TIDMSPK TIDMGHE
RNS Number : 6718T
Spark Ventures PLC
21 July 2015
SPARK Ventures plc
21 July 2015
Placing, Asset Swap & Proposed Open Offer of up to GBP17
million,
Proposed Change to Investing Policy & Investment
Manager,
and Proposed Share Consolidation & Adoption of New
Articles.
The Board of SPARK Ventures plc, the investor in early stage
digital information and technology companies ("SPARK"), is pleased
to announce that it has successfully raised approximately GBP10.1
million from a Placing of new Ordinary shares arranged by Liberum
Capital Limited ("Liberum") and finnCap Limited ("finnCap"), a
further GBP3.8 million via asset swaps and proposes to raise up to
an additional GBP3.1 million from an Open offer of new Ordinary
shares, in order to pursue a new investment strategy in partnership
with Gresham House plc ("GH"), the specialist asset management
group. It is the intention of the board of SPARK to appoint Liberum
as joint corporate broker following the successful completion of
the Placing.
SPARK proposes to appoint GH as its new investment adviser,
replacing its existing manager SPARK Venture Management Holdings
Limited ("SVMH"), in order to pursue its Strategic Public Equity
("SPE") investment strategy. The SPE strategy targets superior
long-term investment returns through applying private equity
techniques to investing in public markets. GH will focus on
inefficient areas of the market, taking influential block stakes in
smaller companies and then constructively engage to identify value
creation catalysts. GH also has the ability to invest a limited
amount in private equity which will include selective venture
capital investments.
GH has also agreed heads of terms with SVMH with the intention
in principle to acquire a majority stake in the business.
In addition, SPARK is pleased that existing shareholders
together with GH have also agreed to inject a limited number of
selective shareholdings into the enlarged SPARK to the value of
approximately GBP3.8 million. These companies have the
characteristics that have historically generated strong returns
including potentially supporting management in shareholder value
creating strategies.
Thomas Teichman, the founder of SPARK and chairman of SVMH, will
join the Investment Committee of GH's SPE team. All these
transactions are subject to shareholder approval at the General
Meeting to be held on 6 August 2015.
SPARK will also consolidate its share capital on a 1:200
basis.
Announcing these key strategic moves, the chairman of SPARK,
David Potter, said - "Over the past six years we have succeeded in
tripling shareholder value in SPARK, and in recent months we have
been seeking to develop a new corporate strategy which will both
maximise the value of our existing assets and continue to create
similarly high levels of shareholder value in the future. We
believe that our proposed partnership with GH will enable us to
deliver those objectives, and we have a high degree of confidence,
in GH's ability to execute this strategy as our new Investment
Manager, with the Board also personally committing to participate
through the open offer alongside the Gresham team in the
fundraising.
"The successful placing has enhanced the strength and quality of
our shareholder base, and we have been much encouraged by the
enthusiasm our new and existing shareholders have shown for these
strategic changes. We also want to give our many loyal private
shareholders the opportunity to participate in these exciting
developments, and the Open Offer will allow them to do so. For
those who decide not to participate we will establish a dealing
facility following the General Meeting for smaller shareholders to
allow them to sell easily."
Gresham House's Chief Executive, Anthony Dalwood, added -
"Securing our first investment mandate is an exciting step for
Gresham House as we deliver on our plans to develop as a specialist
asset manager of differentiated and illiquid alternative investment
strategies. SPARK provides an ideal platform for us to execute our
Strategic Public Equity investment strategy.
"The SPARK board is supportive of our plan to deploy the initial
capital raised and then to scale the company in a staged approach.
The positive feedback from the narrow group of investors we have
seen recently is extremely encouraging and we believe there will be
strong interest from Family Offices and Private Wealth Managers in
addition to institutions."
For further information, please contact:
David Potter/
SPARK Ventures plc Andrew Betton 07478 189 178
Gresham House plc Anthony Dalwood 020 3837 6272
Matt Goode/
finnCap Emily Watts 020 7220 0500
Attila Consultants Charles Cook/ 020 7947 4489 or 07710
Sorrel Davies 910563
Peter Tracey/
Neil Elliot/
Liberum Clayton Bush 020 3100 2199
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2015
Record Date for entitlement upon the Open Offer 6.00 p.m. on 16
July
Announcement of the Fundraising and posting of the Circular, 21 July
Application Form and Form of Proxy
Ex-entitlement date of the Open Offer 8.00 a.m. on 21
July
Open Offer Entitlements and Excess CREST Open Offer 8.00 a.m. on 22
Entitlements credited to stock accounts of Qualifying July
CREST Shareholders
Recommended latest time for requesting withdrawal of 4.30 p.m. on 28
Open Offer Entitlements and Excess CREST Open Offer July
Entitlements from CREST
Latest time and date for depositing Open Offer Entitlements 3.00 p.m. on 29
and Excess CREST Open Offer Entitlements into CREST July
Latest time and date for splitting Application Forms 3.00 p.m. on 31
(to satisfy bona fide market claims only) July
Latest time and date for receipt of completed Application 11.00 a.m. on
Forms and payment in full under the Open Offer and settlement 4 August
of relevant CREST instructions (as appropriate)
Latest time and date for receipt of the Form of Proxy 10.00 a.m. on
or CREST Proxy Instruction for the General Meeting 4 August
Announcement of result of the Open Offer 5 August
General Meeting 10.00 a.m. on
6 August
Announcement of result of the General Meeting 6 August
Record date for Share Consolidation 4:30 p.m. 6 August
New Ordinary Shares admitted to trading on AIM and dealings 8.00 a.m. on 7
in the New Ordinary Shares commence and enablement in August
CREST
1. Background to and reasons for the Fundraising
As has been mentioned in shareholder communications in the past,
the Board has striven to maximise the values of each of the
Company's investments, and it believe this has been a highly
successful operation on which the Company's investment managers,
SVM, should be congratulated. Over the last six years, investors
have received 13 pence per share in dividends. The Board has also
sought to ensure that all other values relating to the Company give
benefit to its Shareholders, these are the remaining primary asset
(IMImobile PLC), the brand value of the Company as a successful
investment company, our stock exchange status and our tax losses,
which are currently estimated at approximately GBP150 million. The
Board has sought to maximise these values for the benefit of
Shareholders and believe that the Proposals represent an attractive
opportunity to enable the Company to achieve these goals.
Some months ago, on the introduction of a shareholder, the
Company was brought together with Gresham House and the Proposals
emanate from those discussions. The Board believes that through
deploying SPE style investment, where the Company will take
influential stakes in publicly quoted smaller companies within a
concentrated portfolio and, through a policy of constructive
corporate engagement, seek to benefit from value created by
strategic, operational or management initiatives. The Company will
aim to generate superior investment returns over the longer term
and will also be able to continue to optimise the value of the
existing portfolio and the Company's unutilised tax losses.
The Company proposes to raise approximately GBP13.2 million from
new and existing investors through the Fundraising, and a further
GBP3.8 million via the asset swaps and to engage Gresham House as
its investment manager focussing on SPE and private equity, in
which they have a strong track record. Gresham House will invest
GBP5 million in the Company and undertake one of the asset swaps.
Once the Fundraising is complete and the New Investment Strategy
established, Messrs Teichman and Betton will retire from the Board
and two new independent directors will be appointed in due course.
David Potter will continue as Chairman.
2. SPE Strategy
The SPE strategy seeks to utilise private equity techniques
including due diligence and engagement with management teams to
identify value opportunities. The New Investment Manager believes
this approach can lead to superior investment returns as it targets
inefficiencies in certain segments of the public markets. There are
over 1,200 companies in the FTSE Small Cap index and on AIM: these
companies typically have limited research coverage and may often
have limited access to growth capital often leading to value
opportunities being overlooked by the wider market. In addition,
the Company is also aware of a number of privately held and venture
capital opportunities that may benefit from the SPE approach.
The Company will focus mainly on cash generative companies where
there is scope for management engagement to identify opportunities
to implement either strategic, management or operational changes to
create shareholder value in the business and to generate improved
equity returns.
In addition to publicly listed opportunities, the New Investment
Manager will also have the flexibility to invest up to 30 per cent.
of the portfolio in selected unquoted securities, including venture
capital opportunities.
3. SPE Investment Process
The Investment Manager has a disciplined four stage process
which it uses to identify and make suitable investments.
Initially, a one page summary of the investment opportunity will
be produced for the internal investment team to consider, which
will summarise the investment thesis and the suitability of the
opportunity against the Company's Investing Policy. If the
opportunity is deemed to be suitable the Investment Manager will
undertake preliminary due diligence, including procedures such as
meetings with the target investment management, board and advisers,
a peer group and industry review and an assessment of the target
company's strategy, and will produce a Preliminary Investment
Report ("PIR"). The Investment Committee will review the PIR and
identify the areas in which to focus a more detailed due diligence
exercise and will authorise the Investment Manager to proceed
accordingly. Additional due diligence may include, inter alia, the
following:
-- Counterparty analysis;
-- Financial, commercial or technical due diligence reports;
-- Bespoke research;
-- External research;
-- Management referencing; and
-- Exit and catalyst identification.
A Final Investment Report ("FIR") will be produced once the due
diligence exercise has been completed following which a decision
whether or not to invest a full portfolio position will be made.
The Investment Committee will then continue to monitor the
performance of the investment against the original investment
thesis. The manager has the ability to invest in limited and
prescribed levels as the diligence process progresses.
4. New Investing Policy
In accordance with Rule 8 of the AIM Rules, the Company is
seeking the consent of the Shareholders at the General Meeting to
its proposed revised investing policy which will, if approved, read
as follows:
Business characteristics
The Company will seek to use the expertise and experience of its
Board and the members of its Investment Committee to invest
according to a rigorous strategic public equity process. The
Company will have an active investing policy, investing in assets
that will typically have a number of the following
characteristics:
-- investments that can generate a 15 per cent. IRR over the
medium to long term principally through capital appreciation;
and
-- investments where the manager believes there are value
creation opportunities through strategic, management or operational
changes.
The Company intends to invest the majority of its capital in a
concentrated portfolio of between 10 to 15 smaller UK/European
publicly traded companies, typically with market capitalisations of
less than GBP250 million and would typically expect a holding
period of three to five years. In addition, the Company may also
invest in interests in privately held companies, primarily in
equity and equity-related instruments and also in preferred equity,
convertible and non-convertible debt instruments. The Company will
seek to acquire influential block stakes (typically between 10 per
cent. and 25 per cent.) for cash or share consideration.
