TIDMBRK TIDMBRG
RNS Number : 2097N
Brooks Macdonald Group PLC
08 June 2010
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION
WHERE IT IS UNLAWFUL TO DO SO
8 June 2010
RECOMMENDED CASH OFFER
for Braemar Group plc
by Brooks Macdonald Group plc
Summary
· Braemar Management, the Braemar Independent Director and the Board of
Brooks Macdonald are pleased to announce that agreement has been reached on the
terms of a recommended cash offer, to be made by Brooks Macdonald, to acquire
the entire issued and to be issued share capital of Braemar not subject to the
Management Share Purchase Agreement.
· The Offer price is 2.25 pence in cash for each Ordinary Share. This
represents a premium of:
o approximately 63.6 per cent. to the Closing Price of an Ordinary Share of
1.375 pence on 7 June 2010, being the last Dealing Day prior to the
Announcement Date; and
o approximately 58.6 per cent. to the average Closing Price of an Ordinary
Share of 1.419 pence for the six months ended 7 June 2010, being the last
Dealing Day prior to the Announcement Date.
· The Offer, together with the acquisition of Ordinary Shares pursuant to
the Management Share Purchase Agreement, values the entire issued and to be
issued share capital of Braemar at approximately GBP4 million.
· Brooks Macdonald is an integrated wealth management group which provides
bespoke fee-based discretionary asset management and financial services for
private clients, pension funds, charities and trusts. Funds under management as
at 31 March 2010 were approximately GBP2.05 billion. Brooks Macdonald has over
160 employees and has offices in London, Hampshire, Manchester, Tunbridge Wells
and Edinburgh. It is quoted on AIM and, as at 7 June 2010, had a market
capitalisation of approximately GBP79 million.
· It is intended that the business and identity of the Braemar Group will
continue substantially as it is at present.
· The Braemar Independent Director, who has been so advised by Zeus Capital,
considers the Offer to be fair and reasonable and recommends to Braemar
Shareholders that they accept the Offer, as he has irrevocably undertaken to do
in respect of his own beneficial shareholding. In providing the Braemar
Independent Director with advice, Zeus Capital has taken account of the
commercial assessments of the Braemar Independent Director.
· Brooks Macdonald has received irrevocable undertakings to accept or
procure acceptance of the Offer, and to vote in favour of the Resolution to
approve the Management Share Purchase Agreement, in respect of, in aggregate,
69,041,665 Ordinary Shares representing approximately 40.1 per cent. of the
existing issued Ordinary Shares and 55.7 per cent. of the Ordinary Shares to
which the Offer will relate.
· Brooks Macdonald has entered into the Management Share Purchase Agreement
pursuant to which it will, conditional upon the Offer being declared
unconditional in all respects, acquire all shares in Braemar held by Braemar
Management, representing approximately 28 per cent. of the existing issued
Ordinary Shares. The Ordinary Shares to which the Offer will relate and the
Ordinary Shares to be acquired pursuant to the Management Share Purchase
Agreement together comprise the entire issued and to be issued share capital of
Braemar.
· In aggregate, the Ordinary Shares covered by the irrevocable undertakings
received by Brooks Macdonald and the Management Share Purchase Agreement
represent approximately 68.1 per cent. of the existing issued Ordinary Shares.
· The Offer will be conditional, inter alia, upon valid acceptances being
received in respect of not less than 90 per cent. (or such lower percentage, not
less than 50 per cent., as Brooks Macdonald decides) in nominal value of the
Ordinary Shares to which the Offer will relate.
· The Offer will also be conditional on the Management Share Purchase
Agreement being approved by the Independent Shareholders at a General Meeting of
Braemar. Further details of the conditions of the Offer are set out in Appendix
A to this announcement. The Offer Document will include notice of the General
Meeting of Braemar in order for the Independent Shareholders to consider and
vote on the Management Share Purchase Agreement.
Comments on the Offer
· Chris Macdonald, Chief Executive of Brooks Macdonald, said:
"I believe this to be an excellent opportunity for shareholders, clients and
staff of both organisations. Braemar has a strong management team, fund
management range and property management business which will complement Brooks
Macdonald's existing offering and is in keeping with Brooks Macdonald's strategy
of expanding its niche range of funds."
· Marc Duschenes, Chief Executive of Braemar, said:
"Whilst acting as a platform for accelerated growth for our business, the Offer
represents delivery of value to our existing shareholders. We have long believed
that our core funds' positioning in the marketplace adds value to investors'
portfolios and I am delighted that these achievements have been recognised by
Brooks Macdonald to the benefit of our shareholders and clients."
Collins Stewart Europe Limited is acting as financial adviser to Brooks
Macdonald Group plc. Zeus Capital Limited is acting as financial adviser to
Braemar Group plc.
Enquiries:
Brooks Macdonald Group plc
Tel: +44(0)20 7499 6424
Chris Macdonald (Chief Executive)
Simon Jackson (Finance Director)
Braemar Group plc
Tel: +44(0)161 929 4969
Martin Robinson (Chairman)
Marc Duschenes (Chief Executive)
Braemar Independent Director
Tel: +353 87 757 4857
Anthony McFarland
Collins Stewart Europe Limited
Financial adviser, Nomad and broker to Brooks Macdonald
Tel: +44(0)20 7523 8350
Bruce Garrow
Mark Connelly
Zeus Capital Limited
Financial adviser, Nomad and broker to Braemar
Tel: +44(0)161 831 1512
Alex Clarkson
Nick Cowles
Bankside Consultants
Financial PR adviser to Brooks Macdonald
Tel: +44(0)20 7367 8888
Simon Rothschild
Oliver Winters
This summary should be read in conjunction with, and is subject to, the full
text of this announcement including the Appendices.
Appendix A sets out the conditions and certain further terms of the Offer.
Appendix B contains certain details relating to the irrevocable undertakings
given by certain Braemar Shareholders. Appendix C contains the definitions of
certain terms used in this announcement.
Collins Stewart Europe Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Brooks
Macdonald Group plc and for no one else in connection with the Offer and is not
advising any other person or treating any other person as its client in relation
thereto and will not be responsible to anyone other than Brooks Macdonald Group
plc for providing the protections afforded to clients of Collins Stewart Europe
Limited, or for giving advice to any other person in relation to the Offer, the
contents of this announcement or any other matter referred to herein.
Zeus Capital Limited, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for Braemar Group plc
and for no one else in connection with the Offer and is not advising any other
person or treating any other person as its client in relation thereto and will
not be responsible to anyone other than Braemar Group plc for providing the
protections afforded to clients of Zeus Capital Limited, or for giving advice to
any other person in relation to the Offer, the contents of this announcement or
any other matter referred to herein.
This announcement is not intended to and does not constitute an offer to sell,
or form part of, or constitute the solicitation of an offer to purchase or
subscribe for or an invitation to purchase, any securities.
In accordance with Rule 2.10 of the City Code, the current issued share capital
of Braemar comprises 172,126,380 Ordinary Shares of 1 pence each. The ISIN
number for the Ordinary Shares is GB00B012XS39.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION
WHERE IT IS UNLAWFUL TO DO SO
8 June 2010
RECOMMENDED CASH OFFER
for Braemar Group plc
by Brooks Macdonald Group plc
1 Introduction
Braemar Management, the Braemar Independent Director and the Board of Brooks
Macdonald are pleased to announce that agreement has been reached on the terms
of a recommended cash offer, to be made by Brooks Macdonald, to acquire the
entire issued and to be issued Ordinary Shares not subject to the Management
Share Purchase Agreement.
