repayment of principal,
interest and arrangement fees.
With the benefit of the Motatos stock, Discount Dragon will,
subject to ongoing sales, have aggregate stock at original
bought-in cost in excess of GBP1m, leaving it well invested for
growth. To date, there has been encouraging conversion of Motatos
customers making purchases at Discount Dragon.
The Directors believe that Discount Dragon has a very large
addressable market and is well placed with an attractive
proposition for consumers, and that there is an opportunity to
scale the business rapidly.
It is the intention of the Company to begin looking for a new
warehouse facility during the early part of 2024 allowing it to
scale further and to operate more efficiently on a 24/7 basis.
The market for discounters has, over the last few years, been
expanding significantly - Mintel research shows that 95% of all
consumers now shop, to some degree, at a discount retailer.
According to Nielsen, the market share of discounters in the UK has
increased more than fourfold in the last 15 years, from 4.6% in
2008 compared to 19.6% in 2022.
The Board has discussed the proposals with a number of its major
institutional investors who are supportive. Accordingly, it has
received irrevocable undertakings to vote in favour of the
proposals from Shareholders in respect of 67,533,832 Ordinary
Shares (35.39% of the Voting Share Capital) who can vote on
Resolutions 1-7 and 33,305,257 Ordinary Shares (17.45% of the
Voting Share Capital) who can vote on Resolution 8.
A brief summary of the key terms of the Acquisition Agreement is
set out in paragraph 8 of Part V of the Circular.
Under presumption 10 of the definition of "acting in concert" of
the Takeover Code shareholders in a private company who sell their
shares for the issue of new shares in a company to which the
Takeover Code applies are considered to be "acting in concert" and
therefore constitute a concert party unless clear evidence has been
presented to the Takeover Panel to "break up" the concert
party.
The Existing Concert Party (which includes Martin Higginson,
Daniel Wortley, David Marks, and Megafone (UK) Limited Retirement
Benefit Scheme (being Martin Higginson's pension scheme)) have an
interest equating to, in aggregate, 19.75% of the Voting Share
Capital.
The Company has agreed with the Takeover Panel that the Existing
Concert Party shall be joined with the Huddled Concert Party as a
consequence of common participants. The Concert Party, upon
Completion of the Acquisition, will have an interest in 53.45% of
the Enlarged Share Capital. Further details of the Panel Waiver are
contained in paragraph 4 of this Part III.
Therefore, the Company is seeking approval of the Allotment
Resolution and the Rule 9 Waiver Resolution which will allow it to
proceed with the Acquisition without the Existing Concert Party
having to make a mandatory offer pursuant to Rule 9 of the Takeover
Code.
The Acquisition is also deemed a related party transaction under
AIM Rule 13 - see paragraph 6 of this Part V of the Circular.
Business and prospects of the Company
The Company published its interim results for the 6-months ended
30 June 2023 on 28 September 2023.
On 28 February 2023, the Company completed the sale of its core
Location Based Entertainment ("LBE") business. The majority of the
sale proceeds were returned to Shareholders and the balance
retained to pursue acquisition opportunities.
Since the sale of the LBE business, and prior to any
acquisitions, the Group's only remaining trading activity has been
its Home Based Entertainment ("HBE") business, which is comprised
of the Let's Explore themed 'Immersive Learning' products, as well
as the 'Vodiac' VR headset, an affordable smartphone-powered VR
headset and companion app which provides the user with 75 different
virtual reality experiences to try across seven channels. These
products retail to consumers via a variety on channels including
QVC, Amazon as well as direct to consumer offering via Facebook and
other social media channels.
The HBE business is predominantly a Q4 focused business, with
the first half of the year being
about investment into the development and planning of new
products.
During H1 the Group has developed three new Let's Explore
products to be launched in Q4 of this year: a revamped 'Let's
Explore Oceans' offering, as well as 'Let's Explore Space' and
'Let's Explore Wildlife' which are two completely new products.