Exposure limits
Any investment which represents more than 15 per cent. of the
Group's gross assets, at the time when the investment is made, in
securities issued by any single company will require the Board's
approval. An investment will only be made after the Investment
Committee believes that the risk/return relationship is acceptable
and the target return hurdle is exceeded.
Gearing
The Company intends to put in place a bank facility but will
limit borrowing to no more than 20 per cent. of gross assets.
Returns on investment
The initial intention is to distribute up to 50 per cent. of
profits on realisations through dividends, share buybacks or other
returns of capital.
Any material change to the New Investing Policy by the Company
will require prior Shareholder approval in accordance with the AIM
Rules.
5. Change of Investment Manager
The Company has agreed to appoint Gresham House as its new
investment manager (the "New Investment Manager") subject to the
terms of the New Management Agreement, which will become effective
on Admission.
The Company will give three months' notice to terminate the
Existing Management Agreement following Admission: this will give
rise a payment of approximately GBP2.3 million to the Existing
Investment Manager to settle the amounts due to it (including the
incentive fee in respect of IMImobile PLC). As the SPARK name is
owned by the Existing Investment Manager and licensed to the
Company pursuant to a licence which expires in October 2015, the
Company and the Existing Investment Manager intend to extend this
licence until October 2017.
In addition, Gresham House has agreed heads of terms with an
intention to acquire the Existing Investment Manager. Upon
completion of this transaction, Gresham House will (in addition to
its existing investment team detailed below) have the continued
venture capital investment expertise of the Existing Investment
Manager at its disposal.
6. Information in relation to Gresham House
Gresham House is an Investing Company (as defined in the AIM
Rules) quoted on AIM. Gresham House holds a mixture of property
assets and quoted and unquoted securities. As at 31 December 2014,
Gresham House had a NAV per ordinary share of 298.0 pence.
Gresham House will continue to operate as an Investing Company
in the short to medium term. However, the directors of Gresham
House intend to develop the company as a specialist asset
management group, either organically or through acquisitions,
focussed on managing funds and co-investments across a range of
differentiated and illiquid alternative investment strategies.
Future investments by Gresham House which meet the criteria for the
SPE Strategy will be made through SPARK or other funds or vehicles
managed by GHAM such that Gresham House's exposure to such
opportunities will be through its investment in SPARK, such funds
or other vehicles only.
In pursuit of this objective, Gresham House has established
Gresham House Asset Management Limited ("GHAM") and applied to the
FCA for regulatory approval. Following Admission, and until GHAM
receives regulatory approval, Sapia Partners LLP ("Sapia") will
act, on an interim basis, as investment manager to the Company and
GHAM will act as investment adviser. Upon receiving regulatory
approval, GHAM will be appointed investment manager and adviser to
the Company and the relationship with Sapia will cease. Gresham
House, in accordance with its investment policy, will make
cornerstone investments in specialist funds managed by GHAM.
Further information on Gresham House can be found on its website
www.greshamhouse.com.
The Investment Committee
Following Admission, it is intended that SPARK's Investment
Committee will be chaired by Anthony (Tony) Dalwood with the other
members being Graham Bird (Head of Gresham House Strategic
Investments), Tom Teichman, Bruce Carnegie-Brown and Rupert
Robinson. Further details of the Investment Committee's relevant
experience is set out below.
Anthony (Tony) Dalwood
Tony is an experienced investor and adviser to public and
private equity businesses and CEO of Gresham House. Tony
established SVG Investment Managers (a former subsidiary of SVG
Capital plc), acted as CEO and chairman of this entity, and
launched Strategic Equity Capital plc. His previous appointments
include CEO of SVG Advisers (formerly Schroder Ventures (London)
Limited), membership of the UK Investment Committee of UBS Phillips
& Drew Fund Management (PDFM), chairman of Downing Active
Management Investment Committee and the board of Schroders Private
Equity Funds.
He is currently on the investment committee and board of the
London Pensions Fund Authority, a non-executive director of JP
Morgan Private Equity Limited and a director of Branton Capital
Limited. Tony is also an adviser to LDC through Gresham House.
Graham Bird
Graham leads the strategic public equity strategy alongside Tony
Dalwood. He is experienced in fund management and in corporate
advisory.
Graham has spent the last six years as a senior executive at
PayPoint plc, most recently as Director of Strategic Planning and
Corporate Development. He was Executive Chairman and President of
PayByPhone, a multi-national division of PayPoint operating out of
Canada, the UK and France between 2010-2014. Prior to joining
PayPoint, Graham was a fund manager and Head of Strategic
Investment at SVG Investment Managers where he helped to establish
and then co-manage the Strategic Recovery Fund II and the
investment trust, Strategic Equity Capital plc. Before joining
SVGIM he was a Director in Corporate Finance at JP Morgan
Cazenove.
Thomas Teichman
Tom was previously Chairman of NewMedia Investors Limited, which
he founded in 1996 and from which SPARK was created in 1999 when it
was admitted to trading on AIM. He was Executive Chairman of SPARK
from 1999 to 2009 and re-joined the Board in July 2014 in a
non-Executive role. He chairs SVM, which has managed SPARK's
investment portfolio since 2009. He was responsible for the
investments in Kobalt Music, Mergermarket and notonthehighstreet,
SPARK's largest exits to date. Tom has over 30 years of venture
capital and investment banking experience with firms including
Credit Suisse/CSFB, Mitsubishi and Bank of Montreal, where he ran
corporate finance. He has extensive venture capital experience in
technology ranging from on-line information, telecoms, video games
and chip design to travel and healthcare and online retailing. He
has backed many successful early stage technology businesses,
mostly from start-up, all the way to flotation (London and NASDAQ)
or trade sale. He was on the boards of these companies normally for
many years, chairing several of them.
Bruce Carnegie-Brown
Bruce is chairman of Aon UK Limited and of Moneysupermarket.com
Group plc and a non-executive director of Santander UK plc and
Close Brothers Group plc. He was previously a managing partner of
3i QPE plc, a managing director of JP Morgan and CEO of Marsh
Limited.
Rupert Robinson
Rupert was previously CEO of Schroders (UK) Private Bank and
head of private clients at Rothschild Asset Management Limited.
7. Share Consolidation
Pursuant to the Share Consolidation it is proposed that, the
Ordinary Shares will be subject to a 1 for 200 consolidation
resulting in Ordinary Shares of the Company with nominal value of
50 pence each.
Save as explained below with regards to fractional entitlements,
following the Share Consolidation each Shareholder will hold such
number of Ordinary Shares as is equal to 0.5 per cent. of the
number of Existing Ordinary Shares that he or she held immediately
beforehand, with a nominal value per Ordinary Share of 50
pence.
With regards to fractional entitlements, where the Share
Consolidation results in any member being entitled to a fraction of
a share, such fraction shall, so far as is possible, be aggregated
with the fractions of Ordinary Shares to which other members of the
Company may be entitled. It is proposed that the Directors will be
authorised to sell (or appoint any other person to sell) to any
person, on behalf of the relevant members, all the Ordinary Shares
representing such fractions at the best price reasonably obtainable
to any person and to distribute the net process of sale of such
Ordinary Shares (less expenses) representing such fractions in due
proportion amongst the persons entitled (except that if the amount
due to a person is less than GBP5 the sum may be retained for the
benefit of the Company).
It is proposed that the Ordinary Shares resulting from the Share
Capital Reorganisation will have exactly the same rights as those
currently accruing to the Existing Ordinary Shares under the
Articles, including those relating to voting and entitlement to
dividends.
8. Details of the Placing and details of the Directors Intentions
The Company proposes to raise gross proceeds up to GBP10.1
million (approximately GBP9.8 million net of estimated expenses)
from new and existing institutional investors, pursuant to the
Placing. The Placing Shares have been conditionally placed by the
Joint Brokers with new and existing institutional investors. The
Placing is not being underwritten and, therefore, there is no
certainty that any funds will be raised under the Placing.
David Potter, Thomas Teichman, Charles Berry and Helen Sinclair,
who are directors of the Company, intend to subscribe for New
Ordinary Shares pursuant to the Open Offer (using excess
entitlements where required) with a value at the Issue Price of
GBP25,000; GBP25,000; GBP5,000; and GBP5,000 respectively. In
addition, Anthony Dalwood, Graham Bird, Bruce Carnegie-Brown,
Rupert Robinson and Michael Philips, who are members of the Gresham
House management team, intend to subscribe for New Ordinary Shares
pursuant to the Placing with a value in aggregate at the Issue
Price of GBP425,000. Gresham House has also agreed to subscribe
GBP5.0 million (representing approximately 50.0 per cent of the
Placing Shares).
The Issue Price represents a discount of 10 per cent to the 1000
pence post- Share Consolidation equivalent closing price of an
Ordinary Share on 20 July 2015 (based on the Closing Price of 5
pence), being the Last Practicable Date. The Placing Shares will,
when issued, rank pari passu in all respects with the Existing
Ordinary Shares. Application will be made for the Placing Shares to
be admitted to trading on AIM. It is expected that Admission will
take place, and dealings in the New Ordinary Shares will commence,
on 7 August 2015.
The Placing is conditional, inter alia, on:
-- the passing of the Resolutions at the General Meeting;
-- the Placing Agreement becoming unconditional in all relevant
respects and not having been terminated in accordance with its
terms prior to Admission; and
-- Admission becoming effective by no later than 8.00 a.m. on 7
August 2015 or such other date (being not later than 8.00 a.m. on
31 August 2015) as the Joint Brokers and the Company may agree.
9. Details of the Open Offer
The Board considers it important to provide the Company's loyal
and supportive Shareholders with an opportunity to participate in
the Fundraising in recognition of their continued support of the
Company.
Qualifying Shareholders can therefore subscribe for, in
aggregate, up to approximately GBP3.1 million (before expenses) in
Open Offer Shares without the Company having to produce a
prospectus (in accordance with the Prospectus Rules) which would
have both cost and timing implications for the Company.
Qualifying Shareholders, on and subject to the terms and
conditions of the Open Offer, will be given the opportunity under
the Open Offer to apply for any number of Open Offer Shares at the
Issue Price pro rata to their holdings on the following basis:
1 Open Offer Share for every 1,200 Existing Ordinary Shares
The Open Offer Shares will rank pari passu in all respects with
the Existing Ordinary Shares. Fractions of Open Offer Shares will
not be allotted to Qualifying Shareholders in the Open Offer and
entitlements under the Open Offer will be rounded down to the
nearest whole number of Open Offer Shares. The Issue Price
represents a discount of 10 per cent to the 1000 pence post-Share
Consolidation equivalent closing price of an Ordinary Share on 20
July 2015 (based on the Closing Price of 5 pence), being the Latest
Practicable Date.