2 The Offer
The Offer, which will be subject to the conditions and further terms set out
below and in Appendix A to this announcement (and to the further terms to be set
out in the Offer Document and the Form of Acceptance), will be made on the
following basis:
2.25 pence in cash for each Ordinary Share in issue or to be issued whilst the
Offer remains open for acceptance.
This represents a premium of:
· approximately 63.6 per cent. to the Closing Price of an Ordinary
Share of 1.375 pence on 7 June 2010, being the last Dealing Day prior to the
Announcement Date; and
· approximately 58.6 per cent. to the average Closing Price of an
Ordinary Share of 1.419 pence for the six months ended 7 June 2010, being the
last Dealing Day prior to the Announcement Date.
Conditional on the Offer becoming or being declared unconditional in all
respects, Brooks Macdonald will acquire the balance of the Ordinary Shares not
the subject of the Offer through the Management Share Purchase Agreement.
Accordingly, Brooks Macdonald will offer and contract to acquire the entire
issued and to be issued share capital of Braemar.
The Offer, together with the acquisition of Ordinary Shares pursuant to the
Management Share Purchase Agreement (further details of which are referred to in
paragraph 9 below), values the entire issued and to be issued share capital of
Braemar at approximately GBP4 million.
If a person to whom the Offer is made holds a number of Ordinary Shares not
exactly divisible by four, the fraction of a penny that results in calculating
the consideration payable by Brooks Macdonald under the Offer will be rounded
down to the nearest penny.
Collins Stewart is satisfied that sufficient financial resources are available
to Brooks Macdonald to satisfy full acceptance of the Offer.
3 Background to and reasons for the Offer
As at 31 March 2010, Brooks Macdonald managed approximately GBP2.05 billion on
behalf of clients, including four onshore funds. Brooks Macdonald had already
evaluated three of Braemar's property funds with a view to investing. When
subsequently introduced to the opportunity to acquire Braemar, Brooks Macdonald
felt that it could provide capital to strengthen further Braemar's marketing, to
expand its distribution capabilities and to provide scale and liquidity to the
Braemar funds.
The Board of Brooks Macdonald believes that the acquisition of Braemar will
strengthen significantly the position of Brooks Macdonald in the fund management
market and fits with its strategy of expanding its niche range of funds. The
key expected benefits for Brooks Macdonald include:
? increased scale and distribution in the UK retail fund management
market;
? the acquisition of a range of services and niche funds complementary
to Brooks Macdonald's;
? increased exposure to the property and alternative asset management
sector;
? strengthening Brooks Macdonald's investment capabilities with the
addition of key talent; and
? expansion of Brooks Macdonald's investment offering to its own
clients.
Furthermore, Braemar has a strong management team which fits well with Brooks
Macdonald and the operation of Braemar Estates within the Braemar Group provides
significant growth opportunities.
It is intended that the business and identity of the Braemar Group will continue
substantially as it is at present.
4 Background to and reasons for recommending the Offer
Braemar was co-founded by its current Chief Executive, Marc Duschenes, in 2001,
with the intention of building a property fund management business, backed by
the development of support services in corporate finance and property
management. While the Braemar Directors are confident that the prospects of the
business as an independent company remain strong, they also recognise the
benefits of increased scale and support achieved by combining Braemar with
Brooks Macdonald. The Braemar Directors believe that, by being part of a larger
group, existing and potential investors in its niche range of funds will have
greater confidence in the ability of Braemar to increase the scale and diversity
of its funds and thereby deliver improved returns for clients.
In considering the merits of the Offer, the Braemar Independent Director has
taken into account:
? the level of the Offer, providing Braemar Shareholders with delivery
of shareholder value at an attractive level, which reflects Braemar's
achievements to date and the medium term growth prospects of the Braemar
business;
? the confirmations received from Brooks Macdonald regarding the
safeguarding of the existing employment rights of the Braemar Group employees
and the belief of Braemar that there will be significant career development
opportunities for Braemar staff within the Brooks Macdonald Group;
? the confirmation from Brooks Macdonald that it is not its present
intention to make any substantial change to the business or identity of Braemar;
and
? the fact that the Offer will provide Braemar with access to the
substantial resources of Brooks Macdonald, which should enhance the development
of the Braemar business.
The Offer provides Braemar Shareholders with an opportunity to realise their
investment in Braemar for cash at a price that represents a premium of
approximately:
? 63.6 per cent. to the Closing Price of an Ordinary Share of 1.375
pence on 7 June 2010, being the last Dealing Day prior to the Announcement Date;
and
? 58.6 per cent. to the average Closing Price of an Ordinary Share of
1.419 pence for the six months ended 7 June 2010, being the last Dealing Day
prior to the Announcement Date.
The Braemar Independent Director believes that the level of the Offer fairly
values Braemar's business, taking into account the values attributable to other
fund and property management businesses in recent transactions in the sector.
Accordingly, the Braemar Independent Director believes that Braemar Shareholders
should have this opportunity to realise their investment in Braemar.
5 Recommendation
The Braemar Independent Director, who has been so advised by Zeus Capital,
considers the Offer to be fair and reasonable and recommends to Braemar
Shareholders that they accept the Offer, as the Braemar Independent Director has
irrevocably undertaken to do in respect of his own beneficial shareholding of
4,641,667 Ordinary Shares (representing approximately 2.7 per cent. of the
existing issued Ordinary Shares and 3.7 per cent. of the Ordinary Shares to
which the Offer will relate).
In providing the Braemar Independent Director with advice, Zeus Capital has
taken into account the commercial assessments of the Braemar Independent
Director.
6 Irrevocable undertakings
Irrevocable undertakings to accept (or procure the acceptance of) the Offer and
to vote in favour of the Resolution have been received by Brooks Macdonald from:
· the Braemar Independent Director in respect of his entire beneficial
holding amounting to 4,641,667 Ordinary Shares (representing approximately 2.7
per cent. of the existing issued Ordinary Shares and 3.7 per cent. of the
Ordinary Shares to which the Offer will relate); and
· certain other shareholders in respect of, in aggregate, 64,399,998
Ordinary Shares (representing approximately 37.4 per cent. of the existing
issued Ordinary Shares and 52.0 per cent. of the Ordinary Shares to which the
Offer will relate).
Brooks Macdonald has therefore received irrevocable undertakings to accept or
procure the acceptance of the Offer in respect of, in aggregate, 69,041,665
Ordinary Shares, representing approximately 40.1 per cent. of the existing
issued Ordinary Shares and 55.7 per cent. of the Ordinary Shares to which the
Offer will relate.
All of the irrevocable undertakings will cease to be binding in the event that
the Offer lapses or is withdrawn. All of the irrevocable undertakings, other
than that given by the Braemar Independent Director, will cease to be binding in
the event that a competing offer, recommended by the Braemar Independent
Director, for a cash price of not less than 2.5 pence, is announced by a third
party in accordance with Rule 2.5 of the City Code and within five business days
thereof Brooks Macdonald has not announced a revised offer at a value equal to
or in excess of such competing offer.
Further details of the irrevocable undertakings are given in Appendix B to this
announcement.
