TIDMAFHP TIDMAFHB
RNS Number : 8375Q
AFH Financial Group Plc
02 March 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION .
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
For immediate release.
2 March 2021
INCREASED RECOMMED CASH OFFER
for
AFH FINANCIAL GROUP PLC
by
CORTINA BIDCO LIMITED
(a newly incorporated company indirectly controlled by funds
managed by Flexpoint Ford LLC)
intended to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Increased Acquisition Price
and
Resumption of trading
Introduction
On 25 January 2021, the board of Cortina Bidco Limited (Bidco),
a newly incorporated company indirectly controlled by funds managed
by Flexpoint Ford, LLC (Flexpoint), and the Independent Directors
of AFH Financial Group Plc (AFH) announced that they had reached
agreement on the terms of a recommended all cash acquisition of the
entire issued, and to be issued, ordinary share capital of AFH (the
Acquisition). The Acquisition is to be effected by means of a
scheme of arrangement under Part 26 of the Companies Act 2006.
The scheme document in respect of the Acquisition (the Scheme
Document) was published and made available to AFH Shareholders on 8
February 2021. Capitalised terms used but not defined in this
announcement have the meanings given to them in the Scheme
Document.
On 1 March 2021, AFH announced the adjournment of the Court
Meeting and the General Meeting and suspension of trading in AFH
Shares. AFH will notify AFH Shareholders of the revised times and
dates on which the Court Meeting and the General Meeting will be
held by announcement through a Regulatory Information Service as
soon as reasonably practicable.
Increased Acquisition Price
The board of directors of Bidco and the Independent Directors of
AFH are pleased to announce that they have reached agreement on the
terms of an increased recommended cash offer by Bidco to acquire
the entire issued and to be issued share capital of AFH (the
Increased Offer).
Under th e terms of the Increased Offer, Scheme Shareholders
will be entitled to receive:
for each Scheme Share 480 pence in cash
The Increased Offer of 480 pence per Scheme Share
represents:
-- a market-leading valuation for the Core Wealth division when
considering the Bidco offer on a sum-of-the-parts basis between
Core Wealth and Protection Broking; and
-- a premium of approximately:
-- 45.5 per cent. to the Closing Price of 330.0 pence per AFH
Share on 1 December 2020 being the date Flexpoint entered into a
confidentially agreement with AFH;
-- 20.8 per cent. to the Closing Price of 397.5 pence per AFH
Share on the Pre-Announcement Date;
-- 39.1 per cent. to the volume-weighted average price of 345.0
pence per AFH Share for the three-month period ended on the
Pre-Announcement Date; and
-- 40.9 per cent. to the volume-weighted average price of 340.7
pence per AFH Share for the six-month period ended on the
Pre-Announcement Date.
The Increased Offer values AFH's entire issued, and to be
issued, ordinary share capital at approximately GBP231.6
million.
In connection with the Increased Offer the AFH Executive
Directors and the Independent Directors who hold AFH Shares have
entered into deeds of amendment to the irrevocable undertakings in
respect of the Acquisition previously entered into by them pursuant
to which they have agreed that certain of the options held by them
over AFH Shares will lapse and not be exercised in connection with
the Acquisition. Consequently, the aggregate proceeds to be
received in connection with the Acquisition by the AFH Executive
Directors and the Independent Directors who hold AFH Shares will
reflect the Acquisition Price set out originally in the Scheme
Document, being 463 pence per AFH Share.
The Scheme will be modified to reflect the terms of the
Increased Offer. Save as disclosed in this announcement, the
Increased Offer is subject to the terms and conditions set out in
the Scheme Document and the Scheme will otherwise remain
unchanged.
Recommendation
The Independent Directors, who have been so advised by KBW as to
the financial terms of the Increased Offer, consider the terms of
the Increased Offer to be fair and reasonable. In providing its
advice, KBW has taken into account the commercial assessments of
the Independent Directors. KBW is providing independent financial
advice to the Independent Directors of AFH for the purposes of Rule
3 of the Code.