Each pack is focused on delivering immersive learning, coming
complete with the new and improved smartphone-powered VR headset, a
range of VR experiences, a holographic cube which unlocks a
selection of in-app augmented reality experiences, a full-colour
hardback fact book, a sticker book, a giant poster, and an
interactive model.
The Company has produced an initial run of 7,500 units of each
offering (22,500 units in total) in conjunction with a respected
publisher on a profit-sharing basis. The recommended retail price
of each pack will be GBP99, or $125. Sales will be focused around
the busy Q4 period and will, as in previous years, be offered via
either a direct sale, or through Amazon both in the UK and USA.
Following a successful TV airing in August 2023 on QVC USA, some
4,000 Vodiac headsets were sold. In addition, the Group has
received additional orders for circa 26,000 Vodiac units to be sold
predominantly through QVC USA, and UK, as well as two tests on QVC
Canada, and Australia, and a select number of retailers, all to be
fulfilled in Q4.
If the Acquisition is approved, the Directors believe the
Company will be well positioned to further develop and grow
Discount Dragon, as well as the Company's own Let's Explore and
Vodiac product ranges.
The Concert Party and Takeover Code
As set out in paragraph 2 of Part I of the Circular, the
Acquisition gives rise to certain considerations under the Takeover
Code. The Takeover Code applies to the Company. Under Rule 9 of the
Code, any person who acquires an interest in shares which, taken
together with shares in which that person or any person acting in
concert with that person is interested, carry 30% or more of the
voting rights of a company which is subject to the Code is normally
required to make an offer to all the remaining shareholders to
acquire their shares.
Similarly, when any person, together with persons acting in
concert with that person, is interested in shares which in the
aggregate carry not less than 30% of the voting rights of such a
company but does not hold shares carrying more than 50% of the
voting rights of the company, an offer will normally be required if
such person or any person acting in concert with that person
acquires a further interest in shares which increases the
percentage of shares carrying voting rights in which that person is
interested. An offer under Rule 9 must be made in cash at the
highest price paid by the person required to make the offer, or any
person acting in concert with such person, for any interest in
shares of the company during the 12 months prior to the
announcement of the offer.
Should the Acquisition complete, each of the individuals and
entities listed in the table below are together considered to be
acting in concert for the purposes of the Takeover Code (together
the "Concert Party"). Their interests at Admission and assuming all
of the Withheld Consideration Shares are allotted and issued are
set out in the table below:
Name of Number of Ordinary !=
beneficial Shares held at Completion Percentage
owner of the
Enlarged
Voting Share
Capital (%)
York House
Investment
Company
Limited 23,591,212 7.00%
--------------------------------------------------------------------------------------- -------------
Martin
Higginson 23,174,346 6.87%
--------------------------------------------------------------------------------------- -------------
M Capital
Investment
Properties
Limited 19,700,126 5.84%
--------------------------------------------------------------------------------------- -------------
Talia Stevens 19,450,758 5.77%
--------------------------------------------------------------------------------------- -------------
Peter
Edmondson 14,713,935 4.36%
--------------------------------------------------------------------------------------- -------------
Robbi & Anais
Kersh 9,725,379 2.88%
--------------------------------------------------------------------------------------- -------------
Charlotte
Shepherd 8,118,184 2.41%
--------------------------------------------------------------------------------------- -------------
David Marks 7,255,487 2.15%
--------------------------------------------------------------------------------------- -------------
Lanton
Investments
Limited 7,231,692 2.14%
--------------------------------------------------------------------------------------- -------------
Deborah
Karavias 7,213,880 2.14%
--------------------------------------------------------------------------------------- -------------
Samuel
Higginson 5,969,522 1.77%
--------------------------------------------------------------------------------------- -------------
Daniel
Wortley 4,898,314 1.45%
--------------------------------------------------------------------------------------- -------------
Conrad
Lewcock 3,788,486 1.12%