7 Information on Brooks Macdonald
Brooks Macdonald is an integrated private client discretionary asset management
and financial advisory group, headquartered in London. It was established in
1991 and, since March 2005, has been admitted to trading on AIM. As at 7 June
2010, Brooks Macdonald's market capitalisation was approximately GBP79 million.
The Group has two operating divisions: Asset Management and Financial
Consulting. Its Asset Management division provides discretionary portfolio
management to private clients, pension funds, charities and trusts. Its
Financial Consulting division provides an independent, fee-based financial
management service across a range of clients.
As at 31 March 2010, Brooks Macdonald had approximately GBP2.05 billion of funds
under management. It has over 160 employees and has offices in London,
Hampshire, Manchester, Tunbridge Wells and Edinburgh. For the year ended 30
June 2009, the Brooks Macdonald Group reported revenue of GBP21.75 million (year
ended 30 June 2008: GBP16.78 million) and a profit before tax of GBP3.18 million
(year ended 30 June 2008: GBP2.02 million). As at 30 June 2009, the Brooks
Macdonald Group had net assets of GBP8.08 million. In the six months ended 31
December 2009 the Brooks Macdonald Group reported revenue of GBP16.38 million
and a profit before tax of GBP2.47 million.
8 Information on Braemar
Braemar, through its two core divisions, Braemar Securities and Braemar Estates,
manages a range of investment funds and property. It was established in 2001
and, since December 2005, has been admitted to trading on AIM. As at 7 June
2010, Braemar's market capitalisation was approximately GBP2.4 million.
Braemar Securities designs, promotes and manages structured financial products
and promotes its funds to high net worth individuals, via IFAs and other
regulated entities. Its range of funds comprises three open ended investment
companies investing in Agricultural Land, Student Accommodation and Ground Rents
and nine closed ended residential property funds, with an aggregate value of
funds under management of approximately GBP44 million as at 31 March 2010.
Braemar Estates provides a full management service to the property funds
operated by Braemar Securities and other institutional and private landlords.
In addition, it manages a diverse portfolio of approximately 3,100 commercial
and residential properties in the UK with a combined value, as at 31 March 2010,
of over GBP500 million on behalf of freeholders and leaseholders.
Braemar has approximately 34 employees and has its head office in Hale,
Cheshire, together with property management operations in Manchester and
Reading. For the year ended 31 March 2010, the Braemar Group reported GBP2.6
million in revenue.
9 Arrangements with Braemar Management
Management Share Purchase Agreement
Pursuant to the Management Share Purchase Agreement (which is conditional upon
the Offer becoming or being declared unconditional in all respects), Braemar
Management and the relevant members of their families have agreed to exchange
all of their existing Ordinary Shares (amounting in aggregate to 48,257,421
Ordinary Shares) for 139,851 New Brooks Macdonald Shares. For the purposes of
such exchange, the Ordinary Shares are valued at 2.25 pence per share and the
New Brooks Macdonald Shares are valued at GBP7.764 per share, being the volume
weighted average share price of Brooks Macdonald Shares over the five Dealing
Days prior to the Announcement Date.
Brooks Macdonald has also agreed, pursuant to the terms of the Management Share
Purchase Agreement, to purchase the GBP312,150 in principal amount of
Convertible Loan Notes held by Marc Duschenes and his wife in exchange for
40,205 New Brooks Macdonald Shares. For the purposes of such purchase, the New
Brooks Macdonald Shares are again valued at GBP7.764 per share, being the volume
weighted average share price of Brooks Macdonald Shares over the five Dealing
Days prior to the Announcement Date.
Braemar Management and their relevant family members will be subject to certain
lock-in arrangements in respect of the New Brooks Macdonald Shares, as set out
in the Management Share Purchase Agreement. They will not, subject to certain
carve-outs, be permitted to sell the New Brooks Macdonald Shares for a period of
one year from the date on which the Offer becomes wholly unconditional without
the consent of Brooks Macdonald and thereafter will be subject to a six month
orderly market undertaking.
Further details of the Management Share Purchase Agreement will be set out in
the Offer Document.
It is a condition of the Offer that the Independent Shareholders approve the
Management Share Purchase Agreement. Accordingly, the Resolution will be put to
the Independent Shareholders at the General Meeting, formal notice of which will
be set out in the Offer Document.
Zeus Capital, which is acting as financial adviser to Braemar, considers the
Management Share Purchase Agreement, for the purposes of Rule 16 of the City
Code, to be fair and reasonable so far as Independent Shareholders are
concerned.
Management Incentivisation Arrangements
The Braemar Management have entered into new employment contracts with Braemar,
which are conditional upon the Offer being declared wholly unconditional in all
respects. The new employment contracts include basic salaries and entitlement to
bonus arrangements on substantially similar terms to their existing service
contracts.
The Braemar Management will also be granted share options and phantom options in
line with Brooks Macdonald's existing remuneration structure. In addition, each
of the Braemar Management will receive between GBP50,000 and GBP56,000 as a one
off payment for entering into the new service contracts and reducing their
notice periods from 12 to 6 months.
Further details of the Management Incentivisation Arrangements will be set out
in the Offer Document.
Zeus Capital considers the Management Incentivisation Arrangements with the
Braemar Management to be fair and reasonable and not unusual either in the
context of the fund management industry or good practice.
10 Employees and locations
Brooks Macdonald intends that, upon the Offer becoming or being declared
unconditional in all respects, the existing contractual and statutory employment
rights and pension rights of all employees of Braemar will be fully safeguarded.
Save for the Management Incentivisation Arrangements referred to above, and
which will be summarised in the Offer Document, Brooks Macdonald's plans do not
involve any material changes to the terms of employment of Braemar's employees,
nor are there any current plans to change the principal locations of Braemar's
business.
The Braemar Independent Director has agreed to resign from the Board of Braemar
on the Offer becoming or being declared unconditional in all respects. It is
proposed that Simon Jackson and Christopher Macdonald, each directors of Brooks
Macdonald, will join the Boards of Braemar, Braemar Securities and Braemar
Estates on the Offer becoming or being declared unconditional in all respects.
11 Braemar Share Scheme
The Offer will extend to any Ordinary Shares unconditionally allotted or issued
while the Offer remains open for acceptance (or until such earlier date as,
subject to the City Code, Brooks Macdonald may decide), including those allotted
or issued as a result of the exercise of Braemar Share Options.
Appropriate proposals will be made, on or shortly after the date of the Offer
Document, to the holders of Braemar Share Options.
12 General Meeting of Braemar
Rule 16 of the City Code provides that, where the members of the offeree
company's management are shareholders in the offeree company and, as a result of
such management incentivisation arrangements, they will become shareholders in
the offeror on a basis that is not being made available to all other offeree
company shareholders, such arrangements must be approved at a general meeting of
the offeree company's shareholders, by a separate vote of independent
shareholders taken on a poll.
Accordingly, the Resolution to approve the Management Share Purchase Agreement
described in paragraph 9 above must be passed on a poll of the Independent
Shareholders at the General Meeting. As they are not Independent Shareholders
for the purposes of the City Code, Braemar Management and their connected
persons will abstain from voting on the Resolution.
