Reach4Entertainment - Proposed cancellation of AIM admission
reach4entertainment enterprises plc
("r4e" or "the Company" or "the Group")
Proposed cancellation of admission of Ordinary Shares to trading on AIM
Re-registration as a private company
Adoption of new Articles of Association
Notice of General Meeting
reach4entertainment enterprises plc (AIM: R4E), the integrated international marketing group in the live performance and entertainment markets, announces that it will be posting a circular to shareholders (the "Circular") containing details of its intention to cancel the admission of Ordinary Shares to trading on AIM, re-register as a private company and accordingly, amend the Company's Articles of Association to the extent that they are suitable for a private company going forward, together (the "Proposals").
Background to and rationale for the Proposals
Although trading to the year ended
During this unprecedented time, the Board has evaluated and pursued a number of strategic options available to the Company and determined that the most appropriate course of action is for the Group to continue to operate and serve the live entertainment industry as a private company. The Board believes that the theatre and live entertainment market has the potential to recover but that it is still not clear how long it may take trading performance to recover to levels seen previously. After careful consideration, it is the Board's belief that in a time where prospects for the future are uncertain and where cash management is paramount, the costs of maintaining a
In addition to the cost savings described above, the Board believes that operating as a private company will provide a greater degree of flexibility and allow for strategic decisions to be implemented faster and more efficiently and ensure the Company's cost base is sustainable in the longer term. The Board believes that this will allow the Group to better serve its market, remain more resilient to future events which may adversely affect the industry and ultimately provide greater opportunity for value creation for shareholders over the longer term.
The Board recognises that in the future there may be the need to raise further capital, however set against the backdrop of the global pandemic, the volatility observed in the market has negatively impacted investor sentiment and therefore the Board is of the view that there may be improved access to a greater variety of funding sources and structures in the private environment than have been made available to the Company in recent times in the public arena. The Board has preserved the pre-emption rights of Shareholders upon the cancellation resolution being passed.
The Board may revisit the decision in the future as to whether it may be appropriate and in the best interests of the Company and its shareholders to readmit to trading on AIM or another public market, however in this current period of uncertainty and for the reasons stated above, the decision has been made to seek shareholder approval to cancel the Company's shares from trading on AIM with effect from
The full timetable for the Cancellation is as follows:
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Announcement of proposed cancellation
Publication and posting of this Circular
Latest time and date for receipt of Proxy votes in respect of the General Meeting
Record time and date for those Shareholders on the Register of Members entitled to attend or vote at the General Meeting
Announcement of results of General Meeting
Expected last day of dealings in Ordinary Shares on AIM
Expected time and date of Cancellation4
1. Each of the above times and/or dates is subject to change at the absolute discretion of the Company,
2. All of the above times refer to
3. All events listed in the above timetable following the General Meeting are conditional on the passing of the Resolutions at the General Meeting.
4. The Cancellation requires approval of not less than 75 per cent. of the votes cast by Shareholders (whether present in person or by proxy) at the General Meeting or any adjournment thereof.
Trading in the Ordinary Shares before and after Cancellation
Prior to Cancellation
If Shareholders wish to buy or sell Ordinary Shares on AIM they must do so prior to the Cancellation becoming effective. As noted above, in the event that Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be
Dealing and settlement arrangements
The Directors are aware that the proposed Cancellation, should it be approved by the Shareholders at the General Meeting, would make it difficult to buy and sell Ordinary Shares should they wish to do so. Accordingly, the Company intends to implement a Matched Bargain Facility to assist Shareholders to trade in the Ordinary Shares with effect from the date of Cancellation.
The Matched Bargain Facility will be provided by J P Jenkins. J P Jenkins is part of
Peterhouse Capital Limited, which is authorised and regulated by the FCA, a Member of the London Stock Exchange and a NEX Exchange Corporate Adviser. Under the Matched Bargain Facility, Shareholders or persons wishing to acquire or dispose of Ordinary Shares will be able to leave an indication with J P Jenkins, through their stockbroker (J P Jenkins is unable to deal directly with members of the public), of the number of Ordinary Shares that they are prepared to buy or sell at an agreed price. In the event that J P Jenkins is able to match that order with an opposite sell or buy instruction, they would contact both parties and then effect the bargain.
It is intended that this facility will be put in place as soon as practicable after the date of Cancellation and will be reviewed periodically thereafter.
Process for Re-registration
Following the proposed Cancellation, the Directors consider that there is little benefit to maintaining the Company's status as a public limited company together with the extra costs and administrative burdens associated with such status. Assuming the resolution to approve the Re-registration is passed, the Company intends to make an application to be re-registered as a private limited company under the Act by the name of reach4entertainment enterprises Limited. Application will be made to the Registrar of Companies for the Company to be re-registered as a private limited company. Re-registration will take effect when the Registrar of Companies issues a certificate of incorporation on Re-registration. The Registrar of Companies will issue the certificate of incorporation on Re-registration when it is satisfied that no valid application can be made to cancel the resolution to re-register as a private limited company or that any such application to cancel the resolution to reregister as a private limited company has been determined and confirmed by the Court.