Accordingly, the Independent Directors confirm that they intend
unanimously to recommend that AFH Shareholders vote, or procure the
vote, in favour of the Scheme at the Court Meeting and the
Resolutions at the General Meeting (in each case, to be reconvened
in due course as referred to below), as the Independent Directors
who are interested in AFH Shares have irrevocably undertaken to do,
or procure to be done, in respect of their own beneficial holdings
of AFH Shares which are under their control, amounting, in
aggregate, to 311,254 AFH Shares representing approximately 0.7 per
cent. of the issued ordinary share capital of AFH and approximately
0.8 per cent. of the AFH Shares eligible to vote at the Court
Meeting, in each case, on the last business day prior to the date
of this announcement; (the Latest Reference Date).
Irrevocable undertakings
Bidco has, in total, received irrevocable undertakings from AFH
Shareholders in respect of a total of 25,882,741 AFH Shares
representing, in aggregate, approximately 60.2 per cent. of the
issued ordinary share capital of AFH (representing approximately
53.7 per cent. of the AFH Shares eligible to vote at the Court
Meeting) on the Latest Reference Date. The irrevocable undertakings
received by Bidco prior to the date of the Announcement are as
described in the Scheme Document (save with respect to certain
amendments to such irremovable undertakings described below) and
the irrevocable undertakings received by Bidco since the date of
the Scheme Document are described in further detail below.
Bidco has received an irrevocable undertaking from Slater
Investments Limited, AFH's second largest shareholder (holding
5,577,529 AFH Shares representing approximately 13.0 per cent. of
AFH's issued share capital and approximately 15.1 per cent. of the
AFH Shares eligible to vote at the Court Meeting, in each case, on
the Latest Reference Date) to vote, or procure the vote, in favour
of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting.
Bidco has also received irrevocable undertakings from each of
GLG Partners Limited, GWM Asset Management Limited, Lombard Odier
Asset Management (Europe) Limited, Otus Capital Management, Sand
Grove Capital Management LLP and Tavira Securities Limited (
holding a combined total of 6,122,535 AFH Shares representing, in
aggregate, approximately 14.2 per cent. of AFH's issued share
capital and approximately 16.5 per cent. of the AFH Shares eligible
to vote at the Court Meeting, in each case, on the Latest Reference
Date) to vote, or procure the vote, in favour of the Scheme at the
Court Meeting and the Resolutions to be proposed at the General
Meeting .
At the time of the Announcement, Bidco had received irrevocable
undertakings from Alan Hudson, each of the other AFH Executive
Directors, the Independent Directors who hold AFH Shares, Paul
Connor, Philip Mobberley and BMO Asset Management Limited to vote,
or procure the vote, in favour of the Scheme at the Court Meeting
and the Resolutions (or, in the case of the AFH Executive
Directors, to be bound by the Scheme) in respect of a total of
14,182,677 AFH Shares, representing approximately 33.0 per cent. of
the issued ordinary share capital of AFH and approximately 22.1 per
cent. of the AFH Shares eligible to vote at the Court Meeting, in
each case, on the Latest Reference Date. Each such party has
executed a deed of amendment (i) confirming that these irrevocable
undertakings remain binding in connection with the Increased Offer,
and (ii) in the case of the AFH Executive Directors and the
Independent Directors who hold AFH Shares, that they agree to
surrender or allow certain options held by them over AFH Shares to
lapse whereby the overall effect is that each AFH Executive
Director and each Independent Director who holds AFH Shares will
receive aggregate proceeds in connection with the Acquisition that
will reflect the Acquisition Price set out originally in the Scheme
Document .
Further details of the irrevocable undertakings described above,
including the circumstances in which they may lapse, are set out in
Schedule 2 to this announcement.
AFH Shareholder Meetings
On 1 March 2021, the Court Meeting and the General Meeting were
adjourned indefinitely. It is intended that the Court Meeting and
the General Meeting be reconvened in due course in connection with
the Increased Offer and AFH Shareholders will be notified of the
revised times and dates on which the reconvened Court Meeting and
the General Meeting will be held by announcement through a
Regulatory Information Service as soon as reasonably practicable.
The resolutions to be proposed at the reconvened Meetings will
remain unchanged notwithstanding the Increased Offer and further
information about how to attend the reconvened Meetings is set out
in the Scheme Document and will be provided to AFH Shareholders in
due course.
