TIDMFFI
RNS Number : 9055G
FFI Holdings PLC
26 July 2019
26 July 2019
FFI Holdings PLC
("FFI" or the "Group")
Proposed Cancellation of Admission to Trading on AIM
Re-registration as a private limited company and adoption of new
articles of association
Publication of Circular and Notice of General Meeting
Further to the recommended mandatory offer for FFI by Lumiere
Acquisitions Company LLC ("Lumiere") announced on 2 July 2019, FFI
today announces that it is proposing to cancel the admission to
trading on AIM of its ordinary shares of GBP0.01 each (the
"Ordinary Shares") (the "Delisting") and is seeking approval to
re-register as a private limited company (the "Re-registration")
and to adopt new articles of association (the "New Articles").
A circular will be published and sent to all FFI shareholders
later today setting out further details of the Delisting, the
related Re-registration and adoption of New Articles and the
implications for FFI shareholders (the "Circular"). Extracts from
the Circular are included within the Appendix of this announcement.
The Circular will contain a notice convening a general meeting of
FFI which is to be held at 9000 Sunset Boulevard, Suite 1400, Los
Angeles, California 90069, USA at 10:00 am Pacific Daylight Time
("PDT") on 19 August 2019, at which the approval of Shareholders of
the Delisting and the related matters will be sought. Owing to
Lumiere and other members of the Lumiere Concert Party (as defined
in the Appendix) now owning or controlling over 75 per cent. of the
issued shares in the Company, the Company expects that the relevant
resolutions will be passed. Accordingly, Shareholders are expected
to approve the Delisting and related matters and it is anticipated
that trading in the Ordinary Shares on AIM will cease at close of
business on 27 August 2019 and cancellation of admission to trading
on AIM of the Ordinary Shares will become effective at 7:00 a.m. UK
time on 28 August 2019. Following cancellation becoming effective
the Company will re-register as a private company and adopt the New
Articles.
ENQUIRIES:
FFI Holdings PLC
David Sasso, Head of Investor Relations Tel: +1 310 275 7323
Liberum (Nominated Adviser and
Corporate Broker)
Steve Pearce Tel: +44 (0)20 3100 2000
Joshua Hughes
Hawthorn Advisors
Victoria Ainsworth Tel: +44 (0)20 3745 3815
Appendix - Extract from Circular
EXPECTED TIMETABLE
2019
Notice provided to the London Stock Exchange to notify it of 26
July
the proposed Cancellation
Posting of this document, Offer Document, Form of Acceptance and
Notice of Availability
26 July
to Shareholders
Latest time and date for receipt of proxy votes in respect
10:00am PDT 15 August
of the General Meeting
Time and Date of General Meeting 10:00am PDT 19 August
Expected last day of dealings on AIM in the Ordinary Shares 27
August
Cancellation of the admission to trading on AIM of the Ordinary
Shares
28 August
expected to be effective
Notes:
All references to times of day in this document are to London
time unless specified otherwise.
Dates set out against events that are expected to occur after
the date of the General Meeting assume that the General Meeting is
not adjourned and that the Resolutions are passed at the General
Meeting.
All of the above times and dates are subject to change at the
Company's discretion. In the event of any change, the revised times
and dates will be notified to Shareholders by an announcement
through a Regulatory Information Service (as defined in the AIM
Rules).
1. Introduction
As further described in the Offer Document, on 2 July 2019,
Lumiere announced that the Independent FFI Directors and Lumiere
had reached agreement on the terms of a recommended mandatory cash
offer to be made by Lumiere for the entire issued and to be issued
ordinary share capital of the Company not already acquired or
agreed to be acquired by Lumiere at a price of 25 pence per
Ordinary Share.
As stated in such Announcement, the Board has concluded,
regardless of the outcome of the Offer, that it is in the best
interests of the Company and its Shareholders to cancel the
admission of the Ordinary Shares to trading on AIM, re-register the
Company as a private limited company and amend the Company's
Existing Articles. As such, the Board noted its intention in the
Announcement to send a circular to Shareholders convening a general
meeting to put forwards resolutions to approve the Cancellation,
Re-registration and adoption of New Articles as soon as reasonably
practicable.
