DJ Eve Sleep plc: Proposed Placing and Approval of a waiver of Rule 9 of the Takeover Code
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Eve Sleep plc (EVE)
Eve Sleep plc: Proposed Placing and Approval of a waiver of Rule 9 of the
Takeover Code
23-Jan-2019 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) NO. 596/2014.
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR
PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, ANY PROVINCE OF CANADA,
AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR NEW ZEALAND OR ANY OTHER
JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE
UNLAWFUL.
Terms used in this announcement have been defined in Appendix III or in the
text below
eve Sleep plc
("eve", the "Company" or the "Group")
Proposed Placing of 120,317,323 Ordinary Shares at 10 pence per new Ordinary
Share to
raise approximately GBP12.0 million (before expenses)
Approval of a waiver of Rule 9 of the Takeover Code
and
GBP0.9 million media for equity arrangement
Introduction
eve Sleep plc (AIM: EVE), a sleep brand focussed on UK&I and France, today
announces a conditional placing of 120,317,323 new ordinary shares of 0.1
pence each ("Ordinary Shares") in the share capital of the Company (the
"Placing Shares") at a price of 10 pence per Placing Share (the "Placing
Price") to raise approximately GBP12.0 million before expenses (the "Placing")
from existing and new investors. In addition Channel Four, which provides
advertising services to the Company and is an existing Shareholder, has
agreed that GBP0.9 million of future advertising spend by the Company with
Channel Four will, when payable, be satisfied by the issue of new Ordinary
Shares at the Placing Price over a period of up to twenty four months from
Admission . The Placing is conditional upon the passing of the Resolutions
set out in the Notice of General Meeting included in the Circular to be
distributed to Shareholders on or around the date of this Announcement.
The Placing Shares represent approximately 86.1 per cent. of the existing
share capital of the Company. Following the Placing, the Company's enlarged
share capital will be 260,052,484 Ordinary Shares ("Enlarged Share
Capital"). The Placing Shares represent approximately 46.3 per cent. of the
Enlarged Share Capital. The Placing Price represents a discount of 3.6 per
cent. to the closing mid-market price of 10.375 pence per existing Ordinary
Share on 22 January 2019, being the latest practicable date prior to the
publication of this Announcement. The Placing Shares, when issued and fully
paid, will rank pari passu in all respects with the Existing Ordinary Shares
and will rank for all dividends or other distributions declared, made or
paid after the date of issue of the Placing Shares.
Woodford, which is a key investor in the Placing, is deemed to be acting in
concert with any investment funds discretionary managed by it (including
each of the Woodford Funds). As such Woodford is deemed to be interested in
the aggregate shares in the Company held by the Woodford Funds for the
purposes of the Takeover Code. Woodford (and any person acting in concert
with it) is currently a beneficial holder of approximately 29.90 per cent.
of the Company's current issued share capital. Woodford, in its capacity as
discretionary investment manager, acting on behalf of certain of its
investment fund clients, has agreed to subscribe for 80,000,000 Placing
Shares, being an amount that would increase the percentage holding of the
Company of Woodford (and those persons acting in concert with it)
immediately following completion of the Placing to 46.83 per cent. of the
Company's Enlarged Share Capital. The Panel has agreed to a waiver of the
obligations under Rule 9 of the Takeover Code (commonly referred to as a
"Whitewash"), subject to the Whitewash Resolution being approved on a poll
at the General Meeting by Independent Shareholders who hold, in aggregate, a
simple majority of the votes cast on the Independent Shares. Without such
waiver, Woodford (and any persons acting in concert with it) would be
obliged to make a general offer to Shareholders under Rule 9 of the Takeover
Code. The Placing is conditional on the Whitewash Resolution being passed by
the relevant majority of Independent Shareholders.
The VCT Placing Shares will be allotted and unconditionally issued before
the other Placing Shares (the latter being allotted and issued conditionally
on Admission) to allow the VCT Placee to benefit from any potential tax
advantages that may be applicable pursuant to the rules of the VCT Scheme.
The VCT Placee has obtained its own independent advice in this regard and
the Company has obtained no assurance from HMRC or any other person that any
VCT relief may be, is or will continue to be available to the VCT Placee or
any other person and the Company disclaims any and all liability in this
regard.
eve will shortly send a circular to Shareholders in connection with the
Placing ("Circular"). The Circular will contain a Notice of a General
Meeting, to be held at 10 a.m. on 11 February 2019, at the offices of Peel
Hunt LLP, Moor House, 120 London Wall, EC2Y 5ET, to approve certain
Resolutions necessary to implement the proposed Placing.
Background to and reasons for the Placing
On 15 November 2018, the Company announced the results of its business
review and a trading update, as well as stating its intention to raise new
equity. The Company provided an update in respect of the planned fundraising
on 6 December 2018.
The net proceeds of the Placing (approximately GBP11.7 million) and the
proposed Channel Four future advertising spend of GBP0.9 million (as described
in the paragraph entitled Future issues of Ordinary Shares for media spend)
will, in conjunction with existing cash resources (of approximately GBP6
million as at 31 December 2018[1]), be utilised by the Company to implement
its updated strategy as described in more detail below as well as for
general working capital purposes.
Updated strategy
The purpose of the Placing is to enable the Company to implement its updated
strategy as announced on 15 November 2018.
From 10 September 2018, following the appointment of James Sturrock as Chief
Executive Officer, the Board carried out a detailed review of the Company's
business. The Company's updated strategy, which has been formulated in light
of this review, is to refocus on the core sleep markets of the UK&I and
France, which collectively are estimated to be worth approximately GBP6
billion per annum[2].
The rationale for this re-focus is twofold. First, the UK&I and France are
among the biggest sleep markets in Europe.[3] Second, despite the Company
achieving growth across the rest of Europe in the first half of the year,
the negative profit contribution from the Company trading in this region was
considered to be too great to justify continued investment.
Within the core markets of UK&I and France, the Board's revised strategy is
to transform eve from being a single product focused business to a repeat
purchase, multi-product sleep specialist, building on the Company's growing
share of the mattress market. The Board believes that this updated strategy,
together with the funds raised in the Placing, will help drive continued
revenue growth and increase conversion. It is also expected that eve's
updated, more targeted marketing strategy will help lead to significant
improvements in unit economics. Such results are expected to be facilitated
by the estimated c.40 per cent. increase in online market penetration of the
UK bedroom furniture market between 2018 and 2023.[4]
Accordingly, the Company's updated strategy will focus on three core pillars
with the intention that the Company will further grow its share of the GBP6
billion bedroom market in UK&I and France resulting in revenue growth for
the Company. The three core pillars are aimed at creating a clearer position
for the Company in the wider sleep market with a wider bedroom product range
and an increased ability for cross-selling, by investing in technology and
digital teams to improve conversion and the Company's repeat purchase
metrics, and by continued investment in a more effective return on marketing
spend. The three core pillars of the Company's strategy are:
· differentiated brand positioning - broadening the Company's current
position to become a trusted destination for a wider range of bedroom
products;
· expanded product range - focussing on carefully curated, design-led
ranges that will increase cross-selling and repeat purchases, whilst
continuing to deliver excellent product quality in the Company's mattress
range; and
· lower friction customer experience - building consumer trust in the
Company's products and services with a view to improving the conversion
rate.
The three pillars are described in more detail below.
The Company, with an estimated compound quarterly revenue growth rate of
c.17 per cent. between Q1 2016 and Q3 2018, aims to achieve further growth.
The Directors believe this revised strategy will drive improved customer
(MORE TO FOLLOW) Dow Jones Newswires
January 23, 2019 02:02 ET (07:02 GMT)
DJ Eve Sleep plc: Proposed Placing and Approval of a -2-
life time value and, as such, offer the potential to deliver medium-term
profitability of approximately high single digit EBITDA margins.[5]
The Directors believe that an increase in current market share could have a
significant impact on revenues and cost ratios. By way of illustration,
overheads and marketing as a percentage of revenue have the potential to
decrease to under 30 per cent. based on a mattress market share of c.5 per
cent. in the targeted markets.[6]
Differentiated brand positioning
In the UK the Company's marketing strategy has been effective in driving
growth in its brand awareness and, at the same time, improving its marketing
efficiency, with unprompted brand awareness growing from 1.4 per cent. in
December 2016 to 11.2 per cent. in August 2018 and, across UK&I, marketing
as a percentage of revenue falling from approximately 60 per cent. in Q1
2017 to approximately 36 per cent. in October 2018 and remaining at below 50
per cent. for the rest of the year.[7]
eve is currently the fifth most well-known mattress brand in the UK[8] and
eighth most well-known mattress brand in France[9] and is the most searched
for mattress in a box brand in the UK and second most searched for mattress
in a box brand in France[10].
The Company plans to continue to build brand awareness in its core markets
through:
· optimised marketing, focusing on improving efficiency through different
media channel weightings throughout next year; and
· enhanced targeting, customer engagement and increased awareness through:
· efficient investment in paid media;
· growing its owned media to improve customer content; and
· further building credibility and awareness through its commercial
retail partnership channels and through brand partnership endorsements.
Expanded product range
Product range expansion has driven growth in non-mattress revenue and also
repeat ordering with online sales of non-mattress products in UK&I growing
from approximately GBP0.3 million in Q1 2017 to approximately GBP1.1 million in
Q3 2018.[11] In addition, online repeat orders in the UK have grown from
approximately 8 per cent. in Q1 2016 to approximately 12 per cent. in Q3
2018.[12]
As such, the Company plans to expand more aggressively its depth and range
of products. The Company's new mattress range is performing well and the
Company has recently launched its premium mattress. The Company also plans
to offer a more extensive, but carefully curated, bedframe product offering,
an extended textiles range, lighting, furniture and accessories and plans to
launch new products in Q1 2019, including a full baby bed and sleep range in
collaboration with the design collective Nous Vous. The Company plans to
more than double the range of products from around 22 in Q3 2018 to around
60 products by the end of 2019, with further range expansions planned beyond
that period.
The Board believes that this will help lead to increased cross-selling
opportunities and repeat purchases, thereby growing sales and reducing
customer acquisition costs and, as a result, significantly improving the
Company's unit economics.