Any votes cast by AFH Shareholders who, prior to the adjournment
of the Court Meeting and the General Meeting, appointed a proxy in
respect of some or all of their AFH Shares to exercise the right to
vote in respect of some or all of the AFH Shares held by such
holder shall remain valid and binding in respect of the reconvened
Court Meeting and General Meeting. To the extent any AFH
Shareholder wishes to alter their vote in light of the Increased
Offer, they should contact the Registrar for further Forms of Proxy
(or photocopy the previously provided forms).
Financing the Increased Offer
The cash consideration payable by Bidco in respect of the
Acquisition, as increased pursuant to the Increased Offer, will be
funded by a combination of equity financing drawn down from the
Flexpoint Funds pursuant to an Equity Commitment Letter entered
into by the Flexpoint Funds and debt financing drawn down under an
interim facilities agreement arranged by Ares Management
Limited.
Raymond James is satisfied that sufficient resources are
available to Bidco to satisfy in full the cash consideration
payable to the Scheme Shareholders under the terms of the Scheme
and the Increased Offer.
General
The expected timetable of principal events for the
implementation of the Scheme will be notified by announcement
through a Regulatory Information Service as soon as reasonably
practicable.
The Increased Offer does not change Bidco's intentions as
regards the business of AFH (including locations of its
operations), the management and employees of AFH and the proposals
in respect of the AFH Share Plans, as set out in the Scheme
Document and in the letters already sent to the participants in the
AFH Share Plans informing them of the effect of the Scheme on their
rights under the AFH Share Plans and, where applicable, containing
appropriate proposals in respect of such rights.
Appendix I contains the sources and bases of certain information
contained in this announcement.
Documents available on website
Copies of the following documents will be made available on
AFH's website at www.afhwm.co.uk/investor-relations (subject to any
applicable restrictions relating to persons resident in Restricted
Jurisdictions) by no later than 12 noon on the business day
following the date of this announcement up to and including the
Effective Date or the date the Scheme lapses or is withdrawn,
whichever is earlier:
-- this announcement;
-- irrevocable undertakings;
-- the equity commitment letter described above; and
-- the written consents provided by each of Raymond James
Financial International Limited and Stifel Nicolaus Europe Limited
to the inclusion of their names in this announcement in the form
and context in which they appear.
Resumption of trading
Following the release of this announcement, trading in the AFH
Shares on AIM and trading in the AFH CULS on the ISM will resume
with effect from 7.30 a.m. on 2 March 2021.
Enquiries
Cortina Bidco Limited via Raymond James
Steven Begleiter
Daniel Edelman
Stephane Essama
Raymond James Financial International
Limited (Sole Financial Adviser
to Bidco) +44 (0) 203 798 5700
Dominic Emery
Edward Griffin
Junya Iwamoto
AFH Financial Group Plc +44 (0) 152 757 7775
John Wheatley (Chairman)
Alan Hudson (Chief Executive Officer)
Keefe, Bruyette & Woods (acting
through Stifel Nicolaus Europe
Limited) (Sole Financial Adviser
to AFH) +44 (0) 20 7710 7600
Alistair McKay
Alex Price
Dennis Towers
Tiber Karadag
Shore Capital (Nominated Adviser) +44 (0) 207 408 4090
Hugh Morgan
Daniel Bush
Sarah Mather
Henry Willcocks
Further information
Raymond James Financial International Limited (Raymond James),
which is authorised and regulated in the United Kingdom by the FCA,
is acting as financial adviser to Bidco and no-one else in
connection with the matters described in this Announcement and will
not be responsible to anyone other than Bidco for providing the
protections afforded to clients of Raymond James nor for providing
advice in connection with the matters referred to herein. Neither
Raymond James 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 Raymond James in connection with this
Announcement, any statement contained herein, the Acquisition or
otherwise.
Stifel Nicolaus Europe Limited, which also trades under the name
Keefe, Bruyette & Woods (KBW), and which is authorised and
regulated in the United Kingdom by the FCA, is acting as financial
adviser to AFH and no-one else in connection with the matters
described in this Announcement and will not be responsible to
anyone other than AFH for providing the protections afforded to
clients of KBW nor for providing advice in connection with the
matters referred to herein. Neither KBW 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 KBW in
connection with this Announcement, any statement contained herein,
the Acquisition or otherwise.