Accordingly, the Company is today convening a meeting of
Shareholders in order to:
-- approve the cancellation of the Company's admission to trading on AIM;
-- re-register the Company as a private limited company; and
-- approve the adoption of the New Articles.
The purpose of this document is to provide you with information
about the background to and the reasons for the Cancellation, to
explain why the Board considers the Cancellation to be in the best
interests of the Company and its Shareholders as a whole and why
the Board unanimously recommends that you vote in favour of the
Resolutions to be proposed at the General Meeting, notice of which
is set out at the end of this document.
The Lumiere Concert Party now holds, in aggregate, a sufficient
number of Ordinary Shares to meet the 75% approval threshold
required to pass the resolutions in relation to the Cancellation,
Re-registration and adoption of New Articles at the General Meeting
and all members of the Lumiere Concert Party have undertaken to
vote in favour of such resolutions at the General Meeting.
Accordingly, regardless of votes cast by other Shareholders at the
General Meeting, providing all members of the Lumiere Concert Party
vote at the General Meeting in accordance with the terms of the
Concert Party Agreement, there is certainty that the resolutions in
relation to the Cancellation, Re-registration and adoption of New
Articles will be passed and that Cancellation, Re-registration and
adoption of New Articles shall take effect regardless of the
outcome of the Offer.
Shareholders should note that the Cancellation, Re-registration
and adoption of the New Articles are inter conditional and
conditional upon the Resolutions being passed at the General
Meeting. It is expected that the Company's admission to trading on
AIM will be cancelled on 28 August 2019.
2. Background and reasons for Cancellation
Reasons for Cancellation
The Directors have conducted a review of the benefits and
drawbacks to the Company and its Shareholders in retaining its AIM
quotation, and believe that Cancellation is in the best interests
of the Company and its Shareholders as a whole. In reaching this
conclusion, the Directors have considered the following key
factors, amongst others:
-- the considerable cost, management time and the legal and
regulatory burden associated with maintaining the Company's
admission to trading on AIM are, in the Directors' opinion,
disproportionate to the benefits to the Company at the present time
and for the foreseeable future;
-- prior to the Offer, a large number of Ordinary Shares were
held in the hands of a small group of investors which led to
limited liquidity in the Ordinary Shares. As a result of the Offer
and Lumiere's market purchases of Ordinary Shares, the Ordinary
Shares will be held in the hands of an even smaller group of
investors with the consequence that the Directors believe that the
Company's admission to trading on AIM does not, in itself, offer
investors the opportunity to trade in meaningful volumes or with
frequency in an active market; and
-- the depressed share price has defeated one of the core
reasons for the Company retaining its AIM quotation, namely to
implement its growth strategy, which involves further acquisitions
of ancillary services businesses. Further to Cancellation, the
Directors believe that the Company will be able to raise further
funds based on a longer term investment horizon.
Following careful consideration, the Board has therefore
concluded that the commercial disadvantages and costs of
maintaining an AIM quotation at this time in the Company's
development, outweigh the potential benefits and that it is
therefore in the best interests of the Company and Shareholders to
seek the proposed Cancellation at the earliest opportunity.
Current trading
The Company announced a trading update on 4 March 2019 ahead of
reporting its results for the fiscal year ending 31 March 2019 (the
"FY19 Profit Forecast"). The FY19 Profit Forecast was further
refined in a trading update issued on 17 May 2019 in which the
Company stated:
"FFI Holdings PLC (AIM: FFI) FFI, the world leader in the
provision of completion contracts to the entertainment industry and
one of the largest providers of production services and equipment
to film makers, is pleased to confirm that it expects Underlying
EBIT will be within, but at the lower end of, the range of $7.5 to
$11.5m set out in its trading statement of 4 March 2019.
Other than completion contracts, which has been exposed to a
number of previously disclosed headwinds in the financial year, all
of the Company's divisions are expected to report trading in line
with or ahead of the Board's expectations."
