For immediate release: 0700hrs Monday 28 September 2009
This announcement is not for release, publication or distribution, directly or
indirectly, in or into the United States, Canada, South Africa, Australia,
Japan or any jurisdiction in which the same would be unlawful. This
announcement is not an offer of securities in the UK, United States, Canada,
South Africa, Australia, Japan or any jurisdiction in which the same would be
unlawful.
Syndicate Asset Management plc
("Syndicate" or "the Company")
Proposed Placing and Open Offer
Highlights
* Syndicate announces its intention to raise approximately GBP17.2 million by
means of a Placing of 500,000,000 new Ordinary Shares ("Placing Shares")
and a one-for-one Open Offer of a further 647,707,648 new Ordinary Shares
("Open Offer Shares");
* Cenkos Securities plc ("Cenkos") has conditionally placed the Placing
Shares at 1.5 pence per share with a number of existing Shareholders
pursuant to the Placing;
* Cenkos has also conditionally placed the Open Offer Shares (subject to
clawback) at 1.5 pence per share with a number of existing Shareholders for
the purposes of the Open Offer;
* Qualifying Shareholders will be offered the opportunity to subscribe on a
pro-rata basis for the Open Offer Shares under the Open Offer;
* A Prospectus relating to the Open Offer and a notice of a General Meeting
to consider the proposals is expected to be posted to shareholders on or
around 9 October 2009 once approved by the UKLA; and
* The net proceeds of the Placing and Open Offer are to be used to reduce
principal bank borrowings by a further £3.3 million to approximately £2.0
million; to boost regulatory capital as required; to pay down deferred
consideration and loan notes as they fall due; and for general working
capital purposes.
David Pinckney, Chairman of Syndicate, commented:
"Throughout the last year, we have been greatly encouraged by the support shown
for the Company from across our shareholder base. As a result, I am delighted
to be able to announce this Placing and Open Offer which will allow Syndicate
to raise approximately £17.2 million through the issue of 1,147,707,648 New
Ordinary Shares at the issue price of 1.5 pence per share. The Placing and Open
Offer provide certainty of funding to RBS prior to the end of September, enable
the Company to eliminate all deferred consideration obligations, substantially
de-risk the balance sheet and leave the Company with net cash resources. We are
now in a position to concentrate on generating further efficiencies across the
Group, promote our valuable brands and build upon the net inflows of funds
achieved in the last financial year despite the recent market turmoil."
For further information:
Syndicate Asset Management plc
David Pinckney (Chairman) Tel: 020 7659 8060
Jonathan Freeman (Group CEO)
Cenkos Securities plc
Stephen Keys/Julian Morse Tel: 020 7397 8900
GTH Communications
Toby Hall/Christian Pickel Tel: 020 7153 8039
Cenkos Securities plc, which is authorised and regulatedby the Financial
Services Authority, is acting for Syndicate Asset Management plcand no oneelse
in connection with the matters referred to in this announcement and will not be
responsible to anyone other than Syndicate Asset Managementplc for providing
the protections afforded to its customers or for providing advice to any other
person in relation to the matters referred to in this announcement.
This announcement does not constitute or form part of any offer or invitation
to sellor issue, or any solicitation of any offer to acquire, purchase or
subscribe for any securities. Any such offer or invitation will be made solely
by means of the prospectus to be published by theCompany in due course. This
announcement has not been examined or approved by the FSA or the London Stock
Exchange or any other regulatory authority. The distribution for this
announcement in certain jurisdictions may be restricted by law and therefore
persons into whose possession this announcement comes should inform themselves
about and observe any suchrestrictions. Any failure to comply with these
restrictions may constitute a violation of the securities laws of any such
jurisdiction. This announcement is not a prospectus and any purchase of or
application for shares in the Placing and the Open Offer should only be made on
the basis of information contained in the formal prospectus to be issued in
connection with the Placing and the Open Offer and any supplement thereto,
copies of which will be made available at the Company's registered office: 7
Hanover Square, London W1S 1HQ.