Shore Capital and Corporate Limited and Shore Capital
Stockbrokers Limited (Shore Capital) are authorised and regulated
in the United Kingdom by the FCA. Shore Capital is acting
exclusively for AFH and no one else in connection with the matters
referred to in this announcement and will not be responsible to
anyone other than AFH for providing the protections afforded to
clients of Shore Capital or for providing advice in connection with
the matters referred to in this announcement. Neither Shore Capital
nor any of its subsidiaries or 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 Shore Capital in connection with this
announcement or any matter referred to herein.
Kirkland & Ellis International LLP is retained as legal
adviser to Flexpoint and Bidco.
Eversheds Sutherland (International) LLP is retained as legal
adviser to AFH.
The person responsible for arranging for the release of this
announcement on behalf of AFH is Paul Wright, Chief Financial
Officer .
This announcement is for information purposes only and is not
intended to and does not constitute, or form part of, an 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 or approval, in any
jurisdiction, pursuant to the Acquisition or otherwise, nor shall
there be any sale, issuance or transfer of securities of AFH in any
jurisdiction in contravention of applicable law. The Acquisition
will be implemented solely by means of the Scheme Document (or, if
applicable, the offer document containing any Offer), which
contains the full terms and conditions of the Acquisition including
details of how to vote in respect of the Scheme (or, if applicable,
how to accept the Offer). Any vote in respect of the Scheme or
other response in relation to the Acquisition should be made only
on the basis of the information contained in the Scheme Document
(or, if applicable, the offer document containing any Offer).
Overseas jurisdictions
The availability of the Acquisition to AFH Shareholders who are
not resident in, and citizens of, the UK may be affected by the
laws of the relevant jurisdictions in which they are located or of
which they are citizens. Persons who are not resident in the UK
should inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdictions.
The release, publication or distribution of this announcement in
or into jurisdictions other than the UK may be restricted by law
and therefore any persons who are subject to the law of any
jurisdiction other than the UK should inform themselves of, and
observe, any applicable legal or regulatory requirements. In
particular, the ability of persons who are not resident in the UK
to vote their AFH Shares with respect to the Scheme at the Court
Meeting, or to appoint another person as proxy to vote at the Court
Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located. Any failure to
comply with the applicable restrictions may constitute a violation
of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons
involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person.
This announcement has been prepared for the purposes of complying
with English Law, the AIM Rules, UK MAR, the rules of the London
Stock Exchange and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws of
jurisdictions outside of England.
Copies of this announcement and the formal documentation
relating to the Scheme and the Acquisition have not been, will not
be, and must not be, mailed or otherwise forwarded, distributed or
sent in, into or from any Restricted Jurisdiction or any
jurisdiction where to do so would violate the laws of that
jurisdiction and persons receiving such documents (including
custodians, nominees and trustees) must not mail or otherwise
forward, distribute or send them in or into or from any Restricted
Jurisdiction. Doing so may render invalid any related purported
vote in respect of the Acquisition. If the Acquisition is
implemented by way of an Offer (unless otherwise permitted by
applicable law or regulation), the Offer may not be made, directly
or indirectly, in or into or by use of the mails or any other means
or instrumentality (including, without limitation, facsimile,
e-mail or other electronic transmission, telex or telephone) of
interstate or foreign commerce of, or any facility of a national,
state or other securities exchange of any Restricted Jurisdiction
and the Offer will not be capable of acceptance by any such use,
means, instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to overseas shareholders are
contained in the Scheme Document.
Additional information for US Holders
US Holders should note that the Acquisition relates to the
securities of an English company and is proposed to be implemented
under a scheme of arrangement under English company law. A
transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules under the US Exchange Act and the
proxy solicitation rules under the US Exchange Act will not apply
to the Acquisition. The Scheme will be subject to UK disclosure
requirements and practices which are different from the disclosure
requirements of the US tender offer and proxy solicitation rules.
The financial information included in this announcement and the
Scheme Document has been, or will have been, prepared in accordance
with IFRS and thus may not be comparable to financial information
of companies whose financial statements are prepared in accordance
with generally accepted accounting principles in the US. However,
if Bidco were to exercise its right to implement the Acquisition of
the AFH Shares by way of an Offer, such Offer will be made in
compliance with applicable US tender offer and securities laws and
regulations. Such an Offer would be made by Bidco.