There will be up to 349,038 New Ordinary Shares available to
Qualifying Shareholders under the Open Offer. A full take up of the
Open Offer Shares would represent approximately 8.8 per cent of the
Enlarged Issued Share Capital.
Qualifying Shareholders are being offered the opportunity to
apply for additional Open Offer Shares in excess of their Open
Offer Entitlement to the extent that other Qualifying Shareholders
do not take up their Open Offer Entitlements in full.
The Open Offer is not underwritten and therefore there is no
certainty that any funds will be raised under the Open Offer.
A Qualifying Shareholder may only apply for additional Open
Offer Shares if they have taken up their Open Offer Entitlement in
full.
In the event that applications are received from Qualifying
Shareholders for in excess of 349,038 Open Offer Shares, it is
intended excess applications will be scaled back pro rata to such
Qualifying Shareholders' entitlements taken up under the Open
Offer.
Application has been made for the Open Offer Entitlements and
Excess CREST Open Offer Entitlements to be admitted to CREST. It is
expected that the Open Offer Entitlements and Excess CREST Open
Offer Entitlements will be admitted to CREST on 22 July 2015. The
Open Offer Entitlements and Excess CREST Open Offer Entitlements
will also be enabled for settlement in CREST on 22 July 2015.
Applications through the CREST system may only be made by the
Qualifying Shareholder originally entitled or by a person entitled
by virtue of a bona fide market claim.
The latest time and date for acceptance and payment in full
under the Open Offer will be 11.00 a.m. on 4 August 2015, unless
otherwise announced by the Company via a Regulatory Information
Service. Qualifying CREST Shareholders should note that, although
the Open Offer Entitlements and Excess CREST Open Offer
Entitlements will be admitted to CREST and be enabled for
settlement, applications in respect of entitlements under the Open
Offer may only be made by the Qualifying Shareholder originally
entitled or by a person entitled by virtue of a bona fide market
claim raised by Euroclear's Claims Processing Unit. Qualifying
Non-CREST Shareholders should note that their Application Form is
not a negotiable document and cannot be traded.
The Open Offer will be conditional, inter alia, on the approval
of the Resolutions by the Shareholders at the General Meeting and
upon the Placing Agreement becoming unconditional in all respects
(other than as to Admission) and Admission of the Open Offer Shares
becoming effective by not later than 8.00 a.m. on 7 August 2015 (or
such later time and/or date as the Company and the Joint Brokers
may determine, not being later than 8.00 a.m. on 31 August
2015).
If Admission does not take place on or before 8.00 a.m. on 7
August 2015 (or such later time and/or date as the Company, and the
Joint Brokers may determine, not being later than 8.00 a.m. on 31
August 2015), the Open Offer will lapse, any Open Offer
Entitlements and Excess CREST Open Offer Entitlements admitted to
CREST will thereafter be disabled and application monies under the
Open Offer will be refunded to the applicants, by cheque (at the
applicant's risk) in the case of Qualifying Non-CREST Shareholders
and by way of a CREST payment in the case of Qualifying CREST
Shareholders, without interest as soon as practicable
thereafter.
Settlement and dealings
Application will be made to the London Stock Exchange for the
Open Offer Shares to be admitted to trading on AIM. It is expected
that Admission will become effective and that dealings in the New
Ordinary Shares will commence at 8.00 a.m. on 7 August 2015.
10. Details of the Asset Swap
As part of its New Investing Policy, the Company has agreed,
conditional upon Admission, to acquire the following interests in
other public companies:
(a) 2,062,500 ordinary shares in SpaceandPeople plc: this
interest is being acquired from Gresham House at a value of
approximately GBP1.4 million to be satisfied by the issue of
151,250 New Ordinary Shares. This valuation represents a discount
of 7 per cent to the Closing Price on the Last Practicable Date of
an ordinary share in SpaceandPeople plc;
(b) 5,000,000 ordinary shares in Miton Group plc: this interest
is being acquired from River & Mercantile Asset Management at a
value of approximately GBP1.3 million to be satisfied by the issue
of 145,833 New Ordinary Shares. This valuation represents the
Closing Price on the Last Practicable Date of an ordinary share in
Miton Group plc;
(c) 3,492,065 ordinary shares in Castle Street Investments plc:
this interest is being acquired from Majedie Asset Management at a
value of approximately GBP1.1 million to be satisfied by the issue
of 123,192 New Ordinary Shares. This valuation represents the
Closing Price on the Last Practicable Date of an ordinary share in
Castle Street Investments plc.
11. Share dealing facility
The Company recognises that some Shareholders may not want to
continue as investors as the Company pursues its New Investing
Policy. Accordingly, the Company has arranged with Capita Asset
Services to provide a low cost dealing facility to allow
Shareholders to realise their investment's potential in a cost
effective way. The service will be available to all private
Shareholders resident in the EEA. After the Share Consolidation has
taken place, Capita Asset Services will be offering free dealing to
Shareholders wishing to sell their entire shareholdings of up to
500 Ordinary Shares (following the Share Consolidation). A reduced
dealing fee of 0.75 per cent, (subject to a minimum of GBP25) will
be applied to all sales of over 500 Ordinary Shares (following the
Share Consolidation). Further information including instruction
forms and details of your shareholdings, will be provided with the
despatch of your new share certificates following the
implementation of the Share Consolidation.
12. General Meeting
The General Meeting has been convened at the offices of Nabarro
LLP, 125 London Wall, London EC2Y 5AL at 10.00 a.m. on Thursday 6
August 2015. Notice of the General Meeting is set out at the end of
the shareholder circular. In order to consider and vote on each of
the Resolutions that are put to the meeting Shareholders will also
be sent a Form of Proxy for use in respect of the General Meeting.
Resolutions 1 to 3 will be proposed as ordinary resolutions and
will be passed if at least 50 per cent. of the votes cast (whether
in person or by proxy) are in favour. Resolutions 4 and 5
(inclusive) will be proposed as special resolutions and will be
passed if at least 75 per cent. of the votes cast (whether in
person or by proxy) are in favour.
Shareholders have the right to attend, speak and vote at the
General Meeting (or, if they are not attending the meeting, to
appoint someone else as their proxy to vote on their behalf) if
they are on the Register at the Voting Record Time (namely 6.00
p.m. on 5 August 2015). Changes to entries in the Register after
the Voting Record Time will be disregarded in determining the
rights of any person to attend and/or vote at the General Meeting.
If the General Meeting is adjourned, only those Shareholders on the
Register 48 hours before the time of the adjourned General Meeting
(excluding any part of a day that is not a Business Day) will be
entitled to attend, speak and vote or to appoint a proxy.
The number of Ordinary Shares a Shareholder holds as at the
Voting Record Time will determine how many votes a Shareholder or
his proxy will have in the event of a poll.
Explanation of the Resolutions to be proposed at the General
Meeting
The notice convening the General Meeting will set out the
Resolutions to be proposed at the General Meeting. An explanation
of these Resolutions is set out below:
Resolution 1 - Change of Investing Policy
In accordance with Rule 8 of the AIM Rules, the Company is
required to seek the consent of Shareholders at the General Meeting
to its proposed revised investing policy. The Company proposes to
revise the existing investment policy, such that the Company will
implement an SPE strategy utilising private-equity style
techniques. The Company intends to invest in assets that can
generate a 15 per cent. IRR over the medium to long term and those
assets will have value creation opportunities through effecting
strategic, management or operational changes.
Resolution 2 - Share Consolidation
This resolution is to consolidate the ordinary shares of 0.25
pence each on a 200 for 1 basis into New Ordinary Shares of 50
pence each. This resolution also authorises the Directors to deal
with fractional entitlements that arise under the Share
Consolidation.
Resolution 3 - Authority to allot shares
This resolution is to authorise the Directors, for the purposes
of section 551 of the Act, to allot shares in the Company or grant
rights to subscribe for or convert any security into shares in the
Company of up to a maximum aggregate nominal amount of
GBP943,748.50 in connection with the Proposals and a further
nominal amount of GBP663,620.50 generally. The general authority is
equal to approximately one third of the Enlarged Issued Share
Capital. Resolution 3 also authorises the directors of the Company
from time to time to allot up to a further nominal amount of
GBP663,620.50 for use only in connection with a fully pre-emptive
rights issue. Save as disclosed in the shareholder circular, there
are no immediate plans to exercise these authorities. The
authorities will expire at the date of the annual general meeting
in 2016 or, if earlier, 6 November 2016.
Resolution 4 - Disapplication of pre-emption rights
This resolution is to disapply statutory pre-emption rights up
to an aggregate nominal amount of GBP769,229.50 in connection with
the Proposals, a rights or other pre-emptive issue and any other
issue of equity securities for cash up to an aggregate nominal
amount of GBP199,086 (representing approximately 10 per cent. of
the Enlarged Issued Share Capital). The authority will expire on
the date of the annual general meeting in 2016 or, if earlier, 6
November 2016.
Resolution 5 - Amendment to the articles of association
This resolution is to approve the amendment of the articles of
association of the Company to change the definition of Ordinary
Shares to reflect the Share Consolidation.
13. Irrevocable Undertakings and letters of support
Insofar as they are interested in Ordinary Shares, certain of
the Directors and persons connected with them have given
irrevocable undertakings to the Company to vote in favour of the
Resolutions (and, where relevant, to procure that such action is
taken by the relevant registered holders if that is not them), in
respect of their entire beneficial holdings totalling, in
aggregate, 16,990,469 Ordinary Shares, representing approximately
4.1 per cent. of the Existing Total Voting Rights
In addition, certain other Shareholders have given irrevocable
undertakings to the Company to vote in favour of the Resolutions to
be proposed at the General Meeting (and, where relevant, to procure
that such action is taken by the relevant registered holders if
that is not one of them) in respect of their holdings totalling, in
aggregate, 71,555,190 Ordinary Shares, representing approximately
17.1 per cent. of the Existing Total Voting Rights and other
shareholders have given letters of support in favour of the
Resolutions to be proposed at the General Meeting in respect of
their holdings of 95,571,567 Ordinary Shares, representing
approximately 22.8 per cent. of the Existing Total Voting
Rights.
