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Gordon Dadds Group PLC   -  GOR   

Proposed placing by accelerated bookbuild

Released 07:00 24-Jan-2019

RNS Number : 9454N
Gordon Dadds Group PLC
24 January 2019
 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR AUSTRALIA, OR TO BE TRANSMITTTED OR DISTRIBUTED TO, OR SENT BY, ANY NATIONAL OR RESIDENT OR CITIZEN OF ANY SUCH COUNTRIES OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION MAY CONTRAVENE LOCAL SECURITIES LAWS OR REGULATIONS. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (596/2014/EU) ("MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION, AS PERMITTED BY MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

 

24 January 2019

Gordon Dadds Group plc

("Gordon Dadds" or the "Company")

 

Proposed placing by way of an accelerated bookbuild to raise a minimum of £10 million

 

Gordon Dadds Group plc (AIM: GOR), the acquisitive London-based legal and professional services business, today announces a proposed placing by way of an accelerated bookbuild to raise a minimum of £10 million (before expenses) via a conditional placing of new Ordinary Shares ("Placing Shares") at a price of not less than 140 pence per Placing Share ("Minimum Placing Price") to institutional investors.

 

Arden Partners plc ("Arden") is acting as Nominated Adviser, sole bookrunner and broker to Gordon Dadds. Defined terms used in this announcement have the same meaning as set out at the end of this announcement and in a circular expected to be published shortly following the completion of the accelerated bookbuild in respect of the Placing ("Circular").

 

Highlights:

 

·      The Company intends to conduct a conditional Placing to raise a minimum of £10 million via the Placing of the Placing Shares at a price not less than the Minimum Placing Price.

 

·      The Placing is to be conducted by way of an accelerated bookbuild process which will commence immediately following this Announcement and will be subject to the terms and conditions set out in the Appendix to this Announcement.

 

·      Completion of the Placing is subject, inter alia, to Shareholder approval of certain resolutions to authorise the issue of the Placing Shares which will be sought at a General Meeting of the Company, details of which will can be found below.

·      The Minimum Placing Price represents a discount of approximately 25.9 per cent. to the closing mid-market price of 189 pence per Ordinary Share on 23 January 2019, being the last practical date prior to the announcement of the opening of the Placing.

 

·      Assuming a Placing of £10 million at the Minimum Placing Price, the Placing Shares will represent approximately 24.8 per cent. of the Group's issued ordinary share capital following Admission.

 

The Circular, containing further details of the Placing and notice of a general meeting of the Company to be held at 10.00 a.m. on 11 February 2019 to, inter alia, pass the Resolutions required to implement the Placing, is expected to be published shortly after the completion of the accelerated bookbuild and to be despatched to Shareholders as soon as practicable thereafter. Following its publication, the Circular will be available on the Group's website at www.gordondaddsgroup.com.

 

 

FOR FURTHER INFORMATION, PLEASE CONTACT:

 

Gordon Dadds Group plc

Adrian Biles, Chief Executive Officer

Christopher Yates, Chief Financial Officer


Via Portland




Arden Partners plc

Nominated Adviser and sole broker to the Company

 

John Llewellyn-Lloyd / Ciaran Walsh / Alex Penney - Corporate Finance

Fraser Marshall - Corporate Broking

 


+44 (0) 20 7614 5900

 

Portland Communications

Steffan Williams

Simon Hamer

 


+44 (0) 20 7554 1789

Email: gordondadds@portland-communications.com

 

 

 

General Meeting and Timetable: 

 

To enable the Placing to take place and to authorise the issue of the Placing Shares, a General Meeting is expected to be convened on or around 11 February 2019 at which the Resolutions will be voted on to enable the Placing to proceed.

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Dates

Announcement of the Placing

24 January 2019

Posting of the Circular and the Form of Proxy to Shareholders

24 January 2019

Latest time and date for receipt of completed Forms of Proxy

10.00 a.m. on 7 February 2019

General Meeting*

10.00 a.m. on 11 February 2019

Completion of the Placing*, Admission effective and dealings expected to commence in the Placing Shares on AIM

8.00 a.m. on 12 February 2019

Placing Shares credited to CREST stock accounts*

12 February 2019

Expected date by which certificates in respect of Placing Shares are to be despatched to certificated Shareholders (as applicable)*

w/c 18 February 2019

 

*Each of the times and dates in the above timetable is subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a Regulatory Information Service.

References to time in this document are to London time. The timetable above assumes that the Resolutions are passed at the General Meeting without adjournment.

 

Additional Information

The Company is seeking to raise a minimum of £10 million (before expenses) via a placing of new Ordinary Shares with institutional investors through an accelerated bookbuild.

The funds raised from the Placing will be used to strengthen the Company's balance sheet in order to remain agile and move quickly on its acquisition strategy.

The Placing will be subject to the approval of the Placing Resolutions by Shareholders at the General Meeting. The Placing Shares will rank pari passu with the Existing Ordinary Shares. The General Meeting is to be held at the offices of Ince Gordon Dadds LLP at Aldgate Tower, 2 Leman Street, London, E1 8QN at 10.00 a.m. on 11 February 2019. It is expected that Admission of the Placing Shares will take place and that dealings in the Placing Shares will commence at 8.00 a.m. on 12 February 2019.

The Directors intend to vote in favour of the Resolutions in respect of 8,248,171 Existing Ordinary Shares, representing approximately 28.7 per cent. of the Company's existing issued share capital.

Information on Gordon Dadds

Gordon Dadds is the ultimate holding company of Ince Gordon Dadds LLP, an acquisitive law firm. Gordon Dadds' management identified an opportunity in the legal services market for a consolidation vehicle and commenced by acquiring Bristol Firm Michael Kelly & Co in 2012. This was followed by the investment in the long-established solicitors' practice of Gordon Dadds in 2013, the transformative pre-pack acquisition of Davenport Lyons in 2014; and a £20 million placing, reverse takeover and re-admission of the Company's share capital to AIM in August 2017.

The Company has made good progress since its re-admission to AIM in August 2017 and has annualised revenues of some £75 million.