Lower friction customer experience
The Company has recently made improvements to its customer experience which
has shown a noticeable improvement in UK conversion rates. The Directors
believe that further increasing conversion rates will have a positive effect
on marketing effectiveness and will improve the key metric of marketing as a
percentage of revenue.
The Company's plans to enhance the customer experience include:
· improving the omni-channel presence, increasing brand awareness and
credibility at the same time as allowing customers to experience the
product before making purchases;
· focussing on the online purchasing experience including improving the
search, discovery and checkout processes on the website; and
· enhancing delivery options for customers and improving post-sales
customer relationship marketing.
The Directors believe that the above enhancements to customer experience
will be a key component in driving long-term, sustainable growth.
The Company is currently reviewing its retail and partnership strategy and,
as part of that, Dreams has engaged with the Company to re-negotiate certain
commercial terms in connection with their partnership with eve. The
Company's objective is that these negotiations are resolved satisfactorily,
however discussions are ongoing.
Use of proceeds
The net proceeds of the Placing (estimated to be GBP11.7 million) and the
proposed Channel Four future advertising spend of GBP0.9 million (as described
in the section entitled Future issues of Ordinary Shares for media spend
below) will be used to support the strategy outlined in the section entitled
"Background to and reasons for the Placing" above. Within those preceding
amounts, the Directors envisage that the principal individual areas of
expenditure, and the approximate breakdown between them, will be as follows:
· to reduce cost per customer acquisition through building a
differentiated and trusted brand (which, including the proposed Channel
Four future advertising spend of GBP0.9 million, is currently expected to be
approximately between GBP4 and 4.5 million);
· to enhance the customer experience to drive conversion rate improvement
(currently expected to be approximately between GBP1.5 and 2 million);
· to broaden the product portfolio by deploying resources and working
capital, to build a defensible position in the sleep market and drive
increased cross-selling and repeat purchasing (currently expected to be
approximately between GBP2.5 and 3 million);
· to invest in internal systems to support the Company's growth, including
investing in stock management, website infrastructure, logistics and
warehouse technology (currently expected to be approximately between GBP2
and 2.5 million); and
· to augment existing net cash resources and to provide general working
capital for the business.
In applying the above amounts, the Directors will have regard to any
material changing trading patterns or conditions in the markets in which the
Group operates and its requirements and the precise actual allocation
between the above elements may be subject to appropriate adjustment up or
down.
The Company previously announced that it required GBP15 million of new equity
(assumed to be GBP14.5 million net of expenses) to fund the Company's updated
strategy. This GBP14.5 million would have provided the Company with cash
headroom on both its base case and downside case business plans looking out
to December 2020. The aggregate net proceeds of the Placing, in conjunction
with the Channel Four media for equity arrangement, amount to c.GBP12.6
million. This amount also provides the Company with headroom on its base
case business plan, and headroom on its downside case business plan when
taking into account certain mitigating actions that would, in those
circumstances, be required to be taken by the Company in Q4 2020.
Current trading and prospects[13]
In the unaudited 12 month period to 31 December 2018, the Group's revenue
was ahead of analyst expectations at c.GBP34.5 million, helped by a
successfully traded Black Friday period and early signs of conversion
improvements supported by an enhanced user experience in the fourth quarter.
UK&I revenue increased to c.GBP22.6 million and France revenue increased to
c.GBP6.8 million in the period, representing an increase of c.40 per cent. and
c.22 per cent. respectively when compared to their respective annual
revenues in 2017.
In the unaudited 10 month period to 31 October 2018, contribution after
marketing before overheads was a loss of c.GBP1.1 million in the UK&I and a
loss of c.GBP3.0 million in France over the same period. Gross margins over
this period were 53 per cent. in UK&I and 52 per cent. in France[14] whilst
return rates in the UK&I have been broadly stable at about 10 per cent. and
in France have improved from about 10 per cent. to 6.5 per cent.[15]
As part of the business review set out above, and as outlined in the
announcement made on 15 November 2018, the Company has re-evaluated its 2019
financial year priorities and expectations based on the updated strategy. In
the current year, the Company is focused on building capabilities in
customer experience and product range and optimising marketing investment.
Following a successful start to the winter sales period in the UK, unaudited
trading results for the first week of 2019 were in line with the Company's
revised expectations.
New Option Grants
Conditionally upon, and following, the implementation of the Placing, the
Company intends that all options over Ordinary Shares granted under the
Share Option Plan at the time of the Company's initial public offering in
May 2017 will be cancelled and new options over Ordinary Shares will be
granted to certain members of management and employees of the Company under
the Share Option Plan with an exercise price equal to the nominal value of
the Ordinary Shares and with a vesting period of three years.
The cancellation of options and the granting of new options, including the
number of individual grants, will be determined by the remuneration
committee of the Board conditional on and following the completion of the
(MORE TO FOLLOW) Dow Jones Newswires
January 23, 2019 02:02 ET (07:02 GMT)
DJ Eve Sleep plc: Proposed Placing and Approval of a -3-
Placing. Such grants shall be made in accordance with, and subject to, the
Share Option Plan, but it is expected that options over up to 10 per cent.
of the Enlarged Share Capital following the Placing will be granted (the New
Option Grants). It is currently intended that options over up to 16.9 per
cent. of the New Option Grants will be granted to James Sturrock, Chief
Executive Officer, and options over up to 8.5 per cent. of the New Option
Grants will be granted to Abid Ismail, Chief Financial Officer. The precise
timing of the cancellation and granting of options will be dependent on the
determination of the Company's remuneration committee following completion
of the Placing and completion of the necessary contractual documentation
related to the cancellation and grants. A further announcement will be made
in due course.
Future issues of Ordinary Shares for media spend
Channel Four, which provides advertising services to the Company and is an
existing Shareholder, has agreed with the Company that on a periodic basis
within a twenty four month period following the Placing, sums payable by the
Company in respect of media spend by it with Channel Four will be reinvested
in the Company through the issue of new Ordinary Shares at a price equal to
the Placing Price up to an aggregate amount of GBP0.9 million.
Details of the Placing
The Company has entered into the Placing Agreement with Peel Hunt on
customary terms and conditions pursuant to which, subject to the conditions
set out in the Placing Agreement, Peel Hunt has agreed to use its reasonable
endeavours (as agent for the Company) to procure placees for 120,317,323 new
Ordinary Shares at the Placing Price. The Company has received firm
commitments from Placees for all of the Placing Shares in the Placing which
will raise approximately GBP12.0 million (before expenses).
The obligations of Peel Hunt under the Placing Agreement are conditional
upon, inter alia, the Resolutions being duly passed at the General Meeting
and Admission becoming effective on or before 8.00 a.m. on 12 February 2019
(or such later time and date as the Company and Peel Hunt shall agree, not
being later than 8.30 a.m. on 26 February 2019).
The Placing Agreement contains provisions entitling Peel Hunt to terminate
the Placing Agreement at any time prior to Admission in certain
circumstances. If this right is exercised or if the conditionality in the
Placing Agreement is not satisfied, the Placing will not proceed.
The Company has agreed to pay Peel Hunt a placing commission together with
reimbursement of certain costs and expenses incurred in connection with the
Placing.
The VCT Placing Shares will be allotted and unconditionally issued before
the other Placing Shares (the latter being allotted and issued conditionally
on Admission) to allow the VCT Placee to benefit from any tax advantages
that may be available pursuant to the rules of the VCT Scheme. For more
detail see the paragraph entitled VCT investors below.
Application will be made for the Placing Shares to be admitted to trading on
AIM. Subject to the Resolutions being passed at the General Meeting, it is
expected that Admission of the Placing Shares will become effective and that
dealings will commence in the Placing Shares at 8.00 a.m. on 12 February
2019.
Related party transactions
Following Admission, Woodford, being a substantial shareholder in the
Company as defined in the AIM Rules, will have a shareholding of 121,774,848
Ordinary Shares representing 46.83 per cent. of the Enlarged Share Capital.
The participation of Woodford (or its associates) in the Placing will be a
related party transaction for the purpose of Rule 13 of the AIM Rules (the
Woodford Related Party Transaction). The Directors, having consulted with
Peel Hunt as the Company's nominated adviser, consider that the terms of the
Woodford Related Party Transaction are fair and reasonable insofar as the
Shareholders are concerned.
Following Admission, the VCT Placee, being a substantial shareholder in the
Company as defined in the AIM Rules, will have a shareholding of 38,461,295
Ordinary Shares representing 14.8 per cent. of the Enlarged Share Capital.
The participation of the VCT Placee (or its associates) in the Placing will
be a related party transaction for the purpose of Rule 13 of the AIM Rules
(the VCT Placee Related Party Transaction). The Directors, having consulted
with Peel Hunt as the Company's nominated adviser, consider that the terms
of the VCT Placee Related Party Transaction are fair and reasonable insofar
as the Shareholders are concerned.
Paul Pindar and James Sturrock, being directors of the Company and therefore
related parties to the Company as defined in the AIM Rules, have
conditionally agreed to subscribe for an aggregate of 10,200,000 Placing
Shares in the Placing as detailed below:
Name Role Number of Number of Percentage of
Placing Ordinary the Enlarged
Shares Shares Share Capital
held
following
Admission
Paul Non-executive 10,000,000 16,527,126 6.4%
Pindar[16 Chairman
]
James CEO 200,000 252,750 0.1%
Sturrock
The participation of the Directors (or their associates) in the Placing will
be a related party transaction for the purpose of Rule 13 of the AIM Rules
(the Director Related Party Transaction). The Independent Directors, having
consulted with Peel Hunt as the Company's nominated adviser, consider that
the terms of the Director Related Party Transaction are fair and reasonable
insofar as the Shareholders are concerned.
The Takeover Code
The Placing gives rise to certain considerations under the Takeover Code and
Shareholders are entitled to the protections afforded under the Takeover
Code. The Takeover Code is issued and administered by the Panel. The
Takeover Code applies to, inter alia, a company which has its registered
office in the United Kingdom and is admitted to trading on AIM.