--------------------------------------------------------------------------------------- -------------
Joe Williams 3,084,910 0.91%
--------------------------------------------------------------------------------------- -------------
Charles Stemp 2,614,305 0.78%
--------------------------------------------------------------------------------------- -------------
Oliver Kenyon 2,449,157 0.73%
--------------------------------------------------------------------------------------- -------------
Andy Haskins 2,449,157 0.73%
--------------------------------------------------------------------------------------- -------------
Leonie &
William
Dobbie 2,351,684 0.70%
--------------------------------------------------------------------------------------- -------------
Matthew Stemp 1,843,286 0.55%
--------------------------------------------------------------------------------------- -------------
Paul Hepworth 1,653,715 0.49%
--------------------------------------------------------------------------------------- -------------
Emma Stanyon 1,426,742 0.42%
--------------------------------------------------------------------------------------- -------------
Sarah
Wilkinson 1,374,975 0.41%
--------------------------------------------------------------------------------------- -------------
Dominic
Benton 1,244,788 0.37%
--------------------------------------------------------------------------------------- -------------
Heyfield Park
Investments
Ltd 1,041,663 0.31%
--------------------------------------------------------------------------------------- -------------
Dimitrios
Georgiou 920,261 0.27%
--------------------------------------------------------------------------------------- -------------
Napier Brown
Holdings
Limited 839,830 0.25%
--------------------------------------------------------------------------------------- -------------
Mark Hepworth 783,410 0.23%
--------------------------------------------------------------------------------------- -------------
John Hepworth 721,228 0.21%
--------------------------------------------------------------------------------------- -------------
Megafone (UK)
Limited
Retirement
Benefit
Scheme 321,101 0.10%
--------------------------------------------------------------------------------------- -------------
John
Alexander
Glynne
Davies 282,915 0.08%
--------------------------------------------------------------------------------------- -------------
Garry Lucas 37,749 0.01%
--------------------------------------------------------------------------------------- -------------
Total 180,272,193 53.45%
--------------------------------------------------------------------------------------- -------------
!= assumes all of the Withheld Consideration Shares are issued
at Withheld Consideration Shares Admission
Assuming the Acquisition and Off-Market Buy Backs completes, the
maximum potential controlling position that the Concert Party will
have will be 180,272,193 Ordinary Shares, representing 53.45% of
the Enlarged Share Capital.
Following the Acquisition, the members of the Concert Party will
hold shares carrying more than 50% of the voting rights of the
Company and (for so long as they continue to be acting in concert)
may accordingly increase their aggregate interests in shares
without incurring any obligation to make an offer under Rule 9,
although individual members of the concert party will not be able
to increase their percentage interests in shares through or between
a Rule 9 threshold without Panel consent.
In order to enable the Company to effect the Acquisition without
triggering the risk of a mandatory offer obligation for the Concert
Party, the Company has consulted with the Takeover Panel and the
Takeover Panel has agreed to waive the requirement for the Concert
Party to make a general offer to all Shareholders under Rule 9 of
the Takeover Code in circumstances where, following the completion
of the Acquisition, the aggregate percentage holding of the Concert
Party increases above 30% or more of the voting rights in the
Company (the "Panel Waiver"). This Panel Waiver is subject to the
approval by a vote of Independent Shareholders of the Company on a
poll at the General Meeting. The Rule 9 Waiver Resolution seeks
this approval. Accordingly, should Independent Shareholders approve
the Rule 9 Waiver Resolution, they will be waiving the requirement
for the Concert Party to make a mandatory general offer under Rule
9 of the Takeover Code as a result of the Acquisition and the
members of the Concert Party may acquire further interests in
Ordinary Shares without incurring any further obligation under Rule
9 of the Takeover Code.
Further information on the Concert Party is set out in Part V of
the Circular.
Intentions of the Concert Party
The Concert Party has no intention of making an offer for the
Company but, if it chooses to, it will not be restricted from
making an offer.