Upon the re-registration of the Company as a private limited company taking effect and the passing of resolution 3, the Directors will be authorised under the Companies Act 2006, (as the Company will have only one class of shares in issue), to exercise without limit any power of the Company to allot shares of that class and to grant rights to subscribe for or to convert any security into such shares. In that connection, a conditional resolution will also be proposed at the General Meeting empowering the Directors to allot such shares for cash in relation to any rights issue or other offer to Shareholders in proportion to their respective holdings of Ordinary Shares and otherwise than on such basis, up to an aggregate nominal amount equal to 20 per cent. of the current issued share capital of the Company. Further details are set out under the heading "General Meeting" below.
The Board believes disapplication of the statutory pre-emption rights in relation to offers of shares for cash is important in order to maintain flexibility in addressing the future funding requirements of the Company.
Under the Act, as part of the Re-registration, the Company is required to make such changes to its Articles of Association as are required in connection with its becoming a private company limited by shares. The proposed New Articles are based on the current Articles of Association but with a number of changes to reflect the change in the Company's status to a private limited company. The principal effects of the Re-registration and the adoption of the New Articles on the rights and obligations of Shareholders and the Company are summarised in Part II of the Circular.
The approval of Shareholders to the Re-registration and adoption of the New Articles is being sought at the General Meeting. The Notice, which convenes the General Meeting at which the Resolutions will be proposed, is set out at the end of the Circular.
A draft of the proposed New Articles may be inspected on the Company's website at www.r4e.com from the date of this announcement up to and including the date of the General Meeting.
Both the Re-registration and adoption of the New Articles will require the approval of not less than 75 per cent. of the votes cast by Shareholders on at the General Meeting.
The Company is seeking Shareholder approval for the Proposals, including the Cancellation, at the General Meeting, which has been convened for
The Proposals are conditional, pursuant to Rule 41 of the AIM Rules, upon the approval of not less than 75 per cent. of the votes cast by Shareholders (whether present in person or by proxy) at the General Meeting. Pursuant to Rule 41 of the AIM Rules, the Company (through its nominated adviser,
The Board cannot stress strongly enough its wish that Shareholders do not put themselves at risk of becoming infected with COVID-19 as a result of travelling to or attending the General Meeting.
With effect from
Given that in the present circumstances shareholders will not be permitted to attend the General Meeting, the Chairman of the meeting will propose that each of the resolutions to be considered at the meeting should be voted on by way of a poll, so that all voting rights exercised by Shareholders who are entitled to do so at the General Meeting will be counted.
Whilst Shareholders will not be permitted to attend the General Meeting, they will still be able to ensure their votes are counted by submitting their proxies in advance. Shareholders wishing to appoint a proxy for this purpose should appoint the Chairman of the meeting. Any Shareholder appointing someone other than the Chairman of the meeting to be their proxy, should note that person will not be permitted to attend the General Meeting and will therefore be unable to cast the Shareholder's vote.
As the situation and resulting government guidance has the ability to change rapidly, Shareholders should note that further changes may need to be put in place at short notice in relation to the General Meeting. Updates on the status of the General Meeting and any changes to the proceedings of the meeting will be notified by announcement through a regulatory information service.
It is the Company's intention to facilitate the establishment and participation of the necessary quorum by electronic means.
Any Shareholders wishing to ask questions relating to the Proposals, are requested to email their questions to the Company ([email protected]) by no later than
Copies of the Circular and the Notice of General Meeting are available on the Company's website (www.r4e.com) and the text of the Letter from the Chairman of the Company is set out in the Appendix to this announcement.
The Directors consider that the Cancellation and the Re-registration as a private company is in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as the Directors intend to do in respect of their own beneficial shareholdings amounting, in aggregate, to 142,997,613 Ordinary Shares, representing approximately 11.2 per cent. of the issued share capital of the Company at the date of this letter.
Unless the context otherwise requires, capitalised terms in this announcement shall have the same meaning ascribed to them in the Circular.
For information, please contact:
reach4entertainment enterprises plc
Phone: +44 (0)20 3978 8590
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Phone: +44 (0)20 7618 9100
Email: [email protected]
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Phone: +44 (0)20 7383 5100
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Phone: +44 (0)20 3903 7715
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reach4entertainment enterprises plc ("r4e") operates a collection of theatrical, film and live entertainment marketing, PR, advertising and display agencies, across the world. The Company uses its extensive experience in the live entertainments space to create value through investing in innovative and established agencies that provide communications services to a range of clients involved with theatre, film, concerts and more. For further information on r4e, you are invited to visit the Company's website at www.r4e.com.
This information is provided by RNS, the news service of the
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