Offer Update

 

TIDMFAN 
 
RNS Number : 5516X 
First Artist Corporation PLC 
08 December 2010 
 

                          First Artist Corporation Plc 
                 ("First Artist", the "Company" or the "Group") 
 
                                  Offer update 
                            Subscription Agreement 
                            Unsecured Loan Agreement 
                              Facility Agreement 
                                Issue of Equity 
                              Total Voting Rights 
 
 
On 10 August 2010, the Board of Directors of the Company announced that it had 
received an approach from a third party that may or may not have led to an offer 
being made for the Company. 
 
The Board now announces that the potential offeror, Pivot Entertainment LLC, 
('Pivot'), a New York based entertainment marketing company whose principals 
have significant experience working in the performing and visual artists 
industry, has agreed to invest $4m in the Company via a subscription for new 
ordinary shares of 2.5p each in the Company ("Ordinary Shares") and to provide 
the Company with a long-term unsecured loan. This is the first stage of an 
investment programme by Pivot into the Company intended to enhance the business 
and reduce bank debt. As a result of the investment made by Pivot a number of 
changes to the Board are anticipated but are yet to be finalised. 
 
As stated on 10 August 2010, the initial approach was at a very early stage with 
no certainty that an offer for the Company would be forthcoming. First Artist 
has since been advised by Pivot that it is no longer considering making an offer 
for the Company. The Company is not in talks with any other party that may or 
may not lead to an offer being made for the Company. Consequently the Company no 
longer remains in an Offer Period pursuant to the Takeover Code. However, Pivot 
reserves the right to consider making an offer for the Company within the next 
six months following the date of this announcement should a third party announce 
an offer for the Company. 
 
Subscription Agreement 
 
Pivot has entered into a subscription agreement with the Company to subscribe 
for 9,900,000 new Ordinary Shares ('the Subscription Shares') at a subscription 
price of 11 pence per Subscription Share (the 'Subscription'). The Subscription 
is conditional on admission of the Subscription Shares to trading on AIM. The 
subscription will raise approximately GBP1.1m before expenses. 
 
Unsecured Loan Agreement 
 
Simultaneously, the Company announces that it has entered into an agreement with 
Pivot to provide the Company with an unsecured loan facility of GBP1.4m (the 
'Loan'). The Loan is for a maximum term of 5 years. The Loan attracts interest 
at 8 per cent. per annum. 
 
The proceeds from the Subscription and Loan will be used to repay existing 
liabilities owed to Drew Hodges as at 31 October 2010 in connection with the 
Company's acquisition of Spot and Company of Manhattan Inc. This is the first 
stage of an investment programme by Pivot into the Company intended to enhance 
the business and reduce bank debt. 
 
 
Facility Agreement 
It is intended that the Company's existing facility with Allied Irish Bank (GB) 
will continue in place until 31 January 2011 (subject to the waiver of certain 
financial covenants during that period and subject to satisfaction of certain 
conditions). This existing facility would then be replaced with a GBP14,500,000 
revolving credit facility ("New AIB Facility") to be used to refinance the 
Company's existing facilities and for working capital, provided that the 
Company, in addition to monies received pursuant to the Subscription and the 
Loan, receives by 31 January 2011 a further GBP4.5m pursuant to a further 
unsecured term loan facility to be provided by Pivot to the Company (in terms 
otherwise identical to the Loan). This would be the subject of a further 
announcement as discussions concerning further investment in the Company 
progress. 
 
Issue of Equity 
 
Application has been made for the admission ("Admission") of the Subscription 
Shares to trading on AIM.  It is expected that Admission will become effective 
and that dealings will commence on 10 December 2010.   Upon issue, the 
Subscription Shares will rank pari passu in all respects with the Company's 
existing Ordinary Shares. 
 
On Admission, Pivot will directly hold 9,900,000 Ordinary Shares. In addition, 
Stoller Family Partners LP, a company connected to Pivot, holds 2,000,000 
Ordinary Shares giving a combined interest of 11,900,000 Ordinary Shares 
representing 29.86 per cent. of the enlarged issued share capital of the 
Company. 
 
Total Voting Rights 
 
Following the Subscription, the total number of shares in issue will be 
39,856,103.  There are no shares held in treasury.  The total number of voting 
rights in the Company is therefore 39,856,103. 
 
The above figure of 39,856,103 may be used by shareholders as the denominator 
for the calculations by which they will determine if they are required to notify 
their interest in, or a change to their interest in, the Company, under the 
Disclosure and Transparency Rules. 
 
This announcement is being made with the consent of Pivot Entertainment LLC. 
 
Commenting on the investment made by Pivot, Jon Smith said, 
 
"The financial structure of the Group is a legacy of decisions made under very 
different economic circumstances. The current recession has been unkind to 
companies with high gearing. We have worked assiduously with our bank Allied 
Irish Bank (GB) who have been immensely supportive to reconstruct our Group and 
it's financing. 
 
We feel that the transaction with Pivot brings with it not only financial 
strength but a creative complement which should greatly assist trading across 
the Group in the coming years. Pivot has considerable experience within the 
entertainment industry and we look forward to working closely with them. 
 
I would pertinently wish to thank Allied Irish Bank whose support in this Group 
has never wavered and their belief in the underlying strength of this business 
is much appreciated." 
 
Enquiries: 
 
First Artist Corporation Plc 
Jon Smith/Shirley Stapleton                                    Tel:  +44 20 
79930000 
 
Seymour Pierce Limited 
Stewart Dickson / Tom Sheldon                               Tel:  +44 20 
71078000 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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