Under Rule 9 of the Takeover Code, where any person acquires, whether by a
series of transactions over a period of time or not, an interest in shares
which (taken together with shares in which persons acting in concert with
him are interested) carry 30 per cent. or more of the voting rights of a
company which is subject to the Takeover Code, that person is normally
required to make a general offer to all the holders of any class of equity
share capital and to the holders of any other class of transferable
securities carrying voting rights in that company to acquire the balance of
their interests in the company.
Rule 9 of the Takeover Code also provides, among other things, where any
person who, together with persons acting in concert with him, is interested
in shares which in aggregate carry not less than 30 per cent. but does not
hold shares carrying more than 50 per cent. of the voting rights of a
company which is subject to the Takeover Code, and such person, or any
person acting in concert with him, acquires an additional interest in shares
which increases the percentage of shares carrying voting rights in which he
is interested, then that person is normally required to make a general offer
to all the holders of any class of equity share capital and to the holders
of any other class of transferable securities carrying voting rights in that
company to acquire the balance of their interests in the company.
An offer under Rule 9 of the Takeover Code must be in cash (or be
accompanied by a cash alternative) at not less than the highest price paid
by the person required to make the offer or any person acting in concert
with him for any interest in shares in the company during the 12 month
period prior to the announcement of the offer.
For the purposes of the Takeover Code, persons acting in concert comprise
persons who, pursuant to an agreement or understanding (whether formal or
informal), cooperate to obtain or consolidate control of a company or to
frustrate the successful outcome of an offer for a company. A person and
each of its affiliated persons will be deemed to be acting in concert all
with each other. Certain categories of person are presumed to be acting in
concert under the Takeover Code unless the contrary is established.
Immediately following Admission, Woodford (including the Woodford Funds and
any other party deemed acting in concert with it) will have acquired
interests in the Ordinary Shares carrying in aggregate 46.83 per cent. of
the voting rights of the Company which, without a waiver of the obligations
under Rule 9 of the Takeover Code, would oblige Woodford (and any party
deemed to be acting in concert with it) to make a general offer to
Shareholders under Rule 9 of the Takeover Code.
Woodford is an investment fund manager. In pursuance of their client's
investment objectives, Woodford actively invests in companies as agent for
its clients. Accordingly, Woodford will subscribe for its Placing Shares
using its clients' available cash resources.
Rule 9 Waiver
The Company has applied to the Panel for a waiver of Rule 9 of the Takeover
Code in order to permit the Placing to proceed without triggering an
(MORE TO FOLLOW) Dow Jones Newswires
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DJ Eve Sleep plc: Proposed Placing and Approval of a -4-
obligation on the part of Woodford to make a general offer to all of the
other Shareholders.
Under Note 1 on the Notes on the Dispensations from Rule 9 of the Takeover
Code, the Panel will normally waive the requirement for a general offer to
Shareholders under Rule 9 of the Takeover Code if, among other things, there
has been a vote of independent shareholders. Accordingly, the Panel has
agreed to grant a waiver of Rule 9 of the Takeover Code subject to the
Independent Shareholders approving the Whitewash Resolution on a poll at the
General Meeting. To be passed, the Whitewash Resolution will require a
simple majority of the votes cast on a poll by the Independent Shareholders.
Independent Shareholders should note that, following completion of the
Placing, Woodford (and those parties deemed to be acting in concert with it)
will not be entitled to increase its interest in the voting rights of the
Company without incurring a further obligation under Rule 9 of the Takeover
Code to make a general offer (unless a dispensation from this requirement
has been obtained from the Panel in advance).
If the Whitewash Resolution is passed by the Independent Shareholders at the
General Meeting, Woodford will not be restricted from making an offer for
the Company.
Independent Shareholders should also note that, following completion of the
Placing, Woodford (by the fact that it is deemed interested, for Takeover
Code purposes, in the aggregate shares held by its discretionary managed
investment fund clients (including the Woodford Funds and any other party
deemed acting in concert with it) will control, in aggregate, approximately
46.83 per cent. of the voting rights of the Company and that this will
increase the percentage of the Ordinary Shares that are not in public hands
(as defined in the AIM Rules). This may in turn have the effect of reducing
the liquidity of trading in the Ordinary Shares on AIM. Woodford's stake in
the voting rights of the Company will also mean that Woodford will be able,
if it so wishes, to block any special resolutions proposed at future general
meetings of the Company and requisition a general meeting to present for
vote resolutions proposed by it. Although it is not the current intention of
Woodford to seek a resolution at a general meeting of the Company to de-list
the Ordinary Shares from AIM, Woodford could, if it so wishes in the future,
propose such a resolution.
Independent advice provided to the Board
The Takeover Code requires the Board to obtain competent independent advice
regarding the merits of the transaction which is the subject of the
Whitewash Resolution, the controlling position which it will create, and the
effect which it will have on the Shareholders generally.
Accordingly, Peel Hunt, as the Company's nominated adviser, has provided
formal advice to the Board regarding the Placing and the Whitewash. Peel
Hunt confirms that it is independent of Woodford.
VCT investors
No assurance has been obtained from HMRC or any other person that a
subscription for Ordinary Shares in the Company is a "qualifying holding"
for the purpose of investment by VCTs.
The status of the Ordinary Shares as a qualifying holding for VCT purposes
will be dependent on a number of factors, including that the Ordinary Shares
are "eligible shares" and a "qualifying holding" for VCT purposes.
None of the Company nor any of the Directors nor any of the Company's
officers, employees, agents or advisers gives any warranty, representation
or undertaking that any VCT investment in the Company is a qualifying
holding (or, in the event that it is deemed to be a qualifying holding as at
the Last Practicable Date, that it will remain so). The Company does not
give any guarantee, undertaking or other assurance that it conducts or will
conduct its business in a way which ensures that the Company will meet the
requirements of a VCT Scheme. The Company has obtained no assurance from
HMRC or any other person that any VCT relief may be, is or will continue to
be available to the VCT Placee or any other person and any and all liability
in this regard is disclaimed in respect of the Directors, the Company and
its officers, employees, agents and advisers.
VCTs considering making a qualifying VCT investment are required to seek
their own professional advice in order that they may fully understand how
the relief legislation may apply in their individual circumstances.
Enquiries:
eve Sleep plc via M7 Communications
Ltd
James Sturrock, Chief Executive
Officer
Abid Ismail, Chief Financial Officer
Peel Hunt LLP (NOMAD and broker) +44 (0) 20 7418 8900
Dan Webster
George Sellar
Guy Pengelley
M7 Communications Ltd +44 (0) 7903 089 543
Mark Reed
The person arranging release of this Announcement on behalf of the Company
is Abid Ismail, Chief Financial Officer.
Important information
This Announcement is for information purposes only and does not itself
constitute an offer or invitation to underwrite, subscribe for or otherwise
acquire or dispose of any securities in the Company and does not constitute
investment advice. Each Placee should consult with its own advisers as to
legal, tax, business and related aspects in relation to any acquisition of
Placing Shares. The price of the shares in the Company and the income from
them (if any) may go down as well as up and investors may not get back the
full amount invested on disposal of shares.
Neither this Announcement nor any copy of it may be taken or transmitted,
published or distributed, directly or indirectly, into the United States of
America, any province of Canada, Australia, Japan, the Republic of South
Africa or New Zealand or to any persons in any of those jurisdictions or any
other jurisdiction where to do so would constitute a violation of the
relevant securities laws of such jurisdiction. Any failure to comply with
this restriction may constitute a violation of United States, Australian,
Canadian, Japanese or South African securities laws. The distribution of
this Announcement in other jurisdictions may be restricted by law and
persons into whose possession this Announcement comes should inform
themselves about, and observe any such restrictions.
This Announcement does not constitute, or form part of, any offer or
invitation to sell or issue, or any solicitation of any offer to purchase or
subscribe for any shares or other securities in the United States (including
its territories and possessions, any state of the United States and the
District of Colombia (the United States or US)), any province of Canada,
Australia, Japan, the Republic of South Africa or New Zealand or in any
jurisdiction to whom or in which such offer or solicitation is unlawful. The
Placing and the distribution of this Announcement and other information in
connection with the Placing in certain jurisdictions may be restricted by
law and persons into whose possession this Announcement, any document or
other information referred to herein, comes should inform themselves about
and observe any such restriction. Any failure to comply with these
restrictions may constitute a violation of the securities laws of any such
jurisdiction. Neither this Announcement nor any part of it nor the fact of
its distribution shall form the basis of or be relied on in connection with
or act as an inducement to enter into any contract or commitment whatsoever.
In particular, the securities of the Company (including the Placing Shares)
have not been and will not be registered under the US Securities Act of
1933, as amended (the Securities Act), or under the securities laws or with
any securities regulatory authority of any state or other jurisdiction of
the United States, and accordingly the Placing Shares may not be offered,
sold, pledged or transferred, directly or indirectly, in, into or within the
United States except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and the
securities laws of any relevant state or jurisdiction of the United States.
Any securities referred to herein may be offered and sold only in "offshore
transactions" as defined in and pursuant to Regulation S under the US
Securities Act or otherwise in private placement transactions that are
exempt from the registration requirements under the US Securities Act. There
is no intention to register any portion of the offering in the United States
or to conduct a public offering of securities in the United States.
The Placing Shares have not been approved or disapproved by the US
Securities and Exchange Commission, any state securities commission or other
regulatory authority in the United States, nor have any of the foregoing
authorities passed upon or endorsed the merits of the Placing or the
accuracy or adequacy of this Announcement. Any representation to the
contrary is a criminal offence in the United States.
Peel Hunt LLP (Peel Hunt) is authorised and regulated in the United Kingdom
by the Financial Conduct Authority (FCA) and is acting as nominated adviser
and broker to the Company in respect of the Placing. Peel Hunt is acting for
the Company and for no-one else in connection with the Placing, and will not
be treating any other person as its client, in relation thereto and will not
be responsible for providing the regulatory protections afforded to its
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DJ Eve Sleep plc: Proposed Placing and Approval of a -5-
customers nor for providing advice in connection with the Placing or any
other matters referred to herein and apart from the responsibilities and
liabilities (if any) imposed on Peel Hunt by Financial Services and Markets
Act 2000 (as amended) (FSMA), any liability therefor is expressly
disclaimed. Any other person in receipt of this Announcement should seek
their own independent legal, investment and tax advice as they see fit.
