Update on Offer conditions for 32Red plc

Released : 27.03.2017

RNS Number : 5378A
Kindred Group PLC
27 March 2017
 

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

EMBARGOED UNTIL 7.00 A.M. (27 MARCH 2017)

 27 March 2017

 

RECOMMENDED CASH OFFER
for
32Red plc ("32Red")
by
Kindred Group plc ("Kindred")

 

UPDATE ON OFFER CONDITIONS


1. Introduction

On 23 February 2017, the boards of directors of 32Red and Kindred announced that they had reached agreement on the terms of a recommended cash offer for the entire issued and to be issued share capital of 32Red, to be implemented by way of a takeover offer in accordance with the laws of Gibraltar (the "Offer").

An offer document setting out the full terms and conditions of the Offer was published on 3 March 2017 (the "Offer Document").

Terms and expressions used in this announcement shall, unless the context otherwise requires, have the same meanings as given to them in the Offer Document.

 

2. Offer unconditional as to acceptances

The board of directors of Kindred is pleased to announce that, by virtue of the level of acceptances received as described below, the Offer has become unconditional as to acceptances.

The Offer will remain open for acceptance until further notice.

 

3. Level of acceptances and share purchases

As at 1.00 p.m. (London time) on 24 March 2017, valid acceptances had been received from 32Red Shareholders in respect of 77,978,301 32Red Shares (representing approximately 91.4 per cent. of the issued share capital of 32Red), which Kindred may count towards the satisfaction of the acceptance condition of the Offer.

 

These acceptances include:

·    36,993,281 32Red Shares, representing approximately 43.3 per cent. of the issued share capital of 32Red, received from the 32Red Directors who had given Kindred irrevocable undertakings to accept (or procure the acceptance of) the Offer; and

·    23,582,110 32Red Shares, representing approximately 27.6 per cent. of the issued share capital of 32Red, received from the non-director 32Red Shareholders who had given Kindred irrevocable undertakings to accept (or procure the acceptance of) the Offer.

 

None of the acceptances of the Offer received have been from persons acting in concert with Kindred. 

 

In addition, Kindred has acquired 3,320,233 32Red Shares, representing approximately 3.9 per cent. of the issued share capital of 32Red, through market purchases as announced on 24 February 2017, 27 February 2017, 28 February 2017 and 1 March 2017 respectively.

 

In total, Kindred has therefore received valid acceptances of the Offer in respect of, or has acquired, 81,298,534 32Red Shares, representing approximately 95.3 per cent. of the issued share capital of 32Red.

 

The percentage holdings of 32Red Shares referred to in this announcement are based on there being a total of 85,347,528 32Red Shares in issue on 23 March 2017.

 

4. Approval by the Licensing Authority of Gibraltar

On 23 March 2017, Kindred received approval from the Licensing Authority (Gambling Division) of HM Government of Gibraltar to the acquisition by Kindred of 32Red Shares representing more than 50 per cent. of the voting rights carried by the 32Red Shares and any matters pursuant to such acquisition which relate to the control, management and operation of 32Red such that the Condition set out in  paragraph 2(a) of Part A of Section III (Conditions to and further terms of the Offer) of the Offer Document has been satisfied.

 

5. Continuation of the Offer

The Offer remains subject to the satisfaction of the remaining outstanding Conditions set out in the Offer Document, and will remain open for acceptance until further notice. At least 14 days' notice will be given by an announcement before the Offer is closed.

 

If the UKGC does not make a determination pursuant to section 102(4)(a) of the UK Gambling Act that all relevant operating licenses held by the Wider 32Red Group shall continue to have effect following the completion of the Transaction (as set out in Condition 2(b) of Part A of Section III (Conditions to and further terms of the Offer) of the Offer Document) (the "Determination") by 5.00 p.m. (London time) on 14 April 2017, 32Red and Kindred have agreed that the Offer timetable will be extended such that the final date for the fulfilment of the Conditions will be the earlier of (i) the Business Day following the date upon which the UKGC makes the Determination or (as the case may be) Kindred receives comfort to its reasonable satisfaction that the UKGC does not object to the Transaction and that the Determination will be made, and (ii) 7 June 2017 (being the date falling 12 weeks after the date on which an application was submitted by 32Red to the UKGC pursuant to section 102(2)(b) of the UK Gambling Act requesting the Determination).

 

32Red Shareholders who have not yet accepted the Offer are urged to do so as soon as possible.