This announcement and the information contained herein does not constitute an
offer tosell, exchange or transfer any securities of the Company and is not
soliciting an offer to purchase, exchange or transfer such securities in any
jurisdiction where the offer,sale, exchange or transfer is not permitted or to
any person or entity to whom it is unlawful to make that offer, sale, exchange
or transfer.
No decision as to whether to invest or purchase securities in the Company
should be made on the basis of the information contained in this announcement.
Any decision to subscribe for Open Offer Shares in the Open Offer should be
made only the basis of the information contained in the Prospectus and not in
reliance on the information contained in this announcement.
This announcement and the information contained herein are not an offer for
sale of securities in or into the United States,Canada, South Africa,
Australia, Japan or in any other jurisdiction and the information contained
herein is not for publication or distribution in or into the United States,
Canada, South Africa, Australiaor Japan or any other jurisdiction where the
same wouldbe unlawful. The securities referred to herein have not been and will
notbe registered under the U.S. Securities Act of 1933 (the "Act"), as amended,
and may not be offered or sold in the United States or to or for the account or
benefit of US persons (as such term is definedin Regulation S under the Act)
absent registration under the Act or an availableexemptionfrom registration. No
public offering of the securities referred to herein will be made in the United
States. The shares referred to herein may not, directlyor indirectly, be
offered, sold, taken upor delivered in, into or from Australia, Canada, Japan
or the Republic of South Africa or in any other jurisdiction where the same
would be unlawful.
Certain statementsin this announcement are forward looking statements. By their
nature, forward looking statements involve a number of risks, uncertainties and
assumptions because they relate to events and/or depend on circumstances that
may or may not occur in the future and could cause actual results to differ
materially from those expressed in, or implied by, the forward
lookingstatements. These include, among other factors: the effects of continued
or increasing volatility in international financial markets, economic
conditions both internationally and in individual markets in which
Syndicateoperates, and other factors affecting the level of Syndicate's
business activities and the costs and availability of future financing for its
activities. These and other factors could adversely affect the outcome and
financial effects of the plans and events described herein. Forward looking
statements contained in this announcement based on past trends or activities
should not be taken as a representation that such trends or activities will
continue in the future. Subject to any requirement under the AIM Rules for
Companies, neither the Company nor Cenkos Securities plc undertakes any
obligation to update or revise any forwardlooking statements, whether asa
result of new information, future events or otherwise. You should not place
undue reliance on forward looking statements, which speak only as of the date
of this announcement.
This announcement isnot for release, publication ordistribution,directly or
indirectly, in or into the United States, Canada, South Africa, Australia,
Japan or any jurisdiction in which the same would be unlawful.
Syndicate Asset Management plc
("Syndicate" or "the Company")
Proposed Placing and Open Offer
Introduction
The Company is pleased to announce that it proposes to raise approximately £
17.2 million (approximately £15.8 million net of expenses) by the issue of
1,147,707,648 New Ordinary Shares through a conditional Placing and Open Offer
at the Issue Price of 1.5 pence per New Ordinary Share. Qualifying Shareholders
will have the right to subscribe for their pro-rata entitlements under the Open
Offer in accordance with the terms of the Open Offer.
The Placing and Open Offer Shares have been conditionally placed by Cenkos at
the Issue Price with certain existing Shareholders (subject, in the case of the
Open Offer Shares, to clawback to satisfy valid applications received from
other Qualifying Shareholders under the Open Offer). A total of 500,000,000 new
Ordinary Shares will be issued under the Placing and a further 647,707,648 new
Ordinary Shares will be issued under the Open Offer. Each of the Directors and
certain Shareholders participating in the Placing have irrevocably agreed to
take up their respective entitlements under the Open Offer and the Company has
obtained commitments from placees under the Placing, subject to clawback, to
subscribe for the balance of the Open Offer Shares.
The Issue Price of 1.5 pence per New Ordinary Share represents a discount of
1.33 pence (47.0 per cent.) to the closing mid-market price of 2.83 pence per
Ordinary Share on 25 September 2009 (the last practicable date prior to the
announcement by the Company of its intention to make the Open Offer).
