RNS Number : 2439I
Hasgrove PLC
17 November 2008
17 November 2008
Hasgrove plc
Placing
Hasgrove plc (AIM: HGV, "Hasgrove", "the Group"), the pan European marketing and
communications services group, has raised £0.96
million (approximately £0.91 million after expenses) via a placing, by KBC Peel Hunt on
behalf of the Group with institutional and other
investors, of 1,068,400 new Ordinary Shares at price of 90 pence per share.
Highlights
* Placing to raise £0.96 million at a price of 90 pence per share, approximately
£0.91 million net of expenses;
* The Placing proceeds will be used to provide sufficient headroom in the Group's cash
facilities in order to:
* be well placed to acquire appropriate companies at attractive prices when the
opportunity arises;
* accelerate the process of 'off-shoring' some of the Group's software development
requirements to a more cost effective location;
and
* enable the 'productising' of some of the Group's software products to achieve
significant scale and additional revenue in the
Digital Communications business;
* The Placing Price represents a discount of approximately 13 per cent. to the closing
mid-market price of 103.5 pence per Ordinary
Share on 14 November 2008;
* The Placing is subject to the terms and conditions set out in the Appendix to this
announcement;
* Admission of the Placing Shares to AIM is expected to take place on 20 November
2008.
For further information, please contact:
Hasgrove plc 0161 817 4200
Rod Hyde, Chief Executive
Paul Sanders, Group Finance Director
KBC Peel Hunt (Nominated Adviser and Broker) 020 7418 8900
Capel Irwin
Oliver Stratton
College Hill 020 7457 2020
Adrian Duffield
Rozi Morris
Note to editors
Hasgrove plc is a pan European marketing and communications services group, with three
mutually supportive disciplines from which it
derives synergy benefits. They are Public Affairs and Corporate Communications; Digital
Communication Services; and Design.
The Group's strategic goal is to build a pan European organisation that is capable of
capitalising on the rapidly changing world of
communications by operating in high growth, niche areas where Hasgrove can be a market leader.This is being achieved by a combination of
organic development and acquisition within the fragmented marketing communications sector. The
Group provides services which encompass
multi-channel, cross-disciplinary and cross-border activity.
There are now more than 350 personnel in the Group, serving a broad client base of more
than 500 clients, working in a number of well
established, profitable and strongly cash generative operating businesses:
* Interel, including Politics International, is a leading European Corporate Affairs
consultancy focusing on public affairs and
issues management. Interel has over 130 professionals in its offices in Brussels, London,
Berlin, Paris, Prague, Madrid and Washington DC
and has a well established network of partners in all other major cities in Europe. Odyssey
Interactive, which is part of the Public Affairs
and Corporate Communications Division, supplies intranet software solutions.
* Amaze offers a broader range of marketing and technology services, including the
delivery of web technology solutions, as well as
traditional PR, print and broadcast advertising and brand consulting.
* The Chase is a leading UK graphic design agency.
FORWARD LOOKING STATEMENTS
This announcement contains forward-looking statements, including, without limitation,
statements containing the words 'believes',
'anticipates', 'expects', and similar expressions. Such forward-looking statements involve
unknown risks, uncertainties and other factors
which may cause the actual results, financial condition, performance or achievements of the
Company, or industry results, to be materially
different from any future results, performance or achievements expressed or implied by such
forward-looking statements. Given these
uncertainties, prospective investors are cautioned not to place any undue reliance on such
forward-looking statements. The Company disclaims
any obligation to update any such forward-looking statements in this announcement to reflect
future events or developments.
Hasgrove plc
Placing
1. Introduction
Hasgrove plc is pleased to announce a placing by KBC Peel Hunt on behalf of the Company
with institutional and other investors of
1,068,400 new Ordinary Shares at price of 90 pence per share to raise £0.96 million
(approximately £0.91 million after expenses). The issue
of the Placing Shares will represent an increase of 5 per cent. in the issued share capital of
the Company.
2. Placing
The Company is proposing to raise £0.96 million, before expenses, by the issue of
1,068,400 new Ordinary Shares to institutional and
other investors at 90 pence per share. Pursuant to the terms of the Placing Agreement, KBC
Peel Hunt, as agent for Hasgrove, has agreed to
use reasonable endeavours to place the Placing Shares with certain institutional and other
investors, subject to the terms and conditions
set out in the Appendix to this announcement.