Background to, and reasons for, the Placing

Background

The Company raised £20 million at the time of its reverse takeover and re-admission to AIM in August 2017, with £14 million designated for acquisitions. Since August 2017, Gordon Dadds has invested those funds in five acquisitions, taken on £6 million of debt finance for the purposes of the Acquisition and acquired £43 million of revenues, the results of which are flowing through the Group. Although the Company's aim at the time of listing was to double revenues in 3 years, it has trebled revenues in the space of 18 months. The Directors believe there are many other opportunities in the sector and actively maintain an acquisitions pipeline which includes target businesses in Malta, Gibraltar, South Africa, China, Hong Kong and Bermuda, all of which would complement the international network.

The Directors have delivered on their stated strategy on listing and have continued to make earnings enhancing acquisitions for the Company.

Reasons for the Placing

The Company is undertaking the Placing to provide Gordon Dadds with the financial flexibility to take swift advantage of opportunities in the legal and professional services sectors. Gordon Dadds is recognised for its strong balance sheet and ability to execute and move quickly on earnings enhancing acquisitions. The funds proposed to be raised by the Placing will allow the Company to continue this strategy.

The Company's acquisition strategy is now focussed on firms with £10 million or more of fee income or with a complementary international business. The Directors believe that the Company is uniquely placed to deliver on further opportunities in the professional services sector and will continue to seek to acquire firms at advantageous performance-based prices.

The Acquisition

Ince background

London based Ince & Co LLP was founded in 1870. Its London office was the headquarters for a network of 13 affiliated offices across Asia, Europe and the Middle East. The Ince network had approximately 200 people in the UK and 500 worldwide including more than 200 lawyers.

Ince had always been a highly regarded network of commercial law firms providing legal and strategic guidance to its clients specialising in the shipping, insurance and transport sectors. Its annual worldwide fee income at the time of the Acquisition (excluding France and Monaco) was approximately £65 million of which approximately £30.5 million was attributable to the assets that came under the Group's control as a result of the Acquisition with the balance being attributable to the international network.

Ince UK's 22 equity partners have committed to Ince Gordon Dadds LLP for a minimum of eighteen months.

Acquisition opportunity and synergies

The Directors believe that the Acquisition offers significant synergies, notably:

 

1.         significant cross selling opportunities for the Group through Ince's deep sector specialisms and strength complemented by the breadth and quality of Gordon Dadds' wider product offering;

2.         operating synergies through the merging of London offices;

3.         £3 million of savings per annum as a result of the migration of Ince UK's accounting and other non-productive functions to the Group's South Wales operation; and

4.         £2 million saving per annum from the vacating of the Group's Agar Street offices as a result of imminent lease break clauses.

The Directors expect that the Acquisition will be immediately earnings enhancing in the current year (before exceptional costs) and significantly earnings enhancing for the year to 31 March 2020. The Company will continue to work towards its operational targets to:

 

·      achieve a gross margin of 50 per cent.;

·      maintain total continuing overheads (before acquisitions costs) at 30 per cent. or less; and

·      achieve net profit before tax of 15 per cent. of earnings as pre-tax profits to shareholders.

The Company achieved a net profit margin of 9.5 per cent. for the year ended 31 March 2018. The Directors believe that the turnover acquired as part of the Acquisition will significantly enhance the Company's net margins.

Acquisition structure

On 31 December 2018, Gordon Dadds announced it had acquired the members' interests in and certain of the assets of Ince UK for a consideration equal to the capital and current account balances of those members (which will be established through completion accounts to be prepared as at 31 December 2018) together with a goodwill payment. Following extensive due diligence and to protect the interests of the Shareholders, Ince & Co LLP was put into administration immediately following the acquisition of its members' interests. It is estimated that the payments in respect of the Ince partners' account balances and the net assets of Ince UK aggregate to up to £12.3 million. The goodwill payments will be equivalent to a percentage of the turnover generated in the first three years post Acquisition by those Ince partners joining the Group and, based on the fee income generated by the Ince UK partners in the last financial year, it is estimated that the goodwill payments to the Ince UK partners will amount to £15.0 million. Following the three year period of goodwill earnings, the former Ince partners will move fully to the Ince Gordon Dadds LLP standard remuneration model. In addition, the former Ince fee earners have been or will be granted options to acquire a total of up to 3 million Ordinary Shares at 140 pence.

The Company agreed to settle the Ince capital account balances on or shortly after completion of the Acquisition and to discharge the partners' capital loans. The goodwill payments will be paid in cash over approximately the next four years.

The total consideration for the Acquisition (excluding the options) is estimated at £27.3 million.

To finance the consideration payments, the Company arranged debt facilities comprising a £6 million Term Loan that was drawn down on completion of the Acquisition and a £6.5 million Revolving Credit Facility that is available to be drawn down.

Ongoing relationship with the Ince international network

The Company will maintain close working relationships with the other firms in the Ince network that were not acquired as part of the Acquisition and has conditionally agreed to enter into new network arrangements with the firms in Hong Kong, Singapore, Dubai, Greece and Germany subject, amongst other things, to any required regulatory approvals. In the meantime the Group will provide administrative services to such firms. These entities will continue to trade as Ince & Co. The Company will seek to develop deeper relationships with these international entities which between them generate fee income of approximately £35 million.

Subject to satisfying any necessary regulatory approvals, the Directors' believe that within 12 months the Company will be able to consolidate the results of the Hong Kong, Singapore, Dubai, Greece, and Germany offices. Before any such arrangements have been finalised, the results of the Ince international affiliates will not be consolidated into the results of the Company and they remain separate businesses.

The Ince offices in France and Monaco are not currently part of the Company's new network arrangements although central administration services will be provided to them by the Group.

Review of executive incentive arrangements and extension of the Company's Share Scheme

The retention of people at every level is imperative to the long term prospects and ultimate success of the Company. That being the case, the remuneration committee of the Board intends to undertake a review of the incentive arrangements for the Company's senior executives and management (including the executive Directors) to ensure they are appropriate to the revised prospects of the Company following the completion of the Acquisition and the Placing.

At the time of its re-admission to AIM in August 2017, the Directors received approval to grant options under the Company's Share Scheme over 10 per cent. of the Company's then issued share capital.  Given the prospective increase in the Company's issued share capital as a result of the Placing and the fact that options have been or will be granted as a consequence of the Acquisition, the Board is seeking Shareholders' approval to increase the maximum number of Ordinary Shares which may be granted under the Company's Share Scheme (including pursuant to options which have already been granted under such Scheme) to an amount equal to 10 per cent. of the issued ordinary share capital of the Company at Admission.

