RNS Number : 9230Q
Northern Bear Plc
23 October 2023
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE USA, SINGAPORE, THE REPUBLIC OF SOUTH AFRICA AND ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE UK VERSION OF THE MARKET ABUSE REGULATION (EU 596/ 2014) AS IT FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED

 

23 October 2023

Northern Bear plc

("Northern Bear", the "Company" or, together with its subsidiaries, the "Group")

 

Proposed return of capital of up to £3.1 million by way of Tender Offer for up to 5,000,000 Ordinary Shares at a fixed price of 62 pence per Ordinary Share

Notice of General Meeting

Trading Update

 

Northern Bear (LSE:NTBR), the AIM quoted holding company of the group of companies providing specialist building and support services headquartered in Northern England and serving customers across the UK, is pleased to announce a proposed return of capital of up to £3.1 million by way of a Tender Offer for up to 5,000,000 Ordinary Shares at a fixed price of 62 pence per Ordinary Share (the "Tender Offer"), pursuant to which Shareholders are invited to tender some or all of their Ordinary Shares for purchase by the Company. The maximum number of Ordinary Shares that could be purchased under the Tender Offer will be 5,000,000, which is equivalent to 26.7 per cent. of the Current Issued Ordinary Shares as at the Record Date and at a price of 62 pence per Share (the "Tender Price").

The Tender Price of 62 pence per Ordinary Share represents:

?     a premium of 39.3 per cent. to the closing price of 44.5 pence per Ordinary Share on the Latest Practicable Date; and

?     a premium of 26.0 per cent. to the volume weighted average price per Ordinary Share over one month prior to the Latest Practicable Date.

The Company expects to post a circular (the "Circular") to Shareholders today explaining details of the Tender Offer and including a Notice of General Meeting detailing a proposed ordinary resolution authorising the Company to repurchase up to 5,000,000 Ordinary Shares (the "Resolution"). The Resolution shall be proposed at the General Meeting which will be convened at 10:00 a.m. on 15 November 2023.

A copy of the Circular will be published on the Company's website at www.northernbearplc.com later today and will be posted to shareholders. A Tender Form for use by Shareholders who hold their Ordinary Shares in Certificated Form in connection with the Tender Offer is also being sent together with the Circular.

 

RECOMMENDATION

As Shareholders are aware, the Board has undertaken a review of strategic options for the Company and its approach to capital allocation.

The Board has also undertaken a more proactive approach to investor relations, including the appointment of Hybridan as corporate broker to the Company, which has resulted in Hybridan initiating research coverage and earnings forecasts.

As part of this strategic review, the Board explored potential exit options for all Shareholders, including Jeff Baryshnik, as the Company's largest shareholder. Having concluded this strategy review, as announced on 5 April 2023, the Company's Executive Directors, Keith Soulsby and Thomas Hayes, subsequently proposed that the Company undertake the Tender Offer primarily as an accretive event for Shareholders and secondarily as a means of shareholders who wish to sell their investments, including Jeff Baryshnik, exiting their investments in an orderly manner, while still ensuring the Company could secure sufficient funding to pursue its growth strategy.

The Board considers the Tender Offer, the resultant repurchases of Ordinary Shares into treasury, and, therefore, the passing of the Tender Offer Resolution to be in the best interests of the Company and Shareholders as a whole; and therefore, unanimously recommends that Shareholders vote in favour of the Tender Offer Resolution.

The Board does not however make any recommendation to Shareholders as to whether or not to tender any or all or their Ordinary Shares pursuant to the Tender Offer. Such a decision is reserved solely for individual Qualifying Shareholders and any such Shareholders who are in any doubt as to whether or not to tender some or all of their Ordinary Shares should take their own independent financial advice from their stockbroker, bank manager, solicitor, accountant or other appropriate independent financial adviser duly authorised under FSMA if they are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

 

RATIONALE

The Board believes that the Tender Offer outlined above is in the Company and Shareholders' best interests for the following reasons:

·    The Tender Offer is expected to be accretive to earnings per share from completion of the Tender Offer and for the financial year commencing 1 April 2024 onwards.