The Placing is neither a rights issue nor an open offer and the Placing Shares will not be
offered generally to shareholders on a
pre-emptive basis. The Directors believe that the considerable extra cost and delay involved
in a rights issue or open offer would not be in
the best interests of the Company in the circumstances, and accordingly, the Board considers
that it is in the best interests of the Company
and shareholders as a whole for the funds to be raised through the Placing.
The Placing Price represents a discount of approximately 13 per cent. to the closing
mid-market price of 103.5 pence per Ordinary Share
on 14 November 2008, being the latest practicable date prior to the publication of this
document.
Reasons for the Placing and Use of Proceeds
The Group has raised approximately £0.91 million (net of expenses) to provide sufficient
headroom in its cash facilities for the
following reasons:
(a) To be well placed to acquire appropriate companies at attractive prices when the
opportunity arises. This was the case with the
acquisition of Amaze Limited almost 12 months ago, which, in the Directors* opinion, has
proved to be extremely good value for shareholders.The Group was able to take advantage of the opportunity that arose at very short notice as the
decision had to be made within 48-72 hours
before the Directors believed that the inherent value in the business would have started to
decline with probable employee departures and
client losses.
(b) Currently the Group*s Digital Communications business employs relatively expensive
contractors to complete software development
projects. The Board is considering the *off-shoring* of some of the Group*s software
development requirements to a more cost effective
location, where the Directors believe there is a proven track record of both quality and a
competitive cost base. Whilst this move could be
funded organically over an extended period,, the Board believes that relatively modest
additional funding would enable the acceleration of
this process.
(c) In order to be able to achieve significant scale in the Digital Communications
business, the Directors believe that some of the
Group*s software products which are currently only available as bespoke packages should be
*productised*.
One area of particular opportunity relates to the Group's Bid Solutions product that
essentially automates large parts of the tender
process for professional services firms. This has been a Group objective for some time but has
proved difficult to progress rapidly as it
requires a dedicated development software resource for an extended period of time. The
Directors estimate that the Bid Solutions product
could be ready for launch as a stand alone product in six months if the Group had a dedicated
team of up to five additional permanent
developers to service and support clients.
The Directors believe the Placing will allow the Company to build on its existing assets
to further strengthen its position in its main
global markets.
APPENDIX
TERMS AND CONDITIONS OF THE PLACING
For Invited Placees only - Important Information
1. Eligible Participants
This Appendix, including the terms and conditions of the Placing set out below, is
directed only at persons who are FSMA Qualified
Investors.
In this Appendix "you" or "Placee" means any person who is or becomes committed to
subscribe for Placing Shares under the Placing.
Members of the public are not eligible to take part in the Placing.
2. Overseas jurisdictions
The distribution of the Announcement and this Appendix and the Placing and/or issue of
ordinary shares in certain jurisdictions may be
restricted by law. No action has been taken by the Company or KBC Peel Hunt that would permit
an offer of ordinary shares or possession or
distribution of the Announcement and this Appendix or any other offering or publicity material
relating to such ordinary shares in any
jurisdiction where action for that purpose is required. FSMA Qualified Investors who seek to
participate in the Placing must inform
themselves about and observe any such restrictions. In particular, the Announcement does not
constitute an offer to sell or issue or the
solicitation of an offer to buy or subscribe for ordinary shares in the capital of the Company
in the United States, Canada, Japan or
Australia or in any other jurisdiction in which such offer, solicitation, publication or
distribution is or would be unlawful. The Placing
Shares have not been and will not be registered under the US Securities Act or under the
securities laws of any State or other jurisdiction of the United States, and, subject to
certain exceptions, may not be
offered or sold, resold or delivered, directly or indirectly in or into the United States, or
to, or for the account or benefit of, any US
persons. No public offering of the Placing Shares is being made in the United States. No
money, securities or other consideration from any
person inside the United States is being solicited pursuant to the Announcement or the
Placing.