Under the terms of the irrevocable undertakings referred to in paragraph 6
above, Braemar Shareholders (including the Braemar Independent Director) holding
in aggregate 69,041,665 Ordinary Shares, representing approximately 40.1 per
cent. of the existing issued Ordinary Shares and 55.7 per cent. of the Ordinary
Shares held by Independent Shareholders, have agreed to vote in favour of the
Resolution.
Zeus Capital, which is acting as financial adviser to the Braemar Independent
Director, considers the Management Share Purchase Agreement, for the purpose of
Rule 16 of the City Code, to be fair and reasonable so far as Independent
Shareholders are concerned.
13 Compulsory acquisition, cancellation of AIM admission and
re-registration
If Brooks Macdonald receives acceptances under the Offer in respect of, and/or
otherwise acquires, 90 per cent. or more of the Ordinary Shares to which the
Offer relates and the Offer becomes or is declared unconditional in all
respects, Brooks Macdonald intends to exercise its rights pursuant to the
provisions of Sections 979 to 982 (inclusive) of the Companies Act to acquire
compulsorily all remaining Ordinary Shares on the same terms as the Offer.
Assuming the Offer becomes or is declared wholly unconditional, Brooks Macdonald
intends to procure that Braemar applies to the London Stock Exchange for the
cancellation of admission of the Ordinary Shares to AIM. If this cancellation
occurs, it will significantly reduce the liquidity and marketability of any
Ordinary Shares not assented to the Offer. It is anticipated that the
cancellation of admission to AIM will take effect no earlier than the expiry of
20 business days after the date on which the Offer becomes or is declared wholly
unconditional (and will be subject to Brooks Macdonald acquiring or agreeing to
acquire Ordinary Shares carrying 75 per cent. or more of the voting rights of
Braemar).
It is also proposed that, following the Offer becoming or being declared
unconditional in all respects and after the cancellation of admission of the
Ordinary Shares to AIM, Braemar will be re-registered as a private limited
company under the relevant provisions of the Companies Act.
14 Current trading and prospects of the Braemar Group
Braemar has today issued the announcement of its audited results for the year
ended 31 March 2010.
Group revenue for the year ended 31 March 2010 was GBP2.6 million (2009: GBP2.6
million). Recurring income has increased by 45% to GBP1.3 million. With the
reduction in administration expenses to GBP1.7 million (2009: GBP1.8 million),
recurring income for the period covered 76% of administration expenses (2009:
50%), demonstrating significant progress in management's medium term goal of
recurring income covering administration expenses in full.
These factors have contributed to a reduction in the loss before tax for the
second half to GBP21,000 from the first half loss of GBP109,000, giving an
overall loss before tax for the year of GBP130,000 (2009: GBP210,000 loss).
During the year, Braemar diversified its range of Open Ended Investment
Companies ("OEICs") to include Ground Rents, launched during the summer of 2009,
adding to the existing UK Agricultural Land and Student Accommodation funds.
Funds under management have increased by more than 20% to over GBP44 million.
On 1 April 2010, Braemar Estates took over as block and lettings manager for two
landmark properties, both known as the Beetham Tower, in Manchester and in
Birmingham. These appointments, together with other contractual gains during the
year, have increased the value of assets under management by more than 100% to
over GBP500 million. As most of the increase came at or close to the year end,
the benefit of this increase will only begin to show in the current financial
year.
The Braemar Directors are pleased that the above achievements, in particular the
increase in recurring income, are providing a stable financial footing for the
Braemar Group and a platform for solid profitable growth. Current trading is in
line with the Braemar Director's expectations.
15 Disclosure of interests
Brooks Macdonald will, at the date of this announcement, make a separate public
Opening Position Disclosure as required under Rule 8.1(a) of the City Code.
Such announcement will contain details of any interests or short positions in,
or rights to subscribe for, any relevant securities of a party to the Offer for
the purposes of the City Code.
16 General
The Offer will be conditional, inter alia, upon valid acceptances being received
in respect of not less than 90 per cent. (or such lower percentage, being not
less than 50 per cent., as Brooks Macdonald decides) in nominal value of the
Ordinary Shares to which the Offer will relate. The Offer will also be
conditional on the Management Share Purchase Agreement being approved by the
Independent Shareholders at the General Meeting.
Further details of the conditions and certain further terms of the Offer are set
out in Appendix A to this announcement. Brooks Macdonald intends that the Offer
Document, setting out the full terms of the Offer, together with the Form of
Acceptance and notice of the General Meeting, will be posted to Braemar
Shareholders as soon as is reasonably practicable and, in any event (unless the
Panel permits otherwise), within 28 days after the date of this announcement.
The availability of the Offer to persons not resident in the United Kingdom may
be affected by the laws and regulations of the relevant jurisdiction in which
they are located. Persons who are not resident in the United Kingdom should
inform themselves about and observe any applicable requirements. Further
details in relation to overseas shareholders will be contained in the Offer
Document.
Appendix C contains the definitions of certain terms used in this announcement.
In accordance with Rule 19.11 of the City Code, a copy of this announcement will
be published on the following websites: www.brooksmacdonald.com and
www.braemar-group.co.uk.
Enquiries
Brooks Macdonald Group plc
Tel: +44(0)20 7499 6424
Chris Macdonald (Chief Executive)
Simon Jackson (Finance Director)
Braemar Group plc
Tel: +44(0)161 929 4969
Martin Robinson (Chairman)
Marc Duschenes (Chief Executive)
Braemar Independent Director
Tel: + 353 87 757 4857
Anthony McFarland
Collins Stewart Europe Limited
Financial adviser, Nomad and broker to Brooks Macdonald
Tel: +44(0)20 7523 8350
Bruce Garrow
Mark Connelly
Zeus Capital Limited
Financial adviser, Nomad and broker to Braemar
Tel: +44(0)161 831 1512
Alex Clarkson
Nick Cowles
Bankside Consultants
Financial PR adviser to Brooks Macdonald
Tel: +44(0)20 7367 8888
Simon Rothschild
Oliver Winters
Collins Stewart Europe Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Brooks
Macdonald Group plc and no one else in connection with the Offer and is not
advising any other person or treating any other person as its client in relation
thereto and will not be responsible to anyone other than Brooks Macdonald Group
plc for providing the protections afforded to clients of Collins Stewart Europe
Limited or for giving advice to any other person in relation to the Offer, the
contents of this announcement or any other matter referred to herein.
Zeus Capital Limited, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for Braemar Group plc
and no one else in connection with the Offer and is not advising any other
person or treating any other person as its client in relation thereto and will
not be responsible to anyone other than Braemar Group plc for providing the
protections afforded to clients of Zeus Capital Limited or for providing advice
to any other person in relation to the Offer, the contents of this announcement
or any other matter referred to herein.
This announcement is not intended to and does not constitute an offer to sell,
or form part of, or constitute the solicitation of an offer to purchase or
subscribe for or an invitation to purchase any securities. The Offer will be
made solely through the Offer Document, which together with the Form of
Acceptance will contain the full terms and conditions of the Offer.
In accordance with Rule 2.10 of the City Code, the current issued share capital
of Braemar comprises 172,126,380 Ordinary Shares of 1 pence each. The ISIN
number for the Ordinary Shares is GB00B012XS39.
