K3 Capital Group PLC Proposed Secondary Placing of Existing Shares (7725B)

TIDMK3C

RNS Number : 7725B

K3 Capital Group PLC

24 September 2018

24 September 2018

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE RESTRICTED AND ARE NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN K3 CAPITAL GROUP PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF K3 CAPITAL GROUP PLC. PLEASE SEE THE IMPORTANT NOTICE AT THE OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014 ("MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION, AS PERMITTED BY MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

K3 CAPITAL GROUP PLC

Proposed secondary placing of a minimum of 1,500,000 Existing Ordinary Shares in the Company

K3 Capital Group plc (the "Company"), a leading business and company sales specialist in the UK, today announces that it has been notified by two Directors of the Company, being Anthony (Tony) Ford (Executive Vice Chairman) and Stuart Lees (Executive Director) (the "Selling Shareholders"), of their intention to sell, a minimum of 1,500,000 ordinary shares of 1 penny each in the Company ("Placing Shares") at a price of 300 pence per Placing Share in the Company (the "Placing") in order to satisfy investor demand.

In the Company's final results published on 11 September 2018, the Board recommended a final dividend payment of 8.4 pence per ordinary share, which remains subject to shareholder approval at the Company's annual general meeting to be held on Friday 26 October at 11.00am. If approved, the final dividend will be paid on 30 October 2018 to shareholders on the register at the close of business on 28 September 2018, with an associated ex-dividend date of 27 September 2018. finnCap Ltd ("finnCap") is acting as bookrunner in relation to the Placing ("Bookrunner").

The sale of the Placing Shares will be effected by way of an accelerated bookbuild to institutional investors, which will be launched immediately following this announcement ("Bookbuild"). A further announcement will be made following completion of the Bookbuild.

The timing for the close of the Bookbuild and the distribution of allocations will be at the absolute discretion of finnCap.

The Company is not a party to the Placing and will not receive any proceeds from the Placing.

The Selling Shareholders have entered into a block trade agreement with finnCap to act as Bookrunner.

The minimum number of Placing Shares represent in aggregate approximately 3.6% of the issued share capital of the Company. Details of the minimum number of Placing Shares to be disposed of by the Selling Shareholders are as follows, with the final numbers to be confirmed in due course:

 
                                                          Resultant holding assuming 
                                                           minimum number of Placing 
                                                                  Shares sold 
 Director/                                Number of 
  PDMR          Current shareholding    Placing Shares     Ordinary Shares        % 
               ---------------------  ----------------  ---------------------  ------ 
 Tony Ford      7,597,895              1,350,000         6,247,895              14.8 
               ---------------------  ----------------  ---------------------  ------ 
 Stuart Lees    800,000                150,000           650,000                1.5 
               ---------------------  ----------------  ---------------------  ------ 
 

Lock-In Agreements

Tony Ford entered into a lock-in agreement on 5 April 2017 ("TF Lock-In Agreement"). The formal lock-in period expires on 6 April 2019 although the TF Lock-In Agreement also contains a 12-month orderly market agreement that will govern any potential disposal of Ordinary Shares for a following 12 months. The TF Lock- In Agreement shall remain in force following the Placing, details of which are set out on page 73 of the Company's annual report and accounts, published on 11 September 2018 and also in the Company's admission document published on 6 April 2017. The Lock-In Agreement is not a Rule 7 lock-in, as defined by the AIM Rules for Companies.

The Selling Shareholders have advised the Company that the prime motivation for the Placing is to satisfy market demand following the Company's investor roadshow and a strong set of results. As such, the Company believes now is an appropriate time for the Selling Shareholders to realise value from their shareholdings. The independent directors of the Company, being Ian Mattioli MBE and Martin Robinson (the "Independent Directors"), believe that Tony Ford remains fully committed to the Company, both as a Director and as a shareholder. The Independent Directors have confirmed the release of Tony Ford from his existing Lock-In Agreement for the purposes of the Placing. In making this confirmation, the Independent Directors considered the overall merits from investors' perspectives, including taking account of feedback resulting from the market sounding exercise, as well as the resultant market demand. The Independent Directors also considered that the time period to the stated expiry date of the Lock-In Agreement was short, being approximately 6 months until expiry and therefore this provided an opportunity for Tony Ford to realise value from his shareholding in a way that promotes an orderly market in the Company's Ordinary Shares. finnCap, as party to the TF Lock-In Agreement, has also agreed to waive the TF Lock-in Agreement for the purposes of the Placing after due and careful consideration, on the basis it is in the best interests of maintaining an orderly market in the Company's Ordinary Shares. The TF Lock- In Agreement shall remain in force following the Placing.

Stuart Lees also entered into a lock-in agreement on 5 April 2017 ("SL Lock-In Agreement"), with the formal lock-in period having expired on 6 April 2018 and the sale being in accordance with the orderly market agreement that currently governs any potential disposal of Ordinary Shares by him. The SL Lock- In Agreement shall remain in force following the Placing.

