Volvere PLC Tender Offer (5114A)

TIDMVLE

RNS Number : 5114A

Volvere PLC

29 May 2019

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

Volvere plc

("Volvere" or the "Company")

Tender Offer

Volvere is pleased to announce the return of up to GBP16.6 million in cash to Shareholders by way of a tender offer for Ordinary Shares (the "Tender Offer"). The Tender Offer will be effected by using the Company's existing authority to repurchase Ordinary Shares granted to the Company by its Shareholders by way of special resolution passed at the annual general meeting of the Company on 25 June 2018, and is therefore not subject to Shareholder approval.

The Company is posting a circular to Shareholders (the "Circular") today setting out the terms of the Tender Offer being made by Hobart Capital Markets LLP ("Hobart") to purchase up to 1,283,927 Ordinary Shares, representing 41.18 per cent. of the Company's issued Ordinary Shares (excluding treasury shares) as at 24 May 2019, at a fixed price of 1290 pence per Ordinary Share, in accordance with the terms and conditions of the Tender Offer set out in Part 3 of the Circular. The Tender Offer is expected to close at 1.00 p.m. on 11 June 2019.

The Tender Offer is being made available to all Eligible Shareholders (being Shareholders who are on the Register at 6.00 p.m. on 11 June 2019). Eligible Shareholders can decide whether they wish to tender any or all of their Ordinary Shares in the Tender Offer but the acceptance of tenders may be scaled back depending on the take-up of the Tender Offer (see the Circular for further details).

The Tender Offer is being made by Hobart, as principal, on the basis that all Ordinary Shares that it buys under the Tender Offer will be purchased subsequently from it by the Company under its existing buy-back authority.

The Tender Offer is not being made, directly or indirectly, in or into a Restricted Territory.

The Circular will be available from the Company's website at www.volvere.co.uk.

Capitalised terms used in this announcement shall have the meanings given to them in the Circular referred to above. References to time in this announcement are to UK time unless otherwise stated.

The Chairman's Letter in respect of the Tender Offer, as contained in the Circular, is set out below. References in that letter to "this document" are references to the Circular.

This announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.

Chairman's Letter

   1.    Introduction and summary 

On 29 May 2019, the Company announced a proposal to return up to GBP16.6 million in cash to Shareholders by way of a Tender Offer for Ordinary Shares. This letter sets out the background to and reasons for this proposal and full details of the Tender Offer.

The Tender Offer is being made to all Eligible Shareholders who are on the Register at 6.00 p.m. on 11 June 2019, with the exception of holders in certain overseas jurisdictions. Eligible Shareholders can decide whether they want to tender up to their Basic Entitlement at a price of 1290 pence per Ordinary Share, a premium of 12.2 per cent. to the closing mid-market price of 1150 pence per Ordinary Share on 24 May 2019, being the last practicable date prior to the publication of this document. Eligible Shareholders may also be able to participate in excess of their Basic Entitlement, potentially up to their maximum shareholding in the Company, depending on the number of Ordinary Shares tendered by other Eligible Shareholders. Eligible Shareholders are not obliged to tender any or all of their Ordinary Shares if they do not wish to do so. The maximum number of Ordinary Shares capable of being purchased under the Tender Offer is 1,283,927 Ordinary Shares.

The Tender Offer is being made by Hobart, broker to the Company, as principal on the basis that all Ordinary Shares that it buys under the Tender Offer will be subsequently repurchased from it by the Company pursuant to the terms of the Repurchase Agreement and under the Company's Existing Authority. Any Ordinary Shares purchased by Hobart under the Tender Offer and subsequently repurchased by the Company will be held in treasury.

Shareholders should note that Jonathan Lander and Nick Lander, being directors of the Company who hold Ordinary Shares, intend to tender some of their Ordinary Shares in the Tender Offer. David Buchler, Chairman of the Company, does not intend to tender any of his Ordinary Shares in the Tender Offer.

The Board is making no recommendation to Eligible Shareholders in relation to their participation in the Tender Offer.