Forward-looking statements
Certain information contained in this Announcement constitutes
forward-looking information. This information relates to future events or
occurrences or the Company's future performance. All information other than
information of historical fact is forward-looking information. The use of
any of the words "anticipate", "plan", "continue", "estimate", "expect",
"may", "will", "project", "should", "believe", "predict" and "potential" and
similar expressions are intended to identify forward-looking information.
This information involves known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ materially from
those anticipated in such forward-looking information. No assurance can be
given that this information will prove to be correct and such
forward-looking information included in this Announcement should not be
relied upon. Forward-looking information speaks only as of the date of this
Announcement. The forward-looking information included in this Announcement
is expressly qualified by this cautionary statement and is made as of the
date of this Announcement. Neither the Company, nor Peel Hunt undertake any
obligation to publicly update or revise any forward-looking information
except as required by applicable securities laws.
Appendix I - Risk Factors
An investment in new Ordinary Shares is subject to a number of risks. Before
making an investment decision with respect to new Ordinary Shares,
prospective investors should carefully consider the risks associated with an
investment in the Company, the Company's business and the industry in which
the Company operates, in addition to all of the other information set out in
this Announcement and the Circular and, in particular, those risks described
below.
If any of the circumstances identified in the risk factors were to
materialise, the Company's business, financial condition, results of
operations and future prospects could be adversely affected and investors
may lose all or part of their investment. Certain risks of which the
Directors are aware at the date of this Announcement and the Circular and
which they consider material to prospective investors are set out in the
risk factors below. Additional risk factors which the Directors consider may
be relevant to the Company's business can be found in the Company's
Admission Document dated 15 May 2017. Copies of the Admission Document can
be obtained on the Company's website at
https://investor.evemattress.co.uk/aim-rule [1]. However, further risks and
uncertainties relating to the Company which are not currently known to the
Directors, or that the Directors do not currently deem material, may also
have an adverse effect on the Company's business, financial condition,
results of operations and future prospects. If this occurs, the price of the
Ordinary Shares may decline and investors may lose all or part of their
investment.
An investment in the Company may not be suitable for all potential
investors. Potential investors are therefore strongly recommended to consult
an independent financial adviser, authorised under FSMA, who specialises in
advising upon the acquisition of shares and other securities before making a
decision to invest.
Risks relating to the Company's business and its industry
The Company may not be successful in implementing its updated strategy
There is no guarantee that the Company will be successful in implementing
its updated strategy to focus on UK&I and France. The Company's future
business and results of operation will depend on the successful
implementation of this strategy and, in particular, upon the impact of the
measures which the Company proposes to take to increase its brand awareness,
expand its product range and improve the experience of its customers.
The Company's ability to generate sales growth is dependent upon a number of
factors, including its ability to: increase penetration through effective
marketing strategies, stronger product recognition and greater brand
awareness; successfully design, launch and develop future products to extend
its product range; provide a satisfactory customer experience; and secure
and maintain relationships with key partners in its core markets.
Implementation of the Company's strategy may place significant demands on
its management, administrative, operational, IT, financial, personnel and
other resources. The Company will need to continue to maintain, develop and
integrate its management, administrative, operational, financial and
accounting systems, internal controls and supervisory procedures. As the
Company's operations continue to expand, it may also be required to incur
further expenditure and effort to invest in its IT systems and
infrastructure and to recruit additional personnel. The Company may
experience constraints in its ability to expand, such as being required to
comply with additional legal or regulatory restrictions in its existing and
target markets. There is no assurance that the Company will be successful in
implementing its updated strategy, a lack of market acceptance of such
efforts or the Company's inability to generate satisfactory revenue to
offset its expansion costs could have a material adverse effect on its
business, financial condition, results of operations and future prospects.
The Company operates in the highly competitive mattress and wider sleep
market and may not be able to grow, or maintain, its existing market share
Participants in the sleep products market compete on price, quality, brand
recognition, product availability and product performance. The highly
competitive nature of this market means that the Company is continually
subject to the risk of (a) loss of, or failure to increase, market share,
(b) reductions in margins and (c) the inability to secure new customers.
The Company faces competition from other parties including those parties
with greater capacity and scale than the Company and those who have a more
established presence and/or reputation in the sleep market, as well as from
new market entrants. The Company's business model relies on marketing and
having sufficient resources to market its products. Competitors who have
greater resources than the Company may be more successful in marketing their
products, which may impact on the Company's ability to create, maintain or
grow a market share.
A number of competitors offer sleep products that compete directly with the
Company's products. The Company may not achieve the goals of its updated
strategy and as a result may fail to sufficiently differentiate itself from
both traditional and mattress in a box competitors. Competition from
established or new market entrants (particularly those who have an online
direct-to consumer model for mattresses) may impact the Company's sales of
its products and damage the Company's reputation and brand awareness, any of
which may have a material adverse effect on the Company's business,
financial condition, results of operations and future prospects and inhibit
the successful implementation of its updated strategy.
The Company is reliant on the success of its brand and may be subject to
reputational harm that could damage its brand
The Company's success relies significantly on the strength of its brand.
There can be no assurance that the Company will be able to continue to
develop its brand awareness in order to increase its market share, nor
maintain current levels of brand awareness.
The Company could be damaged by reputational harm if it fails to address
actual or perceived issues with its product (including product quality,
value for money, comfort, safety, aesthetics and environmental concerns),
its website, the effectiveness of its logistics operations and customer
service. In addition, the Company is exposed to risks which could undermine
the strength of the Company's brand and its reputation and goodwill, such as
negative news coverage, customer ratings and reviews (including adverse
social media commentary), poor quality control, operational failures and
customer service.
The Company may be subject to litigation, disputes, claims and complaints,
including adversarial actions, by customers, employees, suppliers,
competitors, insurers and others in the ordinary course of business.
Significant claims or a substantial number of small claims may be expensive
to defend, may divert the time and focus of management away from the
Company's operations and may result in the Company having to pay monetary
judgments, any of which could have a material adverse effect on the
Company's results of operations and financial condition. In addition,
adverse publicity or a substantial judgment against the Company related to
litigation could negatively impact its reputation, even if the Company is
not found liable. An inability to manage risks relating to its brand for any
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January 23, 2019 02:02 ET (07:02 GMT)
DJ Eve Sleep plc: Proposed Placing and Approval of a -6-
reason could have a material adverse effect on the Company's business,
financial condition, results of operations and future prospects.
Advertising expenditure may not generate the anticipated sales volume and
brand awareness improvements
A significant component of the Company's marketing strategy involves the use
of direct marketing to generate brand awareness and sales. Further growth
and profitability depends upon the Company increasing brand awareness in
order to generate the required level of interest in the Company's product
range whilst balancing the cost of running advertising campaigns. The
Company intends to continue investing in marketing and partnership channels
to grow its business. Successful growth may require the establishment of
additional sales and marketing channels. In addition, the return on these
investments may be lower or develop more slowly than expected and there can
be no guarantee that the Company will be able to deliver anticipated sales
or market share, which in turn could have a material adverse effect on the
Company's business, financial condition, results of operations and future
prospects.
Investment in infrastructure and new product development may not result in
improved website conversion rates or generate anticipated sales volume
A significant component of the Company's technology and new product
development strategy involves investment in customer-centric platform
optimisation, operational technology infrastructure and an expanded product
range in order to facilitate improved conversion rates on website traffic.
Further growth and profitability rely on improved conversion rates achieved
via repeat purchase, purchase from a broadened customer base or purchases
achieved as a result of platform optimisation. Whilst the expectation is
that resources invested will result in improved website conversion, the
outcome may not result in increased sales or generate the anticipated sales
volumes. There is a risk that sales attributable to this planned investment
are lower or develop more slowly than expected and there can be no guarantee
that the Company will be able to increase its sales and market share, which
in turn could have a material adverse effect on the Company's business,
financial condition, results of operations and future prospects
The Company's collaboration with partners in core markets may not achieve
expected results and the Company's reputation may be adversely impacted
The Company currently has partnerships with Debenhams, Fenwick, Dreams and
Next in the UK and But in France as well as online partnerships with Amazon,
ShopDirect and Wayfair. There is no guarantee that the Company will be able
to maintain a cost-effective relationship with its partners or that the
partnerships will deliver the anticipated sales growth. The Company is
currently reviewing its retail and partnership strategy and, as part of
that, Dreams has engaged with the Company to re-negotiate certain commercial
terms in connection with their partnership with eve. The Company's objective
is that these negotiations are resolved satisfactorily, however discussions
are ongoing. The Company's partners could terminate their relationship with
the Company and could also enter into agreements with the Company's
competitors, which may have a material adverse effect on the Company's
reputation, business, financial condition, results of operations and future
prospects.
The Company's market share and business position may be adversely affected
by economic, political and market factors beyond the Company's control
The markets in which the Company operates are directly affected by many
national and international factors that are beyond the Company's control.
Any of the following factors, among others, may cause a substantial decline
in the markets in which the Company offers its services and an impact on
future demand for the Company's products: economic, stock market and
political conditions, including uncertainty in the UK and European economy
in part related to the uncertainty around the terms on which the United
Kingdom will leave the European Union; the level and volatility of the UK
consumer goods market; the cost of materials; concerns about inflation;
consumer confidence; unemployment levels; decreased demand; a reduction in
the disposable income of customers; consolidation in the sleep sector; order
volumes, delays, cancellations and return rates; inability for the Company
and suppliers to accurately forecast future product demand trends; and
legislative and regulatory changes. In recent years, markets have been
affected by the global financial crisis. Worsening or volatile economic
conditions could impact consumer confidence and the demand for the Company's
services.
Uncertain economic prospects or a decline in the financial and/or consumer
goods market in any of the countries where the Company operates could:
(a) adversely affect the performance of the Company and its reputation;
(b) result in a deterioration of the Company's competitive position and a
reduction in the overall level of its business; and
(c) lead to a failure to win new business.
