Belvoir Lettings PLC - Rule 2.4 Announcement
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 OR REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Possible Merger Offer with
The Belvoir directors consider that the combination of TPFG and Belvoir would be in the best long term interests of both companies and their respective shareholders.
The strong preference of Belvoir is to implement the Possible Merger Offer on a recommended basis. The TPFG board has however informed Belvoir that that they do not believe this to be an opportune time to entertain offers or a merger for TPFG.
The Belvoir board are disappointed that the TPFG board have declined to enter into a dialogue, not least because they had previously indicated a willingness to engage with Belvoir in this regard and also given the strategic rationale for the Possible Merger Offer outlined below.
The Belvoir board strongly believe that now is exactly the time for such industry consolidation and that a more broadly based multi franchise group will be better positioned to leverage the opportunities in the sector and that the shareholders of the respective companies are looking for such leadership. The Belvoir board believes that the franchise-facing operations of Belvoir and TPFG will remain largely unchanged.
Given the above, the Belvoir board has decided to publicise the terms of its Proposed Merger Offer to facilitate direct discussions with the shareholders of TPFG and Belvoir.
Key terms of the Possible Merger Offer
Belvoir envisages that the Possible Merger Offer, the terms of which have been presented to the board of TPFG, would be achieved through a merger of Belvoir and TPFG and TPFG shareholders would be entitled to receive a combination of new ordinary shares in Belvoir and cash. Such cash payment would be limited to a maximum of
Assuming a maximum cash payment of
0.7150 Belvoir shares and
Based on the closing mid-market price of a Belvoir share of
Furthermore, based on (i) the above share exchange ratio, which is derived from the closing mid-market prices of each of Belvoir and TPFG shares on
The announcement and terms of any Possible Merger Offer are subject to the section headed Pre-Conditions and Reservations set out below.
Rationale for a combination of Belvoir and TPFG
The Proposed Merger Offer would create a UK property franchise group with some 683 outlets and 108,000 tenanted managed properties. With the changing dynamics in the industry, the combination of TPFG and Belvoir would, in the opinion of the Belvoir board, cement a more robust market position for the
Given the high degree of similarity between Belvoir and TPFG, the proposed merger creates the opportunity to:
· enhance scale with a step-change through 683 outlets providing greater geographic coverage across the UK;
· enhance the prospects for organic growth whilst in parallel presenting over time increasing opportunities for operational synergies and efficiencies (particularly in relation to the central administrative functions); and
· create a company which can continue to drive the industry consolidation, and with an enlarged platform that would attract the best talent in our industry to help our franchisees develop their business at a faster pace.
With an increased market capitalisation, the
Management of the
Belvoir believe it is vital for the success of the
Accordingly, Belvoir propose that the board of directors of the
· Mike Goddard, current Chairman of Belvoir, would be Chairman of the
· Richard Martin, current Chairman of TPFG, would be offered the role of Non-executive Deputy Chairman of the
· Dorian Gonsalves, current Chief Executive Officer of Belvoir, would be Chief Executive Officer of the
· Louise George, current Chief Financial Officer of Belvoir, would be Chief Financial Officer of the
Financing of Possible Merger Offer
In relation to the cash element of the Possible Merger Offer outlined above, Belvoir have agreed indicative terms for a new revolving credit facility with a major UK lending bank, The Belvoir board believe that the use of such a facility will provide the
Founded in 1995 and listed on AIM in 2012, Belvoir operates a nationwide property franchise group with 300 offices across four brands offering a range of specialist services in property rental, property management, residential lettings, buy to let, property sales and property-related financial services. With its Central Office in Grantham, Lincolnshire, Belvoir manages 58,000 properties and reported revenue of
TPFG operates a property franchise business managing 50,000 properties through over 370 offices and six franchise brands: Martin & Co, CJ Hole, Parkers, Ellis & Co, EweMove and Whitegates. TPFG reported revenues of
Pre-conditions and reservations
This announcement does not amount to a firm intention by Belvoir to make an offer for TPFG and, accordingly, there can be no certainty that any offer for TPFG will be made by Belvoir even if the pre-conditions set out below are satisfied or waived.
The announcement by Belvoir of a firm intention to make an offer for TPFG under Rule 2.7 of the Code would be subject to certain customary pre-conditions (which, in accordance with Rule 2.5(c)(i) of the Code may be waived in whole or in part by Belvoir):
1) satisfactory completion of confirmatory due diligence on TPFG, including appropriate access to senior management;
2) the directors of TPFG providing a unanimous and unqualified recommendation and the provision of irrevocable undertakings on terms satisfactory to Belvoir in favour of the transaction from the directors of TPFG (and their connected persons) who are also shareholders; and
3) Belvoir finalising committed debt financing for the cash element of the Possible Merger Offer.
Belvoir reserves the right to vary the form and/or mix of the consideration referred to in this announcement.
In addition, pursuant to Rule 2.5 of the Code, Belvoir reserves the right to set aside the financial terms referred to in this announcement and/or at any time to make an offer or a merger proposal on less favourable terms, in the following circumstances:
1) with the recommendation or consent of the board of TPFG;
2) if a third party announces a firm intention to make an offer for TPFG; or
3) if TPFG announces a whitewash proposal (for the purposes of Note 1 of the Notes on Dispensations from Rule 9 of the Code) or a reverse takeover.
Belvoir reserves the right to reduce the Possible Merger Offer consideration by the amount of any dividend (or other distribution) which is paid or becomes payable by TPFG to its shareholders following the date of this announcement.
Rule 2.6(a) of the Code requires that Belvoir, by no later than
Belvoir will make a further announcement in due course.
The person responsible for arranging release of this announcement on behalf of Belvoir is Louise George, Chief Financial Officer.
Dorian Gonsalves, Chief Executive Officer
Louise George, Chief Financial Officer
01476 584 900
Cantor Fitzgerald Europe
0207 894 7000
0207 466 5000
This announcement is not intended to, and does not, constitute, represent or form part of any offer, invitation or solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.
The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law or regulation and therefore any person who comes into possession of this announcement should inform themselves about, and comply with, such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws or regulations of any such relevant jurisdiction.
Cantor Fitzgerald Europe, which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Cantor Fitzgerald Europe or for providing advice in relation to the contents of this announcement, or any other matters referred to in this announcement.
Rule 2.9 of the Code
Pursuant to Rule 2.9 of the Code, Belvoir confirms that, as at the close of business of
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for; any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the
Publication on website
In accordance with Rule 26.1 of the Code, a copy of this announcement will be made available on the Company's website www.belvoirlettingsplc.com by no later than 12 noon on
This announcement may contain "forward-looking statements" relating to each of TPFG, Belvoir and/or the
This information is provided by RNS
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Market Cap: £50.02 m
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