   2.    Background to and reasons for the Tender Offer 

The Company is a holding company which invests in distressed or under-performing companies. In October 2018, the Company disposed of one of its investee companies, Impetus Automotive Limited, generating total proceeds of approximately GBP31 million, of which Volvere's share was approximately GBP23.1 million. On 23 May 2019, the Company disposed of its wholly owned subsidiary, Sira Defence and Security Limited ("Sira"), generating gross proceeds of approximately GBP3.0 million, and netting Volvere approximately GBP2.55 million The Group currently has approximately GBP36.2 million of cash but believes that the appropriate level of cash available for investment on an ongoing basis should be around GBP20 million and accordingly, the Group has funds surplus to its current operational requirements.

The Company has 3,118,109 shares in issue (excluding treasury shares) and the closing share price on 24 May 2019, being the last practicable date prior to the publication of this document, was 1150 pence. The Company's market capitalisation is currently approximately GBP35.9 million, a discount to the Group's net asset value of GBP40.4 million as at 31 December 2018, plus the GBP2.55 million net proceeds from the sale of Sira.

If the maximum number of Ordinary Shares under the Tender Offer is acquired, this will result in an amount of approximately GBP16.6 million being paid by the Company to Eligible Shareholders, which will leave the Company with approximately GBP19.6 million in cash reserves to enable it to continue to pursue its investing policy.

   3.    Benefits of the Tender Offer 

The Board considers that the Tender Offer provides an opportunity for Eligible Shareholders to tender all, some or none of their Ordinary Shares depending on their own liquidity requirements and their view of the prospects of the Company going forward at a time when there is limited liquidity in the stock which is traded on the AIM market.

The Board has concluded, following consultation with the Company's advisers, that a return of up to GBP16.6 million of capital is in the interests of the Group and its Shareholders as it provides Eligible Shareholders with an opportunity to sell part of their respective shareholdings and to receive their respective share of the capital which the Company is seeking to return up to the amount of their respective Basic Entitlements. Eligible Shareholders may also be able to participate in excess of their Basic Entitlements, potentially up to their entire shareholding in the Company, to the extent that other Eligible Shareholders do not wish to participate in the Tender Offer in respect of their respective Basic Entitlements.

   4.    The Tender Offer 

The Tender Offer is being made by Hobart to all Eligible Shareholders (other than certain Overseas Shareholders). Full details of the Tender Offer, including the terms and conditions on which it is being made, are set out in Part 3 of this document and, in relation to Eligible Shareholders holding Ordinary Shares in a certificated form, on the Tender Form to be sent to Eligible Shareholders who hold their Ordinary Shares in certificated form.

The Tender Offer involves the following:

-- The Tender Offer is being made to Eligible Shareholders (other than certain Overseas Shareholders) by Hobart for the purchase of the Tender Offer Shares.

-- Under the Tender Offer, Eligible Shareholders are entitled to have accepted in the Tender Offer valid tenders to Hobart in respect of their Basic Entitlements.

-- In addition, Eligible Shareholders may tender Ordinary Shares in excess of their Basic Entitlements. Such excess applications will be satisfied to the extent that:

o other Eligible Shareholders do not tender to the full amount of their Basic Entitlements; and

o there are Overseas Shareholders in Restricted Jurisdictions who cannot participate in the Tender Offer.

To the extent that there is insufficient headroom to satisfy all excess applications, the excess applications will be scaled back at the discretion of the Board pro rata to tendering Eligible Shareholders' holdings of Ordinary Shares. It is likely, although there can be no guarantee, that the Board will exercise its discretion not to scale back applications tendering small shareholdings of 1,000 Ordinary Shares or less. In the event of scaling back, tenders will be rounded down to the nearest whole number of shares. The number of Ordinary Shares to be purchased in the Tender Offer will not, in any event, exceed the Tender Offer Shares.

-- The Tender Offer is being made at a premium of 12.2 per cent. to the closing mid-market price of 1150 pence per Tender Offer Share on 24 May 2019, being the last practicable date prior to the publication of this document.

-- Eligible Shareholders (other than certain Overseas Shareholders) will be able to decide to tender none, some or all of their Ordinary Shares.

-- The Tender Offer is subject to the Conditions set out in Part 3 of this Agreement being fulfilled. Following completion of the Tender Offer, the Company's issued share capital would be reduced to 1,834,182 Ordinary Shares (excluding treasury shares), assuming the Tender Offer is taken up in full.