Copies of the FY2019 Profit Forecast and trading update issued
on 17 May 2019 are available on the Company's website at:
http://www.filmfinances.com. The Directors confirm that the FY19
Profit Forecast remains valid as at the date of this document.
3. Prior to, process for, and principal effects of, the Cancellation
Prior to Cancellation
Shareholders should note that they are able to trade in the
Ordinary Shares on AIM, prior to Cancellation. In addition, as
further detailed in the Announcement, Lumiere, a direct,
wholly-owned subsidiary of the 777 Group, has made a recommended
mandatory offer to acquire all of the shares in the Company not
already held by Lumiere. Shareholders wishing to accept the Offer
may do so in accordance with the Offer Document and Form of
Acceptance (which are being published and posted to Shareholders on
the date of this document). The Cancellation will not take effect
until after the Offer has closed for acceptances.
A copy of the Announcement, Offer Document and Form Of
Acceptance are available on the Company's website at:
http://www.filmfinances.com.
Effect of Cancellation
The Directors are aware that certain Shareholders may be unable
or unwilling to hold Ordinary Shares in the event that the
Cancellation is approved and becomes effective. Such Shareholders
should consider either selling their interests in the market prior
to the Cancellation becoming effective or accepting the Offer.
Lumiere is permitted to purchase or arrange to purchase Ordinary
Shares otherwise than under the Offer, at the offer price of 25
pence per Ordinary Share. Any Shareholders who are interested in
selling their Ordinary Shares in cash can contact Cantor Fitzgerald
Europe on +44 20 7894 7590 who have authority to make market
purchases on behalf of Lumiere.
The principal effects of Cancellation and the Re-registration
(as further described in paragraph 3 (Background to and Reasons for
the Recommendation of the Independent FFI Directors) of Part 1 of
the Offer Document) will be that:
-- there will be no public market or trading facility on any
recognised investment exchange for the Ordinary Shares and,
consequently, there can be no guarantee that a Shareholder will be
able to purchase or sell any Ordinary Shares. The underlying
liquidity in the Ordinary Shares is currently low and, in the
opinion of the Directors, if the Cancellation does not proceed will
likely remain that way for the foreseeable future. However, as a
private company the opportunity for Shareholders to realise their
investment in the Company will be subject to further
limitations;
-- there shall be a significant reduction in the liquidity and
marketability of Ordinary Shares;
-- the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply. The Company will, therefore, achieve cost savings as
a result of no longer being subject to the provisions of this
regime;
-- Shareholders will no longer be afforded the protections given
by the AIM Rules, such as the requirement to be notified of certain
events, including substantial transactions, financing transactions,
related party transactions and fundamental changes in the Group's
business, including certain acquisitions and disposals;
-- the Company will cease to have a nominated adviser and broker;
-- as an unlisted private company, the Company will be subject
to less stringent accounting disclosure requirements;
-- the Cancellation may have either positive or negative
taxation consequences for Shareholders. Shareholders who are in any
doubt about their tax position should consult their own
professional independent adviser immediately; and
-- it is the intention of the Company that, following
Re-registration and completion of settlement in connection with the
Offer, its CREST facility will be cancelled and although the
Ordinary Shares will remain transferable, they will cease to be
transferable through CREST. Following Re-registration and
completion of settlement in connection with the Offer, Shareholders
who hold Ordinary Shares in CREST will receive share
certificates.
The Takeover Code currently applies to the Company. However,
following Cancellation, and for a period of ten years following
Re-registration, the Takeover Code will not apply to the Company
for so long as a majority of the Board remain resident outside of
the United Kingdom (after which period the Takeover Code shall not
apply to the Company regardless of the residency of a majority of
the Board). As such, Shareholders should note that, if the
resolution to re-register the Company as a private company becomes
effective, for so long as a majority of the Board remain resident
outside of the United Kingdom, they will not receive the
protections afforded by the Takeover Code in the event that there
is a subsequent offer to acquire their Ordinary Shares.