Accordingly, any of these factors could have a material adverse effect on
the Company's business, financial condition, results of operations and
future prospects.
The Company operates in a rapidly changing industry and may fail to adapt to
changes in the industry
The e-commerce and m-commerce industries are characterised by rapidly
changing technology, evolving laws, regulations, rules and industry and
other applicable standards and codes of conduct, new service and product
introductions and changing customer demands.
An inability of the Company to respond to technological advances on a
cost-effective and timely basis, may impede its ability to establish or
maintain a competitive advantage. There are constant developments in
internet searching, online marketing, communications, social networking and
other services to enhance the online experience of the consumer and the
devices on which that online experience is available. Significant investment
in infrastructure, research and development and other areas is required in
order to enhance the Company's platform technology. Technological advances
may require the Company to re-evaluate its business model and adopt
significant changes to its strategy and business plan. Failure to innovate
and adapt to changes in the online market may have a material adverse effect
on the Company's business, financial condition, results of operations and
future prospects.
The Company is heavily reliant upon its technology systems and, like other
ecommerce companies handling consumer data, is vulnerable to hacking and
other cyberattacks. The Company takes both preventative and detective
actions to identify such attacks, but the risk remains that data loss may
lead to increased business costs in the form of fines or compensations as
well as reduced anticipated sales. All of which may have a material adverse
effect on the Company's business, financial condition, results of operations
and future prospects.
The application or modification of existing laws or regulations, or adoption
of new laws and regulations (including those relating to the internet,
e-commerce, online operations and protection of consumers online) could
adversely affect the manner in which the Company currently conducts its
business. The growth and development of the market for online retail may
lead to more stringent customer protection laws which may impose additional
burdens on the Company and increase its business costs, all of which may
have a material adverse effect on the Company's business, financial
condition, results of operations and future prospects.
The Company is, or will be, subject to laws and regulation and supervision
by regulators in a number of countries. Regulators can typically conduct
industry-wide investigations into the business of firms supervised by that
regulator. Such investigations can follow adverse publicity in respect of
another participant in the same industry as the Company and might not
necessarily result from any action or omission by the Company. A regulator
may determine that the Company has failed to comply with applicable laws,
regulations, rules and industry and other applicable standards and codes of
conduct or that it has applied such laws, regulations, rules and industry
and other applicable standards and codes of conduct to its business model in
a manner with which a regulator disagrees. The impact of the Company being
found to be non-compliant in any such inquiry and/or investigation is
difficult to assess or quantify and would depend on which regulatory regime
was involved and the disciplinary/enforcement powers of the regulator
responsible for the supervision of that particular business. Such inquiries
or investigations could result in adverse publicity for, or negative
perceptions being created regarding, the Company and affect the Company's
relationships with regulators and its reputation with customers and
suppliers, as well as diverting management's attention. Such action could
also subject the Company to additional remediation costs to redress
non-compliance, which in turn could have a material adverse effect on the
Company's business, financial condition, results of operations and future
prospects.
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DJ Eve Sleep plc: Proposed Placing and Approval of a -7-
The Company relies on manufacturers and third-party delivery companies
The supply of product to customers in a timely manner is critical to the
success of the Company. There can be no assurance that manufacturers and
delivery companies will be able to meet the Company's requirements on a
timely or cost-effective basis.
The Company is reliant on third party manufacturers for the production of
all of its products. In order to manage its quality control standards, the
Company and the Company's warehouse partners perform spot checks on the
products that its manufacturers produce prior to the products leaving the
depot. However, there is an inherent risk that such procedures will not pick
up all manufacturing defects in every product which in turn could have a
material adverse effect on the Company's business, financial condition,
results of operations and future prospects.
In the event of a particularly high demand for the Company's products or an
issue with a manufacturer (whether due to a disagreement between the Company
and the manufacturer, a problem with the manufacturer's ability to supply
products or otherwise), the Company would need to engage one or more
alternative suppliers, which it may be unable to do on similar terms, if at
all. Further, the alternative supplier may be unable to satisfy the full
amount on the Company's demand on short notice, which in turn may impact on
the Company's ability to satisfy its orders from customers and may damage
the Company's reputation as well as its profitability.
Interruptions to or failures in the logistics platform or delivery services
may be due to events that are beyond the control of the Company, the
manufacturers and delivery companies (for example, natural disasters,
transportation disruptions or labour unrest). Sourcing alternative logistics
and delivery companies may not be possible or may result in delays and a
poor customer service experience. The Company's products are also at risk of
being damaged during transit. Such logistical delays or failures in the
delivery process may have a material adverse effect on the Company's
business, financial condition, results of operations and future prospects.
In addition, some of the Company's products are (and others may be)
manufactured in markets outside the United Kingdom. There are a variety of
risks generally associated with doing business in foreign markets, including
risks relating to labour practices, heightened anti-bribery and corruption
concerns, quality assurance concerns, environmental risks, risks of
transportation of product by sea and imposition of taxes. Any of these risks
could restrict the availability of product and/or increase the costs of the
Company's products and/or change consumers' perceptions about the quality of
its product and could have a material and adverse effect on the Company's
business, financial condition, results of operations and future prospects.
The Company is subject to the risk relating to the withdrawal of the UK from
membership of the EU
The UK held a referendum on its continued membership of the EU on 23 June
2016, the result of which was a majority vote for the UK to leave the EU.
The UK government formally served notice of the UK's intention to leave the
EU on 29 March 2017 in accordance with Article 50(2) of the Treaty on
European Union, marking the start of the process of the UK's withdrawal from
the EU. The political, economic, legal and social consequences of the UK's
exit from the EU and the ultimate outcome of the negotiations between the UK
and the European Commission are uncertain at the current time and may remain
uncertain for some time to come. Such potentially prolonged political and
economic uncertainty and the potential negative economic trends that may
follow could have a material adverse effect on the Company's business,
financial position and/or results of operations. Therefore, there can be no
certainty at present on the severity or complexity of any negative trends
affecting the Company's business and ability to sustain and grow its
European markets following the result of the UK referendum. A further
consequence of the UK leaving the EU may be that the Company's ability to
offer Ordinary Shares to EU residents is affected by potential new EU
securities laws. The potential significance is such that all of the
information in Part II of the Circular should be read in conjunction with
the statement set out above, as negative outcomes arising from the UK
referendum result could exacerbate the effect on the Company of all or any
of the risk factors its business would otherwise face.
The Company relies on the retention of key management personnel
The Company depends on the services of its key management personnel and, in
particular, on the services of the senior management team. The loss of the
services of any of these persons could have a material adverse effect on the
Company's business, financial condition, results of operations or future
prospects. In addition, as the Company's business expands, it may need to
add new personnel to service the Company's increased level of business. The
Company's success is also highly dependent on its continuing ability to
identify, hire, train, motivate and retain key management. Competition for
such personnel in the sector can be intense and the Company's personnel are
frequently targeted by other companies for recruitment, and the Company
cannot give assurances that it will be able to attract or retain such
personnel in the future. The Company's inability to attract and retain the
necessary management may adversely affect its future growth and
profitability.
It may also be necessary for the Company to increase the level of
remuneration paid to existing or new employees to such a degree that its
operating expenses could be materially increased.
Risks Relating to the Ordinary Shares
Investment in AIM securities
An investment in shares traded on AIM is perceived to involve a higher
degree of risk and to be less liquid than investment in companies whose
shares are listed on the Official List and traded on the London Stock
Exchange's main market for listed securities. An investment in Ordinary
Shares may be difficult to realise. Prospective investors should be aware
that the value of Ordinary Shares may go down as well as up and that the
market price of the Ordinary Shares may not reflect the underlying value of
the Company. Investors may, therefore, realise less than, or lose all of,
their investment.
Potentially volatile share price and liquidity
The Placing Price may not be indicative of the market price for the Placing
Shares following Admission. The share price of quoted emerging companies can
be highly volatile and shareholdings illiquid. The price at which the
Ordinary Shares are quoted and the price which investors may realise for
their Ordinary Shares may be influenced by a significant number of factors,
some specific to the Company and its operations and some which affect quoted
companies generally. These factors could include the performance of the
Company, large purchases or sales of Ordinary Shares, legislative changes
and general, economic, political or regulatory conditions.
Share price effect of sales of Ordinary Shares
There can be no assurance that certain Directors or other Shareholders will
not elect to sell their Ordinary Shares. The market price of Ordinary Shares
could decline as a result of any such sales of Ordinary Shares or as a
result of the perception that these sales may occur. In addition, if these
or any other sales were to occur, the Company may in the future have
difficulty in offering Ordinary Shares at a time or at a price it deems
appropriate.
The Company's ability to pay dividends in the future depends, amongst other
things, on the Company's financial performance and capital requirements and
is therefore not guaranteed
The Company's ability to pay dividends in the future depends, amongst other
things, on the Company's financial performance and capital requirements and
is therefore not guaranteed. Under English law, a company can only pay cash
dividends to the extent that it has distributable reserves and cash
available for this purpose. In addition, the Company may not pay dividends
if the Directors believe this would cause the Company to be inadequately
capitalised (or if, for any other reason, the Directors conclude it would
not be in the best interests of the Company). Any of the foregoing could
limit the payment of dividends to Shareholders or, if the Company does pay
dividends, the amount of such dividends.
Issuance of additional Ordinary Shares
Although the Company's business plan does not currently involve the issuance
of Ordinary Shares other than in connection with the Placing and to Channel
Four as described in Part I of the Circular, it is possible that the Company
may decide to issue, pursuant to a public offer or otherwise, additional
Ordinary Shares in the future at a price or prices higher or lower than the
Placing Price. An additional issue of Ordinary Shares by the Company, or the
public perception that an issue may occur, could have an adverse effect on
the market price of Ordinary Shares and could dilute the proportionate
ownership interest, and hence the proportionate voting interest, of
Shareholders if, and to the extent that, such an issue of Ordinary Shares is
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DJ Eve Sleep plc: Proposed Placing and Approval of a -8-
not effected on a pre-emptive basis or Shareholders do not take up their
rights to subscribe for further Ordinary Shares as a pre-emptive offer.
