Williams Grand Prix Holdings PLC (0W4R)
Williams Grand Prix Holdings PLC: 2019 Annual Results, Commencement of
Strategic Review and Formal Sale Process
29-May-2020 / 17:14 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
*NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.*
*THIS IS AN ANNOUNCEMENT OF A POSSIBLE OFFER UNDER RULE 2.4 OF THE CITY CODE
ON TAKEOVERS AND MERGERS (THE 'TAKEOVER CODE' OR 'CODE') AND DOES NOT
CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE
2.7 OF THE TAKEOVER CODE. THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE
MADE NOR AS TO THE TERMS ON WHICH ANY OFFER MIGHT BE MADE.*
29 May 2020
*Williams Grand Prix Holdings PLC ('Williams', 'WGPH', the 'Company' or the
'Group')*
*2019 Annual Results, Commencement of Strategic Review and Formal Sale
Process*
*Results Press Release*
Williams Grand Prix Holdings PLC (WGPH, Ticker: WGF1) today announces the
Group's financial results for the year ended 31 December 2019.
Group revenue declined to GBP160.2m in 2019, from GBP176.5m in 2018 and EBITDA
deteriorated to a loss of GBP(13.0)m, compared to a profit of GBP12.9m in the
previous year. The results were driven by the Formula 1 operation's poor
on-track performance, despite continued progress at Williams Advanced
Engineering.
Formula 1 revenue declined to GBP95.4m in 2019, from GBP130.7m in 2018 and
EBITDA was GBP(10.1)m last year, compared to GBP16.0m the previous year.
Williams Advanced Engineering revenue increased to GBP63.7m in 2019, from
GBP44.8m in 2018, with EBITDA up to GBP7.5m in 2019 from GBP5.1m in 2018.
'The financial results for 2019 reflect the recent decline in
competitiveness of the F1 operation and the consequent reduction in
commercial rights income' said Mike O'Driscoll, Chief Executive Officer.
'After four years of very solid performance in the FIA F1 Constructors'
Championship during which we claimed two third and two fifth place finishes,
we endured a couple of very difficult seasons. We have implemented a
significant restructuring over the last nine months and have strengthened
the technical leadership team.'
'The 2020 Formula 1 season has, of course, been disrupted due to the
COVID-19 pandemic, and this will have an impact on our commercial rights
income this year. The Team have also served notice to terminate its
relationship with its title partner, ROKiT, and major sponsor, ROK Drinks.
In common with many other businesses, we have taken extensive action to
mitigate, including a prolonged furlough period for much of our staff. As
this awful global crisis recedes, everyone at Williams Racing is looking
forward to the start of the new season.'
'There has been an enormous gap in earnings and expenditure between the
three largest teams and the rest of the grid for a number of years, but we
are confident that Liberty Media's long-term vision and plans, including a
first-ever cost-cap for the sport, will deliver a more level playing field
for 2021 and beyond, on which all teams can compete more fairly.'
'Williams Advanced Engineering growth continued in 2019, and we decided to
bring external investment into the Group, through the sale of a majority
stake, on 31 December 2019. This will enable WAE to continue to deliver the
innovative solutions for which it is known and respected. Whilst we are no
longer a majority shareholder in WAE we hold a significant minority stake in
the business and remain a key partner for them through the provision of
technical and support services.'
*F1* *WAE* *Other[1]* *Group*
*2019*
Revenue (GBPm) 95.4 63.7 1.1 160.2
EBITDA (GBPm)[2] (10.1) 7.5 (10.4) (13.0)
Operating free cash flow (GBPm)3 (15.9)
*2018*
Revenue (GBPm) 130.7 44.8 1.0 176.5
EBITDA (GBPm)2 16.0 5.1 (8.2) 12.9
Operating free cash flow (GBPm)[3] 6.3
*New Strategic Direction*
The 2018 and 2019 seasons proved very challenging for Williams with
disappointing performances in the FIA F1 Constructors' Championship, after a
number of years of much stronger performance. As a result, revenue has been
under pressure, due to lower commercial income resulting from the Team's
on-track performance, as well as a decline in sponsorship.
Success in Formula 1 over the last decade has been very heavily weighted in
favour of corporately-backed teams with comparatively large annual budgets.
The new commercial rights holder, Liberty Media, is introducing new
financial regulations from next year which, significantly, will include a
cost cap for the first time. In addition commercial income from the sport is
expected to be distributed more equitably than at present. The WGPH board
believes these changes will address the greatest inequity in the sport and
will allow all teams to compete on a more even basis. Formula 1 and the
Sport's governing body, the FIA, are also introducing new technical
regulations for the 2022 season with the objective of ensuring much more
competitive and exciting racing in the future. To that end, and in light of
these challenges, WGPH has embarked upon a renewal programme setting out a
new strategic direction, to ensure it is well positioned to take advantage
of Formula 1's new era which will begin in 2021.