Current Trading
The Group today announced its final results for the year ended 31 March 2009.
The Group reported a drop in profit from operations for the year to £1.16
million, a fall of £3.35 million from that reported in the previous year (2007/
8: £4.51 million). As announced, this was primarily due to a reduction of £2.80
million in revenue for the year to £37.49 million from £40.29 million in 2007/
8. A large proportion of the decrease in profitability is attributable to the
effect that the recent falls in the value of the UK stock markets during the
year under review have had on certain of the Group's subsidiaries. The Group
has also reduced the carrying value of goodwill associated with previous
acquisitions at 31 March 2009 by approximately £18.13 million, the carrying
value of other intangible assets at 31 March 2009 by £0.66 million and the
carrying value of investment in associated company and available-for-sale
investments by £0.52 million. The effect of these charges, together resulted in
the Group recording a loss before tax of £19.07 million for the year ended 31
March 2009 (2007/8: profit of £3.76 million).
Reasonsfor the Placing and Open Offer
The Company has split its current fundraising into the Placing and Open Offer.
This is to provide the Group with the ability through the Placing to show
certainty of funding to RBS (the Group's principal lending bank) prior to the
end of September, for any increase in the Group's regulatory capital
requirements, to have assurance that the Company would have sufficient
resources to meet shorter term deferred consideration obligations and for
general working capital purposes. This structure at the same time provides all
Qualifying Shareholders with the ability to participate in the fundraising at
the same price as the Placing. The Placing, which will raise approximately £7.5
million from certain existing Shareholders, provides the minimum level of
funding required to give certainty that repayment obligations will be met
within the timeframe set by, inter alia, RBS. Subsequent to the Placing, all
Qualifying Shareholders will have the right to subscribe for their pro-rata
entitlements under the Open Offer in accordance with the terms of the Open
Offer. Entitlements under the Open Offer will not be altered by the allocation
of New Ordinary Shares under the Placing.
The continued uncertainties and volatility in the UK stock market generally,
which have resulted in reduced management fees for the Group and ultimately a
significant reduction in profitability due to the Group's high levels of fixed
costs, have placed significant strain on the Group's funding position. The
Group's principal lending bank, RBS, continues to be supportive of Syndicate.
Due to the Group's reduced profitability over the last 12 months, RBS have
agreed to waive certain lending covenants relating to the Group's profitability
in return for a repayment by the Group during 2009 of some of its outstanding
borrowings. The Group was able to repay £2.0 million to RBS following the May
Subscription and has agreed to repay a further £3.3 million out of the proceeds
of the Placing and Open Offer. If the Placing and Open Offer were to fail to
complete and the Group was unable to raise £3.3 million from other sources by
31 October 2009, the Group's borrowing facilities could become due and
repayable immediately thereafter (at the option of RBS).
In addition to making the repayments to RBS, the Group also intends to bolster
the level of cash available for regulatory capital and to use some of the
proceeds to pay off the Group's deferred consideration obligations as they fall
due, as well as to raise additional funds for general working capital purposes.
Information on the Placing
Cenkos has conditionally placed 500,000,000 Ordinary Shares with certain
existing Shareholders under the Placing on the terms and subject to the
conditions of the Placing Agreement. The Placing is conditional upon, amongst
other things, the Placing Agreement having become unconditional in all respects
and not having been terminated in accordance with its terms prior to Admission.
Information on the Open Offer
Cenkos intends, as agent for the Company, to invite Qualifying Shareholders to
apply for the Open Offer Shares on the following basis:
1 Open Offer Share at 1.5 pence per share for every 1 Existing Ordinary Share
held and registered in their name at 5.00 p.m. on the Record Date. Only
Qualifying Shareholders holding one or more Existing Ordinary Shares would be
invited to subscribe under the Open Offer. The Company has obtained commitments
from the placees under the Placing to take up any new Ordinary Shares not taken
up in the Open Offer.
