RNS Number:2853I
Nettec PLC
31 August 2006
NOT FOR RELEASE OR DISTRIBUTION IN OR INTO THE USA, CANADA, AUSTRALIA, THE
REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN
NETTEC PLC
ACQUISITION OF NEWFOUND GROUP
#20 MILLION PLACING AND SUBSCRIPTION
SUSPENSION OF SHARE TRADING TO BE LIFTED
Nettec plc announces that its new group holding company, Newfound N.V., has
conditionally agreed to acquire Newfound Group, a developer and operator of
up-market holiday resorts in a deal worth up to #95 million. A placing and
subscription has raised #20 million from institutional investors, the management
of Nettec plc and others, of which #10 million is new money for the company.
Trading in shares of Nettec on AIM, which was suspended at the Company's request
on 4 April 2006, will recommence today.
Newfound Group has established a proven business model through the success of
its Humber Valley Resort in Canada. It is developing two further resorts in
Nevis and St. Kitts.
Humber Valley is an all-season, up-market resort offering golf, sailing and
skiing. 380 privately owned properties have been sold at Humber Valley and the
2,200 acre site has capacity for a further 720 properties.
Jeremy White, Chairman of Nettec, said:
"From Humber Valley we know that the Newfound model works. People
love the holiday experience and really want to own the sort of properties
that have been developed, giving the company exposure to increasing land
values as the resorts develop and to a series of long-term income streams."
"The new money being raised is expected to give the enlarged group the
chance to exploit a wide range of global opportunities. We are
particularly pleased at the level of support we have received from
institutional investors in the placing."
Shareholders in Nettec will be asked to approve the transaction at an
Extraordinary General Meeting to be held on 25 September 2006, with admission of
the Newfound N.V. ordinary shares to trading on AIM and completion of the
transaction expected on 26 September 2006.
This summary should be read in conjunction with the full text of the following
announcement. Certain terms used in the summary are defined in the Appendix of
the attached announcement.
For further information:
Nettec plc
Edwin Richards +44 (0)20 7152 6472
Collins Stewart Limited
Adrian Hadden +44 (0)20 7523 8350
Cubitt Consulting
Michael Henman +44 (0)20 7367 5100
Collins Stewart Limited, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting exclusively for Nettec plc and
Newfound N.V. in connection with the matters described in this announcement and
is neither advising nor treating as a client any other person and will not be
responsible to anyone other than Nettec plc and Newfound N.V. for providing the
protections afforded to clients of Collins Stewart Limited nor for providing
advice in relation to such matters.
Collins Stewart Limited is the nominated adviser and broker for the purposes of
the AIM Rules to Nettec plc and Newfound N.V.. Its responsibilities as such
nominated adviser and broker under the AIM Rules are owed solely to the London
Stock Exchange and not to Nettec plc, Newfound N.V., any director of such
companies or any other person.
No offer or invitation to purchase or subscribe for ordinary shares is being
made by this announcement. The Admission Document of Newfound N.V. is expected
to be published on or around the date of this announcement and any acquisition
of shares in Nettec plc or Newfound N.V. should be made only by reference to the
Admission Document.
The Newfound N.V. ordinary shares have not been, and will not be registered
under the United States Securities Act of 1933, as amended (the 'Securities
Act') or under the securities legislation of any state of the United States, and
may not be offered or sold in the United States. The relevant clearances have
not been, and will not be, obtained from the Securities Commission of any
province or territory of Canada; no document in relation to the Admission or the
Placing or Subscription has been, or will be, lodged with, or registered by, The
Australian Securities and Investments Commission; no registration statement has
been, or will be, filed with the Japanese Ministry of Finance in relation to the
Admission or the Placing or Subscription; and no registration statement has
been, or will be, filed with the Irish Stock Exchange in relation to the
Admission or the Placing or Subscription. Accordingly, subject to certain
exceptions, the Newfound N.V. ordinary shares the subject of the Placing and/or
the Subscription may not, directly or indirectly, be offered or sold within the
United States, Canada, Australia, Japan or the Republic of Ireland or offered or
sold to a resident of the United States, Canada, Australia, Japan or the
Republic of Ireland.