The individual members of the Concert Party have each confirmed
to the Company that they are not proposing, following any increase
in their percentage interests in the Voting Share Capital as a
result of the Tender Offer, to make any change in the general
nature of the Company's business. The Concert Party has further
confirmed that it has no intention to change the Company's plans
with respect to: (i) the composition of the Board, nor the
Company's plans with respect to the continued employment of
employees and management of the Company and its subsidiaries
(including any material change in conditions of employment) or any
material change to the balance of skills and functions of the
employees and management; (ii) the Company's future business and
its strategic, research and development plans; (iii) the location
of the Company's headquarters or headquarter functions or the
location of the Company's place of business; (iv) employer
contributions into any of the Company's pension schemes, the
accrual of benefits for existing members, nor the admission of new
members; (v) redeployment of the Company's fixed assets; or (vi)
the continuation of the Ordinary Shares being admitted to trading
on AIM.
The Independent Directors approve of the above statements of
intention.
Your attention is drawn to Part V of the Circular which sets out
certain further information and financial information respectively
that is required to be disclosed in the Circular pursuant to the
rules contained in the Takeover Code.
In accordance with the requirements of the Takeover Code,
members of the Existing Concert Party are not permitted to vote on
the Rule 9 Waiver Resolution in respect of their aggregate holding
of 37,688,269 Ordinary Shares.
Related Parties Transaction
Martin Higginson, Daniel Wortley, M Capital Investment
Properties Limited (a company controlled by Martin Higginson) and
Lanton Investments Limited (a company controlled by the family of
David Marks) as directors of the Company, and in the case of M
Capital Investment Properties Limited and Lanton Investments
Limited an associate of a director of the Company, are considered
to be related parties pursuant to Rule 13 of the AIM Rules as they
are also shareholders and Sellers in Huddled.
The participation in this Acquisition by Martin Higginson,
Lanton Investments Limited and Daniel Wortley is considered to
result in a related party transaction under AIM Rule 13 of the AIM
Rules due to these individuals being directors or associates of
directors of the Company. The Independent Directors of the Company,
having consulted with Cavendish Securities PLC, the Company's
Nominated Adviser, consider that the terms of the Acquisition are
fair and reasonable insofar as the Company's Shareholders are
concerned.
In addition, as a result of the interests held by Martin
Higginson and the MH Connected Persons (being approximately 21.63%)
in the Huddled Sale Shares, the Acquisition constitutes a
substantial property transaction for the purpose of section 190 of
the Act and, accordingly is also subject to shareholder approval at
the General Meeting.
The Company is therefore seeking approval of the SPT Resolution
at the General Meeting which will allow it to proceed with the
Acquisition.
The Proposals are being voted on by Shareholders at the
forthcoming General Meeting.
Background to the Off-Market Buy Backs
On 5 June 2023, the Company announced that it had received
requests from a small number of longstanding overseas shareholders
who were not able to participate in the Tender Offer for regulatory
reasons to be put in the same position as the vast majority of
shareholders who were able to participate.
The four shareholders in question have held their shares prior
to the Company's IPO in July 2018.
In order to put them in the same position as other shareholders
who accepted the Tender Offer, the Company has conditionally agreed
to acquire 65% of their respective holdings of Ordinary Shares at a
price of 4.75 pence per share. The aggregate consideration for the
Ordinary Shares to be bought back via the Off-Market Buy Backs is
GBP153,261.03.
On the 27 September 2023 the Company entered into the Off-Market
Buy Back Agreements which are conditional upon (amongst others) the
Company having sufficient distributable profits to fund the
acquisitions of the Ordinary Shares and Shareholder approval.
Further details of the Off-Market Buy Back Agreements are set out
in Part IV of the Circular and copies of each of the Off-Market Buy
Back Agreements are available for inspection at the registered
office of the Company for a period of 15 days ending on the date of
the General Meeting.