The extension of the number of options which may be granted under the Company's Share Scheme would be consistent with the Board's stated objective of facilitating further share ownership by the employees and consultants of the Group and is conditional upon the passing of the Resolutions at the General Meeting.

Use of proceeds

The gross proceeds receivable by the Company pursuant to the Placing are expected to be a minimum of £10 million. The Company intends to use the proceeds together with its existing cash resources and debt facilities to strengthen its balance sheet in order to remain agile and move quickly on its acquisition strategy.



£

Gross proceeds of the Placing


£10 million*

Expenses of the Placing


£(0.8) million*

Net proceeds of the Placing


£9.2 million*

*Assuming a Placing of £10 million

Current Trading and Prospects

The Company's results for the six months ended 30 September 2018 were released on 31 December 2018. A copy of these results can be found at www.gordondaddsgroup.com.

Since completion of the Acquisition on 31 December 2018, significant progress has already been made in terms of the integration of Ince UK into the Group. The majority of the partners and staff of Gordon Dadds LLP have moved into the Ince UK offices in Aldgate Tower, London E1, the Merged Firm has been re-branded as Ince Gordon Dadds LLP and the combined entities are now fully operational on one IT system. The Group continues to trade in line with the Directors' expectations.

Financial Information

Audited accounts for the Company for each of the three years ended 31 March 2018, 31 March 2017 and 31 March 2016 are available on the Company's website at www.gordondaddsgroup.com.

Details of the Placing

Arden is conditionally raising a minimum of £10 million (before expenses) for the Company pursuant to the Placing (by way of an accelerated bookbuild) of Placing Shares at a price the Placing Price with institutional shareholders.

The Placing is conditional, inter alia, on approval by Shareholders at the General Meeting of the Placing Resolutions and Admission. It is expected that the Placing Shares will be admitted to trading on AIM at 8.00 a.m. on 12 February 2019.

The Minimum Placing Price represents a discount of approximately 25.9 per cent. to the Closing Price of 189 pence per Ordinary Share on 23 January 2019, being the last practical date prior to the announcement of the Placing and the publication of this document.

The Company and Arden have entered into the Placing Agreement, pursuant to which Arden has agreed to use its reasonable endeavours to procure placees pursuant to the Placing. The Company has agreed to pay all costs and expenses relating to the Placing and the application for Admission including a corporate finance fee and commission payable to Arden. The Placing Agreement is conditional upon, amongst other things, Admission having occurred on or before 28 February 2019.

The Placing Agreement contains certain warranties and indemnities by the Company in favour of Arden. It also contains provisions entitling Arden to terminate the Placing Agreement if, amongst other things, a breach of any of the warranties occurs or an event occurs which is material in the context of the Placing.

Conditions of the Placing

The Placing is conditional, inter alia, upon:

i.        the passing of the Placing Resolutions at the General Meeting;

ii.         Arden having procured binding commitments from Placees to subscribe for a minimum of £10 million worth of Placing Shares at the Placing Price;

iii.       the Placing Agreement becoming unconditional in all respects (save for Admission occurring) and not having been terminated in accordance with its terms; and

iv.        admission of the Placing Shares to trading on AIM becoming effective by no later than 8.00 a.m. on 12 February 2019 (or such later time and/or date as the Company and Arden may agree (being not later than 8.30 a.m. on 28 February 2019)).

If such conditions are not satisfied or, if applicable, waived, by the date(s) and time(s) referred to above the Placing will not proceed.

The Placing is not underwritten by Arden or any other person.

Assuming a Placing of £10 million at the Minimum Placing Price, the Placing will result in the issue of 7,142,858 Placing Shares representing approximately 24.8 per cent. of the Enlarged Share Capital. The Placing Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares on Admission.

For personal reasons Simon Howard, a Non-Executive Director of the Company, has separately agreed upon Admission to sell 80,000 Ordinary Shares simultaneously with and conditional upon the Placing

Settlement and dealings

The Placing Shares will be issued credited as fully paid and will rank pari passu with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of Ordinary Shares after admission of the Placing Shares.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM.  Subject to the passing of the Placing Resolutions at the General Meeting it is expected that Admission will become effective at 8.00 a.m. on 12 February 2019.

Recommendation

The Directors unanimously consider that the Placing and the extension of the Company's Share Scheme are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions, as the Directors intend to do in relation to their own and associated holdings of 8,248,171 Ordinary Shares in total, representing approximately 28.7 per cent. of the Existing Ordinary Shares.

 

IMPORTANT NOTICES

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(1)(e) OF DIRECTIVE 2003/71/EC AS AMENDED, INCLUDING BY THE 2010 PROSPECTUS DIRECTIVE AMENDING DIRECTIVE (DIRECTIVE 2010/73/EC) AND INCLUDING ANY RELEVANT IMPLEMENTING DIRECTIVE OR MEASURE IN ANY RELEVANT MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN SECTION 86 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 ("FSMA") WHO (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (3) PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN GORDON DADDS GROUP PLC.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE OF THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

The distribution of this Announcement and/or the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Arden or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Arden to inform themselves about and to observe any such restrictions.

This Announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia (the "United States" or the "US")), Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction in which the same would be unlawful. No public offering of the Placing Shares is being made in any such jurisdiction.

No action has been taken by the Company or Arden, or any of their respective affiliates, that would, or which is intended to, permit a public offer of the Placing Shares in any jurisdiction or the possession or distribution of this announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Persons into whose possession this announcement comes shall inform themselves about, and observe, such restrictions.

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus. In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) does not apply.

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. The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action.

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in the Appendix.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of information contained in this this announcement.

This Announcement may contain "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its respective affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings; the effect of operational risks; and the loss of key personnel. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Arden is authorised and regulated by the FCA in the United Kingdom and is acting exclusively 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 this document) as a client in relation to the Placing and Admission and Arden will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this Announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Arden or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

No statement in this Announcement or in any previous announcement or in any previous presentation issued by the Company was or is intended to be a profit forecast or estimate, and no statement in this Announcement nor in any previous announcement or in any previous presentation issued by the Company should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange.