The receipt of cash pursuant to the Acquisition by a US Holder
as consideration for the transfer of its Scheme Shares pursuant to
the Scheme may be a taxable transaction for US federal income tax
purposes and under applicable US state and local, as well as
foreign and other, tax laws. Each AFH Shareholder is urged to
consult his, her or its independent professional adviser
immediately regarding the tax consequences of the Acquisition
applicable to him, her or it.
It may be difficult for US Holders to enforce their rights and
claims arising out of the US federal securities laws since Bidco
and AFH are located in countries other than the US and some or all
of their officers and directors may be residents of countries other
than the US. US Holders may not be able to sue a non-US company or
its officers or directors in a non-US court for violations of US
securities laws. Further, it may be difficult to compel a non-US
company and its affiliates to subject themselves to a US court's
judgment.
In accordance with normal UK practice and pursuant to Rule
14e-5(b) of the US Exchange Act, Bidco or its nominees, or their
brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase, AFH Shares outside of
the US, other than pursuant to the Acquisition, until the date on
which the Scheme and/or the Acquisition becomes Effective, lapses
or is otherwise withdrawn. These purchases may occur either in the
open market at prevailing prices or in private transactions at
negotiated prices. Any information about such purchases will be
disclosed as required in the UK, will be reported to a Regulatory
Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com.
Forward-looking statements
This announcement, oral statements made regarding the
Acquisition, and other information published by Bidco and/or AFH
contain statements which are, or may be deemed to be,
"forward-looking statements". Forward-looking statements are
prospective in nature and are not based on historical facts but
rather on current expectations and projections of the management of
Bidco and/or AFH about future events and are therefore subject to
risks and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward-looking statements.
The forward-looking statements contained in this announcement
include statements relating to the expected effects of the
Acquisition on Bidco and AFH, the expected timing and scope of the
Acquisition and other statements other than historical facts.
Often, but not always, forward-looking statements can be identified
by the use of forward-looking words, phrases and statements such as
"plans", "expects" or "does not expect", "is expected", "is subject
to", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
variations of such words, phrases or statements that certain
actions, events or results "may", "could", "should", "would",
"might" or "will" be taken, occur or be achieved. Although Bidco
and AFH believe that the expectations reflected in such
forward-looking statements are reasonable, Bidco and AFH can give
no assurance that such expectations will prove to be correct. By
their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking
statements.
These factors include, but are not limited to: the ability to
complete the Acquisition; the ability to obtain requisite
regulatory and shareholder approvals and the satisfaction of other
Conditions on the proposed terms and schedule; the behaviour of
other market participants; the anticipated benefits from the
proposed transaction not being realised as a result of changes in
general economic and market conditions in the countries in which
Bidco and AFH operate; weak, volatile or illiquid capital and/or
credit markets; changes in tax rates, interest rates and currency
value fluctuations; the degree of competition in the geographic and
business areas in which Bidco and AFH operate; and changes in laws
or in supervisory expectations or requirements. Other unknown or
unpredictable factors could cause actual results to differ
materially from those in the forward-looking statements. Such
forward-looking statements should therefore be construed in the
light of such factors. Neither Bidco nor AFH, nor any of their
respective associates or directors, officers or advisers, provides
any representation, assurance or guarantee that the occurrence of
the events expressed or implied in any forward-looking statements
in this Announcement will actually occur. You are cautioned not to
place any reliance on these forward-looking statements. Other than
in accordance with their legal or regulatory obligations, neither
Bidco nor AFH is under any obligation, and Bidco and AFH expressly
disclaim any intention or obligation, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
No profit forecasts or profit estimates
No statement in this announcement is intended as a profit
forecast or profit estimate for any period and no statement in this
announcement should be interpreted to mean that earnings or
earnings per share for Bidco or AFH, as appropriate, for the
current or future financial years would necessarily match or exceed
the historical published earnings or earnings per share for Bidco
or AFH, as appropriate.
Dealing disclosure requirements
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. 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) 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 one per cent. 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) 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. 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).
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 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.
Publication on website
In accordance with Rule 26.1 of the Code, a copy of this
announcement will be made available, subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions, on AFH's website at
https://www.afhwm.co.uk/investor-relations by no later than 12 noon
(London time) on the business day following this announcement. For
the avoidance of doubt, the contents of this website is not
incorporated by reference into, and does not form part of, this
announcement.