-- All successfully tendered Ordinary Shares purchased by Hobart will be repurchased from Hobart by the Company pursuant to the terms of the Repurchase Agreement, and will be held in treasury.

-- There is no guarantee that the Tender Offer will take place. The Tender Offer will not proceed if any of the conditions specified in paragraph 2 of Part 3 of this document are not satisfied or if it is withdrawn by the Company at any point prior to the announcement of the results of the Tender Offer. The nonfulfillment of the specified conditions would mean that the Tender Offer could not be implemented and that the Company would have to bear the abortive costs of making the Tender Offer.

   --     There is no obligation on Eligible Shareholders to participate in the Tender Offer. 

-- Any rights of Eligible Shareholders who choose not to tender their Ordinary Shares will be unaffected, however, the reduction in the Company's issued share capital (excluding treasury shares) may result in a reduction in the liquidity of the Ordinary Shares on the secondary market.

The issued share capital of the Company at the latest practicable date prior to the date of this document was 3,118,109 Ordinary Shares, excluding the 3,088,965 Ordinary Shares currently held in treasury. If the Tender Offer is implemented in full, this will result in the purchase of up to 1,283,927 Ordinary Shares (approximately 41.18 per cent. of the Existing Ordinary Shares), which will be held in treasury. The issued Ordinary Share capital of the Company (excluding treasury shares) will then be 1,834,182, and the Ordinary Shares held in treasury will be 4,372,892.

The Tender Offer will be financed solely from the Company's existing cash resources.

   5.    Directors' intentions regarding the Tender Offer 

Jonathan Lander and Nick Lander, being Directors of the Company who hold Ordinary Shares, intend to tender some of their Ordinary Shares in the Tender Offer, which constitutes a related party transaction under the AIM Rules. David Buchler, Chairman of the Company, does not intend to tender any of his Ordinary Shares in the Tender Offer.

David Buchler, the sole independent director, considers, having consulted with the Company's nominated adviser, Cairn Financial Advisers LLP, that the terms of the participation of Jonathan Lander and Nick Lander in the Tender Offer are fair and reasonable insofar as the Company's Shareholders are concerned.

   6.   Maximising the Effect of the Tender Offer 

If the Tender Offer is not accepted in full, the Board, having given Eligible Shareholders the opportunity to participate in the Tender Offer, reserves the right in its absolute discretion to purchase in the market, up to such number of Ordinary Shares as is equal to the difference between the number of Ordinary Shares successfully tendered in the Tender Offer and 1,283,927 Ordinary Shares (being the maximum number of Tender Offer Shares).

   7.    Existing Authority 

By a resolution passed at the Company's annual general meeting on 25 June 2018, the Company was authorised to make one or more market purchases of Ordinary Shares subject to certain limitations including that the maximum aggregate number of Ordinary Shares authorised to be purchased was 1,834,181 and the maximum price (exclusive of expenses) payable for any Ordinary Share should (unless the Company makes market purchases of its own Ordinary Shares by way of a tender or partial offer made to all holders of Ordinary Shares on the same terms), not be more than 20 per cent. above the average of the closing offer prices for Ordinary Shares as derived from the AIM Appendix to the London Stock Exchange Official List for the five business days immediately preceding the date on which the Ordinary Share was purchased.

On 30 October 2018, the Company completed the buy-back of 550,254 Ordinary Shares pursuant to that Existing Authority. Accordingly, there is headroom within the Existing Authority for the Company to buy-back the 1,283,927 Tender Offer Shares on market if the Tender Offer is accepted in full.

At the forthcoming annual general meeting of the Company to be held on 24 June 2019, the Company will be seeking a new authority to make further market purchases of its Ordinary Shares ("New Authority"). A resolution to that effect will be proposed at the annual general meeting, notice of which is enclosed with this document. Your attention is directed to that notice for the terms of the proposed New Authority.

The New Authority is being sought irrespective of the take-up of the Tender Offer under the Existing Authority.