This announcement is released by Gordon Dadds Group plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR") it is disclosed in accordance with the Group's obligations under Article 17 of MAR.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Christopher Yates, Chief Financial Officer.

Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks on the Company's website (or any other website) is incorporated in, or forms part of, this Announcement.

This Announcement has been issued by, and is the sole responsibility of, the Company.  No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Arden or by any of its respective affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Information for Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail and professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Arden will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares pursuant to the Placing.

Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Placing Shares and determining appropriate distribution channels.

 

 



 

 TERMS AND CONDITIONS OF THE PLACING

 

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THESE TERMS AND CONDITIONS ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FSMA, AS AMENDED, ("QUALIFIED INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE INCLUDING ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE; (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO: (I) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) FALL WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THESE 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 THESE TERMS AND CONDITIONS RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

(a) Introduction

These terms and conditions apply to persons making an offer to acquire Placing Shares under the Placing. Each person to whom these conditions apply, as described above, who confirms his agreement to Arden, and the Company (whether orally or in writing) to acquire Placing Shares under the Placing (an "Investor") hereby agrees with Arden and the Company to be bound by the contract note issued by Arden to such Investor and these terms and conditions, being the terms and conditions upon which Placing Shares will be sold under the Placing. An Investor shall, without limitation, become so bound if Arden confirms to such Investor its allocation of Placing Shares under the Placing.

Upon being notified of its allocation of Placing Shares in the Placing, an Investor shall be contractually committed to acquire the number of Placing Shares allocated to them at the Placing Price and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment. Dealing may not begin before any notification is made.

(b) Application for Admission

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. Subject to the satisfaction or waiver of the conditions of the Placing Agreement (the "Conditions"), it is expected that Admission will take place and dealings in the Placing Shares will commence on AIM on or around 8.00 a.m. on 12 February 2019.

(c) Bookbuilding Process

Commencing today, Arden will be conducting an accelerated bookbuilding process to determine demand for participation in the Placing by Placees (the "Bookbuilding Process"). This Announcement gives details of the terms and conditions of, and the mechanics of participation in, the Placing. However, Arden will be entitled to effect the Placing by such alternative method to the Bookbuilding Process as it may, after consultation with the Company, determine. No commissions will be paid by or to Placees in respect of any participation in the Placing or subscription for Placing Shares.

(d) Participation in, and principal terms of, the Bookbuilding Process

Participation in the Placing is by invitation only and will only be available to persons who may lawfully be, and are, invited to participate by Arden. Arden and Arden Affiliates are entitled to participate as Placees in the Bookbuilding Process.

The Bookbuilding Process will establish the number of Placing Shares to be issued pursuant to the Placing at the Placing Price.

The book will open with immediate effect. The Bookbuilding Process is expected to close not later than 4.30 p.m. on 24 January 2019, but may be closed at such earlier or later time as Arden may, in its absolute discretion (after consultation with the Company), determine. A further announcement will be made following the close of the Bookbuilding Process detailing the number of Placing Shares to be subscribed for by the Placees at the Placing Price (the "Placing Results Announcement").

A bid in the Bookbuilding Process will be made on the terms and conditions in this Announcement and will be legally binding on the Placee on behalf of which it is made and, except with Arden's consent, will not be capable of variation or revocation after the close of the Bookbuilding Process.

A Placee who wishes to participate in the Bookbuilding Process should communicate its bid by telephone to its usual sales contact at Arden. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at the Placing Price. If successful, Arden will re-contact and confirm orally to Placees following the close of the Bookbuilding Process the size of their respective allocations and a trade confirmation will be despatched as soon as possible thereafter. Arden's oral confirmation of the size of allocations and each Placee's oral commitments to accept the same will constitute an irrevocable legally binding agreement in favour of the Company and Arden pursuant to which each such Placee will be required to accept the number of Placing Shares allocated to the Placee at the Placing Price and otherwise on the terms and subject to the conditions set out herein and in accordance with the Company's articles of association. Each Placee's allocation and commitment will be evidenced by a trade confirmation issued by Arden to such Placee. The terms of this Appendix will be deemed incorporated in that trade confirmation.

Arden reserves the right to scale back the number of Placing Shares to be subscribed by any Placee in the event that the Placing is oversubscribed. Arden also reserves the right not to accept offers to subscribe for Placing Shares or to accept such offers in part rather than in whole. The acceptance and, if applicable, scaling back of offers shall be at the absolute discretion of Arden.

Each Placee's obligations will be owed to the Company and to Arden. Following the oral confirmation referred to above, each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Company and Arden, as agent of the Company, to pay to Arden (or as Arden may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares allocated to such Placee.

To the fullest extent permissible by law, none of Arden, any subsidiary of Arden, any branch, affiliate or associated undertaking of Arden or of any such subsidiary nor any of their respective directors, officers, employees, agents or advisers (each an "Arden Affiliate") nor any person acting on their behalf shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of Arden, any Arden Affiliate nor any person acting on their behalf shall have any liability (including, to the extent legally permissible, any fiduciary duties), in respect of its conduct of the Bookbuilding Process or of such alternative method of effecting the Placing as Arden may determine.

All obligations of Arden under the Placing will be subject to fulfilment of the conditions referred to in this Announcement including without limitation those referred to below under "Conditions of the Placing".

(e) Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of Arden under the Placing Agreement are conditional, among other things, upon:

(i)               the passing of the Placing Resolutions at the General Meeting;

(ii)              Arden having procured binding commitments from Placees to subscribe for a minimum of £10 million worth of Placing Shares at the Placing Price;

(iii)            the warranties on the part of the Company contained in the Placing Agreement being true and accurate and not misleading on and as of the date of the Placing Agreement and at Admission of the Placing Shares; 

(iv)             the obligations of Arden not having been terminated (as described below under "Right to terminate under the Placing Agreement"); and

(v)              Admission of the Placing Shares occurring not later than 8.00 a.m. on 12 February 2019 or such later time and/or date as Arden and the Company may agree (but in any event not later than 28 February 2019).