The Company is seeking approval of the Off-Market Buy Backs as
part of the Proposals.
General Meeting and Resolutions
The Notice of General Meeting is set out in Part VII of the
Circular.
The General Meeting will take place at the offices of Cavendish
at 1 Bartholomew Close London EC1A 7BL at 2 p.m. on 16 October
2023. At the General Meeting, the Resolutions set out in Part V of
the Circular will be proposed to Shareholders.
An ordinary resolution will be passed if 50% or more of the
votes cast (in person or by proxy) at the General Meeting are in
favour of it. A special resolution will be passed if 75% or more of
the votes cast (in person or by proxy) at the General Meeting are
in favour of it.
The Resolutions, are summarised below:
Resolution 1 - this is an ordinary resolution to approve the
Gary Martin Buy Back Agreement.
Resolution 2 - this is an ordinary resolution to approve the
John Ketcham Buy Back Agreement.
Resolution 3 - this is an ordinary resolution to approve the
Janice Ritchie Buy Back Agreement.
Resolution 4 - this is an ordinary resolution to approve the
Griffin Stenger Buy Back Agreement.
Resolution 5 - this is an ordinary resolution to seeking
approval for the Acquisition by the Company of the Huddled Sale
Shares from certain individual sellers which include Martin
Higginson (a director of the Company) and the MH Connected Persons.
It constitutes a substantial property transaction under sections
190 and 191 of the Act, and therefore requires prior approval of
the Shareholders in accordance with section 190 of the Companies
Act. This resolution is conditional on the passing of resolutions 6
and 7 below.
Resolution 6 - this is an ordinary resolution to specifically
authorise the Directors to allot relevant securities up to an
aggregate nominal amount of GBP60,011.07, being equal to
149,621,212 Ordinary Shares (i.e. the number of Consideration
Shares to be issued).
Resolution 7 - this is an ordinary resolution to approve the
waiver conditionally granted by the Takeover Panel for the
disapplication of Rule 9 of the Takeover Code following the
Acquisition. The Takeover Panel has confirmed that, subject to the
Rule 9 Waiver Resolution being passed by the requisite majority of
the Independent Shareholders on a poll, no mandatory bid obligation
on the Concert Party under Rule 9 of the Takeover Code would be
triggered by virtue of the Acquisition. The Rule 9 Waiver
Resolution seeks the approval of the Panel Waiver by Independent
Shareholders.
Resolution 8 - this is a special resolution to authorise the
Change of Name from Let's Explore Group plc to Huddled Group plc
which is conditional upon the passing of resolutions 4-7(inclusive)
and the completion of the Acquisition.
In accordance with the requirements of the Takeover Code,
members of the Concert Party are not permitted to vote on the Rule
9 Waiver Resolution in respect of their aggregate holding of
39,715,944 Ordinary Shares, but may vote on the remainder of the
Resolutions.
Action to be taken in respect of the General Meeting
Shareholders will find a Form of Proxy enclosed with the
Circular for use at the General Meeting. Whether or not you intend
to be present at the General Meeting, you are requested to complete
and return the Form of Proxy in accordance with the instructions
printed thereon as soon as possible. To be valid, completed Forms
of Proxy must be received by the Company's Registrars, Neville
Registrars Limited, by not later than 2p.m. on 16 October 2023, or
48 hours (excluding any part of a day that is not a Business Day)
before any adjourned General Meeting. Completion of the Form of
Proxy will not preclude you from attending the meeting and voting
in person if you so wish.
Recommendation
The Independent Directors, who have been so advised by
Cavendish, consider that the Acquisition and the issue of the
Consideration Shares are fair and reasonable and in the best
interests of the Independent Shareholders and the Company as a
whole. In providing advice to the Independent Directors, Cavendish
has taken into account the Independent Directors' commercial
assessments.