In total, therefore, the Company has received irrevocable
undertakings or letters of support to vote in favour of the
Resolutions in respect of holdings totalling in aggregate
184,117,226 Ordinary Shares, representing approximately 44.0 per
cent. of the Existing Total Voting Rights.
14. Action to taken
A Form of Proxy for use in connection with the General Meeting
will be sent with the Circular. Whether or not Shareholders intend
to be present at the General Meeting, they are requested to
complete and sign the Form of Proxy and return it, in accordance
with the instructions printed on it, by post or (during normal
business hours only) by hand to Capita Asset Services, The
Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU to arrive as
soon as possible and, in any event, by no later than 10.00 a.m. on
4 August 2015. Shareholders who hold their Existing Ordinary Shares
in CREST may appoint a proxy by completing and transmitting a CREST
Proxy Instruction to Capita Asset Services so that it is received
by no later than 10.00 a.m. on 4 August 2015. The return of a
completed Form of Proxy or the transmission of an electronic proxy
or CREST Proxy Instruction will not prevent a Shareholder from
attending the General Meeting and voting in person (in substitution
for their proxy vote) should they wish to do so and are so
entitled.
15. Recommendation
The Board considers the Resolutions are likely to promote the
success of the Company and are in the best interests of the Company
and its Shareholders as a whole. The Directors unanimously
recommend that Shareholders vote in favour of the Resolutions which
are proposed at the General Meeting.
The Directors have irrevocably undertaken or intend to vote in
favour of all of the Resolutions which are proposed at the General
Meeting in respect of their own beneficial holdings, amounting in
aggregate to 19,673,019 Existing Ordinary Shares (representing
approximately 4.7 per cent of the Existing Total Voting Rights
.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, SOUTH
AFRICA OR JAPAN.
Certain statements in this announcement are forward-looking
statements which are based on the Company's expectations,
intentions and projections regarding its future performance,
anticipated events or trends and other matters that are not
historical facts. These statements are not guarantees of future
performance and are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied by such
forward-looking statements. Factors that would cause actual results
or events to differ from current expectations, intentions or
projections might include, amongst other things, changes in equity
markets, political risks, changes to regulations affecting the
Company's activities, delays in obtaining or failure to obtain any
required regulatory approval, uncertainties relating to the
availability and costs of financing needed in the future,
acquisitions and other strategic transactions. Given these risks
and uncertainties, prospective investors are cautioned not to place
undue reliance on forward-looking statements, which are not
guarantees of future performance. Forward-looking statements speak
only as of the date of such statements and, except as required by
the FCA, the London Stock Exchange or applicable law, each of the
Company, finnCap and Liberum expressly disclaims any obligation or
undertaking to review, revise or release publicly any updates to
any forward-looking statements to reflect any changes in SPARK's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is based,
whether as a result of new information, future events or
otherwise.
This announcement is for information purposes only and shall not
constitute an offer to buy, sell, issue, or subscribe for, or the
solicitation of an offer to buy, sell, issue, or subscribe for any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. This announcement has
been issued by and is the sole responsibility of SPARK.
No representation or warranty, express or implied, is or will be
made as to, or in relation to, and no responsibility or liability
is or will be accepted by finnCap or Liberum or by any of their
respective affiliates or agents as to, or in relation to, the
accuracy or completeness of this announcement, including the
Appendices, or any other written or oral information made available
to or publicly available to any interested party or its advisers,
and any liability therefore is expressly disclaimed.
finnCap, which is authorised and regulated in the United Kingdom
by the FCA, is acting for SPARK and for no-one else in connection
with the Placing, and will not be responsible to anyone other than
SPARK for providing the protections afforded to customers of
finnCap nor for providing advice to any other person in relation to
the Placing or any other matter referred to herein.
Liberum, which is authorised and regulated in the United Kingdom
by the FCA, is acting for SPARK and for no-one else in connection
with the Placing, and will not be responsible to anyone other than
SPARK for providing the protections afforded to customers of
Liberum nor for providing advice to any other person in relation to
the Placing or any other matter referred to herein.
The distribution of this announcement and the offering of the
Placing Shares in certain jurisdictions may be restricted by law.
No action has been taken by SPARK, finnCap or Liberum that would
permit an offering of such shares or possession or distribution of
this announcement or any other offering or publicity material
relating to such shares in any jurisdiction where action for that
purpose is required. Persons into whose possession this
announcement comes are required by SPARK, finnCap and Liberum to
inform themselves about, and to observe such restrictions.
The price of shares and the income from them may go down as well
as up and investors may not get back the full amount invested on
disposal of the shares.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS
AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION
PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) (I)
INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER
2005 (THE "ORDER"), OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A)
TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS,
ETC") OF THE ORDER, OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE
LAWFULLY COMMUNICATED; AND (B) (I) PERSONS IN MEMBER STATES OF THE
EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS (AS DEFINED IN
ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC (THE "PROSPECTUS
DIRECTIVE")), AND/OR (II) PERSONS IN THE UNITED KINGDOM WHO ARE
QUALIFIED INVESTORS (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS
"RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDICES)
AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT MUST NOT
BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.
ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT
(INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT IN
THIS ANNOUNCEMENT RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT
(INCLUDING THE APPENDICES) DOES NOT ITSELF CONSTITUTE AN OFFER FOR
SALE OR SUBSCRIPTION OF ANY SECURITIES IN SPARK VENTURES PLC.
Persons (including individuals, funds or otherwise) by whom or
on whose behalf a commitment to acquire Placing Shares has been
given ("Placees") will be deemed to have read and understood this
announcement, including the Appendices, in its entirety and to be
making such offer on the terms and conditions, and to be providing
the representations, warranties, acknowledgements, and undertakings
contained in Appendix I. In particular, each such Placee
represents, warrants and acknowledges that it is: (i) a Relevant
Person (as defined above) and undertakes that it will acquire,
hold, manage or dispose of any Placing Shares that are allocated to
it for the purposes of its business; (ii) not within the United
States; (iii) not within Australia, Canada, South Africa, Japan or
any other jurisdiction in which it is unlawful to make or accept an
offer to acquire the Placing Shares; (iv) not acquiring the Placing
Shares for the account of any person who is located in the United
States, unless the instruction to acquire was received from a
person outside the United States and the person giving such
instruction has confirmed that it has the authority to give such
instruction, and that either (a) it has investment discretion over
such account or (b) it is an investment manager or investment
company and, in the case of each of (a) and (b), that it is
acquiring the Placing Shares in an "offshore transaction" (within
the meaning of Regulation S under the United States Securities Act
of 1933, as amended ("Securities Act"); and (v) it is not acquiring
the Placing Shares with a view to the offer, sale, resale,
transfer, delivery or distribution, directly or indirectly, of any
such Placing Shares into the United States or any other
jurisdiction referred to in (iii) above.
This announcement, including the Appendices, is not for
distribution directly or indirectly in or into the United States
(including its territories and possessions, any State of the United
States and the District of Columbia), Canada, Australia, South
Africa or Japan or any jurisdiction into which the same would be
unlawful. This announcement is not an offer of securities for sale
in the United States. Securities may not be offered or sold in the
United States absent registration or an exemption from
registration. No offering of securities will be made in the United
States by SPARK in connection with the Placing.
This announcement does not constitute or form part of an offer
or solicitation to purchase or subscribe for shares in the capital
of SPARK in Canada, Australia, South Africa or Japan or any
jurisdiction in which such an offer or solicitation is unlawful. No
public offering of securities of SPARK will be made in connection
with the Placing in the United Kingdom or elsewhere.
The relevant clearances have not been, and nor will they be,
obtained from the securities commission of any province or
territory of Canada; no prospectus has been lodged with, or
registered by, the Australian Securities and Investments Commission
or the Japanese Ministry of Finance; and the Placing Shares have
not been, and nor will they be, registered under or offered in
compliance with the securities laws of any state, province or
territory of Canada, Australia, South Africa or Japan. Accordingly,
the Placing Shares may not (unless an exemption under the relevant
securities laws is applicable) be offered, sold, resold or
delivered, directly or indirectly, in or into the United States,
Canada, Australia, South Africa or Japan or any other jurisdiction
outside the United Kingdom.
The Placing Shares have not been approved or disapproved by the
US Securities and Exchange Commission, any State securities
commission or any other regulatory authority in the United States,
nor have any of the foregoing authorities passed upon or endorsed
the merits of the Placing or the accuracy or adequacy of this
announcement. Any representation to the contrary is unlawful.
Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
of the Appendices or this announcement should seek appropriate
advice before taking any action.
The Placing Shares to be issued pursuant to the Placing will not
be admitted to trading on any stock exchange other than the London
Stock Exchange. Neither the content of SPARK's website nor any
website accessible by hyperlinks on SPARK's website is incorporated
in, or forms part of, this announcement.
APPENDIX I
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
Details of the Placing
The Joint Brokers have entered into an agreement with SPARK (the
"Placing Agreement") under which, subject to the conditions set out
in that agreement, the Joint Brokers have agreed to use reasonable
endeavours to procure subscribers for the Placing Shares at a price
of 900 pence per Placing Share (the "Placing Price") on the terms
and subject to the conditions set out in this announcement.
The Placing Shares will, when issued, be credited as fully paid
and will rank pari passu in all respects with the existing Ordinary
Shares including the right to receive all dividends and other
distributions declared in respect of such ordinary shares after the
date of issue of the Placing Shares.
Application for admission to trading
Application will be made to the London Stock Exchange for
admission of the Placing Shares to trading on AIM. Admission is
conditional upon the passing of the Resolutions at the General
Meeting proposed to be convened on or around 6 August 2015 by the
shareholders of the Company. It is expected that Admission will
become effective on or around 7 August 2015 and that dealings in
the Placing Shares will commence at that time.
Bookbuild
The Joint Brokers have undertaken a bookbuilding process in
respect of the Placing (the "Bookbuild") to determine demand for
participation in the Placing by Placees. This Appendix gives
details of the terms and conditions of, and the mechanics of
participation in, the Placing. No commissions will be paid to
Placees or by Placees in respect of any Placing Shares.
The Joint Brokers and SPARK shall be entitled to effect the
Placing by such alternative method to the Bookbuild as they may, in
their sole discretion, determine.
Participation in, and principal terms of, the Placing:
1. finnCap and Liberum are acting as joint brokers and agents of SPARK.
2. Participation in the Placing will only be available to
persons who may lawfully be, and are, invited to participate by the
Joint Brokers. The Joint Brokers and their affiliates are each
entitled to enter bids in the Bookbuild as principal.