If (a) the Conditions of the Placing are not fulfilled (or to the extent permitted under the Placing Agreement waived by Arden), or (b) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and each Placee's rights and obligations hereunder shall cease and determine at such time and no claim may be made by a Placee in respect thereof. None of Arden, any Arden Affiliate, the Company, nor any subsidiary of the Company, nor any branch, affiliate or associated undertaking of any such company nor any of their respective directors, officers and employees (each a "Gordon Dadds Affiliate") shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition in the Placing Agreement or in respect of the Placing generally.

By participating in the Placing, each Placee agrees that Arden's rights and obligations in respect of the Placing terminate, inter alia, in the circumstances described below under "Right to terminate under the Placing Agreement".

(f) Right to terminate under the Placing Agreement

Arden has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event of a breach of the warranties given to Arden in the Placing Agreement (in a manner which is material in the context of the Placing), the failure of the Company to comply with certain of its obligations under the Placing Agreement, the occurrence of a force majeure event or a material adverse change in the financial or trading position or prospects of any member of the Group.

By participating in the Placing, each Placee agrees with Arden that the exercise by Arden of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Arden and that Arden need not make any reference to the Placees in this regard and that, to the fullest extent permitted by law, neither the Company, Arden, any Arden Affiliate nor any Gordon Dadds Affiliate  shall have any liability whatsoever to the Placees in connection with any such exercise or failure to so exercise.

(g) No Prospectus

No offering document or prospectus has been or will be prepared in relation to the Placing and no such prospectus is required (in accordance with the Prospectus Directive) to be published or submitted to be approved by the FCA and Placees' commitments will be made solely on the basis of the information contained in this Announcement.

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 to Arden and the Company that it has neither received nor relied on any information, representation, warranty or statement made by or on behalf of Arden (other than the amount of the relevant Placing participation in the oral confirmation given to Placees and the trade confirmation referred to below), any Arden Affiliate, any persons acting on its or their behalf or the Company or any Gordon Dadds Affiliate and none of Arden, any Arden Affiliate, any persons acting on their behalf, the Company, any Gordon Dadds Affiliate nor any persons acting on their behalf will be liable for the decision of any Placee to participate in the Placing based on any other information, representation, warranty or statement which the Placee may have obtained or received (regardless of whether or not such information, representation, warranty or statement was given or made by or on behalf of any such persons). By participating in the Placing, each Placee acknowledges to and agrees with Arden for itself and as agent for the Company that, except in relation to the information contained in this Announcement, it has relied on its own investigation of the business, financial or other position of the Company in deciding whether to participate in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

(h) Registration and settlement

Settlement of transactions in the Placing Shares following Admission will take place within the CREST system, using the delivery versus payment mechanism, subject to certain exceptions. Arden reserves the right to require settlement for and delivery of the Placing Shares to Placees by such other means as Arden may deem necessary, including, without limitation, if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

The expected timetable for settlement will be as follows: 

Trade Date

8 February 2019

Settlement Date

12 February 2019

ISIN Code

GB00BZBY3Y09

SEDOL

BZBY3Y0

Deadline for input instruction into CREST

5.00 p.m. on 8 February 2019

CREST ID for Arden

601

 

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation stating the number of Placing Shares allocated to it, the Placing Price, the aggregate amount owed by such Placee to Arden and settlement instructions. Placees should settle against the Arden CREST ID shown above. It is expected that such trade confirmation will be despatched on the expected trade date shown above. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions which it has in place with Arden.

It is expected that settlement will take place on the Settlement Date shown above on a delivery versus payment basis in accordance with the instructions set out in the trade confirmation unless otherwise notified by Arden.

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 the base rate of HSBC Bank Plc.

Each Placee is deemed to agree that if it does not comply with these obligations, Arden may sell any or all of the Placing Shares allocated to the Placee on such Placee's behalf and retain from the proceeds, for Arden's own account and profit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The Placee will, however, remain liable for any shortfall below the aggregate amount owed by such Placee and it may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, the Placee should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in the Placee's name or that of its nominee or in the name of any person for whom the Placee is contracting as agent or that of a nominee for such person, such Placing Shares will, subject as provided below, be so registered free from any liability to any levy, stamp duty or stamp duty reserve tax. If there are any circumstances in which any other stamp duty or stamp duty reserve tax is payable in respect of the issue of the Placing Shares, neither Arden nor the Company shall be responsible for the payment thereof. Placees will not be entitled to receive any fee or commission in connection with the Placing.

(i) Agreement to acquire Placing Shares

Conditional on: (i) Admission occurring and becoming effective by 8.00 a.m. (London time) on 12 February 2019 (or such later time and/or date as the Company and Arden may agree) and on the Placing Agreement being otherwise unconditional in all respects and not having been terminated in accordance with its terms on or before Admission; and (ii) the confirmation mentioned under paragraph (a) above, an Investor agrees to become a member of the Company and agrees to acquire Placing Shares at the Placing Price. The number of Placing Shares acquired by such Investor under the Placing shall be in accordance with the arrangements described above.

(j) Payment for Placing Shares

Each Investor undertakes to pay the Placing Price for the Placing Shares acquired by such Investor in such manner as shall be directed by Arden. In the event of any failure by an Investor to pay as so directed by Arden , the relevant Investor shall be deemed hereby to have appointed Arden or its nominee to sell (in one or more transactions) any or all of the Placing Shares in respect of which payment has not been made as so directed by Arden and to have agreed to indemnify on demand Arden in respect of any liability for stamp duty and/or stamp duty reserve tax arising in respect of any such sale or sales.