Requesting hard copy documents
AFH Shareholders may request a hard copy of this announcement by
contacting the Company Secretary of AFH during business hours on
+44 (0)152 757 7775 or by submitting a request in writing to the
Company Secretary of AFH at AFH House, Buntsford Drive, Stoke
Heath, Bromsgrove, Worcestershire, B60 4JE. For persons who receive
a copy of this announcement in electronic form or via a website
notification, a hard copy of this announcement will not be sent
unless so requested. You may also request that all future
documents, announcements and information to be sent to you in
relation to the Acquisition should be in hard copy form.
Electronic communications
Please be aware that addresses, electronic addresses and certain
other information provided by AFH Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from AFH may be provided to Bidco during the offer
period as required under Section 4 of Appendix 4 of the Code to
comply with Rule 2.11(c).
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of figures that precede them.
Inside Information
This announcement contains inside information. Upon the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
If you are in any doubt about the contents of this announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial
adviser.
Schedule 1
Bases and Sources
Unless otherwise stated in this Announcement:
1. all references to AFH Shares are to ordinary shares of 10
pence each in the capital of AFH;
2. the value attributed to the fully diluted issued ordinary
share capital of AFH is based on:
a) 43,005,051 AFH Shares in issue as at the Latest Reference Date; and
b) 1,910,129 AFH Shares which may be issued on or after the date
of this announcement to satisfy the exercise of options and vesting
of awards outstanding under the AFH Share Plans as at the Latest
Reference Date (assuming an Effective Date of 31 March 2021 and
that optionholders have saved the maximum amount possible under the
AFH SAYE Option Plan); and
c) 3,597,588 AFH Shares which may be issued on or after the date
of this announcement to satisfy the conversion of AFH CULS into AFH
Shares (assuming 31 March 2021 as the "change of control" date
under the trust deed relating to the AFH CULs);
3. historical AFH Share prices are sourced from the AIM Appendix
to the Daily Official List and represent Closing Prices on the
relevant dates; and
4. the volume-weighted average prices of AFH Shares and trading
volume data have been derived from Capital IQ and, in the case of
volume-weighted average prices, have been rounded to the nearest
single decimal place.
Schedule 2
Details of Irrevocable Undertakings
AFH Executive Director undertakings
Alan Hudson Undertaking
Alan Hudson has given an irrevocable undertaking in respect of
6,105,700 AFH Shares beneficially owned by him (or in respect of
which he is interested pursuant to options held over AFH Shares)
(being all of the AFH Shares (on a fully diluted basis)
beneficially owned by him or in respect of which he is interested),
and representing approximately 12.6 per cent of AFH's issued, and
to be issued, share capital as at the Latest Reference Date) to be
bound by the terms of the Scheme and, in respect of 5,955,700 AFH
Shares beneficially owned by him (being all of the AFH Shares
beneficially owned by him) and representing approximately 13.9 per
cent. of AFH's issued share capital as at the Latest Reference
Date), to vote, or procure the vote, in favour of the special
resolution to be proposed at the General Meeting to approve the
adoption of the amended Articles. Alan Hudson is not entitled to
vote at the Court Meeting, and is not entitled to vote at the
General Meeting in respect of the Rollover Resolution.
The terms of Alan Hudson 's irrevocable undertaking do not
permit him to accept a higher competing offer made prior to the
Scheme becoming Effective, if any person other than Bidco, or a
person acting in concert with Bidco, announces a firm intention to
make an offer to acquire the entire issued, and to be issued,
ordinary share capital of AFH.
Alan Hudson's irrevocable undertaking will cease to be binding
only if: (i) the Panel consents to Bidco not proceeding with the
Acquisition; or (ii) the Scheme lapses or is withdrawn in
accordance with its terms or the Scheme does not become Effective
by the Long Stop Date. As stated above, the irrevocable undertaking
will remain binding in the event that a higher competing offer for
AFH is made.
In connection with the Increased Offer, Alan Hudson has executed
a deed of amendment (i) confirming that his irrevocable undertaking
(as summarised above) remains binding, and (ii) that he agrees to
surrender or allow certain options held by him over AFH Shares to
lapse whereby the overall effect is that he will receive aggregate
proceeds in connection with the Acquisition that will reflect the
Acquisition Price set out originally in the Scheme Document, being
463 pence per AFH Share .