 

To accept the Offer in respect of 32Red Shares held in certificated form (that is, not in CREST), 32Red Shareholders should complete and return the Form of Acceptance accompanying the Offer Document (together with the relevant share certificates and any other documents of title) so as to be received by the Receiving Agent, Capita Asset Services, as soon as possible. Acceptance of the Offer for 32Red Shares held in uncertificated form (that is, shares held in CREST) should be made electronically through CREST so that settlement occurs as soon as possible. If you are a CREST sponsored member, you should refer to your CREST sponsor as only your CREST sponsor will be able to send the necessary TTE instruction to Euroclear.

 

6. Compulsory acquisition, delisting and cancellation of trading

If the Offer becomes, or is declared, unconditional in all respects, Kindred intends to procure that 32Red will make an application for the cancellation of the admission to trading of 32Red Shares on AIM and Kindred will seek to re-register 32Red as a private limited company.

A notice period of not less than 20 Business Days before the cancellation will commence on the date on which the Offer becomes or is declared unconditional in all respects.

Cancellation of admission to trading would significantly reduce the liquidity and marketability of any 32Red Shares not assented to the Offer.

Given that Kindred has received acceptances for the Offer in respect of more than 90 per cent. of the 32Red Shares to which the Offer relates by nominal value and voting rights attaching to such shares, if the Offer becomes, or is declared, unconditional in all respects, Kindred intends to exercise its rights under applicable Gibraltar law to acquire compulsorily, on the same terms as the Offer, the remaining 32Red Shares not assented to the Offer.

 

7. Disclosure of interests

Save as disclosed in this announcement, neither Kindred nor the directors of Kindred nor any person acting, or deemed to be acting, in concert with Kindred for the purposes of the Offer has any interest in relevant securities of 32Red or a right to subscribe for or any short positions (whether conditional or absolute and whether in the money or otherwise), including any short positions under a derivative, any agreement to sell or delivery obligation or right to require another person to purchase or take delivery in respect of any relevant securities of 32Red or has during the Offer Period borrowed or lent any relevant securities of 32Red.

 

8. 32Red Shareholder enquiries

Subject to certain restrictions relating to persons in Restricted Jurisdictions, the Offer Document, together with those documents listed in paragraph 15 of Section V (Additional Information) of the Offer Document, are available on the Kindred website at www.kindredplc.com and on the 32Red website at www.32redplc.com. You may request further copies of the Offer Document by contacting Capita Asset Services on +44 (0) 371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am - 5.30 pm (London time), Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice (in relation to the Offer or otherwise) and calls may be recorded and monitored for security and training purposes. If requested, copies will be dispatched, free of charge, within two business days of request.

 

Enquiries:


Kindred Group plc


Henrik Tjärnström

+46 (0) 723 878 059

Inga Lundberg

+44 (0) 788 799 6116



Houlihan Lokey (Financial adviser to Kindred)


George Fleet

+44 (0) 20 7839 3355



Panmure Gordon (Broker to Kindred)


Ben Thorne

+44 (0) 20 7886 2500

Erik Anderson




32Red plc

+00 350 200 49396

Ed Ware


Jon Hale




Numis (Financial adviser, nominated adviser and broker to 32Red)

+44 (0) 20 7260 1000

Michael Meade


Richard Thomas


Michael Burke




Hudson Sandler (PR adviser to 32Red)

+44 (0) 207 796 4133

Alex Brennan


Bertie Berger


Important Notices

Houlihan Lokey EMEA, LLP which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Kindred and no-one else in connection with the subject matter of this announcement, and will not be responsible to anyone other than Kindred for providing the protections afforded to clients of Houlihan Lokey EMEA, LLP, nor for giving advice in relation to the subject matter of this announcement. Neither Houlihan Lokey EMEA, LLP, nor any of its subsidiaries or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Houlihan Lokey EMEA, LLP, in connection with this announcement, any statement contained herein or otherwise.

Panmure Gordon (UK) Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Kindred and no-one else in connection with the matters set out in this announcement, and will not be responsible to anyone other than Kindred for providing the protections afforded to clients of Panmure Gordon (UK) Limited nor for giving advice in relation to the subject matter of this announcement.

Numis Securities Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for 32Red and no-one else in connection with the subject matter of this announcement, and will not be responsible to anyone other than 32Red for providing the protections afforded to clients of Numis Securities Limited, nor for giving advice in relation to the subject matter of this announcement.

The City Code on Takeovers and Mergers

By virtue of its status as a Gibraltar incorporated company, the Code does not apply to 32Red. Accordingly, 32Red Shareholders are reminded that the Panel does not have responsibility, in relation to 32Red, for ensuring compliance with the Code and is not able to answer 32Red Shareholders' queries. In accordance with 32Red's articles of association, 32Red and Kindred confirmed in the Offer Announcement that, to implement the Offer, they will observe and comply with the provisions of the Code as if 32Red (and therefore the Offer) were subject to the Code. Further details are set out in the Offer Document.