3. The Bookbuild has closed. The Joint Brokers may, in agreement
with SPARK, accept bids that are received after the Bookbuild has
closed. SPARK reserves the right (upon the agreement of the Joint
Brokers) to reduce or seek to increase the amount to be raised
pursuant to the Placing, in its absolute discretion.
4. Each prospective Placee's allocation will be agreed between
the Joint Brokers and SPARK and will be confirmed orally by one of
the Joint Brokers as agent of SPARK following the close of the
Bookbuild. That oral confirmation will constitute an irrevocable
legally binding commitment upon that person (who will at that point
become a Placee) in favour of the Joint Brokers and SPARK to
subscribe for the number of Placing Shares allocated to it at the
Placing Price on the terms and conditions set out in this Appendix
and in accordance with SPARK's articles of association.
5. Each prospective Placee's allocation and commitment will be
evidenced by a contract note issued to such Placee by one of the
Joint Brokers. The terms of this Appendix will be deemed
incorporated in that contract note.
6. Each Placee will also have an immediate, separate,
irrevocable and binding obligation, owed to SPARK and the relevant
Joint Broker as agent of SPARK, to pay the relevant Joint Broker
(or as it may direct) in cleared funds, an amount equal to the
product of the Placing Price and the number of Placing Shares such
Placee has agreed to subscribe and SPARK has agreed to allot and
issue to that Placee.
7. The Joint Brokers may choose to accept bids, either in whole
or in part, on the basis of allocations determined in agreement
with SPARK and may scale down any bids for this purpose on such
basis as they may determine. The Joint Brokers may also,
notwithstanding paragraphs 4 and 5 above, subject to the prior
consent of SPARK (i) allocate Placing Shares after the time of any
initial allocation to any person submitting a bid after that time
and (ii) allocate Placing Shares after the Bookbuild has closed to
any person submitting a bid after that time.
8. A bid in the Bookbuild will be made on the terms and subject
to the conditions in this announcement and will be legally binding
on the Placee on behalf of which it is made and except with the
consent of either of the Joint Brokers will not be capable of
variation or revocation after the time at which it is
submitted.
9. Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed, settlement for all Placing
Shares to be acquired pursuant to the Placing will be required to
be made at the same time, on the basis explained below under
"Registration and Settlement".
10. All obligations under the Bookbuild and Placing will be
subject to fulfilment of the conditions referred to below under
"Conditions of the Placing" and to the Placing not being terminated
on the basis referred to below.
11. By participating in the Bookbuild, each Placee will agree
that its rights and obligations in respect of the Placing will
terminate only in the circumstances described below and will not be
capable of rescission or termination by the Placee.
12. To the fullest extent permissible by law, neither of the
Joint Brokers nor any of their affiliates shall have any liability
to Placees (or to any other person whether acting on behalf of a
Placee or otherwise). In particular, neither of the Joint Brokers
nor any of their affiliates shall have any liability (including to
the fullest extent permissible by law, any fiduciary duties) in
respect of the Joint Broker's conduct of the Bookbuild or of such
alternative method of effecting the Placing as the Joint Brokers
and SPARK may agree.
Conditions of the Placing
The obligations of the Joint Brokers under the Placing Agreement
are conditional on, amongst other things:
(a) the passing of the Resolutions, without amendment, at the
General Meeting of the Company to be convened on or around 6 August
2015;
(b) Admission taking place by 8.00 a.m. (London time) on 7
August 2015 (or such later date as SPARK and the Joint Brokers may
otherwise agree); and
(c) the Placing Agreement becoming unconditional in all other respects.
If any of the conditions contained in the Placing Agreement in
relation to the Placing Shares are not fulfilled or waived by the
Joint Brokers, by the respective time or date where specified (or
such later time and/or date as SPARK and the Joint Brokers may
agree), the Placing will not proceed and the Placee's rights and
obligations hereunder in relation to the Placing Shares shall cease
and terminate at such time and each Placee agrees that no claim can
be made by the Placee in respect thereof.
The Joint Brokers may, at their discretion and upon such terms
as they think fit, waive compliance by SPARK with the whole or any
part of any of SPARK's obligations in relation to the conditions in
the Placing Agreement save that the conditions in the Placing
Agreement relating to Admission taking place may not be waived. Any
such extension or waiver will not affect Placees' commitments as
set out in this announcement.
None of the Joint Brokers, SPARK or any other person shall have
any liability to any Placee (or to any other person whether acting
on behalf of a Placee or otherwise) in respect of any decision they
may make as to whether or not to waive or to extend the time and /
or the date for the satisfaction of any condition to the Placing
nor for any decision they may make as to the satisfaction of any
condition or in respect of the Placing generally, and by
participating in the Placing each Placee agrees that any such
decision is within the absolute discretion of the Joint
Brokers.
The Placing Agreement may be terminated by the Joint Brokers at
any time prior to Admission in certain circumstances including,
among other things, following a breach of the Placing Agreement by
the Company or the occurrence of certain force majeure events.
Upon such termination, the parties to the Placing Agreement
shall be released and discharged (except for any liability arising
before or in relation to such termination) from their respective
obligations under or pursuant to the Placing Agreement subject to
certain exceptions.
By participating in the Placing, Placees agree that the exercise
by the Joint Brokers of any right of termination or other
discretion under the Placing Agreement shall be within the absolute
discretion of the Joint Brokers and that they need not make any
reference to Placees and that they shall have no liability to
Placees whatsoever in connection with any such exercise or failure
so to exercise.
No prospectus
No offering document, prospectus or admission document has been
or will be submitted to be approved by the FCA or submitted to the
London Stock Exchange in relation to the Placing and Placees'
commitments will be made solely on the basis of the information
contained in this announcement (including the Appendices) released
by SPARK today and any information previously published by SPARK by
notification to a Regulatory Information Service, and subject to
the further terms set forth in the contract note to be provided to
individual prospective Placees.
Each Placee, by accepting a participation in the Placing, agrees
that the content of this announcement (including the Appendices) is
exclusively the responsibility of SPARK and confirms that it has
neither received nor relied on any other information (other than
any information previously published by SPARK by notification to a
Regulatory Information Service), representation, warranty, or
statement made by or on behalf of SPARK or the Joint Brokers or any
other person and none of the Joint Brokers or SPARK nor any other
person will be liable for any Placee's decision to participate in
the Placing based on any other information, representation,
warranty or statement which the Placees may have obtained or
received. Each Placee acknowledges and agrees that it has relied on
its own investigation of the business, financial or other position
of SPARK in accepting a participation in the Placing. Nothing in
this paragraph shall exclude the liability of any person for
fraudulent misrepresentation.
Registration and settlement
Settlement of transactions in the Placing Shares following
Admission will take place within the system administered by
Euroclear UK & Ireland Limited ("CREST"), subject to certain
exceptions. SPARK reserves the right to require settlement for and
delivery of the Placing Shares (or a portion thereof) to Placees in
certificated form if, in the Joint Brokers' opinion, delivery or
settlement is not possible or practicable within the CREST system
or would not be consistent with the regulatory requirements in the
Placee's jurisdiction.
Following the close of the Bookbuild for the Placing, each
Placee allocated Placing Shares in the Placing will be sent a
contract note stating the number of Placing Shares to be allocated
to it at the Placing Price and settlement instructions.
Each Placee agrees that it will do all things necessary to
ensure that delivery and payment is completed in accordance with
the standing CREST or certificated settlement instructions that it
has in place with the Joint Brokers. SPARK will deliver the Placing
Shares to CREST accounts operated by each of the Joint Brokers as
agents for SPARK, and the Joint Brokers will enter their respective
delivery (DEL) instruction into the CREST system. The input to
CREST by a Placee of a matching or acceptance instruction will then
allow delivery of the relevant Placing Shares to that Placee
against payment.
It is expected that settlement will take place on 7 August 2015,
being the business day following the General Meeting, on a delivery
versus payment basis.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two percentage points above LIBOR as
determined by the Joint Brokers.
Each Placee is deemed to agree that, if it does not comply with
these obligations, SPARK may sell any or all of the Placing Shares
allocated to that Placee on such Placee's behalf and retain from
the proceeds, for SPARK's account and benefit, an amount equal to
the aggregate amount owed by the Placee plus any interest due. The
relevant Placee will, however, remain liable for any shortfall
below the aggregate amount owed by it and may be required to bear
any stamp duty or stamp duty reserve tax (together with any
interest or penalties) which may arise upon the sale of such
Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the trade confirmation
is copied and delivered immediately to the relevant person within
that organisation. Insofar as Placing Shares are registered in a
Placee's name or that of its nominee or in the name of any person
for whom a Placee is contracting as agent or that of a nominee for
such person, such Placing Shares should, subject as provided below,
be so registered free from any liability to UK stamp duty or stamp
duty reserve tax. Placees will not be entitled to receive any fee
or commission in connection with the Placing.
