RNS Number : 0055E
MAMA Group Plc
22 September 2008
MAMA Group Plc
22 September 2008
MAMA Group Plc
Acquisition of Heaven (London) Limited and issue of convertible loan note
MAMA Group Plc ("MAMA" or "the Company") is pleased to announce that through its jointly
owned subsidiary, G-A-Y Group Limited
("G-A-Y"), it has acquired the entire issued share capital of Heaven (London) Limited
("Heaven"), the company which owns the leasehold of
Heaven Nightclub (the "Venue") and owns, operates and manages the business of promoting events
at the Venue (the "Business") and the assets
used in connection with the Business (the "Assets").
The Venue, located in central London, has been in operation since 1979 and has played host
to performances by an array of renowned
international artists including the Eurythmics, Grace Jones and Cher. It has a capacity of
over 1,600 and is the only venue in Westminster
with a premises licence which permits it to sell alcohol until 6:00 a.m. every day. The Venue
is one of the most famous nightclubs in London
and one of the largest in terms of floor space in central London. It hosts club nights, comedy
club nights, live music performances and is
also hired for large scale private events such as corporate and university parties. Based on
the management accounts to 31 January 2008 the
Venue has operating profits of £167,528 before management charges from associated companies
and other non-recurring costs.
It is intended that the highly successful club nights held at the London Astoria under the
Company's G-A-Y brand will transfer to the
Venue under the direction of the Company's partner in the G-A-Y business, Jeremy Joseph. These
nights have featured performances from
artists such as Kylie Minogue, Madonna, Boyzone and the Sugababes and are regarded as being
amongst the most high profile club nights staged
in London.
The purchase consideration for the acquisition of shares in Heaven is £650,000. Heaven
acquired the Business and Assets immediately
prior to completion of G-A-Y's acquisition of its shares. The consideration payable by Heaven
for the Business and Assets was £2,100,000
(additional consideration will also be payable by Heaven for stock and certain cash left in
the Business once the relevant amounts have been
agreed between the parties and VAT is also payable in respect of certain of the assets
acquired). G-A-Y loaned Heaven the monies required by
it in order to meet the costs of this acquisition and to meet associated costs in connection
with the acquisition.
This loan was financed by way of debt facilities provided by the Company and Jeremy
Joseph. The Company has financed the provision of
its debt facility by the issue of a convertible loan note of £2,750,000 (the "Loan Note") to
Pacific Capital S.a.r.l, a shareholder of the
Company.
The Loan Note must either be converted into ordinary shares in the capital of MAMA
("Ordinary Shares") or redeemed (at the sole option
of the Company) by no later than 31 December 2008. Conversion of the Loan Note into Ordinary
Shares is conditional upon the Company
obtaining the necessary shareholder approval at a general meeting of the Company. MAMA
intends to convene the necessary general meeting on
or around 31 October 2008 and, subject to obtaining shareholder approval, exercise its right
to convert the Loan Note into Ordinary Shares
prior to 31 December 2008. Following a conversion of the Loan Note by MAMA, Pacific Capital
would be issued with 55,000,000 Ordinary Shares
of 5p each issued at par. Interest shall accrue on the Loan Note at a fixed rate of 1.75 per
cent. above the base rate of the Bank of
England at the date of issue of the Loan Note.
The Venue will continue to trade following completion and it is expected that the
acquisition will be earning enhancing in the current
financial year.
Pacific Capital S.a.r.l holds 101,020,000 Ordinary Shares in MAMA, representing 13.41% of
the total shares in issue. As such, under the
AIM Rules for Companies, Pacific Capital S.a.r.l is treated as a related party of MAMA. The
Directors of MAMA consider, having consulted
with Panmure Gordon (UK) Limited, MAMA's nominated adviser, that the terms of the Loan Note
are fair and reasonable insofar as its
shareholders are concerned.
Adam Driscoll and Dean James, Co-Chief Executive Officers of MAMA commented:
"Heaven is a historical venue which has been at the heart of the London nightclub scene
for almost thirty years. It has a phenomenal
reputation, not just in London but internationally and we are delighted that the acquisition
of Heaven (London) Limited has enabled us to
add this unique venue to our expanding live music portfolio. The transfer of the G-A-Y club
nights to Heaven together with other popular
club nights currently staged at the venue will ensure the continued growth and development of
Heaven. "
For further information contact:
Adam Driscoll or Dean James, Co-Chief Executives
MAMA Group Plc 020 7688 9000
Katherine Roe
Panmure Gordon & Co 020 7459 3600
Mark Longson
Square1 Consulting Limited 020 7929 5599
This information is provided by RNS
The company news service from the London Stock Exchange
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