In particular, public disclosures consistent with the provisions of Rule 8 of the Code (as if it applied to 32Red) should not be emailed to the Panel, but, as described below, released directly through a Regulatory Information Service.

Overseas jurisdictions

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or Gibraltar or who are residents, citizens, nationals or subjects of other jurisdictions should inform themselves of, and observe, any applicable requirements. Any failure to comply with these requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such requirements by any person.

US 32Red Shareholders should note that the Offer relates to the securities of a Gibraltar company which are admitted to trading on AIM, is subject to applicable Gibraltar and UK procedural and disclosure requirements (which are different from those of the US) and is proposed to be implemented under a takeover offer under applicable Gibraltar law and in accordance with the Code (as if it applied to 32Red, and therefore the Offer). Accordingly, the Offer will be subject to any applicable Gibraltar procedural and disclosure requirements and practices, which are different from the procedural and disclosure requirements of the US tender offer rules under the United States Exchange Act. The financial information with respect to 32Red included in this announcement and the Offer documentation has been or will have been prepared in accordance with IFRS and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US.

Unless otherwise determined by Kindred and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may accept the Offer by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. Doing so may render any purported acceptance of the Offer invalid. Such persons should read Parts B - E of Section III (Conditions to and further terms of the Offer) of the Offer Document before taking any action.

The receipt of cash pursuant to the Offer by Overseas Shareholders may be a taxable transaction under applicable national, state and local, as well as foreign and other tax laws. Each Overseas Shareholder is urged to consult their independent professional adviser regarding the tax consequences of accepting the Offer.

Further details in relation to Overseas Shareholders are contained in paragraph 2 of Section II (Letter from Kindred) of the Offer Document.

Forward looking statements

This announcement contains statements about Kindred and the 32Red Group that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. They are based on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans" "believes", "expects", "aims"," intends", "will", "may", "anticipates", "estimates", "projects" or, words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include, but are not limited to, statements relating to the following: (i) statements relating to the expected benefits of the acquisition to Kindred, the Wider Kindred Group and/or the 32Red Group; (ii) background to and reasons for the Offer; (iii) expectations of the impact of the acquisition on revenue and earnings of Kindred, the Wider Kindred Group and/or the 32Red Group; (iv) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; and (v) business and management strategies and the expansion and growth of Kindred's, the Wider Kindred Group's and/or the 32Red Group's operations and potential synergies resulting from the Offer. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements, including risks relating to the successful combination of 32Red with Kindred; higher than anticipated costs relating to the combination of 32Red with Kindred or investment required in 32Red to realise expected benefits and facts relating to 32Red that may impact the timing or amount of benefit realised from the acquisition that are unknown to Kindred. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Each of 32Red, Kindred and their respective members, directors, officers, employees, advisers and any person acting on behalf of one or more of them expressly disclaims any intention or obligation to update or revise any forward looking or other statements contained herein, whether as a result of new information, future events or otherwise except as required by applicable law.

None of 32Red, Kindred and their respective members, directors, officers, employees, advisers and any person acting on their behalf provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur.

No forward-looking or other statements have been reviewed by the auditors of 32Red or Kindred. All subsequent oral or written forward-looking statements attributable to any of 32Red, Kindred, or their respective members, directors, officers, advisers or employees or any person acting on their behalf are expressly qualified in their entirety by the cautionary statement above.

No profit forecasts or estimates

Nothing contained in this announcement shall be deemed to be a profit forecast, projection or estimate for any period unless otherwise stated, and no statement in this announcement should be interpreted to mean that earnings or earnings per 32Red Share for the current or future financial years will necessarily match or exceed the historical published earnings or earnings per 32Red Share.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown in the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Electronic communications

Please be aware that addresses, electronic addresses and other information provided by 32Red Shareholders, persons with information rights and other relevant persons for the receipt of communications from 32Red may be provided to Kindred during the Offer Period as required under Section 4 of Appendix 4 of the Code as if the Code applied.

Publication on website and availability of hard copies

This announcement will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Kindred's website at www.kindredplc.com/ promptly and in any event by no later than 12 noon (London time) on the Business Day following the publication of this announcement.

Additional documents in relation to the Offer required to be published pursuant to Rule 26 of the Code are available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Kindred's website at www.kindredplc.com.

Neither the content of any website referred to in this announcement nor the content of any website accessible from hyperlinks is incorporated into, or forms part of, this announcement.

You may request a hard copy of the Offer Document by contacting Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am - 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form. Unless 32Red Shareholders have previously elected to receive hard copies, all future documents, announcements and information, shall not be sent to 32Red Shareholders in hard copy unless requested.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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