(k) Representations and warranties

By receiving this announcement, each Investor and, to the extent applicable, any person confirming his agreement to acquire Placing Shares on behalf of an Investor or authorising Arden to notify an Investor's name to the Registrars, is deemed to acknowledge, agree, undertake, represent and warrant to each of Arden, the Registrars and the Company that:

(i)               the Investor has read this Announcement in its entirety and acknowledges that its participation in the Placing shall be made solely on the terms and subject to the conditions set out in these terms and conditions, the Placing Agreement and the Articles. Such Investor agrees that these terms and conditions and the contract note issued by Arden to such Investor represent the whole and only agreement between the Investor, Arden and the Company in relation to the Investor's participation in the Placing and supersedes any previous agreement between any of such parties in relation to such participation. Accordingly, all other terms, conditions, representations, warranties and other statements which would otherwise be implied (by law or otherwise) shall not form part of these terms and conditions. Such Investor agrees that none of the Company, Arden nor any of their respective officers or directors will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation;

(ii)           the content of this Announcement is exclusively the responsibility of the Company and the Directors and that neither Arden nor any person affiliated with Arden or acting on its behalf is responsible for or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company or any member of the Group and will not be liable for any decision by an Investor to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise;

(iii)         the Investor has not relied on Arden or any person affiliated with Arden in connection with any investigation of the accuracy of any information contained in this announcement or its investment decision;

(iv)          in agreeing to acquire Placing Shares under the Placing, the Investor is relying on this Announcement and not on any draft thereof or other information or representation concerning the Group, the Placing or the Placing Shares. Such Investor agrees that neither the Company nor Arden nor their respective officers, directors or employees will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation;

(v)           Arden is not making any recommendations to Investors or advising any of them regarding the suitability or merits of any transaction they may enter into in connection with the Placing, and each Investor acknowledges that participation in the Placing is on the basis that it is not and will not be a client of Arden and that Arden is acting for the Company and no one else, and Arden will not be responsible to anyone else for the protections afforded to its clients, and that Arden will not be responsible for anyone other than the Company for providing advice in relation to the Placing, the contents of this Announcement or any transaction, arrangements or other matters referred to herein, and Arden will not be responsible for anyone other than the relevant party to the Placing Agreement in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of Arden ' rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein;

(vi)          save in the event of fraud on its part (and to the extent permitted by the rules of the Financial Conduct Authority), neither Arden nor any of its directors or employees shall be liable to an Investor for any matter arising out of the role of Arden as the Company's nominated adviser and broker or otherwise, and that where any such liability nevertheless arises as a matter of law each Investor will immediately waive any claim against Arden and any of its respective directors and employees which an Investor may have in respect thereof;

(vii)        the Investor has complied with all applicable laws and such Investor will not infringe any applicable law as a result of such Investor's agreement to acquire Placing Shares under the Placing and/or acceptance thereof or any actions arising from such Investor's rights and obligations under the Investor's agreement to acquire Placing Shares under the Placing and/or acceptance thereof or under the Articles;

(viii)       all actions, conditions and things required to be taken, fulfilled and done (including the obtaining of necessary consents) in order: (i) to enable the Investor lawfully to enter into, and exercise its rights and perform and comply with its obligations to acquire the Placing Shares under the Placing; and (ii) to ensure that those obligations are legally binding and enforceable, have been taken, fulfilled and done. The Investor's entry into, exercise of its rights and/or performance under, or compliance with its obligations under the Placing, does not and will not violate: (a) its constitutional documents; or (b) any agreement to which the Investor is a party or which is binding on the Investor or its assets;

(ix)          it understands that no action has been or will be taken in any jurisdiction by the Company, Arden or any other person that would permit a public offering of the Placing Shares, or possession or distribution of this Announcement, in any country or jurisdiction where action for that purpose is required; and that, if the Investor is in a relevant EEA member state, it is: (i) a legal entity which is authorised or regulated to operate in the financial markets or, if not so authorised or regulated, its corporate purpose is solely to invest in securities; (ii) a legal entity which has two or more of: (a) an average of at least 250 employees during the last financial year; (b) a total balance sheet of more than €43,000,000; and (c) an annual net turnover of more than €50,000,000, in each case as shown in its last annual or consolidated accounts; (iii) otherwise permitted by law to be offered and sold Placing Shares in circumstances which do not require the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive or other applicable laws; or (iv) in the case of any Placing Shares acquired by an Investor as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, either:

1.               the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their placing or resale to, persons in any relevant member state other than qualified investors, as that term is defined in the Prospectus Rules, or in circumstances in which the prior consent of Arden has been given to the placing or resale; or

2.               where Placing Shares have been acquired by it on behalf of persons in any relevant member state other than qualified investors, the placing of those Placing Shares to it is not treated under the Prospectus Rules as having been made to such persons;

(x)           to the fullest extent permitted by law, the Investor acknowledges and agrees to the disclaimers contained in this Announcement and acknowledges and agrees to comply with the selling restrictions set out in this Announcement;

(xi)          the Placing Shares have not been and will not be registered under the Securities Act or under the securities legislation of, or with any securities regulatory authority of, any state or other jurisdiction of the United States or under the applicable securities laws of Australia, Canada, Japan or the Republic of South Africa or where to do so may contravene local securities laws or regulations;

(xii)        the Investor is, and at the time the Placing Shares are acquired, will be located outside the United States and eligible to participate in an "offshore transaction" as defined in and in accordance with Regulation S;

(xiii)       the Investor is not acquiring the Placing Shares as a result of any "directed selling efforts" as defined in Regulation S or as a result of any form of general solicitation or general advertising (within the meaning of Rule 502(c) of Regulation D under the Securities Act);

(xiv)       if it is acquiring the Placing Shares for the account of one or more other persons, it has full power and authority to make the representations, warranties, agreements and acknowledgements herein on behalf of each such account;

(xv)         the Investor is acquiring the Placing Shares for investment purposes only and not with a view to any resale, distribution or other disposition of the Placing Shares in violation of the Securities Act or any other United States federal or applicable state securities laws;

(xvi)       the Company is not obliged to file any registration statement in respect of resales of the Placing Shares in the United States with the US Securities and Exchange Commission or with any state securities administrator;

(xvii)      the Company, and any registrar or transfer agent or other agent of the Company, will not be required to accept the registration of transfer of any Placing Shares acquired by the Investor, except upon presentation of evidence satisfactory to the Company that the foregoing restrictions on transfer have been complied with;

(xviii)     the Investor invests in or purchases securities similar to the Placing Shares in the normal course of its business and it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Placing Shares;

(xix)       the Investor has conducted its own investigation with respect to the Company and the Placing Shares and has had access to such financial and other information concerning the Company and the Placing Shares as the Investor deemed necessary to evaluate the merits and risks of an investment in the Placing Shares, and the Investor has concluded that an investment in the Placing Shares is suitable for it or, where the Investor is not acting as principal, for any beneficial owner of the Placing Shares, based upon each such person's investment objectives and financial requirements;