Brief details of the Panel, the Takeover Code and the
protections given by the Takeover Code are described in paragraph 4
of this Part 1. The above considerations are not exhaustive and,
before giving your consent to the Re-registration, you may want to
consider the contents of paragraph 3 (Background to and Reasons for
the Recommendation of the Independent FFI Directors) of Part 1 of
the Offer Document and take independent professional advice from an
appropriate independent financial adviser.
Cancellation process
Under the AIM Rules, the Cancellation can only be effected by
the Company after the passing of a resolution approved by at least
75 per cent. of the votes cast by Shareholders (present in person
or by proxy) in a general meeting, and the expiration of a period
of 20 Business Days from the date on which notice of the
Cancellation is given, which is deemed to have been given in the
announcement made by the Company on 26 July 2019. In addition, a
period of at least five Business Days following approval of the
Cancellation is required before the cancellation of admission of
the Ordinary Shares to trading on AIM will be effective. The
Company, through its nominated adviser, Liberum, has notified the
London Stock Exchange of the proposed Cancellation.
Shareholders' attention is drawn to paragraph 6 below and the
level of shareholder support in favour of the Cancellation.
Transactions in Ordinary Shares
Shareholders should note that, if effected, and for those
shareholders who have not accepted the Offer, the Cancellation will
significantly reduce the liquidity and marketability of the
Ordinary Shares. Neither the Directors, nor, as set out in the
Announcement, the 777 Group, intend to provide, seek or support any
trading facilities for Ordinary Shares or arrangement whereby
Ordinary Shares can be bought or sold on a matched bargain facility
basis following the Cancellation becoming effective. Accordingly,
interests in Ordinary Shares are unlikely to be readily capable of
sale and, where a buyer is identified, it will be difficult to
place a fair value on any such sale.
4. The Takeover Code
The Takeover Code is issued and administered by the Panel. FFI
is a company to which the Takeover Code applies and its
shareholders are accordingly entitled to the protections afforded
by the Takeover Code.
The Takeover Code and the Panel operate principally to ensure
that shareholders are treated fairly and are not denied an
opportunity to decide on the merits of a takeover and that
shareholders of the same class are afforded equivalent treatment by
an offeror. The Takeover Code also provides an orderly framework
within which takeovers are conducted. In addition, it is designed
to promote, in conjunction with other regulatory regimes, the
integrity of the financial markets.
The General Principles and Rules of the Takeover Code
The Takeover Code is based upon a number of General Principles
which are essentially statements of standards of commercial
behaviour. For your information, these General Principles are set
out in Part 2. The General Principles apply to all transactions
with which the Takeover Code is concerned. They are expressed in
broad general terms and the Takeover Code does not define the
precise extent of, or the limitations on, their application. They
are applied by the Panel in accordance with their spirit to achieve
their underlying purpose.
In addition to the General Principles, the Takeover Code
contains a series of Rules, of which some are effectively
expansions of the General Principles and examples of their
application and others are provisions governing specific aspects of
takeover procedure. Although most of the Rules are expressed in
more detailed language than the General Principles, they are not
framed in technical language and, like the General Principles, are
to be interpreted to achieve their underlying purpose. Therefore,
their spirit must be observed as well as their letter. The Panel
may derogate or grant a waiver to a person from the application of
a Rule in certain circumstances.
Giving up the protection of the Takeover Code
A summary of key points regarding the application of the
Takeover Code to takeovers generally is set out in Part 3. You are
encouraged to read this information carefully as it outlines
certain important protections which you will be giving up if you
agree to the Re-registration.
5. Re-registration and adoption of New Articles
It is proposed that, if the Resolutions are approved, the
Company, which is currently a public limited company, be
re-registered as a private company and that amendments to reflect
this change in status be made to the Company's articles of
association subject to the passing, if applicable, of the statutory
period of time before the resolution giving effect to the
Re-registration may be registered at Companies House and the
certificate of incorporation on re-registration issued. Resolution
2 contained in the Notice of General Meeting seeks Shareholder
approval for the Re-registration and adoption of the New
Articles.