Other AFH Executive Directors' Undertakings
Paul Wright has given an irrevocable undertaking in respect of
285,000 AFH Shares owned by him (or in respect of which he is
interested pursuant to options held over AFH Shares) (being all of
the AFH Shares (on a fully diluted basis) owned by him or in
respect of which he is interested ), and representing approximately
0.6 per cent. of AFH's issued, and to be issued, share capital as
at the Latest Reference Date) to be bound by the terms of the
Scheme and, in respect of 35,000 AFH Shares owned by him (being all
of the AFH Shares owned by him) and representing approximately 0.1
per cent. of AFH's issued share capital as at the Latest Reference
Date), to vote, or procure the vote, in favour of the special
resolution to be proposed at the General Meeting to approve the
adoption of the amended Articles. Paul Wright is not entitled to
vote at the Court Meeting, and is not entitled to vote at the
General Meeting in respect of the Rollover Resolution.
Austin Broad has given an irrevocable undertaking in respect of
101,420 AFH Shares owned by him (or in respect of which he is
interested pursuant to options held over AFH Shares) (being all of
the AFH Shares (on a fully diluted basis) owned by him or in
respect of which he is interested ), and representing approximately
0.2 per cent. of AFH's issued, and to be issued, share capital as
at the Latest Reference Date) to be bound by the terms of the
Scheme (or, if the Acquisition is to be implemented by way of an
Offer, to accept, or procure the acceptance of, the Offer) and, in
respect of 15,000 AFH Shares owned by him (being all of the AFH
Shares owned by him) and representing approximately 0.03 per cent.
of AFH's issued share capital as at the Latest Reference Date), to
vote, or procure the vote, in favour of the special resolution to
be proposed at the General Meeting to approve the adoption of the
amended Articles. Austin Broad is not entitled to vote at the Court
Meeting, and is not entitled to vote at the General Meeting in
respect of the Rollover Resolution.
Alex Larvin has given an irrevocable undertaking in respect of
101,420 AFH Shares in which she is interested pursuant to options
held over such AFH Shares (being all of the AFH Shares in which she
is interested and representing approximately 0.2 per cent. of AFH's
issued, and to be issued, share capital as at the Latest Reference
Date), to be bound by the terms of the Scheme (or, if the
Acquisition is to be implemented by way of an Offer, to accept, or
procure the acceptance of, the Offer). As Alex Larvin's interests
are currently held by way of options over AFH Shares only, which
will not have been exercised at the date of the General Meeting,
she will not have the right to vote on the special resolution to be
proposed at the General Meeting to approve the adoption of the
amended Articles, nor at the Court Meeting nor General Meeting in
respect of the Rollover Resolution.
The terms of these irrevocable undertakings are otherwise the
same as those of the Alan Hudson's irrevocable undertaking referred
to above.
In connection with the Increased Offer, each of Paul Wright,
Austin Broad and Alex Larvin has executed a deed of amendment (i)
confirming that the irrevocable undertaking given by such person
remains binding, and (ii) that they agree to surrender or allow
certain options held by them over AFH Shares to lapse whereby the
overall effect is that they will receive aggregate proceeds in
connection with the Acquisition that will reflect the Acquisition
Price set out originally in the Scheme Document, being 463 pence
per AFH Share .
AFH Independent Director undertakings
The following Independent Directors who are interested in AFH
Shares have given irrevocable undertakings to vote, or procure the
vote, in favour of the Scheme at the Court Meeting and the
Resolutions (or, if the Acquisition is to be implemented by way of
an Offer, to accept, or procure the acceptance of, the Offer) in
relation to the following AFH Shares:
Name Number of AFH Shares Percentage of AFH Shares as at the Latest Reference Date (%)
John Wheatley 233,121 0.5
Mark Chambers 78,133 0.2
These irrevocable undertakings do not permit acceptance of a
higher competing offer made prior to the Scheme becoming Effective,
if any person other than Bidco, or a person acting in concert with
Bidco, announces a firm intention to make an offer to acquire the
entire issued, and to be issued, ordinary share capital of AFH.
These irrevocable undertakings lapse in the same circumstances
described in relation to Alan Hudson's irrevocable undertaking
above.