(xx)         the Investor or, where the Investor is not acting as principal, any beneficial owner of the Placing Shares, is able to bear the economic risk of an investment in the Placing Shares for an indefinite period and the loss of its entire investment in the Placing Shares;

(xxi)       there may be adverse consequences to the Investor under tax laws in other jurisdictions resulting from an investment in the Placing Shares and the Investor has made such investigation and has consulted such tax and other advisors with respect thereto as it deems necessary or appropriate;

(xxii)      the Investor is not a resident of the United States, Australia, Canada, Japan or the Republic of South Africa and acknowledges that the Placing Shares have not been and will not be registered nor will a prospectus be prepared in respect of the Placing Shares under the securities legislation of the United States, Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa and, subject to certain exceptions, the Placing Shares may not be offered or sold, directly or indirectly, in or into those jurisdictions;

(xxiii)     the Investor is liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by it or any other person on the acquisition by it of any Placing Shares or the agreement by it to acquire any Placing Shares;

(xxiv)     in the case of a person who confirms to Arden on behalf of an Investor an agreement to acquire Placing Shares under the Placing and/or who authorises Arden to notify such Investor's name to the Registrars, that person represents that he has authority to do so on behalf of the Investor;

(xxv)      the Investor has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ("Money Laundering Regulations 2017") and any other applicable law concerning the prevention of money laundering and, if it is making payment on behalf of a third party, that: (i) satisfactory evidence has been obtained and recorded by it to verify the identity of the third party; and (ii) arrangements have been entered into with the third party to obtain from the third party copies of any identification and verification data immediately on request as required by the Money Laundering Regulations 2017 and, in each case, agrees that pending satisfaction of such obligations, definitive certificates (or allocation under the CREST system) in respect of the Placing Shares comprising the Investor's allocation may be retained at Arden 's discretion;

(xxvi)     the Investor agrees that, due to anti-money laundering and the countering of terrorist financing requirements, Arden and/or the Company may require proof of identity of the Investor and related parties and verification of the source of the payment before the application can be processed and that, in the event of delay or failure by the Investor to produce any information required for verification purposes, Arden and/or the Company may refuse to accept the application and the moneys relating thereto. The Investor holds harmless and will indemnify Arden and/or the Company against any liability, loss or cost ensuing due to the failure to process this application, if such information as has been required has not been provided by it or has not been provided on a timely basis;

(xxvii)    the Investor is not, and is not applying as nominee or agent for, a person which is, or may be, mentioned in any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depository receipts and clearance services);

(xxviii)  the Investor has complied with and will comply with all applicable provisions of FSMA with respect to anything done by the Investor in relation to the Placing in, from or otherwise involving the UK;

(xxix)     if the Investor is in the UK, the Investor is a person: (i) who has professional experience in matters relating to investments falling within article 19(5) of the Order; or (ii) a high net worth entity falling within article 49(2)(a) to (d) of the Order; or (ill) is a person to whom this announcement may otherwise be lawfully communicated, and in all cases is capable of being categorised as a Professional Client or Eligible Counterparty for the purposes of the Financial Conduct Authority Conduct of Business Rules;

(xxx)      if the Investor is in the EEA, the person is a "Professional Client/Eligible Counterparty" within the meaning of Annex ll/Article 24 (2) of MiFID and is not participating in the Placing on behalf of persons in the EEA other than professional clients or persons in the UK and other Member States (where equivalent legislation exists) for whom the Investor has authority to make decisions on a wholly discretionary basis;

(xxxi)     each Investor in a relevant member state of the EEA who acquires any Placing Shares under the Placing contemplated hereby will be deemed to have represented, warranted and agreed with each of Arden and the Company that: (i) it is a qualified investor within the meaning of the law in that relevant member state implementing Article 2(1) of the Prospectus Directive; and (ii) in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive: (A) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any relevant member state other than qualified investors, as that term is defined in the Prospectus Directive, or in other circumstances falling within Article 3(2) of the Prospectus Directive and the prior consent of Arden has been given to the offer or resale; or (B) where Placing Shares have been acquired by it on behalf of persons in any relevant member state other than qualified investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons;

(xxxii)       represents and warrants that its participation in the Placing would not give rise to an offer being required to be made by it or any person with whom it is acting in concert pursuant to Rule 9 of the City Code on Takeovers and Mergers;

(xxxiii)  in the case of a person who confirms to Arden on behalf of an Investor an agreement to acquire Placing Shares under the Placing and who is acting on behalf of a third party, that the terms on which the Investor (or any person acting on its behalf) are engaged enable it to make investment decisions in relation to securities on that third party's behalf without reference to that third party;

(xxxiv)   the exercise by Arden of any rights or discretions under the Placing Agreement shall be within its absolute discretion and Arden need not have any reference to any Investor and shall have no liability to any Investor whatsoever in connection with any decision to exercise or not to exercise or to waive any such right and each Investor agrees that it shall have no rights against Arden or any of its directors or employees under the Placing Agreement;

(xxxv)    it irrevocably appoints any director of Arden as its agent for the purposes of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares agreed to be taken up by it under the Placing and otherwise to do all acts, matters and things as may be necessary for, or incidental to, its acquisition of any Placing Shares in the event of its failure so to do;

(xxxvi)   it will indemnify and hold the Company, Arden and its respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this paragraph and further agrees that the provisions of this paragraph will survive after completion of the Placing;

(xxxvii) Arden may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Placing Shares and/or related instruments for its own account and, except as required by applicable law or regulation, Arden will not make any public disclosure in relation to such transactions; and

(xxxviii)             Arden and each of its respective affiliates, each acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by Arden and/or any of its respective affiliates, acting as an investor for its or their own account(s). Neither Arden nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so.

The Company and Arden will rely upon the truth and accuracy of each of the foregoing representations, warranties and undertakings.

(l) Supply and disclosure of information

If any of Arden, the Registrars or the Company or any of their respective agents request any information about an Investor's agreement to acquire Placing Shares, such Investor must promptly disclose it to them and ensure that such information is complete and accurate in all respects.

(m) Miscellaneous

The rights and remedies of Arden, the Registrars and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them, and the exercise or partial exercise of one will not prevent the exercise of others.