   8.    Taxation 

Eligible Shareholders who sell Ordinary Shares pursuant to the Tender Offer should, subject to the potential application of Chapter 1 of Part 13 ITA 2007 (in respect of individual Shareholders) and Part 15 of CTA 2010 (in respect of corporate Shareholders), be treated as having sold their Ordinary Shares in the normal way. Shareholders may, depending on their individual circumstances, incur a liability to taxation on capital gains. UK individual and corporate Shareholders should be aware that HMRC may seek to treat part or the whole of the disposal proceeds of their Ordinary Shares as income under Chapter 1 of Part 13 ITA 2007 and Part 15 of CTA 2010 respectively. Further information on the UK taxation consequences of the Tender Offer is set out in Part 4 of this document.

Eligible Shareholders who are in any doubt as to their tax position or who are subject to tax in a jurisdiction other than the UK should consult an appropriate professional adviser.

   9.    Overseas Shareholders 

Eligible Shareholders with registered or mailing addresses outside the UK, or who are citizens or nationals of, or resident in, a jurisdiction other than the UK, should read paragraph 9 of Part 3 of this document and the relevant provisions of the Tender Form. It is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of any legal requirements in their jurisdiction, including, without limitation, any relevant requirements in relation to the ability of such holders to complete and return a Tender Form.

10. Repurchase Agreement

The Company and Hobart entered into a repurchase agreement on 29 May 2019 pursuant to which the Company has agreed to purchase from Hobart, on-market, such number of Ordinary Shares as Hobart shall purchase pursuant to the Tender Offer, at an aggregate price equal to the amount paid by Hobart for the Exit Shares. In acquiring Exit Shares pursuant to valid tenders made in the Tender Offer and in selling such Exit Shares to the Company, Hobart will act as principal.

The Company will be liable to pay Hobart's fees, costs and expenses under the terms of Hobart's engagement by the Company in connection with the Tender Offer.

11. Notification of interests

Under section 5.1.2 of the DTR, certain substantial Shareholders are required to notify the Company and the FCA of the percentage of voting rights they hold as Shareholders or through their direct or indirect holding of financial instruments within the limits referred to in the DTR. Following the completion of the Tender Offer, the percentage of voting rights held by a Shareholder may change, which may give rise to an obligation on the Shareholder to notify the Company and the FCA within two trading days of becoming aware (or being deemed to have become aware) of such change. If you are in any doubt as to whether you should notify the Company and the FCA or as to the form of that notification, please consult your solicitor or other professional adviser.

12. Takeover Code

The Company is subject to the Takeover Code. Under Rule 9 of the Takeover Code, where:

-- any person who acquires an interest (as such term is defined in the Takeover Code) in shares which, taken together with the shares in which he and persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights in a company which is subject to the Takeover Code; or

-- any person, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights of a company subject to the Takeover Code but does not hold shares carrying more than 50 per cent. of such voting rights, and such person or any persons acting in concert with him acquires an interest in any other shares which has the effect that their percentage holding of such voting rights is increased,

that person is normally required by the Panel to make a general offer to all shareholders of that company in cash at not less than the highest price paid by that person (or any person acting in concert with him) for shares in the company during the previous 12 months.

Under Rule 37.1 of the Takeover Code, when a company which is subject to the Takeover Code purchases its own voting shares, the resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting, or presumed to be acting, in concert is interested will be treated as an acquisition for the purpose of Rule 9. A shareholder not acting in concert with the directors will not normally incur an obligation to make a general offer under Rule 9 if, as a result of the purchase of its own shares by a company, he comes to exceed the percentage limits set out in Rule 9. However, this exception will not normally apply when a shareholder (or any relevant member of a group of persons acting in concert) not acting, or presumed to be acting, in concert with any one or more of the directors has acquired an interest in shares at a time when he had reason to believe that such a purchase of its own shares by the company would take place.

Hobart will purchase, as principal, voting shares under the Tender Offer which could result in Hobart acquiring an interest in Ordinary Shares carrying 30 per cent. or more of the voting rights of the Company before such shares are bought back by the Company under the Repurchase Agreement. Accordingly, a waiver has been obtained from the Takeover Panel in respect of the application of Rule 9 to the purchase by Hobart of the voting shares under the Tender Offer.

13. Action to be taken

The Tender Offer will open on 29 May 2019 and will close at 1.00 p.m. on 11 June 2019. The Tender Offer will only be available to Eligible Shareholders on the Register at the Record Date. Eligible Shareholders are reminded that the Tender Offer is not being made to certain Overseas Shareholders.

