TIDMBEST
RNS Number : 4894R
Best of the Best PLC
04 November 2011
4 November 2011
Best of the Best plc
("Best of the Best" or "the Company")
Announcement of Tender Offer and General Meeting
The Company announced today that it intends to return surplus
cash to Shareholders by way of a tender offer, pursuant to which
Charles Stanley Securities ("Charles Stanley") will purchase, as
principal, up to approximately 16.67 per cent. of the Company's
Ordinary Shares (one Ordinary Share for every six held) at a price
of 63 pence per Ordinary Share (and these Ordinary Shares may then
be purchased from Charles Stanley by the Company pursuant to the
Repurchase Agreement).
If the maximum number of Ordinary Shares under the Tender Offer
are acquired this will result in an amount of GBP1,180,884 being
paid to Qualifying Shareholders. If implemented, the Tender Offer
will enable Qualifying Shareholders to achieve a partial
realisation of their holding at 63 pence per Ordinary Share.
A circular, containing the formal terms and conditions of the
Tender Offer and instructions to Shareholders on how to tender
their Ordinary Shares should they choose to do so, together with a
Tender Form and Form of Proxy, are expected to be posted to
Shareholders later today.
Background to and reasons for the Proposals
Your Board considers that it is in the interests of Shareholders
to implement the Tender Offer so as to provide those Qualifying
Shareholders who wish to sell shares in the Company the opportunity
to do so.
The Company has been cash generative for a number of years and
has benefited from a strong balance sheet with significant cash
reserves. The exit of sites at Heathrow in January 2011 also
resulted in a release of cash (refunded capital expenditure),
coupled with a reduction in stock (cars on display). Furthermore,
the Company has significantly reduced both the level of capital
expenditure and stock on display required at the new retail sites
it has opened (Westfield White City, Westfield Stratford, Lakeside
Shopping Centre) and those it is currently refitting (Stansted
Airport and Luton Airport). This is a trend that the Board
anticipates will continue with expected refurbishments at Gatwick
and Birmingham Airports. Further, the Board believes that the major
investment in its information technology systems and platform over
the previous 24 months is sufficient and will not require
significant further funding in the short term.
As a result of the above, the Company has a cash balance surplus
to the operational requirements of its continuing activities. The
Company now proposes to return up to GBP1,180,884 to Qualifying
Shareholders by means of the Proposals. Following completion of the
Proposals, the Directors believe that the Company will have
sufficient working capital to fund its activities going forward
over the short to medium term.
In determining the level of return of value, the Board has taken
into consideration its aim of improving the Company's earnings per
share, as well as targeting a more efficient capital structure
through returning excess balance sheet cash to Shareholders.
Benefits of the Proposals
The Board has considered a range of options for returning cash
to Shareholders but decided to do this by way of the Tender Offer
because it believes this process benefits both Qualifying
Shareholders and the Company. In particular, the Directors believe
that the Tender Offer:
-- provides those Qualifying Shareholders who wish to sell
Ordinary Shares with the opportunity to do so;
-- is available to all Qualifying Shareholders regardless of the
size of their shareholdings;
-- allows the Company to broaden the return of cash to include
those Qualifying Shareholders whose Ordinary Shares might not
otherwise be purchased by the Company through a buy back in the
market;
-- enables those Shareholders who do not wish to receive capital
at this time to maintain their full investment in the Company;
-- enables Ordinary Shares to be sold free of commissions or
charges that would otherwise be payable if Qualifying Shareholders
were to sell their shares through their broker; and
-- immediately enhances earnings per share.
Acceptance of the Tender Offer will constitute a return of
capital of 63 pence per share in respect of each Ordinary Share
tendered.
Details of the Proposals
The Directors propose that the Tender Offer be made, pursuant to
which Charles Stanley will purchase, as principal, up to
approximately 16.67 per cent. of the Company's Ordinary Shares at a
price of 63 pence per Ordinary Share.
The Tender Offer is being made subject to the passing of a
special resolution which will be proposed at the General Meeting.
The Tender Offer is also subject to the conditions set out in the
Repurchase Agreement and Part 2 of the Circular being posted to
Shareholders today. The Tender Offer is open to the Shareholders on
the Register at 5.00 p.m. on 23 November 2011 (the "Tender Offer
Record Date").
In accordance with the terms and subject to the conditions of
the Repurchase Agreement, Charles Stanley has granted to the
Company a call option pursuant to which, the Company may, at its
sole discretion, purchase from Charles Stanley the Ordinary Shares
purchased by it pursuant to the Tender Offer at a price of 63 pence
per Ordinary Share. All of the Ordinary Shares purchased by the
Company under the Repurchase Agreement will be cancelled.