·    The Tender Offer would enhance the Company's capital structure. The Company would fund the Tender Offer using its existing cash resources and an increase of £1.0 million to its existing debt facilities of £4.5 million from its bank, Clydesdale Bank plc (trading as Virgin Money), with modest leverage required in relation to historical profit levels.  The Group currently has no bank debt and had a net cash position at the last financial year end of £3.2 million, although the year-end position is ordinarily the high point of the financial year and there are significant movements in net cash on a week-to-week basis.  The average month-end balance since 1 April 2023 was £1.3 million net cash and the low point during the same period was £0.6 million net debt.

·    The Tender Offer would create an exit strategy for Shareholders who wish to sell their investments, including Jeff Baryshnik.

·    The Tender Offer would remove the prolonged uncertainty that an overhang of shares would create, should any significant Shareholders wish to sell their holdings through the market. 

·    The Tender Offer is offered at a premium to the current share price and at a discount to the 52-week high price of sixty-four pence (£0.64) per Ordinary Share reached during August 2023.

·    The Tender Offer is open to all Shareholders (but will not be taken up by those Directors, PDMRs and/or major Shareholders who have signed irrevocable undertakings not to tender their holdings of Ordinary Shares pursuant to the Tender Offer, as detailed below), on an equal basis, with approval being granted at a Company General Meeting, giving Shareholders the ability to vote on the proposal and to participate in the Tender Offer. 

 

DIRECTOR AND SUBSTANTIAL SHAREHOLDER INTENTIONS

Jeff Baryshnik (the Company's Non-Executive Chairman) and Cedarvale Holdings Ltd., a company owned by Jeff Baryshnik, have signed an irrevocable undertaking to vote in favour of the Tender Offer Resolution to be proposed at the General Meeting and to tender their combined shareholding of, in aggregate, 4,736,717 Ordinary Shares in the Tender Offer.

The Company's other Board members and PDMRs holding Ordinary Shares, being Steven Mark Roberts (who was previously a director of the Company and remains a director of its subsidiaries)  Thomas Edward Hayes (Finance Director), Keith Soulsby (Operations Director), and the Company's second largest shareholder, Nicholas Beaumont-Dark, have signed irrevocable undertakings to vote in favour of the Tender Offer Resolution and to NOT participate in the Tender Offer on the basis that it is accretive to Shareholders. They wish to retain their holdings and believe that there is greater long-term value in the Company than represented by the Tender Price. 

The non-participating irrevocable undertakings apply to the following holdings:

Shareholder

Number of Ordinary Shares

Steven Mark Roberts

813,300

Thomas Edward Hayes

80,000

Keith Soulsby

557,820

Nicholas Beaumont-Dark

3,253,500

Total:

4,704,620

 

EFFECT OF IRREVOCABLES NOT TO ACCEPT THE TENDER OFFER

After deducting the irrevocables detailed above the maximum number of shares that can be tendered by qualifying Shareholders is 14,020,656.

Therefore, Shareholders will be able to tender a minimum of 35.6% of their holdings if they so wish.

The Company and registrars will endeavour to not leave tendering Shareholders with an uneconomic small shareholding.

BOARD CHANGES

On conclusion of the General Meeting, assuming the Tender Offer Resolution is passed, Jeff Baryshnik will retire from his role as Chairman and as a Board Director of the Company and its subsidiaries. At such time, Harry Samuel, one of the Company's current Non-Executive Directors, would take the position of Interim Non-Executive Chairman until the Board has identified and appointed a permanent successor.

UPDATE ON TRADING

The Company last provided a trading update on 12 September 2023 in advance of its Annual General Meeting. It stated that the Group had continued to trade in line with management's expectations since publication of the preliminary results on 17 July 2023 and that trading in the new financial year from 1 April to 31 July was ahead of strong prior year results for the same period. It also stated that site activity levels remain high despite the ongoing economic challenges and their related impact on the construction industry.

The Board is pleased to reiterate this update and to state that trading in the period from 1 April 2023 to 31 August 2023 has been ahead of strong prior year results. The Board intends to provide a further trading update, including commentary on the expected financial performance for the six-month period to 30 September 2023, in the week commencing 30 October 2023 in order to allow Shareholders to make decisions based on the expected half-year results.

The Group's interim financials for the 6-month period to 30 September 2023 are expected to be released in late November 2023, at which point the Board will provide further guidance on expected full year results. The Board continues to monitor ongoing uncertainties in the macroeconomic climate in which the Company operates, including the challenges of attracting and retaining high quality employees in the construction industry as has been noted in previous trading updates.