Information contained in this announcement may include 'forward-looking
statements'. All statements other than statements of historical facts included
in this announcement, including, without limitation, those regarding Nettec
plc's or any member of the Newfound Group's financial position, business
strategy, plans and objectives of management for future operations are
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other important factors that could cause the
actual results, performance or achievements of the relevant company or group to
be materially different from future results, performance or achievements
expressed or implied by such forward-looking statements.
NOT FOR RELEASE OR DISTRIBUTION IN OR INTO THE USA, CANADA, AUSTRALIA, THE
REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN
NETTEC PLC
ACQUISITION OF NEWFOUND GROUP
#20 MILLION PLACING AND SUBSCRIPTION
SUSPENSION OF SHARE TRADING TO BE LIFTED
Introduction
On 27 July 2006 Nettec announced proposals to establish a new group holding
company incorporated in The Netherlands, to be known as Newfound N.V. These
proposals, which are to be implemented by way of a scheme of arrangement under
section 425 of the Companies Act 1985, were sent to Nettec Shareholders in a
circular dated 4 August 2006.
Nettec today announces that Newfound N.V. has conditionally agreed to acquire
Newfound Group for an initial consideration of #55.9 million (together with
further incentive consideration, if applicable). Completion of the Acquisition
is, inter alia, conditional upon the Scheme of Arrangement becoming effective
and upon the admission of the ordinary share capital of Newfound N.V. to trading
on AIM. Newfound N.V. has today issued an Admission Document in connection with
such admission, a copy of which will be sent to Nettec Shareholders.
The Acquisition constitutes a reverse takeover of Newfound N.V. under the AIM
Rules and the prior approval of Nettec Shareholders at an extraordinary general
meeting is therefore required. As it is proposed that the Scheme of
Arrangement, under which Nettec Shareholders will become shareholders in
Newfound N.V., will not become effective until immediately prior to completion
of the Acquisition, approval for the Acquisition is now being sought from Nettec
Shareholders prior to their becoming shareholders in Newfound N.V. For these
purposes, a notice of an extraordinary general meeting of Nettec, to be held on
25 September 2006, is set out at the end of the Circular to be sent to Nettec
Shareholders today.
The suspension of trading in Nettec Shares, which took effect on the
announcement of the possible acquisition of Newfound Group on 4 April 2006, has
been lifted today. The Board anticipates that trading in Nettec Shares will
continue until 21 September 2006, being the expected date for the Court Hearing
to sanction the Scheme of Arrangement. If the Scheme of Arrangement is not
sanctioned, trading in Nettec Shares will continue. If the Scheme is
sanctioned, trading in Nettec Shares will be suspended, pending the Scheme
becoming effective at which point Nettec Shareholders will become shareholders
in Newfound N.V. and trading in Nettec Shares will be cancelled upon the
admission of the ordinary share capital of Newfound N.V. to trading on AIM.
Background to and terms of the Acquisition
Nettec has for some time been pursuing a strategy of seeking a merger or
acquisition. In September 2005, the Company recruited Edwin Richards, whose
background was in private equity, to develop the search for a suitable
acquisition on a full time basis. Following a review of more than 100 potential
opportunities, Nettec announced on 4 April 2006 that it was in exclusive
negotiations for the acquisition of Newfound Group, an international developer
and operator of up-market holiday resorts.
The negotiations with Newfound Group have culminated in the announcement today
that Newfound N.V. has conditionally agreed to acquire Newfound Group for an
initial consideration of #55.9 million, to be satisfied by the issue to the
Vendors of the Consideration Shares at an issue price of 65 pence per share and
the payment of cash of #6,736,946. The Vendors may become entitled to further
consideration in the form of Incentive Shares upon the achievement of certain
performance targets in 2006 and 2007. Jeremy White and Edwin Richards, who are
directors of Newfound N.V., will also be entitled to participate in such
incentive arrangements if these targets are achieved. Further information on the
Acquisition Agreement and the Incentive Shares will be set out in the Admission
Document.
The Newfound N.V. Directors, the Newfound N.V. Proposed Director and the Vendors
will be subject to lock-in arrangements in respect of their interests in the
securities in Newfound N.V. for a period of one year from Admission and will, in
addition, be subject to orderly market arrangements for a further period of one
year. Details of the lock-in arrangements will be set out in the Admission
Document.