3. Placing
This Appendix gives details of the terms and conditions of, and the mechanics of
participation in, the Placing. KBC Peel Hunt will
arrange the Placing as agent for and on behalf of the Company. KBC Peel Hunt will determine in
its absolute discretion the extent of each
Placee's participation in the Placing, which will not necessarily be the same for each Placee.No commissions will be paid to or by Placees
in respect of their agreement to subscribe for any Placing Shares.
Each Placee will be required to pay to KBC Peel Hunt, on the Company's behalf, the Placing
Price as the subscription sum for each
Placing Share agreed to be subscribed by it under the Placing in accordance with the terms set
out in this Appendix. Each Placee's
obligation to subscribe and pay for Placing Shares under the Placing will be owed to each of
the Company and KBC Peel Hunt. Each Placee will
be deemed to have read and understood this Appendix in its entirety. To the fullest extent
permitted by law and applicable FSA rules,
neither KBC Peel Hunt nor any other KBC Person shall have any liability to Placees or to any
person other than the Company in respect of the
Placing.
4. Participation and settlement
Participation in the Placing is only available to persons who are invited to participate
in it by KBC Peel Hunt.
A Placee's commitment to subscribe for a fixed number of Placing Shares under the Placing
will be agreed orally with KBC Peel Hunt. Such
agreement will constitute a legally binding commitment on your part to subscribe for that
number of Placing Shares at the Placing Price on
the terms and conditions set out or referred to in this Appendix and subject to the Company's
memorandum and articles of association. After
such agreement is entered into, a written confirmation will be dispatched to you by KBC Peel
Hunt confirming the number of Placing Shares
that you have agreed to subscribe and the aggregate amount you will be required to pay for
those Placing Shares. It is expected that such
written confirmations will be despatched on the date of the Announcement, that the "trade
date" for settlement purposes will be 17 November
2008 and the "settlement date" will be 20 November 2008.
A settlement instruction form will accompany each written confirmation and, on receipt,
should be completed and returned to Chris Holmes
at KBC Peel Hunt in accordance with the instructions printed thereon.
Settlement of transactions in the Placing Shares (ISIN: GB001B1FRDB45, SEDOL B1FRDB4) will
take place within the CREST system, subject
to certain exceptions, on a "delivery versus payment" (or "DVP") basis. You should settle
against CREST ID: 9LMAY. KBC Peel Hunt reserves
the right to require settlement for and delivery of the Placing Shares to Placees by such
other means that it deems appropriate if delivery
or settlement is not possible or practicable within the CREST system within the timetable set
out in the Announcement or would not be
consistent with the regulatory requirements in any Placee's jurisdiction.
If Placing Shares are to be delivered to a custodian or settlement agent, please ensure
that the written confirmation is copied and
delivered immediately to the appropriate person within that organisation.
5. No Prospectus
No prospectus has been or will be submitted for approval by the FSA in relation to the Placing
or the Placing Shares. Placees* commitments
in respect of Placing Shares will be made solely on the basis of the information contained in
the Announcement and the Presentation.
6. Placing Shares
The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in
all respects with the existing issued ordinary
shares of the Company.
Application will be made for the admission of the Placing Shares to trading on AIM. It is
expected that Admission will take place, and
dealings in the Placing Shares will commence, on 20 November 2008.
7. Placing Agreement
KBC Peel Hunt has, on the terms and subject to the conditions set out in the Placing
Agreement, agreed to use its reasonable endeavours as
agent of the Company to procure subscribers for Placing Shares at the Placing Price.
8. Placing conditions
The Placing is conditional, inter alia, on (a) the Placing Agreement not being terminated
in accordance with its terms, (b) Admission
taking place not later than 8.00 a.m. on 20 November 2008, and (c) the Placing Agreement
becoming unconditional in all other respects.
KBC Peel Hunt reserves the right to waive or (with the agreement of the Company) extend
the time and or date for the fulfilment of any
of the conditions in the Placing Agreement to a time no later than 8.00 am on 1 December 2008
("the Long Stop Date").
If any condition in the Placing Agreement is not fulfilled or waived by KBC Peel Hunt by
the relevant time, the Placing will lapse and
your rights and obligations pursuant to the Placing shall cease and terminate at such time.