The Board has arranged for Link Group (the Company's registrar), acting as agent on the Company's behalf, to undertake and conduct the Tender Offer for up to 26.7 per cent. of the Current Issued Ordinary Shares at the Tender Price (being 62 pence per Ordinary Share). Link Group, will, subject to completion of the Tender Offer and in accordance with its terms, arrange for the payment of the Tender Price in cash to successful tendering Shareholders in accordance with the terms of the Tender Offer (as set out in Part 4 of the Circular - Details of the Tender Offer).

Further details on the Tender Offer and the rationale are set out below.

 

For further information, please contact:

Northern Bear PLC

Jeff Baryshnik - Non-Executive Chairman

Tom Hayes - Finance Director

+44 (0) 166 182 0369

 

 

 

Strand Hanson Limited (Nominated Adviser)

James Harris

James Bellman

+44 (0) 20 7409 3494

 

Hybridan LLP (Nominated Broker)

Clarie Louise Noyce

+44 (0) 20 3764 2341

 

 

 

Expected timetable of principal events with respect to the Tender Offer

Action

Date

Announcement and open of the Tender Offer and issue of the Circular

23 October 2023

Latest time and date of receipt of Forms of Proxy for the General Meeting

10:00 a.m. on 13 November 2023

General Meeting

15 November 2023

Announcement of results of General Meeting

15 November 2023

Latest time and date for receipt of Tender Forms and share certificates or other documents of title for tendered Certificated Ordinary Shares (i.e. close of the Tender Offer)

1:00 p.m. on 22 November 2023

Latest time and date for settlement of TTE Instructions for tendered Uncertificated Ordinary Shares (i.e. close of the Tender Offer)

1:00 p.m. 22 November 2023

Record Date for the Tender Offer

6:00 p.m. on 22 November 2023

Announcement of the results of the Tender Offer

29 November 2023

Settlement Date for the Tender Offer and purchase of Ordinary Shares under the Tender Offer

8 December 2023

CREST accounts credited for revised Uncertificated shareholdings of Ordinary Shares (in the case of unsuccessful tenders for entire holdings of Ordinary Shares)

8 December 2023

CREST accounts credited in respect of Tender Offer proceeds for Uncertificated Ordinary Shares

8 December 2023

Cheques despatched in respect of Tender Offer proceeds for Certificated Ordinary Shares

8 December 2023

Return of share certificates in respect of unsuccessful tenders of Certificated Ordinary Shares

8 December 2023

Despatch of balance share certificates in respect of unsold Ordinary Shares in Certificated Form

8 December 2023

 

FURTHER INFORMATION REGARDING THE TENDER OFFER

Details of the Tender Offer

The Tender Offer is conditional upon the Tender Conditions (detailed in paragraph 2.1 of Part 4 (Details of the Tender Offer) of the Circular) being satisfied; and, subject to satisfaction of the same, the Tender Offer enables Qualifying Shareholders who wish to realise some of their investment in Ordinary Shares to elect to do so (subject to the overall limits applicable to the Tender Offer). The Tender Offer is being made for up to 26.7 per cent. of the Company's Current Issued Ordinary Shares, and each Qualifying Shareholder is entitled to tender their entire holding of Ordinary Shares (or a proportion thereof) if they so choose. There is no obligation on a Qualifying Shareholder to tender any of their shares.

The maximum number of Ordinary Shares to be acquired under the Tender Offer is 5,000,000 Ordinary Shares, representing 26.7 per cent. of the Ordinary Shares in issue as at the Latest Practicable Date. If Qualifying Shareholders tender shares in excess of this Tender Cap, Link Group, in consultation with the Company will allocate the tendered shares between the tendering Shareholders in accordance with paragraph 5 of Part 4 (Details of the Tender Offer) of the Circular; and the Company shall only be obliged to purchase from those tendering Shareholders such number of tendered shares as Link Group have allocated.

Whilst the Tender Offer is conditional upon the Tender Offer Conditions being satisfied, it is not conditional on the Ordinary Shares trading at a discount to the Tender Price as at the Tender Deadline Date (i.e. in the event that Ordinary Shares are trading at a premium to the Tender Price as at the Tender Deadline Date, Qualifying Shareholders who tender Ordinary Shares may receive less than they could otherwise be able to realise in the market).