In conjunction with the Acquisition, Newfound N.V. is proposing to raise up to
#16.7 million (before expenses) by way of a placing of, and subscription for,
new ordinary shares in Newfound N.V.. In addition, Newfound N.V. has procured
the placing of approximately #3.3 million of shares held by an existing Nettec
Shareholder. Under the subscription arrangements, Edwin Richards and Jeremy
White will subscribe for new ordinary shares of Nettec at the placing price of
65 pence per share with an aggregate value of approximately #5.1 million. The
placing and the subscription are each conditional upon completion of the
Acquisition and the Admission. Further details of the placing and subscription
will be set out in the Admission Document.
Newfound Group has up-market holiday resorts in Canada and the islands of St
Kitts and Nevis. Information on the business of Newfound Group is set out in
Part I, and financial information is set out in Part V, of the Admission
Document. The Scheme of Arrangement is not conditional upon the Acquisition
taking place. In the event that the Acquisition is not approved by Nettec
Shareholders, Newfound N.V. will, following the Scheme of Arrangement becoming
effective, continue to search for a suitable acquisition opportunity pursuant to
its investing strategy.
Summary information on Newfound Group
Newfound Group, founded by Brian Dobbin, is an international developer of
up-market resorts, pursuing a vertically integrated business model with multiple
revenue sources, including development, marketing and sales, and operations. It
owns a resort at Humber Valley in Newfoundland, Canada and has land interests in
two new resort sites in the Caribbean: Pinney's Estate in Nevis and Ocean's Edge
in St. Kitts.
Humber Valley Resort, Newfoundland, Canada
Humber Valley Resort is located on the west coast of the island of Newfoundland,
Canada and is being developed within approximately 2,200 acres of forested land.
As at 31 July 2006, 370 land plots had been sold with associated commitments
entered into for the construction of chalets, of which 140 are completely
constructed and another 70 are under construction. Land plots range in size from
around one half to three acres, with chalet accommodation designs and sizes
varying from 3 to 6 bedrooms and ranging between around 2,200 and 7,000 square
feet in size. Apartments are also offered, of which 8 have been sold subject to
construction (which is now underway).
Pinney's Estate, Nevis
Pinney's Estate is located on the Caribbean island of Nevis, sister island of
St. Kitts. The resort covers approximately 600 acres of undeveloped real estate
adjacent to the renowned Four Seasons Resort Nevis. It is intended that the
beach-front resort will include 490 villas, 220 apartments, a 150-room luxury
hotel, restaurants, bars, a destination spa, swimming pools and tennis courts.
The Newfound N.V. Directors and Newfound N.V. Proposed Director consider the
Pinney's Estate resort to be the blueprint for future resorts. Newfound Group
has a 75 per cent. interest in Pinney's Estate.
Ocean's Edge, St. Kitts
Newfound Group has acquired a 40 per cent. economic interest in the Ocean's Edge
development in St. Kitts and, as part of the arrangement, also manages the
project. Ocean's Edge is situated in Frigate Bay, a ten minute walk from the St.
Kitts Marriott Resort, which provides access to the Royal St. Kitts Golf Club
and the Royal Beach Casino. The approximately 40 acre beach-front development is
expected to include 180 units comprising 20 villas, 60 hillside apartments, 60
beach apartments and 40 garden cottages. The resort will include various leisure
and entertainment facilities such as a clubhouse, fitness centre with spa,
restaurants, pools and tennis courts.
Newfound Property International
NPI provides in-house marketing services to Newfound Group as well as to other
international resort developers. NPI now employs a total of 20 people and has
offices in the UK and North America.
Directors
In the circular relating to the Scheme of Arrangement, which was sent to Nettec
Shareholders on 4 August 2006, it was proposed that Maarten Frech, a Dutch
national, should become a non-executive director of Newfound N.V. Mr Frech has
subsequently determined that, because of his other interests, he will be unable
to devote the time and resource that the position demands, and he has decided
not to proceed with his appointment. As noted in paragraph 1.3 of Part V of the
Scheme of Arrangement circular, Luke Wiseman will resign from the board of
Nettec immediately prior to the Scheme of Arrangement becoming effective and
will not become a director of Newfound N.V. The board of Newfound N.V. intends
to appoint one or two non-executive directors as soon as reasonably practicable
following Admission. Details relating to the service agreements of the Newfound
N.V. Directors and the Newfound N.V. Proposed Director are set out in the
Admission Document.