The Placing may not complete
Completion of the Placing is subject to satisfaction (or, where possible,
waiver) of a number of conditions (including the approval of the Whitewash
Resolution) which are normal for a transaction of this nature. There is no
guarantee that these conditions will be satisfied (or waived), in which case
the Placing will not complete.
The issue of the VCT Placing Shares is not conditional on the allotment and
issue of the other Placing Shares. There is a risk that the issue of the VCT
Placing Shares completes (at 7.30 a.m. on 12 February 2019) and matters
subsequently arise which mean that the Placing Agreement does not complete
as anticipated at 8.00 a.m. on 12 February 2019 and consequently the
remaining New Ordinary Shares are not issued.
Shareholding of Woodford
Should the Whitewash Resolution be approved by the Independent Shareholders
(and the other Resolutions be approved by Shareholders), following
completion of the Placing, over 30 per cent. of the voting rights of the
Company will be controlled by Woodford. This will increase the percentage of
the Ordinary Shares that are not in public hands (as defined in the AIM
Rules) and may in turn have the effect of reducing the liquidity of trading
in the Ordinary Shares on AIM. In addition, Woodford's stake in the voting
rights of the Company will mean that Woodford will be able, if it so wishes,
to block special resolutions proposed at future general meetings of the
Company or otherwise requisition a general meeting to present for vote
resolutions proposed by it. Although it is not the current intention of
Woodford to seek a resolution at a general meeting of the Company to de-list
the Ordinary Shares from AIM, Woodford could, if it so wishes in the future,
propose such a resolution.
VCT
The Company has not obtained any assurance from HMRC or any other person
that a subscription for shares in the Company is a "qualifying holding" for
the purpose of investment by VCTs. The qualifying status for VCT purposes
will be contingent upon certain conditions being met by both the Company and
the relevant VCT investor. None of the Company, any of the Directors nor any
of the Company's advisers give any warranties, undertakings or other
assurances that VCT qualifying status is or will be available or that such
status (if applicable) will not be subsequently withdrawn.
In addition, should the law regarding the VCT Scheme change then any
qualifying status previously obtained may be lost. There may be
circumstances where the business has operated or will operate in a way that
precludes VCT qualifying status or where the Directors have decided or will
decide that the interests of the Company are not best served by acting in a
way that ensures VCT qualifying status. Therefore, the Company gives no
undertaking or other assurance that it has conducted or will conduct its
activities in a way designed to secure or preserve any such status claimed
by any Shareholder.
If the Company does not employ the proceeds of a VCT's share subscription
for qualifying purposes within twenty-four months, the funds invested by the
VCT would be apportioned pro rata and its qualifying holding would be equal
to the VCT's funds that had been employed for qualifying trading purposes
within the above time limits. Any remaining element of the VCT's investment
would comprise part of its non-qualifying holdings.
The information in this Announcement and the Circular is based upon current
tax law and practice and other legislation and any changes in the
legislation or in the levels and bases of, and reliefs from, taxation may
affect the value of an investment in the Company. If the Company or any
qualifying subsidiary ceases to carry on the business outlined in the
Announcement or the Circular or acquires or commences a business which is
not insubstantial to the Company's activities and which is a non-qualifying
trade for VCT Scheme purposes, this could prejudice the qualifying status of
the Company (as referred to above) under the VCT Scheme at any time that a
VCT is an investor in the Company.
Appendix II - TERMS AND CONDITIONS OF THE PLACING
For invited Placees only - Important Information
The information contained in this Announcement is restricted and is not for
publication, release or distribution, in whole or in part, directly or
indirectly, in, into or from the United States, any province of Canada,
Australia, Japan, the Republic of South Africa or New Zealand or any other
jurisdiction in which such publication, release or distribution would be
unlawful. This Announcement has not been approved by the London Stock
Exchange, nor is it intended that it will be so approved.
Each Placee should consult with its own advisers as to legal, tax, business
and related aspects in relation to any acquisition of Placing Shares. The
price of the shares in the Company and the income from them (if any) may go
down as well as up and investors may not get back the full amount invested
on disposal of shares.
eve Sleep PLC
Proposed Placing of Placing Shares at the Placing Price of 10 pence per
Placing Share
This Announcement (including these Terms and Conditions) does not constitute
an offer or invitation to acquire, underwrite or dispose of, or any
solicitation of any offer or invitation to acquire, underwrite or dispose
of, any Ordinary Shares or other securities of the Company to any person in
any jurisdiction to whom it is unlawful to make such offer, invitation or
solicitation in such jurisdiction. Persons into whose possession this
Announcement (or any part of it) or any information contained in it comes
and/or who seek to participate in the Placing must inform themselves about
and observe any such restrictions and must be persons who are able to
lawfully receive this Announcement in their jurisdiction. In particular,
neither this Announcement nor these Terms and Conditions constitutes an
offer or invitation (or a solicitation of any offer or invitation) to
acquire, underwrite or dispose of or otherwise deal in any Ordinary Shares
or other securities of the Company in the United States, Canada, Australia,
Japan, the Republic of South Africa or New Zealand, or in any other
jurisdiction in which any such offer, invitation or solicitation is or would
be unlawful.
Members of the public are not eligible to take part in the Placing.
Prospective investors must inform themselves as to: (a) the legal
requirements within their own countries for the purchase, holding, transfer,
redemption or other disposal of the Ordinary Shares; (b) any foreign
exchange restrictions applicable to the purchase, holding, transfer,
redemption or other disposal of the Ordinary Shares which they might
encounter; and (c) the income and other tax consequences which may apply in
their own countries as a result of the purchase, holding, transfer,
redemption or other disposal of the Ordinary Shares. This Announcement
(including these Terms and Conditions) does not constitute an offer to sell,
or the solicitation of an offer to acquire or subscribe for, Ordinary Shares
in any jurisdiction where such offer or solicitation is unlawful or would
impose any registration, qualification, publication or approval requirements
on the Company or Peel Hunt. The offer and sale of Ordinary Shares has not
been and will not be registered under the applicable securities laws of
Canada, Australia, Japan, New Zealand or the Republic of South Africa.
Subject to certain exemptions, the Ordinary Shares may not be offered to or
sold within Canada, Australia, Japan, the Republic of South Africa or New
Zealand or to any national, resident or citizen of Canada, Australia, Japan,
the Republic of South Africa or New Zealand.
The Ordinary Shares have not been, and will not be, registered with the US
Securities and Exchange Commission under the US Securities Act, or the
securities laws of any other jurisdiction of the United States. The Ordinary
Shares may not be offered or sold, directly or indirectly, in or into the
United States (except pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the US Securities Act). No
public offering of the Ordinary Shares is being made in the United States.
The Ordinary Shares are being offered and sold only outside the United
States in "offshore transactions" within the meaning of, and in reliance on,
Regulation S of the US Securities Act. The Ordinary Shares have not been
approved or disapproved by the United States Securities and Exchange
Commission, any state securities commission in the United States or any
other regulatory authority in the United States, nor have any of the
foregoing authorities passed on or endorsed the merits of the Placing or the
accuracy or adequacy of the information contained in this Announcement
(including these Terms and Conditions). Any representation to the contrary
is a criminal offence in the United States. No money, securities or other
consideration from any person inside the United States is being solicited
and, if sent in response to the information contained in this Announcement,
or any announcement made by the Company, will not be accepted.
In the United Kingdom this Announcement (including these Terms and
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January 23, 2019 02:02 ET (07:02 GMT)
DJ Eve Sleep plc: Proposed Placing and Approval of a -9-
Conditions) is being distributed to, and is directed only at: (a)(i) persons
having professional experience in matters relating to investments who fall
within the definition of "investment professionals" in Article 19(5) of the
Order; or (ii) high net worth companies, unincorporated associations and
other bodies within the meaning of Article 49(2)(a) to (d) of the Order; and
(b) "qualified investors" within the meaning of Article 2(1)(e) of the
Prospectus Directive; or (c) persons to whom it is otherwise lawful to
distribute it (all such persons together being referred to as Relevant
Persons). It is not directed at and may not be acted or relied on by anyone
other than a Relevant Person. Persons who do not fall within the definition
of "Relevant Persons" above should not rely on this Announcement, nor take
any action upon it. By receiving this Announcement you are deemed to warrant
to the Company and Peel Hunt that you are a Relevant Person and agree to and
will comply with the contents of these Terms and Conditions.
In relation to each Relevant Member State, no Ordinary Shares have been
offered, or will be offered, pursuant to the Placing to the public in that
Relevant Member State prior to the publication of a prospectus in relation
to the Ordinary Shares which has been approved by the competent authority in
that Relevant Member State, all in accordance with the Prospectus Directive,
except that offers of Ordinary Shares to the public may be made at any time
under the following exemptions under the Prospectus Directive, if they are
implemented in that Relevant Member State:
1 to any legal entity which is a "qualified investor" as defined in the
Prospectus Directive;
2 to fewer than 150, or, if the Relevant Member State has not implemented
the relevant provision of the Prospectus Directive, 100 natural or legal
persons (other than "qualified investors" as defined in the Prospectus
Directive) in such Relevant Member State; or
3 in any other circumstances falling within Article 3(2) of the Prospectus
Directive,
provided that no such offer of Ordinary Shares shall result in a requirement
for the publication of a prospectus pursuant to Article 3 of the Prospectus
Directive or any measure implementing the Prospectus Directive in a Relevant
Member State and each person who initially acquires any Ordinary Shares or
to whom any offer is made under the Placing will be deemed to have
represented, acknowledged and agreed that it is a "qualified investor"
within the meaning of Article 2(1)(e) of the Prospectus Directive. For the
purposes of this provision, the expression "an offer to the public" in
relation to any offer of Ordinary Shares in any Relevant Member State means
a communication in any form and by any means presenting sufficient
information on the terms of the offer and any Ordinary Shares to be offered
so as to enable an investor to decide to subscribe for the Ordinary Shares,
as the same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member State and the
expression the "Prospectus Directive" means the Prospectus Directive, to the
extent implemented in the Relevant Member State and includes any relevant
implementing measure in each Relevant Member State.