The Placing Agreement may be terminated by KBC Peel Hunt at any time prior to Admission in
certain circumstances including, inter alia,
following a material breach of the Placing Agreement by the Company or the occurrence of
certain force majeure events. The exercise of any
right of termination of the Placing Agreement, any waiver of any condition to the Placing
Agreement or (subject to agreement with the
Company) any decision not to extend the time for satisfaction of any condition to the Placing
Agreement shall be within KBC Peel Hunt's
absolute discretion. KBC Peel Hunt shall have no liability to you in the event of any such
termination, waiver or the extension or in
respect of any decision whether to exercise any such right of termination, waiver or
extension.
9. Payment default
Your entitlement to receive any Placing Shares will be conditional on KBC Peel Hunt's
receipt of payment by the relevant time to be
stated in the written confirmation referred to above, or by such later time and date as KBC
Peel Hunt may in its absolute discretion
determine. KBC Peel Hunt may, in its absolute discretion, waive such condition, and shall not
be liable to you in the event of it deciding
whether to waive or not to waive such condition.
If you fail to make such payment by the required time for any Placing Shares (1) the
Company may release itself (if it decides, at its
absolute discretion, to do so) and will be released from all obligations it may have to allot
and/or issue any such Placing Shares to you or
at your direction which are then unallotted and/or unissued, (2) the Company may exercise all
rights of lien, forfeiture and set-off over
and in respect of any such Placing Shares to the fullest extent permitted under its articles
of association or otherwise by law and to the
extent that you then have any interest in or rights in respect of any such shares, (3) the
Company or, as applicable, KBC Peel Hunt may sell
(and each of them is irrevocably authorised by you to do so) all or any of such shares on your
behalf and then retain from the proceeds, for
the account and benefit of the Company or, where applicable, KBC Peel Hunt (i) any amount up
to the total amount due to it as, or in respect
of, subscription monies, or as interest on such monies, for any Placing Shares, (i) any amount
required to cover any stamp duty or stamp duty reserve tax arising on the sale, and
(iii) any amount required to cover dealing costs and/or commissions necessarily or reasonably
incurred by it in respect of such sale, and
(4) you shall remain liable to the Company and to KBC Peel Hunt for any loss which it may
suffer as a result of it (i) not receiving payment
in full for such Placing Shares by the required time, and/or (ii) the sale of any such Placing
Shares to any other person at whatever price
and on whatever terms as are actually obtained for such sale by or for it. Interest may be
charged in respect of payments not received by
KBC Peel Hunt for value by the required time referred to above at the rate of two percentage
points above the base rate of Barclays Bank plc
from time to time.
10. Placees* warranties and undertakings to the Company and KBC Peel Hunt
By agreeing with KBC Peel Hunt to subscribe for Placing Shares under the Placing you
irrevocably acknowledge and confirm and warrant and
undertake to, and agree with, each of the Company and KBC Peel Hunt (in its capacity as
placing agent), in each case as a fundamental term
of your application for Placing Shares and of the Company's obligation to allot and/or issue
any Placing Shares to you or at your direction,
that:
* you agree to and accept all the terms and conditions set out in this Appendix;
* your rights and obligations in respect of the Placing will terminate only in the
circumstances described in the Appendix and will
not be capable of rescission or termination by you in any circumstances;
* the Announcement and Presentation (which have been, or will be issued by the
Company) are the sole responsibility of the Company;
* you have relied on your own investigation of the business, financial or other
position of the Company in deciding to participate
in the Placing, you are not relying on any information given or any representations,
warranties, agreements or undertakings (express or
implied), written or oral, or statements made at any time by the Company, other than as
contained in Announcement and the Presentation, or
by KBC (other than as contained in this Appendix) and that, accordingly, none of the Company,
any KBC Person or their respective directors,
officers, agents, employees or advisers or any person acting on behalf of any of them shall
have any responsibility for any such other
information or representation and you agree that the Placing will be made solely on this basis
and not otherwise and that you have not been,
and will not be, given any warranty or representation by any KBC Person in relation to the
Placing Shares or the Company or any other member
of its Group;
* you are not, and do not regard yourself as being, a customer of KBC Peel Hunt in