The Independent Directors unanimously recommend that
Shareholders vote in favour of the Rule 9 Waiver Resolution, as
they have undertaken to do in respect of their own beneficial
Holdings of 219,360 Ordinary Shares, representing approximately
0.11 per cent. in aggregate of the Voting Share Capital. Martin
Higginson, David Marks and Daniel Wortley, who are members of the
Concert Party, are not deemed to be independent for the purpose of
this recommendation.
The Directors believe that the Resolutions (excluding the Rule 9
Waiver Resolution) to be considered at the General Meeting are in
the best interests of the Company and its shareholders as a whole
and unanimously recommend that Shareholders vote in favour of each
of the Resolutions, as the Directors who are Shareholders intend to
do in respect of their beneficial shareholders representing, in
aggregate, over 12.07 per cent. of the current issued share capital
of the Company.
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"Acquisition" the acquisition of the entire
issued share capital of Huddled
Group Limited and its Subsidiaries;
"Acquisition Agreement" the conditional sale and purchase
agreement for the Acquisition
entered into on 27 September
2023 between (1) the Sellers
(as defined therein), (2) the
Warrantors (as defined therein)
and (3) the Company;
"Act" Companies Act 2006;
"Admission" admission to trading on AIM of
the Completion Consideration
Shares;
"AIM" AIM, a market operated by the
London Stock Exchange;
"AIM Rules" the AIM Rules for Companies published
by the London Stock Exchange
from time to time;
"Allotment Resolution" the resolution to be proposed
at the General Meeting providing
authority to the Directors to
issue the Consideration Shares
which is set out in full in the
Notice of General Meeting at
resolution 6 ;
"BeerMonster" BeerMonster Online Limited, company
number 13431824, whose registered
office is at 76 Church Street,
Lancaster, England, LA1 1ET,
a wholly owned subsidiary of
Huddled;
"Board" or "Directors" the directors of the Company
or any duly appointed committee
thereof as set out in paragraph
4.1 of Part V of the Circular;
"Cavendish" Cavendish Securities plc, a company
incorporated in England and Wales
with registered number 05210733;
"Change of Name" the proposed change of name of
the Company to Huddled Group
plc;
"Change of Name Resolution" the resolution to be proposed
at the General Meeting to change
the name of the Company to Huddled
Group plc which is set out in
full in the Notice of General
Meeting at resolution 7
"Company" or "LEG" Let's Explore Group plc, a company
incorporated in England and Wales
with registered number 10964782;
"Completion" completion of the Acquisition,
pursuant to the terms of the
Acquisition Agreement;
"Completion Consideration Shares" 130,681,818 Consideration Shares
to be issued to the Sellers at
Completion;
"Concert Party" the Existing Concert Party (excluding
Sir Robin Miller, Nicholas Lee)
and the Huddled Concert Party;
"Consideration Shares" 149,621,212 Ordinary Shares,
being the aggregate of the Completion
Consideration Shares and the
Withheld Consideration Shares
to be issued pursuant to the
Acquisition Agreement as consideration
to the Sellers;
"Consideration Shares Issue" the allotment and issue of the
Consideration Shares to the Sellers
pursuant to the terms of the
Acquisition Agreement;
"CREST Regulations" the Uncertificated Securities
Regulations 2001 (as amended);
"CREST" the relevant system (as defined
in the CREST Regulations) in
respect of which Euroclear is
the Operator (as defined in the
CREST Regulations);
"Discount Dragon" Discount Dragon Limited, company
number 12732998, whose registered
office is at 76 Church Street,
Lancaster, England, LA1 1ET,
a wholly owned subsidiary of
Huddled;
"Enlarged Share Capital" 337,244,537 Ordinary Shares,
as enlarged by the Consideration