Representations and warranties
By participating in the Placing each Placee (and any person
acting on such Placee's behalf) irrevocably acknowledges, confirms,
undertakes, represents, warrants and agrees (as the case may be)
with each of the Joint Brokers (in their capacity as joint brokers
and placing agents of the Company in respect of the Placing) and
the Company, in each case as a fundamental term of their
application for Placing Shares the following:
1. it has read this announcement, including the appendices, in its entirety;
2. that (i) no offering document, listing particulars,
prospectus or admission document has been or will be prepared in
connection with the Placing and (ii) it has not received a
prospectus, admission document or other offering document in
connection with the Bookbuild, the Placing or the Placing
Shares;
3. that the Ordinary Shares are admitted to trading on AIM, and
SPARK is therefore required to publish certain business and
financial information in accordance with the rules and practices of
AIM (collectively, the "Exchange Information"), which includes a
description of the nature of SPARK's business and SPARK's most
recent balance sheet and profit and loss account and that it is
able to obtain or access (i) such Exchange Information and (ii)
such information or comparable information concerning any other
publicly traded company, in each case without undue difficulty;
4. that none of the Joint Brokers or SPARK nor any of their
affiliates nor any person acting on behalf of any of them has
provided, and will not provide, it with any material regarding the
Placing Shares or SPARK or any other person other than this
announcement; nor has it requested any of the Joint Brokers, SPARK,
any of their affiliates or any person acting on behalf of any of
them to provide it with any such information;
5. acknowledges that the Placing Shares have not been and will
not be registered under the securities legislation of the United
States, Australia, Canada, South Africa or Japan and, subject to
certain exceptions, may not be offered, sold, transferred,
delivered or distributed, directly or indirectly, in or into those
jurisdictions;
6. that (i) it is not within the United States; (ii) it is not
within Australia, Canada, South Africa, Japan or any other
jurisdiction in which it is unlawful to make or accept an offer to
acquire the Placing Shares; (iii) it is not acquiring the Placing
Shares for the account of any person who is located in the United
States, unless the instruction to acquire was received from a
person outside the United States and the person giving such
instruction has confirmed that it has the authority to give such
instruction, and that either (a) it has investment discretion over
such account or (b) it is an investment manager or investment
company and, in the case of each of (a) and (b), that it is
acquiring the Placing Shares in an "offshore transaction" (within
the meaning of Regulation S under the Securities Act); and (iv) it
is not acquiring the Placing Shares with a view to the offer, sale,
resale, transfer, delivery or distribution, directly or indirectly,
of any such Placing Shares into the United States or any other
jurisdiction referred to in (ii) above;
7. that the content of this announcement is exclusively the
responsibility of SPARK and that neither of the Joint Brokers nor
any person acting on their behalf has or shall have any liability
for any information, representation or statement contained in this
announcement or any information previously published by or on
behalf of SPARK and will not be liable for any Placee's decision to
participate in the Placing based on any information, representation
or statement contained in this announcement or otherwise. Each
Placee further represents, warrants and agrees that the only
information on which it is entitled to rely and on which such
Placee has relied in committing itself to subscribe for the Placing
Shares is contained in this announcement and any information
previously published by SPARK by notification to a Regulatory
Information Service, such information being all that it deems
necessary to make an investment decision in respect of the Placing
Shares and that it has neither received nor relied on any other
information given or representations, warranties or statements made
by any of the Joint Brokers or SPARK and none of the Joint Brokers
or SPARK will be liable for any Placee's decision to accept an
invitation to participate in the Placing based on any other
information, representation, warranty or statement. Each Placee
further acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of SPARK
in deciding to participate in the Placing;
8. that neither of the Joint Brokers nor any person acting on
behalf of them nor any of their affiliates has or shall have any
liability for any publicly available or filed information, or any
representation relating to SPARK, provided that nothing in this
paragraph excludes the liability of any person for fraudulent
misrepresentation made by that person;
9. that neither it, nor the person specified by it for
registration as a holder of Placing Shares is, or is acting as
nominee or agent for, and that the Placing Shares will not be
allotted to, a person who is or may be liable to stamp duty or
stamp duty reserve tax under any of sections 67, 70, 93 and 96 of
the Finance Act 1986 (depositary receipts and clearance
services);
10. that it has complied with its obligations in connection with
money laundering and terrorist financing under the Proceeds of
Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and
the Money Laundering Regulations 2007 (the "Regulations") and, if
making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the
identity of the third party as required by the Regulations;
11. that it is acting as principal only in respect of the
Placing or, if it is acting for any other person (i) it is duly
authorised to do so, (ii) it is and will remain liable to the
Company and/or the Joint Brokers for the performance of all its
obligations as a Placee in respect of the Placing (regardless of
the fact that it is acting for another person), (iii) it is 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 (iv) such person is either (1) a "qualified investor"
as referred to at section 86(7) of FSMA or (2) a "client" (as
defined in section 86(2) of FSMA) of its that has engaged it to act
as such client's agent on terms which enable it to make decisions
concerning the Placing or any other offers of transferable
securities on such client's behalf without reference to such
client;
12. that, if a financial intermediary, as that term is used in
Article 3(2) of EU Directive 2003/71/EC (the "Prospectus
Directive") (including any relevant implementing measure in any
member state), the Placing Shares purchased by it in the Placing
will not be acquired on a non-discretionary basis on behalf of, nor
will they be acquired with a view to their offer or resale to,
persons in a member state of the European Economic Area which has
implemented the Prospectus Directive other than to qualified
investors, or in circumstances in which the prior consent of the
Joint Brokers has been given to the proposed offer or resale;
13. that it has not offered or sold and, prior to the expiry of
a period of six months from Admission, will not offer or sell any
Placing Shares to persons in the United Kingdom, except to persons
whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for
the purposes of their business or otherwise in circumstances which
have not resulted and which will not result in an offer to the
public in the United Kingdom within the meaning of section 85(1) of
the Financial Services and Markets Act 2000 ("FSMA");
14. that it has not offered or sold and will not offer or sell
any Placing Shares to persons in the European Economic Area prior
to Admission except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted in and which
will not result in an offer to the public in any member state of
the European Economic Area within the meaning of the Prospectus
Directive (including any relevant implementing measure in any
member state);
15. that it has only communicated or caused to be communicated
and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within
the meaning of section 21 of FSMA) relating to the Placing Shares
in circumstances in which section 21(1) of FSMA does not require
approval of the communication by an authorised person;
16. that it has complied and will comply with all applicable
provisions of FSMA with respect to anything done by it in relation
to the Placing Shares in, from or otherwise involving, the United
Kingdom;
17. that (i) it is a person falling within Article 19(5) and /
or Article 49(2)(a) to (d) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005 or is a person to whom
this announcement may otherwise be lawfully communicated; and (ii)
any offer of Placing Shares may only be directed at persons to the
extent in member states of the European Economic Area who are
"qualified investors" within the meaning of Article 2(1)(e) of the
Prospectus Directive (Directive 2003/71/EC) and represents and
agrees that it is such a qualified investor;
18. that it is entitled to purchase the Placing Shares under the
laws of all relevant jurisdictions which apply to it, and that its
subscription/purchase of the Placing Shares will be in compliance
with applicable laws and regulations in the jurisdiction of its
residence, the residence of the Company, or otherwise;
19. that it (and any person acting on its behalf) will make
payment for the Placing Shares allocated to it in accordance with
this announcement on the due time and date set out herein, failing
which the relevant Placing Shares may be placed with other
subscribers or sold as the Joint Brokers may in their discretion
determine and without liability to such Placee;
20. that its allocation (if any) of Placing Shares will
represent a maximum number of Placing Shares which it will be
entitled, and required, to subscribe for, and that SPARK may call
upon it to subscribe for a lower number of Placing Shares (if any),
but in no event in aggregate more than the aforementioned
maximum;
21. that neither of the Joint Brokers, nor any of their
respective affiliates, nor any person acting on behalf of either of
them, is making any recommendations to it, advising it regarding
the suitability of any transactions it may enter into in connection
with the Placing and that participation in the Placing is on the
basis that it is not and will not be a client of either Joint
Broker and that the Joint Brokers have no duties or
responsibilities to it for providing the protections afforded to
their clients or customers or for providing advice in relation to
the Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing Agreement nor
for the exercise or performance of any of its rights and
obligations thereunder including any rights to waive or vary any
conditions or exercise any termination right;
22. that the person whom it specifies for registration as holder
of the Placing Shares will be (i) itself or (ii) its nominee, as
the case may be. Neither of the Joint Brokers or SPARK will be
responsible for any liability to stamp duty or stamp duty reserve
tax resulting from a failure to observe this requirement. Each
Placee and any person acting on behalf of such Placee agrees to
participate in the Placing and it agrees to indemnify SPARK and the
Joint Brokers in respect of the same on the basis that the Placing
Shares will be allotted to the CREST stock accounts of the Joint
Brokers who will hold them as nominee on behalf of such Placee
until settlement in accordance with its standing settlement
instructions;
23. that these terms and conditions and any agreements entered
into by it pursuant to these terms and conditions and any
non-contractual obligations arising out of or in connection with
such agreements shall be governed by and construed in accordance
with the laws of England and Wales and it submits (on behalf of
itself and on behalf of any person on whose behalf it is acting) to
the exclusive jurisdiction of the English courts as regards any
claim, dispute or matter arising out of any such contract, except
that enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest
chargeable thereon) may be taken by SPARK or the Joint Brokers in
any jurisdiction in which the relevant Placee is incorporated or in
which any of its securities have a quotation on a recognised stock
exchange;
24. that the Company, finnCap and Liberum will rely upon the
truth and accuracy of the representations, warranties and
acknowledgements set forth herein and which are irrevocable and it
irrevocably authorises the Company, finnCap and Liberum to produce
this announcement, pursuant to, in connection with, or as may be
required by any applicable law or regulation, administrative or
legal proceeding or official inquiry with respect to the matters
set forth herein;
25. that it will indemnify and hold SPARK, the Joint Brokers and
their respective affiliates harmless from any and all costs,
claims, liabilities and expenses (including legal fees and
expenses) arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and
undertakings in this Appendix I and further agrees that the
provisions of this Appendix I shall survive after completion of the
Placing;
26. that it will acquire any Placing Shares purchased by it for
its account or for one or more accounts as to each of which it
exercises sole investment discretion and it has full power to make
the acknowledgements, representations and agreements herein on
behalf of each such account;
27. that its commitment to subscribe for Placing Shares on the
terms set out herein and in the contract note will continue
notwithstanding any amendment that may in future be made to the
terms of the Placing and that Placees will have no right to be
consulted or require that their consent be obtained with respect to
SPARK's conduct of the Placing. The foregoing representations,
warranties and confirmations are given for the benefit of SPARK as
well as the Joint Brokers. The agreement to settle a Placee's
subscription (and/or the subscription of a person for whom such
Placee is contracting as agent) free of stamp duty and stamp duty
reserve tax depends on the settlement relating only to the
subscription by it and/or such person direct from SPARK for the
Placing Shares in question. Such agreement assumes, and is based on
a warranty from each Placee, that neither it, nor the person
specified by it for registration as holder, of Placing Shares is,
or is acting as nominee or agent for, and that the Placing Shares
will not be allotted to, a person who is or may be liable to stamp
duty or stamp duty reserve tax under any of sections 67, 70, 93 and
96 of the Finance Act 1986 (depositary receipts and clearance
services). If there are any such arrangements, or the settlement
relates to any other dealing in the Placing Shares, stamp duty or
stamp duty reserve tax may be payable. In that event the Placee
agrees that it shall be responsible for such stamp duty or stamp
duty reserve tax, and neither SPARK nor the Joint Brokers shall be
responsible for such stamp duty or stamp duty reserve tax. If this
is the case, each Placee should seek its own advice and notify the
Joint Brokers accordingly;
28. that no action has been or will be taken by any of the
Company, the Joint Brokers or any person acting on behalf of SPARK
or the Joint Brokers that would, or is intended to, permit a public
offer of the Placing Shares in any country or jurisdiction where
any such action for that purpose is required;
29. that, in making any decision to purchase the Shares, it has
knowledge and experience in financial, business and international
investment matters as is required to evaluate the merits and risks
of subscribing for or purchasing the Placing Shares. It further
confirms that it is experienced in investing in securities of this
nature in this sector and is aware that it may be required to bear,
and is able to bear, the economic risk of, and is able to sustain a
complete loss in connection with the Placing. It further confirms
that it relied on its own examination and due diligence of the
Company and its associates taken as a whole, and the terms of the
Placing, including the merits and risks involved;
30. that it has (i) made its own assessment and satisfied itself
concerning legal, regulatory, tax, business and financial
considerations in connection herewith to the extent it deems
necessary; (ii) had access to review publicly available information
concerning the SPARK group that it considers necessary or
appropriate and sufficient in making an investment decision; (iii)
reviewed such information as it believes is necessary or
appropriate in connection with its subscription or purchase of the
Placing Shares; and (iv) made its investment decision based upon
its own judgement, due diligence and analysis and not upon any view
expressed or information provided by or on behalf of finnCap and
Liberum;
31. that it may not rely on any investigation that finnCap and
Liberum or any person acting on their behalf may or may not have
conducted with respect to the Company, its group, or the Placing
and finnCap and Liberum have not made any representation to it,
express or implied, with respect to the merits of the Placing, the
subscription or purchase of the Placing Shares, or as to the
condition, financial or otherwise, of the Company, its group, or as
to any other matter relating thereto, and nothing herein shall be
construed as a recommendation to it to purchase the Placing Shares.