Conditions to the Placing and Open Offer
The Placing and Open Offer and Cenkos' obligations under the Placing Agreement
are conditional upon, amongst other things, the Resolutions having been passed
at the Annual General Meeting and the General Meeting.
The making of the Open Offer also remains conditional upon the UKLA approving
the form of the proposed Prospectus and upon the issue and publication of the
Prospectus. The Placing is conditional upon the Open Offer.
Application will be made to the London Stock Exchange for the New Ordinary
Shares to be admitted to trading on AIM and Admission is expected to occur on
30 October 2009. The total number of Ordinary Shares in issue immediately
following the Placing and Open Offer will be 1,804,015,296.
The New Ordinary Shares will, when issued, rank in full for all dividends
declared, made or paid on the Existing Ordinary Shares after Admission, and
otherwise pari passu in all respects with the Existing Ordinary Shares.
The City Code
As previously announced by the Company on 22 April 2009, and as referred to in
the Company's circular to Shareholders dated 8 May 2009 relating to the May
Subscription, the Company has received a number of unsolicited preliminary
approaches from third parties to acquire all of, or a majority of, the
Company's Ordinary Shares ("Approaches"). Having carefully considered the
Approaches, the Board concluded that they were not on terms that would be
acceptable to the Board or Shareholders at this time. Accordingly, the Board
has rejected the Approaches, although discussions are ongoing. Accordingly, the
Company remains in an offer period for the purposes of the City Code.
Rule 21.1 of the City Code requires, inter alia, that where the board of a
company has reason to believe that a bona fide offer might be imminent, the
board of that company must not, without the consent of shareholders in general
meeting, issue any authorised but unissued shares, since doing so may have the
effect of frustrating a potential offer. The Board is unaware of what effect,
if any, the Placing and Open Offer may have on the Approaches.
Accordingly, the issue of the New Ordinary Shares requires the consent of
Shareholders pursuant to Rule 21.1 of the City Code as set out in part (c) of
the first Resolution to be included in the notice of General Meeting to be
attached to the prospectus.
General Meeting
The Company expects to be posting the Prospectus to Shareholders (incorporating
a notice of General Meeting and form of proxy for use at the General Meeting)
on or around 9 October 2009. The General Meeting is proposed to be held at 3:00
pm on 29 October 2009 at the offices of Memery Crystal LLP, 44 Southampton
Buildings, London WC2A 1AP. The final timetable will depend upon the timing of
approval by the UKLA of the Prospectus.
Related Party Transaction
Should Al Bateen Investment Company LLC, an existing Shareholder, participate
in the Open Offer, their participation would fall within the definition of
related parties in the AIM Rules for Companies because the Company understands
that they beneficially have an interest in at least less than 10 per cent. of
the Company's Existing Ordinary Shares. The Directors, having consulted with
Cenkos as the Company's Nominated Adviser, consider that the terms of this
transaction are fair and reasonable insofar as Shareholders are concerned.
Placing and Open Offer Statistics
Number of Existing Ordinary Shares in issue on the Record Date 647,707,648
Issue Price 1.5 pence
Number of New Ordinary Shares to be issued pursuant to the 500,000,000
Placing
Number of New Ordinary Shares to be issued pursuant to the 647,707,648
Open Offer
Enlarged Issued Share Capital following the Placing and Open 1,804,015,296
Offer
Percentage of the Enlarged Issued Share Capital represented by 27.7 per cent.
the Placing Shares
Percentage of the Enlarged Issued Share Capital represented by 35.9 per cent.
the Open Offer Shares
Percentage of the Enlarged Issued Share Capital represented by 63.6 per cent.
the New Ordinary Shares
Estimated net proceeds of the Placing and Open Offer available £15.8 million
to the Company
Timetable of Principal Events
The following timetable sets out the expected timing of principal events. It is
subject to change and any such change will be notified via a regulatory
information service.