These Terms and Conditions apply to each Placee. Each Placee hereby agrees
with Peel Hunt and the Company to be legally and irrevocably bound by these
Terms and Conditions which will be the terms and conditions on which the
Placing Shares will be acquired in the Placing.
The Terms and Conditions must not be acted on or relied on by persons who
are not Relevant Persons. Any investment or investment activity to which the
Terms and Conditions set out herein relates is available only to Relevant
Persons and will be engaged in only with Relevant Persons.
Acceptance of any offer incorporating the Terms and Conditions (whether
orally or in writing or evidenced by way of a contract note) will constitute
a binding irrevocable commitment by a Placee, subject to the Terms and
Conditions set out below, to subscribe and pay for the relevant number of
Placing Shares (the Placing Participation). Such commitment is not capable
of termination or rescission by the Placee in any circumstances except
fraud. All such obligations are entered into by the Placee with Peel Hunt in
its capacity as agent for the Company and are therefore directly enforceable
by the Company.
In the event that Peel Hunt has procured acceptances from Placees in
connection with the Placing prior to the date of the publication of this
Announcement to a Placee, Peel Hunt will, prior to Admission, request
confirmation from any such Placee that its Placing Participation as agreed
in any earlier commitment remains firm and binding upon the Terms and
Conditions of this Announcement and referable to the contents of this
Announcement of which these terms form part. Upon such confirmation being
given (whether orally, in writing or by conduct (including without
limitation by receipt of the relevant placing proceeds by Peel Hunt)) any
agreement made in respect of the Placing Shares shall be varied, amended
and/or ratified in accordance with these Terms and Conditions and based upon
this Announcement and no reliance may be placed by a Placee on any earlier
version of this Announcement.
Application for admission to trading
Application will be made to the London Stock Exchange for Admission. Subject
to, amongst other things, the Resolutions being passed by the requisite
majority at the General Meeting, it is anticipated that dealings in the
Placing Shares will commence on AIM at 8.00 a.m. on 12 February 2019 for
normal account settlement and that Admission will become effective on that
date. The Placing Shares will not be admitted to trading on any stock
exchange other than AIM.
Participation in and principal terms of the Placing
1 Each Placee will be deemed to have read this Announcement (including these
Terms and Conditions) in their entirety. Each Placee should read and
understand the information provided in the "Important Information" section
of this Announcement.
2 Peel Hunt is acting for the Company and no one else in connection with the
Placing and will not regard any other person (whether or not a recipient of
these Terms and Conditions) as a client in relation to the Placing and to
the fullest extent permitted by law and applicable Financial Conduct
Authority rules, neither Peel Hunt nor any of its affiliates will have any
liability to Placees or to any person other than the Company in respect of
the Placing.
3 The Placing Shares, when issued, will be subject to the articles of
association of the Company and will rank equally in all respects with the
existing Ordinary Shares on Admission, including the right to receive
dividends or other distributions declared, made or paid in respect of such
Ordinary Shares after the date of issue of the Placing Shares, if any.
4 Participation in the Placing will only be available to persons who may
lawfully be, and are, invited to participate by Peel Hunt. Peel Hunt and its
affiliates may participate in the Placing as principal.
5 The Placing Price will be a fixed price of 10 pence per Placing Share.
6 An offer to acquire Placing Shares, which has been communicated by a
prospective Placee to Peel Hunt which has not been withdrawn or revoked
prior to publication of this Announcement, shall not be capable of
withdrawal or revocation immediately following the publication of this
Announcement without the consent of Peel Hunt.
7 Each Placee's allocation will be confirmed to Placees orally by Peel Hunt,
and evidenced by a trade confirmation or contract note which will be
dispatched as soon as practicable thereafter. The terms of this Appendix
will be deemed incorporated by reference therein. The oral confirmation to
such Placee will constitute an irrevocable legally binding commitment upon
such person (who will at that point become a Placee) in favour of Peel Hunt
and the Company, under which it agrees to acquire the number of Placing
Shares allocated to it at the Placing Price on the terms and conditions set
out in this Appendix and in accordance with the Company's articles of
association. Except as required by law or regulation, no press release or
other announcement will be made by Peel Hunt or the Company using the name
of any Placee (or its agent), in its capacity as Placee (or agent), other
than with such Placee's prior written consent.
8 Each Placee will have an immediate, separate, irrevocable and binding
obligation, owed Peel Hunt (as agent for the Company), to pay in cleared
funds immediately on the settlement date, in accordance with the
registration and settlement requirements set out below, an amount equal to
the product of the Placing Price and the number of Placing Shares such
Placee has agreed to take up and that the Company has agreed to allot and
issue to that Placee. Peel Hunt will procure the allotment of the Placing
Shares to each Placee following each Placee's payment to Peel Hunt of such
amount.
9 Irrespective of the time at which a Placee's allocation pursuant to the
Placing is confirmed, settlement for all Placing Shares to be acquired
pursuant to the Placing will be required to be made at the times and on the
basis explained below under "Registration and Settlement".
(MORE TO FOLLOW) Dow Jones Newswires
January 23, 2019 02:02 ET (07:02 GMT)
DJ Eve Sleep plc: Proposed Placing and Approval of a -10-
10 By participating in the Placing, each Placee will agree that its rights
and obligations in respect of the Placing will terminate only in the
circumstances described below and will not be capable of rescission or
termination by the Placee.
11 To the fullest extent permissible by law and applicable FCA rules, none
of the Company, Peel Hunt nor any of their respective affiliates, directors
or employees shall have any liability to Placees (or to any other person
whether acting on behalf of a Placee or otherwise) under these Terms and
Conditions. In particular, none of the Company, Peel Hunt or any of their
respective affiliates shall have any liability (including to the fullest
extent permissible by law and applicable FCA rules, any fiduciary duties) in
respect of Peel Hunt's or the Company's conduct of the Placing. Each Placee
acknowledges and agrees that the Company is responsible for the allotment of
the Placing Shares to the Placees and Peel Hunt shall have no liability to
the Placees for the failure of the Company to fulfil that obligation.
Conditions
Each Placee's Placing Participation is in all respects conditional upon:
1 the Takeover Panel having confirmed to Peel Hunt, the grant of the Rule 9
Waiver (subject to shareholder approval of the Rule 9 Waiver Resolution) and
its approval of the Circular for the purpose of Appendix 1 of the Takeover
Code;
2 the Placing Agreement becoming unconditional in all respects and not
having been terminated in accordance with its terms;
3 the passing of the Resolutions at the General Meeting, without amendment
(save as may be approved by Peel Hunt);
4 in the case of the VCT Placing only, the VCT Shares having been allotted
and issued unconditionally to the VCT Placee in accordance with the Placing
Agreement;
5 in the case of the Non-VCT Placing only, the Company allotting, subject
only to Admission, the Non-VCT Shares in accordance with the Placing
Agreement;
6 in the case of the Non-VCT Placing only, Admission having become
effective,
in each case by 8.00 a.m. on 12 February 2019 or such later time and/or date
as the Company and Peel Hunt agree, but in any event being no later than
8.30 a.m. on 26 February 2019.
Pursuant to the Placing Agreement, Peel Hunt has agreed on behalf of and as
agent for the Company, to use its reasonable endeavours to procure
subscribers for the Placing Shares at the Placing Price.
The Placing Agreement contains certain warranties and indemnities from the
Company for the benefit Peel Hunt. Peel Hunt may, in its absolute discretion
(acting in good faith), terminate the Placing Agreement if, prior to
Admission, inter alia, a force majeure event occurs, the warranties are not
true and accurate in any material respect or have become misleading in a way
that is material in the context of the Placing and Admission, the Company
fails to comply with certain of its obligations under the Placing Agreement
to the extent that the same shall be performed prior to Admission or the
Resolutions (without any amendment that is not approved by Peel Hunt) are
not passed at the General Meeting. The exercise by Peel Hunt of any right of
termination or any right of waiver exercisable by Peel Hunt contained in the
Placing Agreement or under the Terms and Conditions set out herein is within
the absolute discretion of Peel Hunt and neither Peel Hunt nor the Company
will have any liability to any Placee whatsoever in connection with any
decision to exercise or not exercise any such rights.
If (i) any of the conditions in the Placing Agreement are not satisfied (or,
where relevant, waived by Peel Hunt) or (ii) the Placing Agreement is
terminated or (iii) the Placing Agreement does not otherwise become
unconditional in all respects, the Placing will not proceed and all funds
delivered by Placees to Peel Hunt will be returned to them at their risk
without interest, and their rights and obligations hereunder shall cease and
determine at such time and no claim shall be made by them in respect
thereof.
None of the Company, the Directors or Peel Hunt owes any fiduciary duty to
any Placee in respect of the warranties, undertakings or indemnities in the
Placing Agreement.
Peel Hunt does not make any representation in respect of the eligibility of
the VCT Shares under the Income Tax Act 2007 (as amended).
Right to terminate under the Placing Agreement
Peel Hunt is entitled in its absolute discretion, at any time before
Admission and after such consultation with the Company as the circumstances
allow, to terminate the Placing Agreement by giving notice to the Company in
certain circumstances, including, inter alia:
1. in the opinion of Peel Hunt (acting in good faith), the warranties given
by the Company to Peel Hunt are not true and accurate or have become
misleading (or would not be true and accurate or would be misleading if they
were repeated at any time before Admission) by reference to the facts
subsisting at the time when the notice referred to above is given, in each
case in a way that is material in the context of the Proposals; or
2. in the opinion of Peel Hunt (acting in good faith), the Company fails to
comply with any of its obligations under the Placing Agreement and that
failure is material in the context of the Proposals; or
3. in the opinion of Peel Hunt (acting in good faith), there has been a
development or event (or any development or event involving a prospective
change of which the Company is, or might reasonably be expected to be,
aware) which will or is likely to have a material adverse effect on the
operations, condition (financial, operational, legal or otherwise),
prospects, management, results of operations, financial position, business
or general affairs of the Company or the Group respectively, whether or not
foreseeable and whether or not arising in the ordinary course of business;
or
4. a matter arising between the publication of the Circular and the General
Meeting which may be required to be disclosed to Shareholders under Appendix
1 of the Takeover Code and Peel Hunt considers to be material and adverse in
the context of the Rule 9 Waiver; or
5. there has been a change in national or international financial,
political, economic or stock market conditions (primary or secondary); an
incident of terrorism, outbreak or escalation of hostilities, war,
declaration of martial law or any other calamity or crisis; a suspension or
material limitation in trading of securities generally on any stock
exchange; any change in currency exchange rates or exchange controls or a
disruption of settlement systems or a material disruption in commercial
banking, in each case as would be likely in the opinion of Peel Hunt (acting
in good faith) to prejudice the success of the Placing.