It acknowledges and agrees that no information has been prepared by
finnCap, Liberum or the Company for the purposes of this
Placing;
32. that accordingly it will not hold finnCap or Liberum, any of
their respective associates or any person acting on their behalf
responsible or liable for any misstatements in or omission from any
publicly available information relating to the Company's group or
information made available (whether in written or oral form) in
presentations or as part of roadshow discussions with investors
relating to the Company's group (the "Information") and that none
of finnCap, Liberum or any person acting on behalf of finnCap or
Liberum, makes any representation or warranty, express or implied,
as to the truth, accuracy or completeness of such Information or
accepts any responsibility for any of such Information; and
33. that in connection with the Placing, each of finnCap,
Liberum and any of their respective affiliates acting as an
investor for its own account may take up shares in the Company and
in that capacity may retain, purchase or sell for its own account
such shares in the Company and any securities of the Company or
related investments and may offer or sell such securities or other
investments otherwise than in connection with the Placing.
Accordingly, references in this announcement to shares being
issued, offered or placed should be read as including any issue,
offering or placement of such shares in the Company to any of
finnCap, Liberum and any relevant affiliate acting in such
capacity. Neither finnCap nor Liberum intends to disclose the
extent of any such investment or transactions otherwise than in
accordance with any legal or regulatory obligations to do so.
By participating in the Placing, each Placee (and any person
acting on Placee's behalf) subscribing for Placing Shares
acknowledges that: (i) the Placing Shares are being offered and
sold only pursuant to Regulation S under the Securities Act in a
transaction not involving a public offering of securities in the
United States and the Placing Shares have not been and will not be
registered under the Securities Act; and (ii) the offer and sale of
the Placing Shares to it has been made outside of the United States
in an "offshore transaction" (as such term is defined in Regulation
S under the Securities Act) and it is outside of the United States
during any offer or sale of Placing Shares to it.
In addition, Placees should note that they will be liable for
any stamp duty and all other stamp, issue, securities, transfer,
registration, documentary or other duties or taxes (including any
interest, fines or penalties relating thereto) payable outside the
United Kingdom by them or any other person on the subscription by
them of any Placing Shares or the agreement by them to subscribe
for any Placing Shares.
Each Placee and any person acting on behalf of each Placee
acknowledges and agrees that the Joint Brokers or any of their
affiliates may, at their absolute discretion, agree to become a
Placee in respect of some or all of the Placing Shares.
When a Placee or person acting on behalf of the Placee is
dealing with the Joint Brokers, any money held in an account with
any of the Joint Brokers on behalf of the Placee and/or any person
acting on behalf of the Placee will not be treated as client money
within the meaning of the rules and regulations of the FCA made
under FSMA. The Placee acknowledges that the money will not be
subject to the protections conferred by the client money rules; as
a consequence, this money will not be segregated from the relevant
Joint Brokers' money in accordance with the client money rules and
will be used by the relevant Joint Brokers in the course of their
own business; and the Placee will rank only as a general creditor
of the Joint Brokers.
All times and dates in this announcement may be subject to
amendment. The Joint Brokers shall notify the Placees and any
person acting on behalf of the Placees of any changes.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser.
APPENDIX II
RISK FACTORS
An investment in New Ordinary Shares may not be suitable for all
people and involves a number of risks. All the information set out
in this announcement and, in particular, those risks relating to
the Fundraising (which includes the Placing and the Open Offer)
described below, should be carefully considered prior to making any
investment decision. Accordingly, you are strongly recommended to
consult an investment adviser authorised under the FSMA if you are
in the United Kingdom or, if not, another appropriately authorised
independent financial adviser, who specialises in the acquisition
of shares and other securities before making a decision to invest.
In addition to all the other information contained in this
announcement and the Circular to Shareholders, potential investors
should carefully consider the following risk factors which the
Directors consider to be all the known material risks in respect of
the business of the Company and its securities, but are not set out
in any particular order of priority.
If any of the circumstances identified in the risk factors were
to materialise the Company's business, financial condition and
operating results could be materially affected. In particular, the
Company's performance is likely to be affected by changes to the
market and/or economic conditions and/or legal,
accounting, regulatory and tax requirements currently unknown by
the Company. Investors should note that the trading price of the
Ordinary Shares could decline due to any of these risks and
investors may lose all or part of their investment.
Additional risks which are not presently known to the Board, or
that the Board currently deems to be immaterial, may also have an
effect on the Group's business, financial condition and operating
results.
1. Risks relating to the Company
Ability to utilise tax losses
The Group has substantial accumulated tax losses which, if
utilised, would reduce the on-going tax burden of the Group.
However, there can be no guarantee that the Group will be able to
utilise these tax losses and may therefore have to pay more tax
than is currently envisaged.
Ability to pay dividends or return cash to shareholders
The Company has returned cash to Shareholders over the last few
years. The ability to continue to return
cash to Shareholders through the payment of dividends or
otherwise is dependent on the Company generating sufficient surplus
cash to be able to do so and having sufficient distributable
resources to be able to make any such proposed payments. If the
Company does not do so then it may be unable to pay dividends or
return cash to shareholders.
Change to the regulatory environment
The Company engages the services of a regulated investment
manager. In the event that the regulatory environment changes, it
is possible that the Company may have to change its investment
manager or be required to bear additional costs to carry on its
activities.
2. Risks relating to the New Investing Policy and the new
investment strategy
Ability to recruit and retain skilled personnel
The Company's success will depend on the ability of the New
Manager to recruit and retain qualified and experienced employees.
Should Gresham House be unable to attract new employees this could
have a material adverse effect on the Company's ability to grow its
business. In this respect, Anthony Dalwood and Graham Bird are
viewed as key men.
Dependence on key executives
The Company's development and prospects are dependent upon the
service and performance of the New Manager and its senior
management. The loss of the services of any of the senior
management of Gresham House could cause disruption which could have
a material adverse effect on the deliverability of the New
Investing Policy.
Poor investment decision making
There is no assurance the Company will meet its investment
objectives. Meeting those objectives is a target, but the existence
of such objectives should not be considered as an assurance or
guarantee that they can or will be met in relation to the Company's
portfolio in general or in relation to any part of it. In
particular, there is no assurance that the Company will find
suitable, and/or sufficient securities to invest in. There can be
no assurance as to the level of IRR over the long term.
The Company will be investing in assets selected in accordance
with the New Investing Policy. The value of investments and the
income from them, and therefore the value of and income from
Ordinary Shares will be closely linked to the performance of such
investments. Investments made by the Company will be speculative
and an investment in the Company therefore involves a degree of
risk.
Valuation risk
The Company's New Investment Policy is to invest in largely
quoted assets, although some investments are private assets and the
valuation of such investments involves the Investment Manager
exercising judgement.
There can be no guarantee that the basis of calculation of the
value of the Company's investments used in the valuation process
will reflect the actual value on realisation of those investments.
The New Investment Manager will be entitled to receive a management
fee for its services to the Company which is based, in part, on the
value of the Company's investments. This creates a potential
conflict of interest as the Investment Manager is involved in the
valuation of the Company's investments.
Currency Risk
In the event that the Company invests in companies which do not
have sterling as their operational currency, the Company will be
exposed to potential currency fluctuations, which may have an
adverse impact on its results of operations.
Exposure to macroeconomic, geographic, sector-related and
geo-political risks
As noted above in respect of general risks, the Company's
investment activities will expose the Shareholders to risks arising
from macroeconomic, geographic, sector-related and geo-political
risks.
Nature of investee companies
A majority of the direct investments made by the Company will be
in the securities of small and medium
sized companies. Such securities may involve a higher degree of
risk than would be the case for the securities of larger companies.
In addition, the New Investing Policy is to identify and invest in
companies that are believed to be undervalued, such companies may
not prove to be capable of generating any additional value for
their shareholders and so would not assist in achieving the
Company's investment objective.
It is intended that the Company will generally be a minority
investor in the entities in which it invests and, accordingly, its
ability to promote and to protect its interests will be limited and
the subsequent management and control of such an asset may entail
risks associated with multiple owners and decision-makers. Any such
investment also involves the risk that third party owners might
become insolvent or fail to fund their share of any capital
contribution which might be required. In addition, such third
parties may have economic or other interests which are inconsistent
with the Company's interests, or they may obstruct the Company's
plans (for example, in implementing active asset management
measures), or they may propose alternative plans. If such third
parties are in a position to take or influence actions contrary to
the Company's interests and plans, the Company may face the
potential risk of impasses on decisions that affect the ability to
implement its strategies and/or dispose of the asset. The above
circumstances may have a material adverse effect on the Company's
performance, financial condition and business prospects.
Companies in which the Company may invest may be highly geared
which may significantly affect the
equity values of such investee companies and, in a winding up of
any such investee company, may significantly reduce the amounts
returned to shareholders in such company (including the
Company).