Cautionary Notice Regarding Forward Looking Statements
This document contains statements about Brooks Macdonald and Braemar that are or
may be 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 statements
relating to the following: (i) future capital expenditures, expenses, revenues,
earnings, synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects; (ii) business and management
strategies and the expansion and growth of Brooks Macdonald and Braemar's
operations and potential synergies resulting from the Offer; and (iii) the
effects of government regulation on Brooks Macdonald's or Braemar's business.
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. 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. Brooks
Macdonald or Braemar disclaim any obligation to update any forward looking or
other statements contained herein, except as required by applicable law.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the City Code, any person who is interested in 1% or more
of any class of relevant securities of an offeree company or of any paper
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 paper 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 paper offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made
by no later than 3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30 pm
(London time) on the 10th business day following the announcement in which any
paper offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to the deadline
for making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in
1% or more of any class of relevant securities of the offeree company or of any
paper offeror must make a Dealing Disclosure if the person deals in any relevant
securities of the offeree company or of any paper 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 paper 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 3.30 pm
(London time) on the business day following the date of the relevant dealing.
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 paper 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).
Brooks Macdonald will, at the date of this announcement, make a separate public
Opening Position Disclosure as required under Rule 8.1(a) of the City Code.
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 Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. If you are in any doubt as to whether you are required to make
an Opening Position Disclosure or a Dealing Disclosure, you should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
Appendix A
Conditions and certain further terms of the Offer
1 Conditions of the Offer
The Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where
permitted, withdrawn) by not later than 1 pm on the first closing date of the
Offer (or such later time(s) and/or date(s) as Brooks Macdonald may, with the
consent of the Panel or in accordance with the City Code, decide) in respect of
not less than 90 per cent. (or such lower percentage as Brooks Macdonald may
decide) (i) in nominal value of the Ordinary Shares to which the Offer relates,
and (ii) of the voting rights attached to those shares, provided that this
condition shall not be satisfied unless Brooks Macdonald and/or any of its
wholly-owned subsidiaries shall have acquired or agreed to acquire, whether
pursuant to the Offer or otherwise, Ordinary Shares carrying in aggregate more
than 50 per cent. of the voting rights then normally exercisable at general
meetings of Braemar, including, for this purpose, to the extent required by the
Panel, any voting rights attaching to (or which, if issued, would attach to)
Ordinary Shares which are unconditionally allotted or issued before the Offer
becomes or is declared unconditional as to acceptances whether pursuant to the
exercise of any outstanding conversion or subscription rights or otherwise. For
the purposes of this condition:
(i) shares which have been unconditionally allotted but not issued
before the Offer becomes or is declared unconditional as to acceptances, whether
pursuant to the exercise of any outstanding subscription or conversion rights or
otherwise, shall be deemed to carry the voting rights they will carry on being
properly and validly issued;
(ii) valid acceptances shall be deemed to have been received in respect
of the Ordinary Shares which are treated for the purposes of s.979 of the
Companies Act as having been acquired or contracted to be acquired by Brooks
Macdonald by virtue of acceptances of the Offer; and
(iii) the expression "Ordinary Shares to which the Offer relates" shall be
construed in accordance with Part 28 of the Companies Act;
(b) the passing at an extraordinary general meeting of
Braemar (or at any adjournment thereof) of such resolution or resolutions as are
required pursuant to Rule 16 of the City Code by shareholders of Braemar who are
independent shareholders for the purposes of the City Code;
(c) save as Disclosed, no Third Party having decided to take,
institute, implement or threaten any action, proceeding, suit, investigation,
enquiry or reference, or enacted, made or proposed any statute, regulation,
decision or order, or having taken any other steps which would or might
reasonably be expected to:
(i) require, prevent or delay the divestiture, or materially alter the
terms envisaged for any proposed divestiture by any member of the wider Brooks
Macdonald Group or any member of the wider Braemar Group of all or any portion
of their respective businesses, assets or property or impose any limitation on
the ability of any of them to conduct their respective businesses (or any of
them) or to own or control any of their respective assets or properties or any
part thereof which, in any such case, is material in the context of the wider
Brooks Macdonald Group or the wider Braemar Group in either case taken as a
whole;
(ii) require, prevent or materially delay a divestiture by any member of
the wider Brooks Macdonald Group of any shares or other securities (or the
equivalent) in Braemar which is material in the context of the wider Braemar
Group taken as a whole;
(iii) impose any material limitation on, or result in a material delay in,
the ability of any member of the wider Brooks Macdonald Group or the wider
Braemar Group directly or indirectly to acquire or to hold or to exercise
effectively any rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or the equivalent) in any
member of the wider Braemar Group or on the ability of any such member to hold
or exercise effectively any rights of ownership in respect of shares or loans or
securities convertible into shares or any other securities (or the equivalent)
in, or to exercise management control over, any member of the wider Braemar
Group;
(iv) otherwise adversely affect the business, assets, profits or prospects
of any member of the wider Brooks Macdonald Group or of any member of the wider
Braemar Group in a manner which is adverse to and material in the context of the
wider Brooks Macdonald Group or the wider Braemar Group in either case taken as
a whole;
(v) make the Offer, its implementation or the acquisition or proposed
acquisition by Brooks Macdonald or any member of the wider Brooks Macdonald
Group of any shares or other securities in, or control or management of, Braemar
or any member of the wider Braemar Group void, illegal, and/or unenforceable
under the laws of any jurisdiction, or otherwise, directly or indirectly,
restrain, restrict, prohibit, delay or otherwise materially interfere with the
same, or impose additional material conditions or obligations with respect
thereto, or otherwise materially challenge or interfere therewith or require
material amendment to the terms thereof;
(vi) require any member of the wider Brooks Macdonald Group or the wider
Braemar Group to acquire or to offer to acquire any shares or other securities
(or the equivalent) or interest in any member of the wider Braemar Group or the
wider Brooks Macdonald Group owned by any Third Party;
(vii) impose any limitation on the ability of any member of the wider
Braemar Group or the wider Brooks Macdonald Group to conduct, integrate or
co-ordinate its business, or any part of it, with the businesses of any other
members which is adverse to, and material in the context of, the wider Braemar
Group concerned taken as a whole; or
(viii) result in any member of the wider Braemar Group ceasing to be able
to carry on business under any name under which it presently does so which, in
any case, is material in the context of the wider Braemar Group taken as a
whole,
and all applicable waiting and other time periods during which any such Third
Party could take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or any other step under the laws of any
jurisdiction in respect of the Offer or the acquisition or proposed acquisition
of any Ordinary Shares, or other securities in, or control of, Braemar or any
other member of the wider Braemar Group having expired, lapsed or been
terminated;
(d) there being no provision of any agreement, arrangement,
licence, lease, permit or other instrument to which any member of the wider
Braemar Group is a party or by or to which any such member or any of its assets
may be bound, entitled or subject, which in consequence of the Offer or the
proposed acquisition of any shares or other securities in Braemar or because of