Ordinary Shares which are tendered for acceptance under the Tender Offer may not be sold, transferred, charged or otherwise disposed of, and elections to tender Ordinary Shares are irrevocable.

The Tender Offer will only be open to Qualifying Shareholders whose names appear on the Register at the Record Date and only in respect of the Ordinary Shares continually held from that date until completion of the Tender Offer.

The Tender Offer is subject to certain conditions set out in paragraph 2.1 of Part 4 (Details of the Tender Offer) of the Circular. In addition, the Tender Offer may be suspended or terminated in limited circumstances, as set out in paragraph 2.20 of Part 4 (Details of the Tender Offer) of the Circular.

There is no guarantee that any or all Ordinary Shares tendered will be repurchased by the Company.

Available courses of action for Qualifying Shareholders

1.    Tender none of their Ordinary Shares

2.    Apply to tender all of their Ordinary Shares

3.    Apply to tender a proportion only of their Ordinary Shares

Restricted Shareholders and other Overseas Shareholders

The Tender Offer is not being made to those Shareholders who are resident in, or citizens of, a Restricted Jurisdiction. In particular the Tender Offer is not being made, directly or indirectly, in or into or by the use of mails by any means or instrumentality (including, facsimile transmission, internet, telex and telephone) of interstate or foreign commerce, or any facility of a national securities exchange, of the United States, nor is it being made, directly or indirectly, in or into the United States, Canada, Australia, New Zealand, the Republic of South Africa or Japan and the Tender Offer cannot be accepted by any such use means, instrumentality or facility from within the United States, Canada, Australia, New Zealand, the Republic of South Africa or Japan.

It is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of any legal requirements in their jurisdiction, including, without limitation, any relevant requirements in relation to the ability of such holders to participate in the Tender Offer.

Costs and expenses of the proposals

The costs and expenses relating to the Tender Offer will be borne by the Company. The fixed costs and expenses relating to the Tender Offer up to the Tender Deadline Date and assuming that the Tender Offer is taken up in full, are not expected to exceed an aggregate of approximately £400,000 (inclusive of VAT but excluding fees calculated as a product of the total number of Ordinary Shares repurchased).

Taxation

Qualifying Shareholders who sell their Ordinary Shares in the Tender Offer may, depending on their individual circumstances, incur a liability to taxation. Qualifying Shareholders who are in any doubt as to their tax position or who are subject to tax in a jurisdiction other than the United Kingdom should consult an appropriate professional adviser.

Tender Offer Resolution

In summary, the Tender Offer Resolution seeks the Shareholders authority to the Company to purchase up to 5,000,000 Ordinary Shares at the Tender Price pursuant to the Tender Offer. The Tender Offer Resolution is proposed as an ordinary resolution and thus requires in excess of fifty per cent. of the votes cast at the General Meeting to be in favour of it in order for it to be passed.

The Company will only implement the Tender Offer if the Tender Offer Resolution is passed at the General Meeting.

 

ACTION TO BE TAKEN

General Meeting

Shareholders are asked to complete and return the Form of Proxy in accordance with the instructions printed thereon so as to be received as soon as possible and, in any event, by no later than 10:00 a.m. on 13 November 2023.

If the Board believes it has become necessary or appropriate to make alternative arrangements for the holding of the General Meeting, it will ensure that Shareholders are given as much notice as possible. Any further information will be made available by an announcement through an RIS and through the Company's website.

Shareholders are requested to complete and return a Form of Proxy in accordance with the instructions thereon.

Tender Offer

Shareholders are not obliged to tender any Ordinary Shares and, if they do not wish to participate in the Tender Offer, they should not complete or return their Tender Form or submit a TTE Instruction in CREST.

Procedure for tendering Ordinary Shares

Certificated Qualifying Shareholders - Shareholders, other than Restricted Shareholders, who hold shares in Certificate Form and wish to tender any of those Certificated Ordinary Shares should complete the Tender Form in accordance with the instructions set out therein and return the completed Tender Form using the enclosed reply-paid envelope to the Receiving Agent Link  Group,  Corporate  Actions, Central Square, 29 Wellington Street, Leeds LS1 4DL, so as to arrive as soon as possible and, in any event, by no later than 1:00 p.m. on the Tender Deadline Date. Share certificate(s) and/or other document(s) of title in respect of the Ordinary Shares tendered should be sent with the Tender Form.