relation to the Placing and KBC Peel Hunt is not
acting for you in connection with the Placing and will not be responsible to you in respect of
the Placing for providing protections
afforded to its customers. You also acknowledge that any monies of any Placee or any other
person acting on behalf of a Placee held or
received by KBC Peel Hunt will not be subject to the protections conferred by the FSA's Client
Money Rules;
* you will pay the full subscription amount as and when required in respect of all
Placing Shares for which you have committed to
subscribe and will do all things necessary on your part to ensure that payment for such shares
and their delivery to you or at your
direction is completed in accordance with the standing CREST instructions (or, where
applicable, standing certificated settlement
instructions) that you have in place with KBC Peel Hunt or put in place with KBC Peel Hunt
with its agreement;
* you are entitled to subscribe for Placing Shares under the laws of all relevant
jurisdictions which apply to you and you have
complied, and will fully comply, with all such laws (including where applicable, the
Anti-Terrorism, Crime and Security Act 2001, the
Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, and the Money Laundering
Regulations 2007 (the "Regulations") and analogous
laws in other jurisdictions to which you are subject) and have obtained all governmental and
other consents (if any) which may be required
for the purpose of, or as a consequence of, such subscription, and you will provide promptly
to KBC Peel Hunt such evidence, if any, as to
the identity of any person which it may request from you (for the purpose of its complying
with the Regulations or otherwise in connection
with your participation in the Placing) in the form and manner requested by KBC Peel Hunt on
the basis that any failure by you to do so may
result in the number of Placing Shares that are to be allotted and/or issued to you or at your
direction pursuant to the Placing being reduced to such number, or to nil, as KBC Peel Hunt may
decide at its sole discretion;
* you have complied and will comply with all applicable provisions of FSMA with
respect to anything done or to be done by you in
relation to any Placing Shares in, from or otherwise involving, the United Kingdom and you
have not made or communicated or caused to be
made or communicated, and you will not make or communicate or cause to be made or
communicated, any "financial promotion" in relation to
Placing Shares in contravention of section 21 of FSMA;
* you are a FSMA Qualified Investor;
* you are acting as principal only in respect of the Placing or, if you are acting for
any other person in respect of the Placing
(1) you are both an "authorised person" for the purposes of FSMA and a "qualified investor" as
defined at Article 2.1(e)(i) of Directive
2003/71/EC (known as the Prospectus Directive) acting as agent for such person, and (2) such
person is either (i) a FSMA Qualified Investor
or (ii) a "client" (as defined in section 86(2) of FSMA) of yours that has engaged you to act
as his agent on terms which enable you to make
decisions concerning the Placing or any other offers of transferable securities on his behalf
without reference to him;
* nothing has been done or will be done by you in relation to the Placing or to any
Placing Shares that has resulted or will result
in any person being required to publish a prospectus in relation to the Company or to any
Ordinary Shares in accordance with FSMA or the UK
Prospectus Rules or in accordance with any other laws applicable in any part of the European
Union or the European Economic Area;
* you are not, and are not acting in relation to the Placing as nominee or agent for,
a person who is or may be liable to stamp duty
or stamp duty reserve tax in respect of any agreement to acquire (or any acquisition of)
shares or other securities at a rate in excess of
0.5% (including, without limitation, under sections 67, 70, 93 or 96 of the Finance Act 1986
concerning depositary receipts and clearance
services), and the allocation, allotment, issue and/or delivery to you, or any person
specified by you for registration as holder, of
Placing Shares will not give rise to a liability under any such section;
* you will not treat any Placing Shares in any manner that would contravene any
legislation applicable in any territory or
jurisdiction and no aspect of your participation in the Placing will contravene any
legislation applicable in any territory or jurisdiction
in any respect or cause the Company or KBC Peel Hunt to contravene any such legislation in any
respect;
* (applicable terms and expressions used in this paragraph have the meanings that they
have in Regulation S made under the US
Securities Act) (1) none of the Placing Shares has been or will be registered under the US
Securities Act, (2) none of the Placing Shares
may be offered, sold, taken up or delivered, directly or indirectly, into or within the United
States except pursuant to an exemption from,
or in transactions not subject to, the registration requirements of the US Securities Act, (3)