a change in the control or management of Braemar or otherwise, could or might
reasonably be expected to result to an extent which is material in the context
of the wider Braemar Group as a whole in:
(i) any moneys borrowed by or any other indebtedness (actual or
contingent) of, or grant available to, any such member being or becoming
repayable or capable of being declared repayable immediately or earlier than
their or its stated maturity date or repayment date, or the ability of any such
member to borrow moneys or incur any indebtedness being withdrawn or inhibited
or being capable of becoming or being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence, lease, permit or
instrument or the rights, liabilities, obligations or interests of any such
member thereunder being terminated or modified or affected or any obligation or
liability arising or any action being taken thereunder;
(iii) any assets or interests of, or any asset the use of which is enjoyed
by, any such member being or falling to be disposed of or charged or ceasing to
be available to such member, or any right arising under which any such asset or
interest could be required to be disposed of or charged;
(iv) the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
such member or any mortgage, charge or other security interest (whenever created
or arising) becoming enforceable;
(v) the rights, liabilities, obligations or interests of any such member
in, or the business of any such member with, any person, firm or body (or any
arrangement or arrangements relating to any such interest or business) being
terminated, adversely modified or affected;
(vi) the value of any such member or its financial or trading position or
prospects being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business under any
name under which it presently does so; or
(viii) the creation of any liability, actual or contingent, by any such
member,
and no event having occurred which, under any provision of any agreement,
arrangement, licence, lease, permit or other instrument to which any member of
the wider Braemar Group is a party or by or to which any such member or any of
its assets may be bound, entitled or subject, could reasonably be expected to
result in any of the events or circumstances as are referred to in paragraphs
(i) to (viii) of this paragraph (d) in each case, to an extent which is material
in the context of the wider Braemar Group, taken as a whole;
(e) all necessary notifications, filings or applications
having been made in connection with the Offer and all statutory or regulatory
obligations in any relevant jurisdiction having been complied with in connection
with the Offer or the acquisition by any member of the wider Brooks Macdonald
Group of any shares or other securities in, or control of, Braemar and all
authorisations, orders, recognitions, grants, consents, licences, confirmations,
clearances, permissions and approvals reasonably deemed necessary or appropriate
by Brooks Macdonald or any member of the wider Brooks Macdonald Group for or in
respect of the Offer including without limitation, its implementation and
financing or the proposed acquisition of any shares or other securities in, or
control of, Braemar by any member of the wider Brooks Macdonald Group having
been obtained in terms and in a form reasonably satisfactory to Brooks Macdonald
from all appropriate Third Parties including, without limitation, persons with
whom any member of the wider Braemar Group has entered into contractual
arrangements and all such authorisations, orders, recognitions, grants,
consents, licences, confirmations, clearances, permissions and approvals
together with all material authorisations orders, recognitions, grants,
licences, confirmations, clearances, permissions and approvals necessary or
appropriate to carry on the business of any member of the wider Braemar Group
which are material in the context of the wider Brooks Macdonald Group or the
wider Braemar Group as a whole remaining in full force and effect and all
filings necessary for such purpose having been made and there being no notice or
intimation of any intention to revoke or not to renew any of the same at the
time at which the Offer becomes otherwise unconditional and all necessary
statutory or regulatory obligations in any jurisdiction having been complied
with;
(f) save as Disclosed, no member of the wider Braemar Group
having, since 31 March 2010:
(i) save as between Braemar and any member of the Braemar Group or
between any such members of the Braemar Group or for Ordinary Shares issued
pursuant to the exercise of options granted under the Braemar Share Scheme,
issued or agreed to issue or authorised or proposed the issue of additional
shares of any class, or securities convertible into, or exchangeable for, or
rights, warrants or options to subscribe for or acquire, any such shares or
convertible capital or transferred or sold or agreed to transfer or sell or
proposed the transfer or sale of Ordinary Shares out of treasury;
(ii) save as between Braemar and any member of the Braemar Group or
between any such members of the Braemar Group or for Ordinary Shares issued
pursuant to the exercise of options granted under the Braemar Share Scheme,
issued or agreed to issue, authorised or proposed the issue of securities
convertible into shares of any class or rights, warrants or options to subscribe
for, or acquire, any such shares or convertible securities;
(iii) other than to another member of the Braemar Group, recommended,
declared, paid or made or proposed to recommend, declare, pay or make any bonus,
dividend or other distribution whether payable in cash or otherwise;
(iv) save for intra-Braemar Group transactions; merged or demerged with
any body corporate or acquired or disposed of or transferred, mortgaged or
charged or created any security interest over any assets or any right, title or
interest in any asset (including shares and trade investments), which, in each
case, is material in the context of the wider Braemar Group or authorised or
proposed or announced any intention to propose any merger, demerger, acquisition
or disposal, transfer, mortgage, charge or security interest, in each case,
other than in the ordinary course of business;
(v) save for intra-Braemar Group transactions, made or authorised or
proposed or announced an intention to propose any change in its loan capital
which is material in the context of the Braemar Group taken as a whole;
(vi) issued, authorised or proposed the issue of any debentures or save
for intra-Braemar Group transactions and save in the ordinary course of
business, incurred or increased any indebtedness or become subject to any
contingent liability which is material in the context of the Braemar Group taken
as a whole;
(vii) purchased, redeemed or repaid or announced any proposal to purchase,
redeem or repay any of its own shares or other securities or reduced or, save in
respect to the matters mentioned in paragraph (i) above, made any other change
to any part of its share capital;
(viii) implemented, or authorised, proposed or announced its intention to
implement, any reconstruction, amalgamation, scheme, commitment or other
transaction or arrangement otherwise than in the ordinary course of business
which is material in the context of the Braemar Group taken as a whole;
(ix) entered into or changed the terms of any contract with any director
or senior executive;
(x) proposed, agreed to provide or modified the terms of any share option
scheme, incentive scheme, or, other than in the ordinary course of business,
materially altered any other benefit relating to the employment or termination
of employment of any employee of the Braemar Group;
(xi) entered into or varied or authorised or proposed or announced its
intention to enter into or vary, any contract, transaction, arrangement or
commitment (whether in respect of capital expenditure or otherwise) which is of
a long term, onerous or unusual nature or magnitude or which is or could
reasonably be expected to be materially restrictive on the businesses of any
member of the wider Braemar Group or the wider Brooks Macdonald Group or which
involves or could reasonably be expected to involve an obligation of such a
nature or magnitude or which is other than in the ordinary course of business
and which is reasonably be expected to be material in the context of the wider
Braemar Group taken as a whole;
(xii) (other than in respect of a member of the wider Braemar Group which
is dormant and was solvent at the relevant time) taken any corporate action or
had any legal proceedings started or threatened against it for its winding-up,
dissolution or reorganisation or for the appointment of a receiver,
administrative receiver, administrator, trustee or similar officer of all or any
of its assets or revenues or any analogous proceedings in any jurisdiction or
had any such person appointed;
(xiii) entered into any contract, transaction or arrangement which would be
restrictive on the business of any member of the wider Braemar Group or the
wider Brooks Macdonald Group (other than to a nature and extent which is normal
in the context of the business concerned) and which is reasonably expected to be
material in the context of the wider Braemar Group taken as a whole;
(xiv) waived or compromised any claim otherwise than in the ordinary course