The rights and obligations of the Placees shall terminate only in the
circumstances described in these Terms and Conditions and in the Placing
Agreement and will not be subject to termination by the Placee or any
prospective Placee at any time or in any circumstances. By participating in
the Placing, each Placee agrees with the Company and Peel Hunt that the
exercise by Peel Hunt or the Company of any right of termination or other
discretion under the Placing Agreement shall be within the absolute
discretion of the Company or Peel Hunt, and that neither the Company nor
Peel Hunt need make any reference to any Placee and that none of them nor
any of their respective affiliates, directors or employees shall have any
liability to Placees whatsoever in connection with any such exercise or
decision not to exercise. Placees will have no rights against Peel Hunt, the
Company, or any of their respective affiliates, directors or employees under
the Placing Agreement pursuant to the Contracts (Rights of Third Parties)
Act 1999 (as amended).
Following the allotment and unconditional issue of the VCT Shares, the
Placing Agreement is not capable of termination to the extent that it
relates to the VCT Placing.
No admission document or prospectus
The Placing Shares are being offered to a limited number of specifically
invited persons only and will not be offered in such a way as to require an
admission document or prospectus in the United Kingdom or in any other
jurisdiction. No offering document, admission document or prospectus has
been or will be submitted to be approved by the FCA or submitted to the
London Stock Exchange in relation to the Placing, and Placees' commitments
will be made solely on the basis of the information contained in the
Announcement (including this Appendix) and the Exchange Information (as
defined further below). Each Placee, by accepting a participation in the
Placing, agrees that the content of this Announcement is exclusively the
responsibility of the Company and confirms that it has neither received nor
relied on any other information (other than this Announcement and the
Exchange Information), representation, warranty, or statement made by or on
behalf of the Company, Peel Hunt or any other person and none of Peel Hunt,
the Company nor any other person will be liable for any Placee's decision to
participate in the Placing based on any other information, representation,
warranty or statement which the Placees may have obtained or received and,
(MORE TO FOLLOW) Dow Jones Newswires
January 23, 2019 02:02 ET (07:02 GMT)
if given or made, such information, representation, warranty or statement
must not be relied upon as having been authorised by Peel Hunt, the Company,
or their respective officers, directors, employees or agents. Each Placee
acknowledges and agrees that it has relied on its own investigation of the
business, financial or other position of the Company in accepting a
participation in the Placing. Neither the Company nor Peel Hunt are making
any undertaking or warranty to any Placee regarding the legality of an
investment in the Placing Shares by such Placee under any legal, investment
or similar laws or regulations. Each Placee should not consider any
information in this Announcement to be legal, tax or business advice. Each
Placee should consult its own solicitor, tax adviser and financial adviser
for independent legal, tax and financial advice regarding an investment in
the Placing Shares. Nothing in this paragraph shall exclude the liability of
any person for fraudulent misrepresentation.
Registration and settlement
Settlement of transactions in the: (i) VCT Shares (ISIN: GB00BYWMFT51)
following their allotment and issue in accordance with the Placing
Agreement; and (ii) the Non-VCT Shares (ISIN: GB00BYWMFT51) following
Admission, in each case will take place within the CREST system provided
that, subject to certain exceptions, Peel Hunt reserves the right to require
settlement for, and delivery of, the Placing Shares (or a portion thereof)
to Placees by such other means that it deems necessary if delivery or
settlement is not possible or practicable within CREST within the timetable
set out in this Announcement or would not be consistent with the regulatory
requirements in any Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent a trade
confirmation or contract note stating the number of Placing Shares allocated
to it at the Placing Price, the aggregate amount owed by such Placee to Peel
Hunt (as agent for the Company) and settlement instructions. Each Placee
agrees that it will do all things necessary to ensure that delivery and
payment is completed in accordance with either the CREST or certificated
settlement instructions that it has in place with Peel Hunt.
It is expected that settlement in respect of the VCT Shares will be at 7:30
a.m on 12 February 2019 on a T+14 basis in accordance with the instructions
set out in the trade confirmation. Settlement in respect of the Non-VCT
Shares is expected to occur at 8:00 a.m. on 12 February 2019 on a T+14 basis
in accordance with the instructions set out in the trade confirmation.
Interest is chargeable daily on payments not received from Placees on the
due date in accordance with the arrangements set out above at the rate of
two percentage points above LIBOR as determined by Peel Hunt.
Each Placee is deemed to agree that, if it does not comply with these
obligations, Peel Hunt may sell any or all of the Placing Shares allocated
to that Placee on such Placee's behalf and retain from the proceeds, for
Peel Hunt's account and benefit (as agent for the Company), an amount equal
to the aggregate amount owed by the Placee plus any interest due. The
relevant Placee will, however, remain liable and shall indemnify Peel Hunt
(as agent for the Company) on demand for any shortfall below the aggregate
amount owed to it by the Placee and may be required to bear any stamp duty
or stamp duty reserve tax or securities transfer tax (together with any
interest or penalties) which may arise upon the sale of such Placing Shares
on such Placee's behalf. By communicating a bid for Placing Shares to Peel
Hunt, each Placee confers on Peel Hunt all such authorities and powers
necessary to carry out any such sale and agrees to ratify and confirm all
actions which Peel Hunt lawfully takes or causes to be lawfully taken in
pursuance of such sale.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees should ensure that the trade confirmation or contract note is copied
and delivered immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or that of its
nominee or in the name of any person for whom a Placee is contracting as
agent or that of a nominee for such person, such Placing Shares should,
subject as provided below, be so registered free from any liability to UK
stamp duty or stamp duty reserve tax or securities transfer tax. Placees
will not be entitled to receive any fee or commission in connection with the
Placing.
Further Terms, Confirmations and Warranties
In accepting the Placing Participation, each Placee (and any person acting
on such Placee's behalf) makes the following confirmations,
acknowledgements, warranties and/or undertakings to Peel Hunt and the
Company, namely that each Placee (and any person acting on such Placee's
behalf):
1. represents and warrants that it has read this Announcement (including
these Terms and Conditions) in its entirety and acknowledges that its
participation in the Placing will be governed by the Company's articles of
association and the terms, conditions, representations, warranties,
acknowledgements, agreements and undertakings of these Terms and Conditions;
2. acknowledges that no offering document, admission document or prospectus
has been prepared in connection with the Placing and represents and warrants
that it has not received and will not receive a prospectus, admission
document or other offering document in connection therewith
3. acknowledges that the Ordinary Shares are (and the Placing shares will
be) admitted to trading on AIM and the Company is therefore required to
publish certain business and financial information in accordance with the
AIM Rules (collectively Exchange Information), which includes a description
of the nature of the Company's business and the Company's most recent
balance sheet and profit and loss account and that the Placee is able to
obtain or access such information or comparable information concerning any
other publicly traded company without undue difficulty;
4. acknowledges and agrees that its acceptance of its Placing Participation
on the terms set out in this Announcement and these Terms and Conditions is
legally binding, irrevocable and is not capable of termination or rescission
by it in any circumstances and that it has the funds available to pay the
Placing Price in respect of the Placing Shares for which it has given a
commitment under the Placing and it acknowledges, agrees and undertakes that
it will pay the total Placing Price in respect of its participation in the
Placing;
5. acknowledges that the content of this Announcement is exclusively the
responsibility of the Company, and that none of Peel Hunt, its affiliates or
any person acting on its or their behalf has or shall have any liability for
any information, representation or statement contained in this Announcement
or any information previously or concurrently published by or on behalf of
the Company, and will not be liable for any Placee's decision to participate
in the Placing based on any information, representation or statement
contained in this Announcement or otherwise. Each Placee further represents,
warrants and agrees that the only information on which it is entitled to
rely and on which such Placee has relied in committing itself to acquire the
Placing Shares is contained in this Announcement and any Exchange
Information, such information being all that it deems necessary to make an
investment decision in respect of the Placing Shares and that it has neither
received nor relied on any other information given or representations,
warranties or statements made by Peel Hunt, the Company or any of their
respective directors, officers or employees or any person acting on behalf
of any of them, or, if received, it has not relied upon any such
information, representations, warranties or statements (including any
management presentation that may have been received by any prospective
Placee or any material prepared by the Research Department of Peel Hunt (the
views of such Research Departments not representing and being independent
from those of the Company and the Corporate Finance Department of Peel Hunt
and not being attributable to the same), and neither Peel Hunt nor the
Company will be liable for any Placee's decision to accept an invitation to
participate in the Placing based on any other information, representation,
warranty or statement. Each Placee further acknowledges and agrees that it
may not place the same degree of reliance on this Announcement as it may
otherwise place on a prospectus or admission document. Each Placee further
acknowledges and agrees that it has relied solely on its own investigation
of the business, financial or other position of the Company in deciding to
participate in the Placing and it will not rely on any investigation that f
Peel Hunt, its affiliates or any other person acting on its or their behalf
has or may have conducted;
6. confirms, represents and warrants that it has neither received nor relied
on any confidential price sensitive information concerning the Company in
accepting this invitation to participate in the Placing;
7. confirms, represents and warrants that it is sufficiently knowledgeable
to understand and be aware of the risks associated with, and other
characteristics of, the Placing Shares and, among others, of the fact that
(MORE TO FOLLOW) Dow Jones Newswires
January 23, 2019 02:02 ET (07:02 GMT)
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