Shares and reduced by the Off
Market Buy Backs;
"Existing Concert Party" the current concert party in
the Company comprising Sir Robin
Miller, Nicholas Lee, John Alexander
Glynne Davies, Leonie Dobbie,
William Dobbie, Peter Edmondson,
Dimitrios Georgiou, John Hepworth,
Mark Hepworth, Paul Hepworth,
Martin Higginson, Samuel Higginson,
Nicholas Lee, Garry Lucas, David
Marks, Megafone (UK) Limited
Retirement Benefit Scheme, Napier
Brown Holdings Limited, Emma
Stanyon, Daniel Wortley and York
House Investment Company Limited
as more fully described in Part
V;
"Form of Proxy" the form of proxy accompanying
the Circular relating to the
General Meeting;
"FSMA" the Financial Services and Markets
Act 2000, as amended;
"Gary Martin Buy Back Agreement" the off-market buy back agreement
entered into on 27 September
2023 between Gary Martin and
the Company in relation to the
buy back by the Company of the
GM Shares;
"General Meeting" the general meeting of the Company,
notice of which is set out at
the end of the Circular and including
any adjournment(s) thereof;
"GM Shares" the 2,286,803 Ordinary Shares
issued and registered in the
name of Gary Martin;
"Griffin Stenger Buy Back Agreement" the off-market buy back agreement
entered into on 27 September
between Griffin Stenger and the
Company in relation to the buy
back by the Company of the GS
Shares;
"Group" the Company and its subsidiaries
and subsidiary undertakings (in
each case as defined in the Act);
"GS Shares" the 124,397 Ordinary Shares issued
and registered in the name of
Griffin Stenger;
"Huddled " Huddled Group Limited, a company
incorporated in England and Wales
with registered number 12596498;
"Huddled Sale Shares" 16,800 ordinary shares of GBP1
each in the share capital of
Huddled, comprising the entire
issued share capital;
"Huddled Concert Party" the concert party comprising
the following Sellers: Dominic
Benton, Peter Edmondson, Andrew
Haskins, Paul Hepworth, John
Hepworth, Mark Hepworth, Heyfield
Park Investments Ltd, Deborah
Karavias, Oliver Kenyon, Anais
Kersh, Robbi Kersh, Conrad Lewcock,
Martin Higginson, Samuel Higginson,
Lanton Investments Limited, M
Capital Investment Properties
Limited, Charlotte Shepherd,
Emma Stanyon, Charles Stemp,
Matthew Stemp, Talia Stevens,
Sarah Wilkinson, Joe Williams,
Daniel Wortley and York House
Investment Company Limited as
more fully described in Part
V;
"Independent Directors" Sir Robin Miller and Nicholas
Lee;
"Independent Shareholders" Shareholders excluding members
of the Concert Party;
"Janice Ritchie Buy Back Agreement" the off-market buy back agreement
entered into on 27 September
between Janice Ritchie and the
Company in relation to the buy
back by the Company of the JR
Shares;
"JK Shares" the 620,348 Ordinary Shares issued
and registered in the name of
John Ketcham;
"John Ketcham Buy Back Agreement" the off-market buy back agreement
entered into on 27 September
between John Ketcham and the
Company in relation to the buy
back by the Company of the JK
Shares;
"JR Shares" the 195,000 Ordinary Shares issued
and registered in the name of
Janice Ritchie;
"Last Practicable Date" the last practicable date prior
to publication of the Circular
being, 27 September 2023;
"London Stock Exchange" London Stock Exchange plc;
"Market Abuse Regulation" the Market Abuse Regulation (2014/596/EU)
(incorporating the technical
standards, delegated regulations
and guidance notes, published
by the European Commission, London
Stock Exchange, the FCA and the
European Securities and Markets
Authority) as retained in the
UK pursuant to section 3 of the
European Union (Withdrawal) Act
2018;
"MH Connected Persons" Samuel Higginson, Emma Stanyon,
Megafone (UK) Limited Retirement
Benefit Scheme and M Capital
Investment Properties Limited;
"Notice of General Meeting" the notice of General Meeting,
set out in Part VI of the Circular;