Concentrated portfolio
Once fully invested, the Company expects that the majority of
the value of its portfolio of investments will be represented by
investments in a small number of companies. Accordingly,
shareholders should be aware that the portfolio potentially carries
a higher level of risk than a more diversified portfolio.
Liquidity of portfolio
The Company may invest in securities that are not readily
tradable, which may make it difficult for the company to sell its
investments. Shareholders should not expect that the Company will
necessarily be able to realise, within a period which they would
otherwise regard as reasonable, its investments, or that any
realisation will be on a basis which necessarily reflects the
Company's valuation of such investments.
Past performance
In considering any information contained in this announcement
relating to past performance or the background of Gresham House,
Shareholders should bear in mind that past performance is not
necessarily indicative of future results and there can be no
assurance that the Company will achieve results comparable to those
achieved by Gresham House in their previous roles. The Company is
long established but the new Investing Policy is a new start with
no guarantee of success.
Delay/failure to make significant investments
There can be no assurance as to how long it will take for the
Company to invest any or all of the net proceeds of the Placing and
it may not find suitable assets in which to invest all of such
proceeds. The Company is likely to face competition from a variety
of other potential purchasers in identifying and acquiring suitable
assets. The longer the period before investment the greater the
likelihood that the Company's financial condition, business,
prospects and results of operations will be materially adversely
affected. Market conditions may have a negative impact on the
Company's ability to identify and execute investments in suitable
assets that generate acceptable returns.
Potential requirement for further investment
Any potential expansion activity and/or business development may
require additional capital. There can be no guarantee that the
necessary funds will be available on a timely basis on favourable
terms or at all or that such funds (if raised) would be sufficient.
If additional funds are raised by issuing equity securities,
dilution to the existing Shareholders may result. If the Company is
not able to obtain additional capital on acceptable terms or at
all, it may be forced to curtail or abandon such planned expansion,
activity and/or business development.
Use of Ordinary Shares as consideration for acquisitions would
result in dilution of existing Shareholders
Under the new strategy, the Company may make acquisitions for
cash or share consideration. If Ordinary Shares are used as
consideration to make acquisitions the proportionate ownership and
voting interests of the then Shareholders in the Company will be
reduced and the percentage of the total share capital of the
Company that their shares will represent will be reduced
accordingly with a potential consequential reduction in their power
to affect the direction of the Group.
Control systems may prove inadequate
The Company has in place appropriate regulatory, financial and
management controls. The Directors believe the Company also has in
place appropriate protections against detrimental activities such
as fraud, theft, misuse of funds, money laundering or other
unauthorised or criminal activities. Nevertheless, such systems may
prove inadequate. In the event that such controls fail or the Group
is subject to such detrimental activities and such protections
prove inadequate, this may lead to a material adverse effect on the
Company.
3. Risks relating to the New Investment Manager
The New Investment Manager allocates many of its resources to
activities in which the Company is not
engaged, which could have a negative impact on the Company's
ability to achieve its investment objective
The New Investment Manager is not required to commit all of
their resources to the Company's affairs. Insofar as the New
Investment Manager devotes resources to their responsibilities to
other business interests, their ability to devote resources and
attention to the Company's affairs will be limited. This could
adversely affect the Company's ability to achieve its investment
objective, which could have a material adverse effect on the
Company's profitability, Net Asset Value and share price.
The New Investment Manager and its affiliates may provide
services to other clients which could compete directly or
indirectly with the activities of the Company and may be subject to
conflicts of interest in respect of its activities on behalf of the
Company
The New Investment Manager and their affiliates are involved in
other financial, investment or professional activities which may on
occasion give rise to conflicts of interest with the Company. In
particular, the New Investment Manager manages funds other than the
Company and may provide investment management, investment advisory
or other services in relation to these funds or future funds which
may have similar investment policies to that of the Company.
The New Investment Manager and their affiliates may carry on
investment activities for other accounts in which the Company has
no interest. The New Investment Manager and their affiliates may
also provide management services to other clients, including other
collective investment vehicles. The New Investment Manager and
their affiliates may give advice and recommend securities to other
managed accounts or investment funds which may differ from advice
given to, or investments recommended or bought for, the Company,
even though their investment policies may be the same or
similar.
Due diligence
Prior to investing in companies, the New Investment Manager will
assist, in conjunction with the Investment Committee, in performing
due diligence on the proposed investment. To the extent that the
New Investment Manager underestimates or fails to identify risks
and liabilities associated with companies through which the Company
invests, this may impact on the profitability of any
investment.
4. Risks relating to the Company's securities
General
An investment in the Ordinary Shares is only suitable for
investors capable of evaluating the risks (including the risk of
capital loss) and merits of such investment and who have sufficient
resources to sustain a total loss of their investment. An
investment in the Ordinary Shares should be seen as long-term in
nature and complementary to investments in a range of other
financial assets and should only constitute part of a diversified
investment portfolio. Accordingly, typical investors in the Company
are expected to be institutional investors, private client fund
managers and private client brokers, as well as private individuals
who have received advice from their professional advisers regarding
investment in the Ordinary Shares and/or who have sufficient
experience to enable them to evaluate the risks and merits of such
investment themselves.
Conditionality of the Placing and Open Offer
The Placing and Open Offer are conditional upon, inter alia,
Admission. In the event that any condition to which Admission is
subject is not satisfied or, if capable of waiver, waived,
Admission will not take place.
Share price volatility and liquidity
Following Admission, the market price of the Ordinary Shares may
be subject to wide fluctuations in response to many factors,
including stock market fluctuations and general economic conditions
or changes in political sentiment that may substantially affect the
market price of the Ordinary Shares irrespective of the progress
SPARK may make in terms of developing and launching its products or
its actual financial, trading or operational performance. These
factors could include the performance of SPARK, purchases or sales
of the Ordinary Shares (or the perception that the same may occur),
legislative changes and market, economic, political or regulatory
conditions or price distortions resulting from limited liquidity.
The share price for publicly traded companies, particularly those
at an early stage of development, such as the Company, can be
highly volatile. The Company's quotation on AIM should not be taken
as implying that a liquid market for the Ordinary Shares either
exists, or will develop or be sustained. Active, liquid trading
markets generally result in lower price volatility and more
efficient execution of buy and sell orders for investors. The
liquidity of a securities market is often a function of the volume
of the underlying shares that are publicly held by unrelated
parties. If a liquid trading market for the Ordinary Shares does
not develop, the price of the Ordinary Shares may become more
volatile and it may be more difficult to complete a buy or sell
order even for a relatively small number of such Ordinary Shares
discount to NAV.
Substantial sales of Ordinary Shares could cause the price of
Ordinary Shares to decline
There can be no assurance that certain Directors or other
Shareholders will not elect to sell their Ordinary Shares in the
future. The market price of Ordinary Shares could decline as a
result of any such sales of Ordinary Shares or as a result of the
perception that these sales may occur. In addition, if these or any
other sales were to occur, the Company may in the future have
difficulty in offering Ordinary Shares at a time or at a price it
deems appropriate.
There is no guarantee that the Company's Ordinary Shares will
continue to be traded on AIM
The Company cannot assure investors that the Company's Ordinary
Shares will always continue to be traded on AIM or on any other
exchange. If such trading were to cease, certain investors may
decide to sell their shares, which could have an adverse impact on
the price of the Ordinary Shares. Additionally, if in the future
the Company decides to obtain a listing on another exchange in
addition or as an alternative to AIM, the level of liquidity of the
Ordinary Shares traded on AIM could decline.
Investment in AIM traded securities
The Ordinary Shares are, and the New Ordinary Shares will be,
traded on AIM rather than admitted to the Official List of the UK
Listing Authority. AIM is designed primarily for emerging or
smaller companies to which a higher investment risk tends to be
attached than to larger or more established companies. The rules of
AIM are less demanding than those admitted to the Official List and
an investment in shares traded on AIM may carry a higher risk than
an investment in shares admitted to the Official List. In addition,
the market in shares traded on AIM may have limited liquidity,
making it more difficult for an investor to realise its investment
on AIM than to realise an investment in a company whose shares are
admitted to the Official List. Investors should therefore be aware
that the market price of the Ordinary Shares may be more volatile
than that of shares admitted to the Official List, and may not
reflect the underlying value of the Company.
Investors may, therefore, not be able to sell at a price which
permits them to recover their original investment and could lose
their entire investment.
Issuance of additional Ordinary Shares
It is possible that the Company may decide to issue, pursuant to
a public offer or otherwise, additional
Ordinary Shares in the future at a price or prices higher or
lower than the Issue Price. An additional issue of Ordinary Shares
by the Company, or the public perception that an issue may occur,
could have an adverse effect on the market price of Ordinary Shares
and could dilute the proportionate ownership interest, and hence
the proportionate voting interest, of Shareholders if, and to the
extent that, such an issue of Ordinary Shares is not effected on a
pre-emptive basis or Shareholders do not take up their rights to
subscribe for further Ordinary Shares as a pre-emptive offer.
DEFINITIONS
Terms not otherwise defined below have the same meanings given
to them elsewhere in this announcement:
"Admission" means admission of the Placing Shares to trading on
the London Stock Exchange's AIM market;
"AIM" means the AIM market of the London Stock Exchange;
"Board" means the board of directors of the Company;
"finnCap" means finnCap Limited;
"Company" or "SPARK" means SPARK Ventures plc;
"Directors" means the directors of the Company;
"General Meeting" means the General Meeting of the Company
proposed to be held on or around 6 August 2015;
"Group" means the Company and its subsidiary undertakings;
"Joint Brokers" means finnCap and Liberum;
"London Stock Exchange" means London Stock Exchange plc;
"Liberum" means Liberum Capital Limited;
"Ordinary Shares" means the ordinary shares of 50 pence each in
the share capital of the Company following the share consolidation
as described in the circular sent to shareholders;
"Placees" means investors with whom Placing Shares are
placed;
"Placing" means the placing of the Placing Shares described in
this announcement;
"Placing Agreement" means the agreement dated 20 July 2015
entered into by the Company, finnCap and Liberum in connection with
the Placing;
"Placing Price" means the price of 900 pence per Placing
Share;
"Placing Shares" means the new Ordinary Shares to be issued
pursuant to the Placing;
"Resolutions" means the resolutions to be set out in the notice
of General Meeting;
"United States" or "US" means the United States of America, its
territories and possessions, any State of the United States and the
District of Columbia; and
"GBP" means the lawful currency of the United Kingdom
This information is provided by RNS
The company news service from the London Stock Exchange
END
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