Record Date for the Open Offer 25 September 2009
Expected date that shares will be marked 28 September 2009
ex-entitlement by the London Stock Exchange
Prospectus published On or around 9 October
2009*
General Meeting 29 October 2009*
Admission and dealings in New Ordinary Shares 30 October 2009*
commence
* - depending on timing of UKLA approval of the Prospectus
* DEFINITIONS
The following definitions apply throughout this announcement, unless the
context otherwise requires:
"Admission" admission of the New Ordinary Shares to trading on
AIM;
"AIM" AIM, a market operated by London Stock Exchange;
"AIM Rules" the AIM rules for companies published by London
Stock Exchange;
"Annual General Meeting" the annual general meeting of the Company to be
held at the offices of Memery Crystal LLP, 44
Southampton Buildings, London WC2A 1AP at 2 p.m. on
29 October 2009 (or any adjournment thereof);
"Applicant" a Qualifying Shareholder or a person entitled by
virtue of a bone fide market claim who lodges an
Application Form or relevant CREST instruction
under the Open Offer;
"Application Form" the personalised application form relating to the
Open Offer being sent to Qualifying non-CREST
Shareholders together with the Prospectus other
than to certain overseas Shareholders;
"Board" or "Directors" the directors of the Company as at the date of this
announcement;
"Cenkos" Cenkos Securities plc;
"City Code" the UK City Code on Takeovers and Mergers;
"Enlarged Issued Share the issued ordinary share capital of the Company
Capital" immediately following Admission;
"Existing Ordinary Shares" the 647,707,648 Ordinary Shares in issue at the
date of this document;
"FSA" the Financial Services Authority;
"FSMA" the Financial Services Market Act 2000 as amended
from time to time;
"General Meeting" the general meeting of the Company proposed to be
held at the offices of Memery Crystal LLP, 44
Southampton Buildings, London WC2A 1AP3:00 p.m. on
29 October2009 (or any adjournment thereof);
"Group" the Company and its subsidiaries at the date of
this announcement;
"Issue Price" 1.5 pence per New Ordinary Share;
"May Subscription" the issue to certain existing Shareholders and
employees of the Group by the Company of 310
million new Ordinary Shares at 1 penny each;
"New Ordinary Shares" the Placing Shares and the Open Offer Shares;
"Open Offer" the invitation by the Company to be contained in
the Prospectus to be sent to Shareholders inviting
Qualifying Shareholders to apply to subscribe for
the Open Offer Shares at the Issue Price on the
terms and subject to the conditions to be set out
in the Prospectus and where applicable, in the
Application Form;
"Open Offer Entitlements" the pro rata entitlements to subscribe for Open
Offer Shares allocated to a Qualifying Shareholder
pursuant to the Open Offer;
"Open Offer Shares" the 647,707,648 new Ordinary Shares to be allotted
and issued to Qualifying Shareholders pursuant to
the Open Offer;
"Ordinary Shares" fully paid ordinary shares of 0.2 pence each in the
capital of the Company;
"Placees" the institutional and other investors procured by
Cenkos to subscribe for Placing Shares pursuant to
the Placing;
"Placing" the conditional placing by Cenkos (on behalf of the
Company) of the Placing Shares at the Issue Price
pursuant to the Placing Agreement;
"Placing Agreement" the conditional placing and open offer agreement
dated 27 September 2009 between Cenkos and the
Company;
"Placing Shares" the 500,000,000 Ordinary Shares to be issued to
Placees pursuant to the Placing;
"Prospectus" The prospectus in relation to the Placing and Open
Offer to be published and sent to Shareholders on
or around 9 October 2009;
"Qualifying Shareholder" holders of Ordinary Shares on the register of
members of the Company on the Record Date;
"RBS" Royal Bank of Scotland Plc;
"Record Date" the record date for the Open Offer, being the close
of business on 25 September 2009;
"Related Party Transaction" the potential subscription for New Ordinary Shares
by Al Bateen Investment Company LLC;
"Resolutions" resolution 6 to be proposed at the Annual General
Meeting, and resolution 1 to be proposed at the
General Meeting;
"Shareholders" holders of Ordinary Shares;
"subsidiary" a subsidiary as defined in section 736(1) of the
1985 Act, or an English limited partnership;
"Takeover Panel" the Panel on Takeovers and Mergers;
"UK Listing Authority" or the FSA acting in its capacity as the competent
"UKLA" authority for the purposes of Part VI of the FSMA;
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern
Ireland, its territories and dependencies;
"US" or "United States" the United States of America, its territories and
possessions, any state of the United States and the
District of Columbia.