Extraordinary General Meeting of Nettec
A notice will be sent to Nettec Shareholders today convening an Extraordinary
General Meeting of Nettec to be held at 11.00 a.m. on 25 September 2006 at the
offices of Jones Day, 21 Tudor Street, London EC4Y 0DJ.
At the Extraordinary General Meeting, an ordinary resolution will be proposed
for the purposes of approving the Acquisition.
The Acquisition Agreement is conditional, inter alia, upon the passing of the
resolution and therefore if it is not approved by the Nettec Shareholders, the
Acquisition will not complete.
In aggregate, Nettec has received irrevocable undertakings to vote in favour of
the resolution in respect of 61,700,000 Nettec Shares, representing
approximately 52.2 per cent of the existing issued Nettec share capital.
Expected Timetable of Principal Events
Set out below is the expected timetable of principal events in relation to the
Acquisition, Placing and Subscription:
Extraordinary General Meeting of Nettec plc 11.00 a.m. on 25 September 2006
Record date for Scheme of Arrangement 4.30 p.m. on 25 September 2006
Completion date of the Scheme of Arrangement 25 September 2006
Completion date of the Acquisition 26 September 2006
Cancellation of Nettec admission 8.00 a.m. on 26 September 2006
Admission 8.00 a.m. on 26 September 2006
Crediting of CREST accounts 26 September 2006
These times and dates are indicative only and will depend, amongst other things,
on the dates upon which (a) the Court sanctions the Scheme and confirms the
associated reduction of capital and (b) the Court Order sanctioning the Scheme
and confirming the reduction of capital is delivered to the Registrar of
Companies and, in respect of the reduction of capital, the Court Order is
registered by the Registrar of Companies. If the Expected Timetable of Principal
Events changes, the Company shall notify a Regulatory Information Service of the
London Stock Exchange and Nettec Shareholders as appropriate.
APPENDIX
Definitions
''Acquisition'' the proposed acquisition of Newfound
Group pursuant
to the Acquisition Agreement
''Acquisition Agreement'' the conditional agreement dated 31 August
2006
pursuant to which Newfound N.V. has
conditionally
agreed to acquire Newfound Group
''Admission'' the admission of the ordinary share
capital of
Newfound N.V. to trading on AIM and such
admission
becoming effective in accordance with the
AIM Rules
''Admission Document'' the AIM admission document dated 31
August 2006
issued by Newfound N.V. in connection
with, and for
the purposes of, Admission
''AIM'' AIM, the market of that name operated by
London Stock
Exchange plc
''AIM Rules'' the rules for companies whose securities
are traded
on AIM and their nominated advisers
published by
London Stock Exchange plc as amended from
time to
time
''Consideration Shares'' the securities to be issued to the
Vendors as initial
consideration in accordance with the
Acquisition
Agreement
''EGM'' or ''Extraordinary General Meeting'' the extraordinary general meeting of
Nettec to be
held at the offices of Jones Day at 21
Tudor Street,
London EC4Y 0DJ at 11.00 a.m. on 25
September 2006
''Incentive Shares'' the Ordinary Shares and the Additional
Exchangeable
Shares that may be issued to the Vendors
and to Edwin
Richards and Jeremy White pursuant to the
incentive
arrangements in the Acquisition
Agreement
''Nettec'' or ''the Company'' Nettec plc
''Nettec Shareholders'' holders of Nettec Shares
''Nettec Shares'' ordinary shares of #0.01 each in the
capital of
Nettec
''Newfound Group'' Newfound Canada, Inc. and its
subsidiaries to be
purchased under the Acquisition
Agreement
''Newfound N.V. Directors'' Jeremy White and Edwin Richards
''Newfound N.V. Proposed Director'' Brian Dobbin
''Newfound Property International'' or ''NPI'' together NPI Canada, NPI Ireland A, NPI
Ireland B,
NDCL, NPI St. Kitts, NPI UK and NPI USA
''Scheme of Arrangement'' or ''Scheme'' the scheme of arrangement under section
425 of the
Companies Act 1985 between Newfound N.V.,
Nettec and
the Nettec Shareholders including any
modification,
addition or condition approved by or
imposed by the
High Court of Justice in England and
Wales, as set
out in the circular to Nettec
Shareholders published
by Nettec dated 4 August 2006
''Vendors'' the shareholders of Newfound Canada,
Inc.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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