In connection with the Increased Offer, each Independent
Director who is interested in AFH Shares has executed a deed of
amendment (i) confirming that the irrevocable undertaking given by
such Independent Director remains binding, and (ii) that they agree
to surrender or allow certain options held by them over AFH Shares
to lapse whereby the overall effect is that they will receive
aggregate proceeds in connection with the Acquisition that will
reflect the Acquisition Price set out originally in the Scheme
Document, being 463 pence per AFH Share .
Sue Lewis does not currently hold any AFH Shares.
AFH Shareholder undertakings
In addition to the AFH Executive Directors and the AFH
Independent Directors, the following AFH Shareholders have given
irrevocable undertakings to vote, or procure the vote, in favour of
the Scheme at the Court Meeting and the Resolutions (or, if the
Acquisition is to be implemented by way of an Offer, to accept, or
procure the acceptance of, the Offer) in relation to the following
AFH Shares:
Name Number of AFH Shares Percentage of AFH Shares as at the Latest
Reference Date (%)
Slater Investments Limited 5,577,529 13.0
Paul Connor 3,500,000 8.1
Philip Mobberley 2,548,776 5.9
BMO Asset Management Limited 1,816,947 4.2
GLG Partners Limited, acting as general partner
of GLG Partners LP 1,520,000 3.5
Sand Grove Capital Management LLP, as
investment manager for Sand Grove
Opportunities Master
Fund Ltd and Sand Grove Tactical Fund LP 1,424,000 3.3
Otus Capital Management 1,077,768 2.5
GWM Asset Management Limited, acting as
investment management to GWM Growth Fund S.A.,
SICAV-RAIF 981,500 2.3
Lombard Odier Asset Management (Europe)
Limited, acting as discretionary investment
manager
or sub-adviser for and on behalf of certain
managed funds and accounts and / or agent of
Lombard
Odier Asset Management (USA) Corp 611,667 1.4
Tavira Securities Limited 507,600 1.2
The undertakings from the AFH Shareholders named above will
cease to be binding only if:
1.1 the Scheme has not become effective by 6.00 p.m. on the Long
Stop Date (or such later time or date as agreed between Bidco and
AFH, with the approval of the Court and/or the Panel if
required);
1.2 in respect of Slater Investments Limited, BMO Asset
Management Limited, GLG Partners Limited, Sand Grove Capital
Management LLP, Otus Capital Management, GWM Asset Management
Limited, Lombard Odier Asset Management (Europe) Limited and Tavira
Securities Limited, if the Acquisition is to be implemented by way
of an Offer, the Offer lapses or is withdrawn in accordance with
its terms and Bidco publicly confirms that it does not intend to
proceed with the Offer or to implement the Offer by way of a
Takeover Offer or otherwise;
1.3 in respect of Connor and Mobberley, the Panel consents to
the Offeror not proceeding with the Acquisition;
1.4 in respect of BMO Asset Management Limited, GLG Partners
Limited, Sand Grove Capital Management LLP, Otus Capital
Management, GWM Asset Management Limited and Tavira Securities
Limited: (i) a competing offer third party announces a firm
intention pursuant to Rule 2.7 of the Code to acquire the entire
issued and to be issued ordinary share capital of the Company and
the consideration payable to each AFH Share under such proposal is
528 pence or greater; and (ii) Bidco does not confirm an increase
in the consideration to be paid for the AFH Shares pursuant to the
Offer to at least an equivalent amount per share within seven days
of such competing offer.
1.5 in respect of Slater Investments Limited only, (i) a
competing offer third party announces a firm intention pursuant to
Rule 2.7 of the Code to acquire the entire issued and to be issued
ordinary share capital of the Company and the consideration payable
to each AFH Share under such proposal is 481 pence or greater; and
(ii) Bidco does not confirm an increase in the consideration to be
paid for the AFH Shares pursuant to the Offer to at least an
equivalent amount per share within seven days of such competing
offer; or
1.6 in respect of Lombard Odier Asset Management (Europe)
Limited only, a competing offer third party announces a firm
intention pursuant to Rule 2.7 of the Code to acquire the entire
issued and to be issued ordinary share capital of the Company and
the consideration payable to each AFH Share under such proposal is
528 pence or greater.
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END
OFFEAXDAEEPFEEA
(END) Dow Jones Newswires
March 02, 2021 02:30 ET (07:30 GMT)
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