you are not within the United States and
(unless you will be subscribing Placing Shares pursuant to an exemption referred to above in
this paragraph) you are not a US person, (4)
you have not offered, sold or delivered and will not offer sell or deliver any of the Placing
Shares to persons within the United States,
directly or indirectly, (5) neither you, your affiliates, nor any persons acting on your
behalf, have engaged or will engage in any directed
selling efforts with respect to the Placing Shares, (6) you will not be subscribing Placing
Shares with a view to resale in or into the United States, and (7) you will not distribute any
offering
material relating to Placing Shares, directly or indirectly, in or into the United States or
to any persons resident in the United States;
* time is of essence as regards your obligations under this Appendix;
* you shall indemnify and hold each of the Company and KBC Peel Hunt harmless, on an
after tax basis, from any and all costs,
claims, liabilities and expenses (including legal fees and expenses) arising out of or in
connection with any breach by you of the terms in
this Appendix;
* none of your rights or obligations in respect of the Placing is conditional on any
other person agreeing to acquire any Placing
Shares under the Placing and no failure by any other person to meet any of your obligations in
respect of the Placing shall effect any of
your obligations in respect of the Placing;
* the Company and KBC Peel Hunt will reply upon the truth and accuracy of the
representations, confirmations, acknowledgements and
warranties given by you as set out in this Appendix;
* this Appendix and any contract which may be entered into between you and KBC Peel
Hunt and/or the Company pursuant to it or the
Placing shall be governed by and construed in accordance with the laws of England, for which
purpose you submit to the exclusive
jurisdiction of the courts of England and Wales as regards any claim, dispute, or matter
arising out of or relating to this Appendix or such
contract, except that each of the Company and KBC Peel Hunt shall have the right to bring
enforcement proceedings in respect of any
judgement obtained against you in the courts of England and Wales in the courts of any other
relevant jurisdiction; and
* nothing in this Appendix shall exclude any liability of any person for fraud on its
part.
All times and dates in the Announcement are subject to amendment at the discretion of KBC
Peel Hunt, except that in no circumstances
will the date scheduled for Admission be later than the Long Stop Date.
Definitions
"Admission" the admission to AIM of the Placing Shares
"AIM" AIM, a market operated by London Stock Exchange
plc
"Announcement" the announcement to be made by the Company
regarding the Placing including any drafts
thereof
"Board" the board of directors of the Company
"Company" or "Hasgrove" Hasgrove plc, a company registered in England
and Wales with registered number 5247414 and
whose registered office is at St John's Court,
19b Quay Street Manchester M3 3HN
"Directors" the directors of the Company
"Existing Ordinary Shares" the Ordinary Shares in issue immediately prior
to the issue of the Placing Shares
"FSA" the Financial Services Authority
"FSMA" the Financial Services and Markets Act 2000
"FSMA Qualified Investor" a person who is a "qualified investor" as
referred to at section 86(7) of FSMA and at or
to whom any private communication relating to
the Company that is a "financial promotion" (as
such term is used in relation to FSMA) may
lawfully be issued, directed or otherwise
communicated without the need for it to be
approved, made or directed by an "authorised
person" as referred to in FSMA
"KBC Peel Hunt" KBC Peel Hunt Ltd
"KBC Person" any person being (i) KBC Peel Hunt, (ii) an
undertaking which is a subsidiary undertaking of
KBC Peel Hunt, (iii) a parent undertaking of KBC
Peel Hunt or (other than KBC Peel Hunt) a
subsidiary undertaking of any such parent
undertaking, or (iv) a director, officer, agent
or employee of any such person
"Ordinary Shares" the ordinary shares of 10p each in the Company
"Placees" persons who agree to subscribe Placing Shares
pursuant to the Placing
"Placing" the conditional placing by KBC Peel Hunt of the
Placing Shares pursuant to the Placing Agreement
"Placing Agreement" the agreement dated 14 November 2008 between the
Company and KBC Peel Hunt relating to the
Placing
"Placing Price" 90 pence
"Placing Shares" 1,068,400 Ordinary Shares to be placed pursuant
to the Placing
"Presentation" the presentation which the company gives to
Placees relating to the Placing
"Shareholders" holders of Ordinary Shares
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern
Ireland
"US Securities Act" the US Securities Act of 1933
"US person" is as defined in Rule 902(K) of Regulation S of
the US Securities Act
"US Securities Act" the US Securities Act of 1933 as amended
This information is provided by RNS
The company news service from the London Stock Exchange
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