of business and which is material in the context of the wider Braemar Group
taken as a whole;
(xv) made any material alteration to its memorandum or articles of
association or other incorporation documents which is material in the context of
the wider Braemar Group taken as a whole;
(xvi) been unable, or admitted in writing that it is unable, to pay its
debts or commenced negotiations with one or more of its creditors with a view to
rescheduling or restructuring any of its indebtedness, or having stopped or
suspended (or threatened to stop or suspend) payment of its debts generally or
ceased or threatened to cease carrying on all or a substantial part of its
business; or
(xvii) entered into any contract, commitment, arrangement or agreement
otherwise than in the ordinary course of business or passed any resolution or
made any offer (which remains open for acceptance) with respect to or announced
any intention to, or to propose to, effect any of the transactions, matters or
events referred to in this condition,
(g) save as Disclosed, since 31 March 2010:
(i) no adverse change or deterioration having occurred in the business,
assets, financial or trading position or profits or prospects of any member of
the wider Braemar Group;
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the wider Braemar Group is or may become a
party (whether as a plaintiff, claimant, defendant or otherwise) and no
investigation or enquiry by or complaint or reference to any Third Party against
or in respect of any member of the wider Braemar Group having been instituted,
announced or threatened by or against or remaining outstanding in respect of any
member of the wider Braemar Group;
(iii) no contingent or other liability having arisen or become apparent to
Brooks Macdonald which would be likely adversely to affect any member of the
wider Braemar Group; and
(iv) no steps having been taken which are likely to result in the
withdrawal, cancellation, termination or modification of any licence or other
authorisation held by any member of the wider Braemar Group which is necessary
for the proper carrying on of its business,
in each case, which is material in the context of the wider Braemar Group taken
as a whole;
(h) save as Disclosed, since 31 March 2010 Brooks Macdonald
not having discovered:
(i) that any financial, business or other information concerning the
wider Braemar Group as contained in the information publicly disclosed at any
time by or on behalf of any member of the wider Braemar Group is materially
misleading, contains a material misrepresentation of fact or omits to state a
fact necessary to make that information not misleading to a material extent;
(ii) that any member of the wider Braemar Group is subject to any
liability (contingent or otherwise) which is not disclosed in the Accounts and
which is material in the context of the wider Braemar Group taken as a whole; or
(iii) any information which affects the import of any information
disclosed at any time by or on behalf of any member of the wider Braemar Group
and which is material in the context of the wider Braemar Group taken as a
whole; and
(i) Brooks Macdonald not having discovered that, save as
Disclosed:
(i) any past or present member of the wider Braemar Group has failed to
comply with any and/or all applicable legislation or regulation of any
jurisdiction with regard to the disposal, spillage, release, discharge, leak or
emission of any waste or hazardous substance or any substance likely to impair
the environment or harm human health or animal health or otherwise relating to
environmental matters, or that there has otherwise been any such disposal,
spillage, release, discharge, leak or emission (whether or not the same
constituted a non-compliance by any person with any such legislation or
regulations, and wherever the same may have taken place) any of which disposal,
spillage, release, discharge, leak or emission would be likely to give rise to
any liability (actual or contingent) on the part of any member of the wider
Braemar Group and which is material in the context of the wider Braemar Group
taken as a whole;
(ii) there is, or is likely to be, for that or any other reason
whatsoever, any liability (actual or contingent) of any past or present member
of the wider Braemar Group to make good, repair, reinstate or clean up any
property or any controlled waters now or previously owned, occupied, operated or
made use of or controlled by any such past or present member of the wider
Braemar Group, under any environmental legislation, regulation, notice, circular
or order of any government, governmental, quasi-governmental, state or local
government, supranational, statutory or other regulatory body, agency, court,
association or any other person or body in any jurisdiction and which is
material in the context of the wider Braemar Group taken as a whole; or
(iii) that circumstances exist whereby a person or class of person would
be likely to have a claim in respect of any supply, product or process of
manufacture or materials used therein now or previously manufactured, sold or
carried out by any past or present member of the wider Braemar Group and which
is material in the context of the wider Braemar Group taken as a whole.
For the purposes of these conditions the "wider Braemar Group" means Braemar and
its subsidiary undertakings, associated undertakings and any other undertaking
in which Braemar and/or such undertakings (aggregating their interests) have a
significant interest and the "wider Brooks Macdonald Group" means Brooks
Macdonald and its subsidiary undertakings, associated undertakings and any other
undertaking in which Brooks Macdonald and/or such undertakings (aggregating
their interests) have a significant interest and for these purposes "subsidiary
undertaking", "associated undertaking" and "undertaking" have the meanings given
by the Companies Act and its subordinate legislation, other than paragraph
19(1)(b) Part 1 Schedule 6 to the Accounts Regulations which shall be excluded
for this purpose, and "significant interest" means a direct or indirect interest
in ten per cent or more of the equity share capital (as defined in the Companies
Act).
Brooks Macdonald reserves the right to waive, in whole or in part, all or any of
the above conditions, except conditions (a) and (b).
The Offer will lapse unless the conditions set out above (other than condition
(a)) are fulfilled or (if capable of waiver) waived or, where appropriate, have
been determined by Brooks Macdonald in its reasonable opinion to be or to remain
satisfied no later than midnight on the 21st day after the later of (i) the
first closing date of the Offer and (ii) the date on which condition (a) is
fulfilled (or in each such case such later date as Brooks Macdonald may, with
the consent of the Panel, decide). Brooks Macdonald shall be under no
obligation to waive or treat as satisfied any of the conditions (c) to (i)
(inclusive) by a date earlier than the latest date specified above for the
satisfaction thereof, notwithstanding that the other conditions of the Offer may
at such earlier date have been waived or fulfilled and that there are at such
earlier date no circumstances indicating that any of such conditions may not be
capable of fulfilment.
If Brooks Macdonald is required by the Panel to make an offer for Ordinary
Shares under the provisions of Rule 9 of the City Code, Brooks Macdonald may
make such alterations to any of the above conditions as are necessary to comply
with the provisions of that Rule.
Save with the consent of the Panel, the Offer will lapse if it is referred to
the Competition Commission before 1pm on the first closing date of the Offer or
the date on which the Offer becomes or is declared unconditional as to
acceptances, whichever is the later.
If the Offer lapses, it will cease to be capable of further acceptance. Braemar
Shareholders who have already accepted the Offer and Brooks Macdonald shall then
cease to be bound by the acceptances delivered on or before the date on which
the Offer lapses.
The Offer will not be made, directly or indirectly, in or into, or by use of the
mails of, or by any means or instrumentality (including, without limitation,
facsimile transmission, telex, telephone or e-mail) of interstate or foreign
commerce of, or of any facility of a national securities exchange of, the United
States, Canada, Japan or Australia and the Offer will not be capable of
acceptance by any such use, means, instrumentality or facility or from within
the United States, Canada, Japan or Australia.
Ordinary Shares will be acquired under the Offer by Brooks Macdonald fully paid,
free from all liens, equitable interests, charges, encumbrances, rights of
pre-emption and other rights and interests of any nature whatsoever and together
with all rights attaching thereto, including all voting rights and the right to
receive and retain all dividends and other distributions (if any) declared, made
or paid in respect of the Ordinary Shares after the date of this announcement.
The Offer, which will be made by Brooks Macdonald, will comply with the City
Code and will be subject to the jurisdiction of the courts of England and Wales
and to the terms and conditions set out below, in the Offer Document and in the
Form of Acceptance.
Unless otherwise specified, all references to time are to London time.