Under Resolution 2, in conjunction with Re-registration the
Board is asking Shareholders to approve the adoption by the Company
of the New Articles with effect from Re-registration. The New
Articles will include provisions which the Directors believe to be
appropriate for a private limited company incorporated under the
Act with a broad shareholder base, including drag along, tag along
and pre-emption rights. The Directors believe re-registration of
the Company as a private limited company should provide the Company
with greater flexibility to structure potential future transactions
to grow the business.
The principal effects that the Re-registration will have are as
follows:
-- private companies with one class of shares may authorise
their Directors to allot shares up to an unlimited number;
-- private companies are not required to hold annual general meetings;
-- following Re-registration the Company will not be permitted
to make a public offer of shares; and
-- various changes will be required to the Existing Articles to
reflect the change in status from a public to a private company,
which will be effected by the adoption of the New Articles. A
summary of these changes are set out in Part 4.
As set out in the Announcement, the Concert Party Agreement
contains certain pre-emption rights and other provisions.
Shareholders should note that until the Concert Party Agreement is
terminated, in the event of any inconsistency between the
provisions of the New Articles and the Concert Party Agreement, the
terms of the Concert Party Agreement will take precedence.
Notwithstanding Re-registration and the changes that will be
made by the adoption of the New Articles, the Company will remain
subject to the requirements of English company law, which contains
various provisions for the protection of minority shareholders, and
the Company will continue to communicate information about the
Company to the Shareholders in accordance with the requirements of
the Act.
A copy of the Company's Existing Articles and the proposed New
Articles will be available for inspection during normal business
hours (excluding Saturdays, Sundays and bank holidays) at the
Company's registered office from the date of this document until
the close of the General Meeting. The proposed New Articles will
also be available for inspection at the General Meeting at least 15
minutes prior to the start of the meeting and up until the close of
the meeting.
6. Voting commitments in the Concert Party Agreement
Under the terms of the Concert Party Agreement, the members of
the Lumiere Concert Party, holding 125,166,206 Ordinary Shares,
representing 79.3% of the Ordinary Shares in issue, have undertaken
irrevocably to vote in favour of the Resolutions. This increase in
the aggregate shareholding of the Lumiere Concert Party reflects
Ordinary Shares acquired in the market by Lumiere since the
Announcement.
In light of the above, FFI Shareholders should note that,
regardless of votes cast by other Shareholders at the General
Meeting, providing all members of the Lumiere Concert Party vote at
the General Meeting in accordance with the terms of the Concert
Party Agreement, there is certainty that the Resolutions will be
passed and following the General Meeting, admission to trading on
AIM of Ordinary Shares will be cancelled.
7. Resolutions to be voted on at the General Meeting
For the purposes of effecting the Cancellation, Re-registration
and adoption of New Articles, the Resolutions will be proposed at
the General Meeting. Set out at the end of this document is a
notice convening the General Meeting to be held at 9000 Sunset
Boulevard, Suite 1400, Los Angeles, California 90069, USA on 19
August 2019 at 10:00 am PDT. The full text of the Resolutions is
set out in that notice.
Resolution 1 is a resolution to cancel the admission of the
Company's ordinary shares of GBP0.01 each to trading on AIM and to
authorise the directors of the Company to execute all documents and
take all necessary or desirable actions in order to effect such
cancellation.
Resolution 2 is a resolution to re-register the Company as a
private company under the name FFI Holdings Limited, and to adopt
the New Articles as the new articles of association of the Company
(in replacement of the Existing Articles) in connection with
Re-registration.
8. Action to be taken
Shareholders will find enclosed with this document a Notice of
Availability regarding the appointment of a proxy. Proxy votes
should be completed in accordance with the instructions set out in
the notes to the Notice of Availability as soon as possible and in
any event not later than 15 August 2019 at 10:00 am PDT. The
completion and return of a form of proxy, electronic filing or
CREST Proxy Instruction will not preclude you from attending and
voting in person at the General Meeting or any adjournment thereof,
if you so wish and are so entitled. If the proxy vote is not
completed by 10:00 am PDT on 15 August 2019, your vote will not
count.