Concert Party

Tony Ford, John Rigby, Andrew Melbourne, Simon Daniels, Matthew Clancy and Stuart Lees, together with their respective families and other connected persons are deemed to be acting in concert and regarded by the Takeover Panel to be members of the concert party detailed in the Company's admission document dated 6 April 2017 ("Admission Document") (the "Concert Party"). Following the Placing, the Concert Party will remain the holders in aggregate of not less than 30 per cent., but not more than 50 per cent. of the Company's issued share capital. Should any member of the Concert Party or any person acting in concert with any member of the Concert Party acquire an interest in any shares (excluding the exercise of existing options granted to Andrew Melbourne, detailed in the Company's Admission Document) which increases the percentage of shares carrying voting rights in such company in which the Concert Party (or any person acting in concert with the Concert Party) is interested, that person together with people acting in concert with that person will normally be required to make a general offer in cash to all shareholders in the Company, at the highest price paid by that person or any person acting in concert with that person for an interest in such shares within the preceding 12 months, for all the remaining equity share capital of that Company.

For further information please contact:

 
 K3 Capital Group plc                         Tel: c/o Newgate 020 
                                               7680 6550 
 John Rigby, Chief Executive Officer          www.k3capitalgroupplc.com 
 Andrew Melbourne, Chief Financial Officer 
 
 finnCap Ltd (Nominated Adviser and Sole      Tel: [phone] 
  Broker) 
 Jonny Franklin-Adams, Emily Watts, Anthony 
  Adams (Corporate Finance) 
 Tim Redfern, Richard Chambers (ECM) 
 
 Newgate Communications Ltd (Financial PR)    Tel: [phone] 
 Alistair Kellie, Bob Huxford, Zoë       [e-mail] 
  Sibree 
 

Important Notice:

MEMBERS OF THE GENERAL PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND ANY OFFER OF SECURITIES TO WHICH IT RELATES ARE ONLY ADDRESSED TO AND DIRECTED AT (1) IN ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC AND ANY RELEVANT IMPLEMENTING MEASURES (THE "PROSPECTUS DIRECTIVE"); AND (2) IN THE UNITED KINGDOM, PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (AS AMED) (THE "ORDER"); OR (II) FALL WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER OR (III) ARE PERSONS TO WHOM AN OFFER OF THE PLACING SHARES MAY OTHERWISE LAWFULLY BE MADE (ALL SUCH PERSONS REFERRED TO IN (1) AND, (2) TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THE INFORMATION REGARDING THE PLACING 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 RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

This announcement and the information contained herein is for information purposes only and does not constitute or form part of any offer or an invitation to acquire or dispose of securities in the United States, Canada, Australia, South Africa or Japan or in any jurisdiction in which such an offer or invitation is unlawful.

The Placing Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any State or other jurisdiction of the United States, and, absent registration, may not be offered or sold in the United States (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any relevant State or other jurisdiction of the United States. There will be no public offering of the Placing Shares in the United States or elsewhere.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or 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 a criminal offence in the United States.

No prospectus or offering document has been or will be prepared in connection with the Placing. Any investment decision to buy securities in the Placing must be made solely on the basis of publicly available information. Such information is not the responsibility of and has not been independently verified by the Selling Shareholders, finnCap or any of their respective affiliates.

Neither this announcement nor any copy of it may be taken, transmitted or distributed, directly or indirectly, in or into or from the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada, the Republic of South Africa or Japan. Any failure to comply with this restriction may constitute a violation of US, Australian, Canadian, South African or Japanese securities laws.

The distribution of this announcement and the offering or sale of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Selling Shareholders, finnCap or any of their respective affiliates that would, or which is intended to, permit a public offer of the Placing Shares in any jurisdiction, or possession or distribution of this announcement or any other offering or publicity material relating to the Placing Shares, in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Selling Shareholders and finnCap to inform themselves about and to observe any applicable restrictions.

No reliance may be placed, for any purposes whatsoever, on the information contained in this announcement or on its completeness and this announcement should not be considered a recommendation by the Company, the Selling Shareholders, finnCap or any of their respective affiliates in relation to any purchase of or subscription for securities of the Company. No representation or warranty, express or implied, is given by or on behalf of the Company, the Selling Shareholders, finnCap or any of their respective directors, partners, officers, employees, advisers or any other persons as to the accuracy, fairness or sufficiency of the information or opinions contained in this announcement and none of the information contained in this announcement has been independently verified. Save in the case of fraud, no liability is accepted for any errors, omissions or inaccuracies in such information or opinions.

finnCap, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting only for the Selling Shareholders in connection with the Placing and will not be responsible to anyone other than the Selling Shareholders for providing the protections offered to the clients of finnCap, nor for providing advice in relation to the Placing or any matters referred to in this announcement, and apart from the responsibilities and liabilities (if any) imposed on finnCap by FSMA, any liability therefore is expressly disclaimed. Any other person in receipt of this announcement should seek their own independent legal, investment and tax advice as they see fit.

References to time in this announcement are to London time, unless otherwise stated. All times and dates in this announcement may be subject to amendment.

Certain statements in this announcement are forward-looking statements. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. No one undertakes any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Readers should not place any undue reliance on forward-looking statements which speak only as of the date of this announcement. Statements contained in this announcement regarding past trends or events should not be taken as representation that such trends or events will continue in the future.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

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 [e-mail] or visit www.rns.com.

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September 24, 2018 12:45 ET (16:45 GMT)