(i)               On application, each Investor may be asked to disclose, in writing or orally to Arden:

1.               if he is an individual, his nationality; or

2.               if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

(ii)              All documents will be sent at the Investor's risk. They may be sent by post to such Investor at an address notified to Arden.

(iii)            Each Investor agrees to be bound by the Articles (as amended from time to time) once the Placing Shares which such Investor has agreed to acquire have been acquired by such Investor.

(iv)             These provisions may be waived, varied or modified as regards specific Investors or on a general basis by Arden.

(v)              The contract to acquire Placing Shares and the appointments and authorities mentioned herein will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of Arden, the Company and the Registrars, each Investor irrevocably submits to the exclusive jurisdiction of the English courts in respect of these matters. This does not prevent an action being taken against an Investor in any other jurisdiction.

(vi)             In the case of a joint agreement to acquire Placing Shares, references to an "Investor" in these terms and conditions are to each of such Investors and such joint Investors' liability is joint and several.

(vii)           Arden and the Company each expressly reserve the right to modify the Placing (including, without limitation, its timetable and settlement) at any time before allocations of Placing Shares under the Placing are determined.

(viii)          The Placing is subject to the satisfaction of the conditions contained in the Placing Agreement and the Placing Agreement not having been terminated.

DEFINITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise:

Acquisition

the acquisition of the members' interests in and certain of the assets of Ince & Co LLP by the Company as announced on 31 December 2018.

Admission

the admission of the Placing Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules.

AIM

the market of that name operated by the London Stock Exchange.

AIM Rules for Companies

the AIM Rules for Companies published by the London Stock Exchange for the time being.

Arden

Arden Partners plc, the Company's nominated adviser and broker.

Board

the board of directors of the Company for the time being.

Business Day

any day on which banks are open for business in London other than a Saturday, Sunday or statutory holiday.

Circular

the Circular to Shareholders dated on or around the date of this Announcement

CA 2006

the Companies Act 2006, as amended.

Closing Price

the closing mid-market price of an Ordinary Share on AIM as derived from the AIM Appendix to the Daily Official List of the London Stock Exchange.

Company

Gordon Dadds Group plc, a public limited liability company incorporated and registered in England and Wales (with registration number 03744673) whose registered office is at Aldgate Tower, 2 Leman Street, London E1 8QN.

Company's Share Scheme

the Gordon Dadds Group plc unapproved share scheme 2017, details of which are included at paragraph 7.4 of Part 6 of the Company's Admission Document dated 13 July 2017.

CREST

the computerised settlement system (as defined in the CREST Regulations) operated by Euroclear which facilitates the holding and transfer of title to shares in uncertificated form.

CREST Regulations

the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) as amended.

Directors

the directors of the Company as at the date of this Announcement.

Debt Facilities

the debt facilities provided to the Company by Barclays Bank plc comprising the Term Loan and the Revolving Credit Facility

Enlarged Share Capital

the issued ordinary share capital of the Company on Admission comprising the Existing Ordinary Shares and the Placing Shares.

Euroclear

Euroclear UK & Ireland Limited, a company incorporated in England and Wales and the operator of CREST.

Existing Ordinary Shares

the 28,759,711 Ordinary Shares in issue as at the date of this document and Existing Share Capital shall have the same meaning.

FCA

the Financial Conduct Authority of the United Kingdom.

FSMA

the Financial Services and Markets Act 2000, as amended.

General Meeting

the general meeting of the Company convened pursuant to the Notice and to be held at the offices of Ince Gordon Dadds LLP, Aldgate Tower, 2 Leman Street, London, E1 8QN at 10.00 a.m. on 11 February 2019.

Gordon Dadds or Group

the Company and its subsidiary undertakings.

Ince & Co LLP or Ince UK

Blue Co London LLP, previously Ince & Co LLP, a limited liability partnership incorporated  in England and Wales with registered number OC361858, whose registered office is at Aldgate Tower, 2 Leman Street, London, United Kingdom, E1 8QN

Ince Gordon Dadds

Ince Gordon Dadds LLP, previously Gordon Dadds LLP, a limited liability partnership incorporated in England and Wales with registered number OC383616, whose registered office is at Aldgate Tower, 2 Leman Street, London, United Kingdom, E1 8QN.

Ince

Ince & Co International LLP, a limited liability partnership incorporated in England and Wales with registered number OC361858, whose registered office is at Aldgate Tower, 2 Leman Street, London, United Kingdom, E1 8QN and its affiliated entities at the relevant time including Ince UK.

London Stock Exchange

London Stock Exchange plc.

Merged Firm

Ince Gordon Dadds LLP as enlarged by the Acquisition.

Notice

the notice of General Meeting which is set out at the end of the Circular document.

Ordinary Shares

the ordinary shares of 1 pence each in the capital of the Company.

Official List

the official list of the UK Listing Authority.

Placing

the conditional placing of the Placing Shares by Arden, at the Placing Price pursuant to the Placing Agreement.

Placing Agreement

the placing agreement dated 24 January 2019 between Arden and the Company.

Placing Price

the price per Placing Share at which the Placing Shares are to be subscribed for as determined by the accelerated bookbuild process, subject to a minimum of 140 pence per Placing Share.

Placing Resolution

Resolution 1 and 3 as set out in the Notice to authorise the Company to allot and issue the Placing Shares.

Placing Share

the new Ordinary Shares proposed to be issued by the Company to the Placees.

Prospectus Rules

the Prospectus Rules (in accordance with section 73A(3) of FSMA) of the FCA.

Resolutions

the resolutions set out in the Notice which are to be proposed at the General Meeting for the purpose of giving effect to the Placing and the extension of the Company Share Scheme.

Revolving Credit Facility

a £6.5 million revolving credit facility provided to the Company by Barclays Bank plc.

Securities Act

the US Securities Act of 1933, as amended.

Shareholders

the registered holders of Ordinary Shares.

Term Loan

a £6 million term loan expiring on 31 December 2021 provided to the Company by Barclays Banks plc.

UK or United Kingdom

the United Kingdom of Great Britain and Northern Ireland.

uncertificated

recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations may be transferred by means of CREST.

Unless otherwise indicated, all references in this document to "pence" or "p" are to the lawful currency of the United Kingdom.

 

 


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Proposed placing by accelerated bookbuild - RNS