"Off-Market Buy Back Agreements" the Gary Martin Buy Back Agreement,
the John Ketcham Buy Back Agreement,
the Janice Ritchie Buy Back Agreement
and the Griffin Stenger Buy Back
Agreement;
"Off-Market Buy Back Resolutions" the resolutions to be proposed
at the General Meeting in relation
to the proposed Off-Market Buy
Backs which are set out in full
in the Notice of General Meeting
at resolutions 1 - 4 (inclusive);
"Off-Market Buy Backs" the proposals contemplated in
the Gary Martin Buy Back Agreement,
the John Ketcham Buy Back Agreement,
the Janice Ritchie Buy Back Agreement
and the Griffin Stenger Buy Back
Agreement;
"Ordinary Shares" ordinary shares of 0.040108663
pence each in the capital of
the Company;
"Panel Waiver" the waiver granted by the Takeover
Panel, conditional on the approval
by Independent Shareholders of
the Rule 9 Waiver Resolution,
of any obligation which would
otherwise be imposed on members
of the Concert Party, either
individually or collectively,
to make a general offer to all
Shareholders under Rule 9 of
the Takeover Code as a result
of the Acquisition and the issue
of the Consideration Shares;
"Proposals" (i) the Off-Market Buy Backs;
(ii) the Change of Name;
(iii) the Substantial Property
Transaction;
(iv) the Consideration Shares
Issue; and
(v) the Panel Waiver,
all as set out in the Resolutions;
"Registrars" Neville Registrars Limited, registrars
to the Company;
"Related Parties" Martin Higginson, Daniel Wortley,
M Capital Investment Properties
Limited (a company controlled
by Martin Higginson) and Lanton
Investments Limited (a company
controlled by the family of David
Marks);
"Resolutions" the Off-Market Buy Back Resolutions,
the Change of Name Resolution,
the Allotment Resolution, the
SPT Resolution and the Rule 9
Waiver Resolution set out in
full in the Notice of General
Meeting;
"Rule 9 Waiver Resolution" the resolution to be proposed
at the General Meeting in relation
to the Panel Waiver which is
set out in full in the Notice
of General Meeting at resolution
7 .
"SPT Resolution" the resolution to be proposed
at the General Meeting providing
approval for the Substantial
Property Transaction which is
set out in full in the Notice
of General Meeting at resolution
5;
" Sellers" the shareholders of Huddled,
as defined in the Acquisition
Agreement;
"Shareholders" holders of Ordinary Shares;
"Subsidiaries" Discount Dragon Limited and BeerMonster
Online Limited;
"Substantial Property Transaction" the proposed Acquisition involving
Martin Higginson and the MH Connected
Persons;
"Takeover Code" the City Code on Takeovers and
Mergers published by the Takeover
Panel (as amended from time to
time);
"Takeover Panel" the Panel on Takeovers and Mergers;
"Tender Offer" the tender offer conducted by
the Company and announced on
9 May 2023;
"US" the United States of America;
"UK" the United Kingdom of Great Britain
and Northern Ireland;
"Voting Share Capital" 190,849,873 Ordinary Shares comprising
the entire issued share capital
of the Company;
"Warrantors" certain shareholders of Huddled
providing warranties and various
other obligations to the Buyer
in and as defined in the Acquisition
Agreement;
"Withheld Consideration Shares" 18,939,394 Consideration Shares
to be issued on the Withheld
Release Date, subject to adjustments
against any warranty, indemnity
and tax claims in accordance
with the Acquisition Agreement;
"Withheld Consideration Shares admission to trading on AIM of
Admission" the Withheld Consideration Shares
"Withheld Release Date" date of filing of the consolidated
financial statements of the Group
(including Huddled and its Subsidiaries)
for the financial year ending
on 31 December 2024, with the
Registrar of Companies in England.
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END
ACQFFFSVADIDFIV
(END) Dow Jones Newswires
September 28, 2023 02:01 ET (06:01 GMT)
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