Eligible Shareholders who do not wish to sell any Ordinary Shares under the Tender Offer do not need to take any action, either in relation to the Tender Form or the sending of a TTE Instruction.

The procedure for tendering your Ordinary Shares depends on whether your Ordinary Shares are held in certificated form or uncertificated form and is summarised below.

   (a)   Ordinary Shares held in certificated form 

Eligible Shareholders who hold Ordinary Shares in certificated form and who wish to tender any or all of their existing holding of Ordinary Shares should complete the enclosed Tender Form in accordance with the instructions printed thereon and in Part 3 of this document and return it by post or by hand (during normal business hours only) together with share certificate(s) and/or other document(s) of title in respect of the Ordinary Shares tendered to the Receiving Agent, Neville Registrars. Shareholders who hold their Ordinary Shares in certificated form should also return their share certificate(s) and/or other document(s) of title in respect of the Ordinary Shares tendered.

Tender Forms and share certificate(s) and/or other document(s) of title must be received by the Receiving Agent as soon as possible but in any event by no later than 1.00 p.m. on 11 June 2019.

(b) Ordinary Shares held in uncertificated form

Eligible Shareholders who hold their Ordinary Shares in uncertificated form (i.e. in CREST) and who wish to tender any or all of their Ordinary Shares should tender electronically through CREST so that the TTE instruction settles by no later than 1.00 p.m. on 11 June 2019. Further details of the procedures for tendering and settlement are set out in Part 3 and Part 5 of this document.

14. Further Information

If you have any questions about the procedure for tendering Ordinary Shares or if you want help in completing and returning the Tender Form, please call Neville Registrars on 0121 585 1131. The helpline is open between 9.00 a.m. - 5.00 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Neville Registrars cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. Your attention is also drawn to the further information set out in Parts 2 to 5 of this document.

15. No Recommendation

Although the Directors consider the Tender Offer to be in the best interests of the Company and the Shareholders as a whole, the Directors neither make nor intend to make recommendations to Eligible Shareholders in relation to participation in the Tender Offer. Whether or not Eligible Shareholders decide to tender all or any of their Ordinary Shares will depend on, among other things, their view of the Company's prospects and their own individual circumstances, including their tax position.

Yours faithfully

David Buchler

Chairman

Expected Timetable

 
                                                                       2019 
 Publication and posting of circular                                 29 May 
 Tender Offer opens                                                  29 May 
 Closing Date - Latest time and date for               1.00 p.m. on 11 June 
  receipt of (i) Tender Forms and share certificates 
  and (ii) TTE Instruction(s), in relation 
  to the Tender Offer 
 Record Date for the Tender Offer                      6.00 p.m. on 11 June 
 Result of Tender Offer announced                                   12 June 
 Completion of purchase of Ordinary Shares                          19 June 
  under the Tender Offer 
 CREST accounts credited for revised, uncertificated                19 June 
  holdings of Ordinary Shares (or, in the 
  case of unsuccessful tenders, for entire 
  holdings of Ordinary Shares) 
 CREST accounts credited in respect of Tender                       19 June 
  Offer proceeds for uncertificated Ordinary 
  Shares 
 Despatch of cheques in respect of Tender                           19 June 
  Offer proceeds for certificated Ordinary 
  Shares 
 Return of share certificates in respect                 week commencing 24 
  of unsuccessful tenders of certificated                              June 
  Ordinary Shares 
 Despatch of balance share certificates in               week commencing 24 
  respect of unsold Ordinary Shares in certificated                    June 
  form 
 

Each of the above times and/or dates is subject to change at the absolute discretion of the Company and Hobart. If any of the above times and/or dates should change, the revised times and/or dates will be announced through a Regulatory Information Service. References to times in this timetable, throughout this document and in the Tender Form are to UK time unless otherwise stated.

For further information contact:

 
 Volvere plc 
 Jonathan Lander, CEO           Tel: + 44 (0) 20 7634 9707 
                                www.volvere.co.uk 
 Cairn Financial Advisers LLP 
  Sandy Jamieson/James Lewis      Tel: + 44 (0) 20 7213 0880 
 Hobart Capital Markets LLP 
  Lee Richardson                  Tel: + 44 (0) 20 7070 5691 
 

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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