Cenkos Securities plc, which is authorised and regulated by the Financial
Services Authority, is acting for Syndicate Asset Management plc and no one
else in connection with the matters referred to in this announcement and will
not be responsible to anyone other than Syndicate Asset Management plc for
providing the protections afforded to its customers or for providing advice to
any other person in relation to the matters referred to in this announcement.
This announcement does not constitute or form part of any offer or invitation
to sell or issue, or any solicitation of any offer to acquire, purchase or
subscribe for any securities. Any such offer or invitation will be made solely
by means of the prospectus to be published by the Company in due course. This
announcement has not been examined or approved by the FSA or the London Stock
Exchange or any other regulatory authority. The distribution for this
announcement in certain jurisdictions may be restricted by law and therefore
persons into whose possession this announcement comes should inform themselves
about and observe any such restrictions. Any failure to comply with these
restrictions may constitute a violation of the securities laws of any such
jurisdiction. This announcement is not a prospectus and any purchase of or
application for shares in the Placing and the Open Offer should only be made on
the basis of information contained in the formal prospectus to be issued in
connection with the Placing and the Open Offer and any supplement thereto,
copies of which will be made available at the Company's registered office: 7
Hanover Square, London W1S 1HQ.
This announcement and the information contained herein does not constitute an
offer to sell, exchange or transfer any securities of the Company and is not
soliciting an offer to purchase, exchange or transfer such securities in any
jurisdiction where the offer, sale, exchange or transfer is not permitted or to
any person or entity to whom it is unlawful to make that offer, sale, exchange
or transfer.
No decision as to whether to invest or purchase securities in the Company
should be made on the basis of the information contained in this announcement.
Any decision to subscribe for Open Offer Shares in the Open Offer should be
made only the basis of the information contained in the Prospectus and not in
reliance on the information contained in this announcement.
This announcement and the information contained herein are not an offer for
sale of securities in or into the United States, Canada, South Africa,
Australia, Japan or in any other jurisdiction and the information contained
herein is not for publication or distribution in or into the United States,
Canada, South Africa, Australia or Japan or any other jurisdiction where the
same would be unlawful . The securities referred to herein have not been and
will not be registered under the U.S. Securities Act of 1933 (the "Act"), as
amended, and may not be offered or sold in the United States or to or for the
account or benefit of US persons (as such term is defined in Regulation S under
the Act) absent registration under the Act or an available exemption from
registration. No public offering of the securities referred to herein will be
made in the United States. The shares referred to herein may not, directly or
indirectly, be offered, sold, taken up or delivered in, into or from Australia,
Canada, Japan or the Republic of South Africa or in any other jurisdiction
where the same would be unlawful.
Certain statements in this announcement are forward looking statements. By
their nature, forward looking statements involve a number of risks,
uncertainties and assumptions because they relate to events and/or depend on
circumstances that may or may not occur in the future and could cause actual
results to differ materially from those expressed in, or implied by, the
forward looking statements. These include, among other factors: the effects of
continued or increasing volatility in international financial markets, economic
conditions both internationally and in individual markets in which Syndicate
operates, and other factors affecting the level of Syndicate's business
activities and the costs and availability of future financing for its
activities. These and other factors could adversely affect the outcome and
financial effects of the plans and events described herein. Forward looking
statements contained in this announcement based on past trends or activities
should not be taken as a representation that such trends or activities will
continue in the future. Subject to any requirement under the AIM Rules for
Companies, neither the Company nor Cenkos Securities plc undertakes any
obligation to update or revise any forward looking statements, whether as a
result of new information, future events or otherwise. You should not place
undue reliance on forward looking statements, which speak only as of the date
of this announcement.