9. Recommendation
The Directors consider the Cancellation, Re-registration and the
adoption of the New Articles to be in the best interests of the
Company and its Shareholders as a whole and, accordingly,
unanimously recommend Shareholders to vote in favour of the
Resolutions to be proposed at the General Meeting as they intend to
do in respect of their beneficial holdings amounting, in aggregate,
to 11,372,488 Ordinary Shares of the Company, representing
approximately 7.22% per cent. of the existing issued ordinary share
capital of the Company.
DEFINITIONS
The following shall apply throughout this document unless the
context otherwise requires:
"600" means 600 Partners LLC, a limited liability company
incorporated and registered in Delaware with registered number
6269759;
"777" means 777 Partners LLC, a limited liability company
incorporated and registered in Delaware with registered number
5752556;
"777 Group" means together, 777 and 600, and their
subsidiaries;
"Act" the Companies Act 2006;
"AIM" AIM, the market of that name operated by the London Stock
Exchange;
"AIM Rules" the "AIM Rules for Companies" published by the
London Stock Exchange from time to time;
"Announcement" the announcement dated 2 July 2019 in relation to
the Offer;
"Board" the board of directors of the Company, as set out on
page 5;
"Business Day" a day, not being a public holiday, Saturday or
Sunday on which clearing banks in London are open for business;
"Cancellation" the proposed cancellation of admission to trading
on AIM of the Ordinary Shares;
"Company" or "FFI" FFI Holdings PLC;
"Concert Party Agreement" the agreement between entered into
between the members of the Lumiere Concert Party on 2 July 2019
"Directors" the directors of the Company (each being a
"Director");
"Existing Articles" the articles of association of the Company
in force at the date of this document;
"Form of Acceptance" the forms of acceptance and authority
relating to the Offer which will accompany the Offer Document;
"General Meeting" the general meeting of the Company convened
for 10:00 am PDT on 19 August 2019, notice of which is set out at
the end of this document (including any adjournment of such
meeting);
"Golden Sun" means Golden Sun Emerging Fund Limited, a company
incorporated and registered in the Bahamas with registered number
160927;
"Group" the Company and its subsidiary undertakings (as defined
in the Act);
"Independent FFI Directors" being Julian Bartlett and Simon Ingram;
"JDT" means JDT Holdings LLC, a company incorporated and
registered in Florida with registered number 65-1180707;
"London Stock Exchange" London Stock Exchange plc;
"Lumiere" Lumiere Acquisitions Company LLC;
"Lumiere Concert Party" means, together, Lumiere, Golden Sun,
JDT, James Terlizzi, the Trattner Trust, Antony Mitchell, Timothy
Trankina and Stephen Argent (who for the purposes of the Takeover
Code are considered to be acting in concert);
"New Articles" the articles of association to be adopted with
effect from Re-registration (in replacement of the Existing
Articles) conditional upon the passing of Resolution 1 at the
General Meeting to reflect the change of status of the Company to a
private limited company, the key terms of which are set out in Part
4;
"Notice of Availability" the individual notice of availability
enclosed with this document in connection with the General
Meeting;
"Notice of General Meeting" the notice of General Meeting set
out at the end of this document;
"Offer" the recommended mandatory cash offer by Lumiere, a
direct, wholly-owned subsidiary of the 777 Group, for the entire
issued and to be issued ordinary share capital of the Company;
"Offer Document" the formal document enclosed with this document
setting out the full terms of the Offer;
"Ordinary Shares" the ordinary shares of GBP0.01 each in the
capital of the Company;
"Panel" the Takeover Panel;
"Registrar" or "Link" Link Asset Services of 34 Beckenham Road,
Beckenham, Kent BR3 4TU;
"Register" the register of members of the Company;
"Re-registration" the proposed re-registration of the Company as
a private limited company under the Act;
"Resolutions" the resolutions to be proposed at the General
Meeting as set out in the Notice of General Meeting and Resolution
shall mean any one of them;
"Shareholders" the holders of Ordinary Shares and "Shareholder"
shall mean any one of them;
"Takeover Code" the City Code on Takeovers and Mergers;
"The Trattner Trust" means the Trattner Family Trust; and
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCSEDFEMFUSEEW
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