The purchase of shares from Charles Stanley pursuant to the
Repurchase Agreement will be funded from available cash of the
Company and paid out of its distributable reserves. Accordingly,
following the completion of the Repurchase, the Company's
distributable reserves will be reduced by the size of the Tender
Offer. If the call option is exercised by the Company pursuant to
the Repurchase Agreement, the Company's issued share capital will
be reduced to 9,372,100 Ordinary Shares, (excluding shares held in
treasury), assuming the Tender Offer is taken up in full.
General Meeting
The authorisation of the Repurchase Agreement and, accordingly,
the implementation of the Tender Offer, requires, inter alia, the
passing of a special resolution.
Therefore the Company is convening a General Meeting of the
Company to be held at the offices of Charles Stanley, 25 Luke
Street, London EC2A 4AR on 21 November 2011 at 11.00 a.m.
Irrevocable undertakings by Directors and other Shareholders
Directors Michael W Hindmarch, William S Hindmarch, Rupert C E
Garton and Colin Hargrave who, (excluding Options to be exercised
prior to the Tender Offer Record Date), are the registered holders
of, in aggregate, 7,529,137 Ordinary Shares, representing
approximately 68.86 per cent. of the Company's current issued share
capital, have undertaken to accept the Tender Offer in full and to
vote in favour of the Resolution.
Trading update
The Company has been trading in line with expectations and will
be loss making for the financial year due to the loss of its
Heathrow sites. The Company remains on target to move back into
profitability next year.
The restructuring of the Company's principal supercar
competition to incorporate lower entry points has had the desired
effect of increasing participation as well as opening up new
opportunities in shopping centres. The Company has now opened sites
in Westfield White City, Westfield Stratford and Lakeside Shopping
Centres, and it is the Board's ambition to continue rolling out
further shopping centre sites pending the success of the trials at
these locations.
The Company's airport locations continue to trade as expected.
The Company is currently refitting sites at Stansted and Luton,
with Birmingham and Gatwick expected to follow in the coming
months. These refits will benefit from a smaller, more flexible
format devised at the shopping centres, which is working well for
the Company and has been well received by its landlords.
The Company's online offering has been considerably broadened
with new product categories and a greater number of competitions.
Revenues are building steadily and the number of participants has
grown significantly, aided by lower price points and increased
frequency of play.
The results for the six months ended 31 October 2011 are
expected to be announced on 27th January 2012.
Option Schemes
It is anticipated that Rupert C E Garton and Ian Atkinson (the
Company's Sales Director) will exercise Options prior to the Tender
Offer Record Date amounting to 312,765 Ordinary Shares in
aggregate. Further, in accordance with the terms of the Option
Schemes, the Directors will consider the effect of the Proposals on
the terms of the Options, and the terms of the Options may be
adjusted accordingly in due course.
Related Party Transaction
The Directors of the Company are considered to be related
parties to the Company and therefore the transaction is considered
to be a related party transaction pursuant to Rule 13 of the AIM
Rules. The Company's nominated adviser, Charles Stanley, considers
that the terms of the transaction are fair and reasonable insofar
as the Company's Shareholders are concerned.
EXPECTED TIMETABLE OF EVENTS
Announcement of the Proposals 4 November 2011
Tender Offer opens 7 November 2011
Latest time for receipt of Forms of Proxy 11.00 a.m on 19
November 2011
General Meeting 11.00 a.m on 21 November 2011
Latest time for receipt of Tender Forms and TTE Instructions
in
relation to the Tender Offer 1.00 p.m. on 23 November 2011
Tender Offer Record Date 5.00 p.m. on 23 November 2011
Announcement of results of Tender Offer 24 November 2011
Posting of cheques in respect of the Tender Offer, along with
any
balance certificates or the crediting of CREST accounts 25
November 2011
Recommendations by the Directors
The Directors unanimously consider that the Proposals described
above are in the best interests of Shareholders and recommend that
Shareholders vote in favour of the proposed Resolution and that
they follow the action being taken by the Directors (representing
holders of approximately 68.86 per cent. of the issued share
capital) and participate in the Tender Offer in full.
Enquiries:
Best of the Best William Hindmarch, Chief T: 020 7371
plc Executive 8866
Rupert Garton, Commercial
Director
Charles Stanley Mark Taylor / Luke Webster T: 020 7149
Securities 6000
(Nominated Adviser)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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