- As a first stage in this process, WGPH divested a majority stake in
Williams Advanced Engineering in December 2019, providing renewed focus in
the F1 operations
- WGPH has implemented significant operational improvements and the
technical organisation has been comprehensively reorganised with new
leadership and talented designers joining the team
- WGPH has secured a long-term contract renewal for the supply of the
best-in-class Mercedes HPP-AMG power unit
- Additional financing has been secured from third party lenders, providing
WGPH with the resources to deliver upon its new strategic plan
*Strategic Review and Formal Sale Process*
As part of this new strategic direction, the WGPH board is undertaking a
review of all the various strategic options available to the Company.
Options being considered include, but are not limited to, raising new
capital for the business, a divestment of a minority stake in WGPH, or a
divestment of a majority stake in WGPH including a potential sale of the
whole Company. Whilst no decisions have been made regarding the optimal
outcome yet, to facilitate discussions with interested parties, the Company
announces the commencement of a 'formal sale process' (as referred to in
Note 2 on Rule 2.6 of the Takeover Code).
The Board has appointed Allen & Co. and Lazard as joint financial advisers
to assist with the strategic review and formal sale process. Parties with a
potential interest in Williams should contact Allen & Co. or Lazard at the
contact details set out below.
Any interested party participating in the formal sale process will be
required to enter into a non-disclosure agreement with WGPH on terms
satisfactory to the WGPH board. The Company then intends to provide such
interested parties with certain information on the business, following which
interested parties will be invited to submit their proposals.
The Panel on Takeovers and Mergers has agreed that any discussions with
third parties may be conducted within the context of a formal sale process.
Accordingly it has granted a dispensation from the requirements of Rules
2.4(a), 2.4(b) and 2.6(a) of the Takeover Code such that any party
participating in the formal sale process will not be required to be publicly
identified under Rules 2.4(a) or (b) and will not be subject to the 28 day
deadline referred to in Rule 2.6(a) of the Takeover Code for so long as it
is participating in the formal sale process.
The Company is not in receipt of any approaches at the time of this
announcement and confirms that it is in preliminary discussions with a small
number of parties regarding a potential investment in the Company. There can
be no certainty that an offer will be made, nor as to the terms on which any
offer will be made. The WGPH board reserves the right to alter or terminate
the process at any time and if it does so it will make an announcement as
appropriate. The WGPH board also reserves the right to reject any approach
or terminate discussions with any interested party at any time.
Following this announcement, the Company is now considered to be in an
'offer period' as defined in the Takeover Code, and the dealing disclosure
requirements summarised below will apply. Further announcements regarding
timings and procedures for the formal sale process will be made as
appropriate.
While the Company has faced a number of challenges, Williams currently
remains funded and ready to resume racing when the calendar allows in 2020.
The WGPH board believes that the strategic review and formal sale process is
the right and prudent thing to do in order to take time to consider a full
range of options and put the Formula 1 team in the best possible position
for the future.
For further information please contact the following:
*Williams Grand Prix Holdings PLC* *Tel: +44 1235 777 842*
Tim Hunt
*Allen & Company LLC (Joint *Tel: +1 (212) 339 2383*
Financial Adviser)*
Paul Gould williamsprocess@allenco.com
Georg Schloendorff
*Lazard & Co., Limited (Joint *Tel: +44 20 7187 2000*
Financial Adviser)*
Richard Shaw
Matthew Knott
*Important Notices*
*Notes relating to the Joint Financial Advisers*
Allen & Company LLC, which is registered with and licensed as a
broker-dealer by the United Stated Securities and Exchange Commission and
incorporated in the state of New York, is acting as financial adviser to
Williams Grand Prix Holdings PLC and no one else in connection with the
matters described in this announcement and will not be responsible to anyone
other than Williams Grand Prix Holdings PLC for providing the protections
afforded to clients of Allen & Company LLC nor for providing advice in
relation to the matters described or referred to in this announcement.
Neither Allen & Company LLC nor any of its affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who
is not a client of Allen & Company LLC in connection with this announcement,
any statement contained herein or the matters described or referred to in
this announcement or otherwise.
Lazard & Co., Limited, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority_,_ is acting as financial adviser
to Williams Grand Prix Holdings PLC and no one else in connection with the
matters described in this announcement and will not be responsible to anyone
other than Williams Grand Prix Holdings PLC for providing the protections
afforded to clients of Lazard & Co., Limited nor for providing advice in
relation to the matters described or referred to in this announcement.
Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who
is not a client of Lazard & Co., Limited in connection with this
announcement, any statement contained herein or the matters described or
referred to in this announcement or otherwise.
*Forward looking statements*
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the formal sale process, and
other information published by the Company may contain statements about the
Company that are or may be deemed to be forward looking statements. Such
statements are prospective in nature. All statements other than historical
statements of facts may be forward looking statements. Without limitation,
statements containing the words 'targets', 'plans', 'believes', 'expects',
'aims', 'intends', 'will', 'may', 'anticipates', 'estimates', 'projects' or
'considers' or other similar words may be forward looking statements.
Forward looking statements inherently contain risks and uncertainties as
they relate to events or circumstances in the future. Important factors such
as business or economic cycles, the terms and conditions of the Company's
financing arrangements, tax rates, or increased competition may cause the
Company's actual financial results, performance or achievements to differ
materially from any forward looking statements. Due to such uncertainties
and risks, readers are cautioned not to place undue reliance on such forward
looking statements, which speak only as of the date hereof. The Company
disclaims any obligation to update any forward looking or other statements
contained herein, except as required by applicable law.
*Disclosure requirements of the Code*
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be, solely in
cash) must make an Opening Position Disclosure following the commencement of
the offer period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short
positions in, and rights to subscribe for, any relevant securities of each
of (i) the offeree company and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code
applies must be made by no later than 3.30 pm (London time) on the 10th
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th business day
following the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of the
offeree company or of a securities exchange offeror prior to the deadline
for making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in
1% or more of any class of relevant securities of the offeree company or of
any securities exchange offeror must make a Dealing Disclosure if the person
deals in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of (i) the offeree company
and (ii) any securities exchange offeror(s), save to the extent that these
details have previously been disclosed under Rule 8. A Dealing Disclosure by
a person to whom Rule 8.3(b) of the Code applies must be made by no later
than 3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an interest
in relevant securities of an offeree company or a securities exchange
offeror, they will be deemed to be a single person for the purpose of Rule
8.3 of the Code.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree
company, by any offeror and by any persons acting in concert with any of
them (see Rules 8.1, 8.2 and 8.4 of the Code).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror
was first identified. You should contact the Panel's Market Surveillance
Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing Disclosure.
*Rule 2.9 disclosure*
In accordance with Rule 2.9 of the Takeover Code, the Company confirms that
it has 10,000,000 ordinary shares of 5p each in issue ('Ordinary Shares').
The International Securities Identification Number (ISIN) reference for
these securities is DE000A1H6VM4. The Company does not hold any Ordinary
Shares in treasury.
*Publication on Website*
In accordance with Rule 26.1 of the Code, a copy of this announcement will
be available, subject to certain restrictions relating to persons resident
in restricted jurisdictions, on the Company's website at
https://group.williamsf1.com/corporate/investors/strategicreview [1] as soon
as possible and in any event no later than 12.00 noon (London time) on 1
June 2020 (being the business day following the date of this announcement).
The content of the website referred to in this announcement is not
incorporated into and does not form part of this announcement.
This announcement is for information purposes only and is not intended to,
and does not, constitute or form part of any offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of, any securities or the solicitation of any vote in
any jurisdiction whether pursuant to this announcement or otherwise. The
distribution of this announcement in jurisdictions outside the United
Kingdom may be restricted by law and therefore persons into whose possession
this announcement comes should inform themselves about, and observe such
restrictions. Any failure to comply with the restrictions may constitute a
violation of the securities law of any such jurisdiction.
*The securities of the offeree company have not and will not be registered
under the Securities Act of 1933, as amended, or any U.S. state or
jurisdiction securities laws, and cannot be offered or sold in the U.S. or
to a U.S. person without registration or an applicable exemption from
registration.*
*END*
[1] Williams Heritage, Williams Conference Centre, Group costs, and other
projects delivered outside of F1 and Williams Advanced Engineering.
[2] EBITDA represents earnings before interest, taxes, depreciation and
amortisation and excludes non-cash share-based payment charges and
mark-to-market charges on financial derivatives and the exceptional profit
booked on disposal of Williams Advanced Engineering.
[3] Operating free cash flow represents cash flows from operating activities
including capital expenditure and disposals of fixed assets.
Contact:
Mark Biddle
General Counsel
Mark.Biddle@WilliamsF1.com
ISIN: DE000A1H6VM4
Category Code: MSCM
TIDM: 0W4R
LEI Code: 213800AFJXFAVYBTE915
Sequence No.: 66995
EQS News ID: 1059517
End of Announcement EQS News Service
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(END) Dow Jones Newswires
May 29, 2020 11:14 ET (15:14 GMT)
