22 May 2023

More Acquisitions plc

("More" or the "Company")

Update on Proposed Acquisition of Megasteel

Further to the Company's announcement of 23 September 2022, More announces a further update regarding the Company's proposed conditional acquisition of Megasteel Ltd ("Megasteel",  the "Acquisition").

The Directors are pleased to confirm that the Acquisition is progressing and that completion and re-listing of the Company as enlarged by the Acquisition (the "Enlarged Group") is expected early in Q3 2023. Prior to the re-listing, a General Meeting will be held whereby More shareholders will, inter alia, be asked to approve a waiver by the Takeover Panel of the obligation that would otherwise arise for Megasteel to make a general offer for the Enlarged Group under the Rule 9 of the Takeover Code ("Whitewash Resolution").

Megasteel is a cash flow positive , profitable, business, which reported audited post tax profits of £5.34 million, on revenue of £30 million, in its financial year ended 31 October 2022.  As at that date, Megasteel had cash of approximately £10 million and therefore has no requirement to raise any additional funds.

The conditional Heads of Terms (the "HoTs") entered into by the Company and Megasteel in September 2022 however did provide for an element of the proposed overall consideration, amounting to approximately £2.5million, to be raised by the Company and paid by More to Megasteel's owners in cash on completion, subject to prevailing market conditions.

Following a review of such market conditions by the Company, Megasteel and their professional advisers, and in light of the continuing robust pro-forma financial position of the Enlarged Group, the Company has agreed with Megasteel that it should no longer seek to raise any funds in connection with the Acquisition and re-listing. As a consequence of this decision, the entirety of the proposed consideration to be paid by More for Megasteel will now be paid via the issuance of new More shares to the vendors on completion.

As a result of  the above changes, the Company and Megasteel have also now agreed the following additional amendments to the original Heads of Terms;

·    The consideration payable for the Acquisition will now be £31.5 million, and not the initial figure of between £52 million-£65.5 million (inclusive of the £2.5million cash element) as outlined in the September 2022 HoTs.

·    No deferred consideration will now become payable to the Megasteel vendors, with the £31.5 million being the full and final payment for 100% of the share capital of Megasteel.

·    At the same time, it has now been agreed that the value attributable to the Company on completion should also be reduced pro-rata, from £2.81 million to approximately £625,000, or 0.5p per share.

The Directors believe that this material reduction in valuations retains the relative post-completion ownership of the Enlarged Group , and, equally importantly, makes the Enlarged Group an even more attractive long-term investment prospective for all existing and future stakeholders. The Board acknowledges the outstanding commitment given to this future by the current owners of Megasteel in terms of now forgoing any form of cash consideration as part of the revised terms of the Acquisition, and we look forward to seeking the necessary shareholder approvals to complete this Acquisition in the near future

Further updates about the Acquisition's progress will be made in due course.

Rod McIllree, Executive Director of More Acquisitions plc, said:

"The Company is focussed on completing the Acquisition. Given difficult markets, it is fortunate that the Enlarged Group finds itself in the position of not having to raise new funds in order to close the transaction. Therefore, we have restructured the terms of the agreement to eliminate the market 'risk' in terms of completion.

We are confident that shareholders can expect completion of the deal in the next quarter, subject to FCA and other relevant approvals."

Enquiries: 

More Acquisitions plc

Rod McIllree/ Charles Goodfellow

Peterhouse Capital Limited   +44 (0)20 7469 0930

Financial Adviser

Narisha Ragoonanthun/ Guy Miller/ Brefo Gyasi 

Broker

Lucy Williams/ Duncan Vasey