Appendix B
Irrevocable Undertakings to accept the Offer
Brooks Macdonald has received irrevocable undertakings to accept or procure
acceptance of the Offer in respect of, in aggregate, 69,041,665 Ordinary Shares
(representing approximately 40.1 per cent. of the existing issued Ordinary
Shares and approximately 55.7 per cent. of the Ordinary Shares to which the
Offer will relate), as detailed below:
+----------------+----------------+----------------+--------------+
| Name | No. of | % of current | % of |
| | Ordinary | issued | Ordinary |
| | Shares | Ordinary | Shares to |
| | | Shares | which the |
| | | | Offer will |
| | | | relate |
+----------------+----------------+----------------+--------------+
| Anthony | 4,641,667 | 2.7 | 3.7 |
| McFarland | | | |
+----------------+----------------+----------------+--------------+
| Ciano | 47,133,332 | 27.4 | 38.1 |
| Investments | | | |
| Limited | | | |
+----------------+----------------+----------------+--------------+
| Nigel Wray | 8,333,333 | 4.8 | 6.7 |
+----------------+----------------+----------------+--------------+
| Smith & | 8,933,333 | 5.2 | 7.2 |
| Williamson | | | |
| Nominees (on | | | |
| behalf of | | | |
| Stephen | | | |
| Hemsley) | | | |
+----------------+----------------+----------------+--------------+
| ___________ | _____________ | ____________ |____________ |
+----------------+----------------+----------------+--------------+
| TOTAL | 69,041,665 | 40.1 | 55.7 |
+----------------+----------------+----------------+--------------+
All of the irrevocable undertakings will cease to be binding in the event that
the Offer lapses or is withdrawn.
All of the irrevocable undertakings, other than that given by Anthony McFarland,
will cease to be binding in the event that a competing offer, recommended by the
Braemar Independent Director, for a cash price of not less than 2.5 pence, is
announced by a third party in accordance with Rule 2.5 of the City Code and
within five business days thereof Brooks Macdonald has not announced a revised
offer at a value equal to or in excess of such competing offer.
Appendix C
Definitions
Accounts: the annual audited report and accounts of Braemar for the financial
year ended 31 March 2010;
AIM: the market of that name operated by the London Stock Exchange;
Announcement Date: the date of this announcement;
Australia: the Commonwealth of Australia, its states, territories and
possessions;
Board of Brooks Macdonald: the directors of Brooks Macdonald;
Braemar: Braemar Group plc;
Braemar Estates: Braemar Estates (Residential) Limited;
Braemar Group: Braemar and its subsidiary undertakings;
Braemar Independent Director: Anthony McFarland, the non-executive director of
Braemar;
Braemar Management: Marc Duschenes, Martin Robinson and Jonathan Murphy;
Braemar Securities: Braemar Securities Limited;
Braemar Shareholders: holders of Ordinary Shares;
Braemar Share Options: options over Ordinary Shares granted under the Braemar
Share Scheme;
Braemar Share Scheme: the Braemar Share Option Plan, adopted by the Braemar
Board on 27 February 2007, as amended from time to time;
Brooks Macdonald: Brooks Macdonald Group plc;
Brooks Macdonald Group: Brooks Macdonald and its subsidiary undertakings;
Brooks Macdonald Shares: ordinary shares of 1 pence each in the capital of
Brooks Macdonald;
business day: a day on which the London Stock Exchange is open for the
transaction of business;
Canada: Canada, its provinces and territories and all areas subject to its
jurisdiction and any political subdivision thereof;
City Code: the City Code on Takeovers and Mergers of the United Kingdom (as
amended from time to time);
Closing Price: the closing middle market quotation of one Braemar and/or one
Brooks Macdonald share as provided by the Daily Official List of the London
Stock Exchange;
Companies Act: the Companies Act 2006 (as amended from time to time);
Convertible Loan Notes: convertible loan notes issued by Braemar under a
convertible loan note instrument relating to the issue of up to GBP887,150 fixed
rate unsecured convertible loan notes 2010;
Collins Stewart: Collins Stewart Europe Limited, financial adviser to Brooks
Macdonald;
Dealing Day: a day on which the London Stock Exchange is open for business in
the trading of securities admitted to trading on AIM;
Disclosed: (i) fairly disclosed in the Accounts or (ii) publicly announced by
Braemar prior to the Announcement Date through a regulatory information service
or (iii) fairly disclosed in writing by or on behalf of Braemar to Brooks
Macdonald prior to the Announcement Date;
Form of Acceptance: the form of acceptance relating to the Offer which will
accompany the Offer Document;
FSA: the Financial Services Authority or any successor body thereto;
FSMA: the Financial Services and Markets Act 2000 (as amended from time to
time);
General Meeting: the extraordinary general meeting of Braemar (notice of which
will be set out in the Offer Document) in order to propose the Resolution, or
any adjournment thereof;
Independent Shareholders: Braemar Shareholders excluding Braemar Management and
their connected persons;
Japan: Japan, its cities and prefectures, territories and possessions;
London Stock Exchange: London Stock Exchange plc;
Management Incentivisation Arrangements: the arrangements with Braemar
Management referred to in paragraph 9 of this announcement under the heading of
management incentivisation arrangements, which will be described in more detail
in the Offer Document;
Management Share Purchase Agreement: the agreement between Brooks Macdonald,
Braemar Management and Jennie Duschenes relating, among other things, to the
acquisition of the Ordinary Shares and the Convertible Loan Notes beneficially
owned by Braemar Management and their immediate families, further details of
which will be set out in the Offer Document;
New Brooks Macdonald Shares: ordinary shares of 1 pence each in the capital of
Brooks Macdonald issued to Braemar Management under the terms of the Management
Share Purchase Agreement;
Offer: the recommended cash offer to be made by Brooks Macdonald to acquire all
of the issued and to be issued Ordinary Shares which are not subject to the
Management Share Purchase Agreement, on the terms and subject to the conditions
set out in this announcement and to be set out in the Offer Document and the
Form of Acceptance (and, where the context so requires, any subsequent revision,
variation, extension or renewal of such Offer);
Offer Document: the document to be sent to Braemar Shareholders which will
contain, inter alia, the terms and conditions of the Offer;
Ordinary Shares: the ordinary shares of 1 pence each in the capital of Braemar;
Panel: the Panel on Takeovers and Mergers;
Pounds sterling or GBP: UK pounds sterling (and references to "pence", "penny"
or "p" shall be construed accordingly);
Resolution: the resolution to approve the Management Share Purchase Agreement,
which will be set out in the notice of General Meeting in the Offer Document;
South Africa: the Republic of South Africa;
"subsidiary", "subsidiary undertaking", "undertaking" and "associated
undertaking" have the meanings given by the Companies Act, other than paragraph
20(1)(b) of Schedule 4A to that Act which shall be excluded for this purpose,
and "significant interest" means a direct or indirect interest in 10 per cent.
or more of the equity share capital (as defined in that Act) of any undertaking;
Third Party: any government, government department or governmental,
quasi-governmental, supranational, statutory, regulatory, environmental or
investigative body, court, stock exchange, trade agency, association,
institution or any other body or person whatsoever in any jurisdiction (and the
expression "Third Parties" shall be construed accordingly);
UK or United Kingdom: the United Kingdom of Great Britain and Northern Ireland;
United States or USA: the United States of America, its territories and
possessions, any state of the United States of America and the District of
Columbia, and all other areas subject to its jurisdiction; and
Zeus Capital: Zeus Capital Limited, financial adviser to Braemar.
Words importing the singular shall include the plural and vice versa, and words
importing the masculine gender shall include the feminine or neutral gender.
All times referred to in this announcement are London times.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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