AFH Financial Group Plc Statement re Possible Offer for Lighthouse Group (0063T)
23 Mars 2016 - 9:30AM
UK Regulatory
TIDMAFHP TIDMLGT
RNS Number : 0063T
AFH Financial Group Plc
23 March 2016
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT
JURISDICTION.
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.8 of the UK CITY
CODE ON TAKEOVERS AND MERGERS (THE "CODE")
23 March 2016
AFH Financial Group PLC
("AFH", or the "Company")
AFH announces that it does not intend to make an offer for
Lighthouse Group plc ("Lighthouse")
Pursuant to the Company's 17 March 2016 statement to the market,
regarding a possible offer for the entire issued and to be issued
share capital of Lighthouse, the Board of AFH today confirms it
does not intend to make an offer for the entire issued and to be
issued share capital for Lighthouse Group plc ("Lighthouse"). The
statement released by AFH on 17 March 2016 was made following a 35%
price movement in the shares of Lighthouse since the initial
approach was made on 9 March 2016.
The Company's initial approach was made to Lighthouse in order
to explore the potential of a transaction that would be
advantageous to both AFH and Lighthouse shareholders. At the
request of the Lighthouse board AFH indicated a price and
consideration structure. The price of 13 pence outlined in AFH's
indicative offer was based on information available to AFH at that
time and represented a premium of 26.8 per cent. to Lighthouse's
share price on 8 March 2016 (the day before the initial approach to
the board of Lighthouse was made) . In addition AFH confirmed that
at least 50% of any consideration would be in cash with a mix and
match option available to accommodate the individual interests of
Lighthouse shareholders.
The Company's indicative offer recognised Lighthouse's limited
growth prospects under its current strategy and as reflected in
market expectations, its inability to make further distributions or
other non-trading payments from its regulated subsidiaries without
FCA consent and the acknowledgment that approximately 50% of its
cash was required to be retained for Regulatory purposes.
The Board was disappointed by the reaction of the Lighthouse
directors not to engage in discussions and is surprised by
subsequent statements that indicated that Lighthouse did not seek
to consult its shareholders before rejecting AFH's approach.
The Board of AFH believed that a potential enlarged group would
have brought efficiencies and cost synergies. In addition they
believed that access to AFH's proven model would have generated
additional revenue and margin for the combined businesses. Given
the lack of willingness by Lighthouse to engage, together with the
share price movement which has prevented further confidential
discussions, the Company cannot carry out what it considers to be
the appropriate level of due diligence within the time period
imposed.
As previously stated, AFH retains a healthy pipeline of
potential IFA acquisitions and it will continue to execute its
strategy of acquisitive and organic growth to further enhance its
position as a leading financial planning led investment management
firm.
Commenting on today's news, CEO Alan Hudson said: "We are
naturally disappointed with the reaction of Lighthouse to our
indicative proposal which included a mix and match structure for
individual Lighthouse shareholders. AFH, with its extensive track
record of M&A to date, continues to progress its stated organic
and acquisitive growth strategy and looks forward to updating the
market in due course"
This announcement is made in accordance with Rule 2.8 of the
Code. As a result of this announcement, AFH will, except with the
consent of the UK Panel on Takeovers and Mergers, be bound by the
restrictions contained in Rule 2.8 of the Code.
Enquiries:
AFH Financial Group PLC 01527 577 775
Alan Hudson, Chief Executive Officer
Paul Wright, Chief Financial Officer
www.afhfinancialgroup.com
Allenby Capital Limited 020 3328 5656
Nick Naylor/Nick Athanas (Nominated Adviser and Broker)
Chris Crawford (Corporate Broking)
Yellow Jersey PR Limited 07768 537 739
Dominic Barretto
This information is provided by RNS
The company news service from the London Stock Exchange
END
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March 23, 2016 04:30 ET (08:30 GMT)
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