Uncertificated Qualifying Shareholders - Shareholders, other than the Restricted Shareholders, holding Ordinary Shares in Uncertificated Form who wish to tender any of those Uncertificated Ordinary Shares should transmit the appropriate TTE Instruction in CREST as set out in paragraph 3.3 of Part 4 (Details of the Tender Offer) of the Circular so as to be received as soon as possible and, in any event, by no later than 1:00 p.m. on the Tender Deadline Date.

Qualifying Shareholders should note that, once tendered, Ordinary Shares may not be sold, transferred, charged or otherwise disposed of other than in accordance with the terms of the Tender Offer.

Tender Forms or TTE Instructions which are received by the Receiving Agent after 1:00 p.m. on the Tender Deadline Date or which at that time are incorrectly completed or not accompanied by all relevant certificates, documents or instructions may be rejected and returned to the relevant Shareholders or their appointed agents, together with any accompanying share certificate(s) and/or other document(s) of title.

Link Group reserves the right to treat as valid Tender Forms or TTE Instructions which are not entirely in order and which are not accompanied (in the case of Ordinary Shares held in certificated form) by the relevant share certificate(s) and/or other document(s) of title or a satisfactory indemnity in lieu thereof.

Full details of the procedure for tendering Ordinary Shares are set out in Part 4 (Details of the Tender Offer) of the Circular and, in the case of Ordinary Shares held in Certificated Form only, on the Tender Form.

If you do not wish to tender any of your Ordinary Shares, you should not complete and return a Tender Form or submit a TTE Instruction in respect of the Tender Offer.

 

RELATED PARTY TRANSACTION

As outlined above, Jeff Baryshnik (Non-Executive Chairman of the Company) and Cedarvale Holdings Ltd hold, in aggregate, 4,736,717 Ordinary Shares, representing approximately 25.3 per cent. of the Company's total voting rights. The irrevocable undertaking provided by Jeff Baryshnik and Cedarvale Holdings Ltd to tender their combined shareholding of, in aggregate, 4,736,717 Ordinary Shares in the Tender Offer is deemed to constitute a related party transaction under Rule 13 of the AIM Rules for Companies. The independent Directors in respect of such arrangement, being all Directors excluding Jeff Baryshnik, having consulted with Strand Hanson (in its capacity as the Company's Nominated Adviser), consider that the terms of Mr Baryshnik and Cedarvale Holdings Ltd's participation in the Tender Offer are fair and reasonable insofar as Shareholders are concerned.

 

TAKEOVER CODE

Rule 9 of the Takeover Code ("Rule 9") applies to any person who acquires an interest in shares which, when taken together with shares in which persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code. Any such person is required to make a general offer to all Shareholders of that company to acquire their shares in cash at not less than the highest price paid by such person, or by any person acting in concert with him, for any interest in shares within the 12 months prior to the offer. Such an offer under Rule 9 must also be made where any person who, together with persons acting in concert with him, holds not less than 30 per cent. but not more than 50 per cent. of the voting rights in the Company and such person, or any person acting in concert with him, acquires an interest in any other shares which increase the percentage of shares carrying voting rights in which he is interested.

When a company purchases its own voting shares, any resulting increase in the percentage of voting rights held by a Shareholder, or group of shareholders acting in concert, will be treated as an acquisition for the purposes of Rule 9.

The Board has carefully considered the Company's share register and potential Shareholder groupings that may be considered to be acting in concert and, based on the information available and due consultation with the Panel, does not believe that any individual Shareholder (and any persons with whom they are acting in concert) holds (or would hold, on completion of the Tender Offer) 30 per cent. or more of the voting rights as a result of the Tender Offer.

However, Shareholders (including any persons with whom they are considered to be acting in concert) with significant holdings that do not tender their existing holdings under the Tender Offer, should be aware that their proportionate voting rights will increase following implementation of the Tender Offer and should therefore have regard to their potential resultant maximum voting rights, following implementation of the Tender Offer in full and any potential consequential obligations under Rule 9 of the Takeover Code. Such significant Shareholders should also be cognisant of thresholds under Rule 9 in respect of their own holding and anyone acting in concert with them when considering any additional acquisitions of Ordinary Shares.

 

CONCLUSION

The Board believes that the Tender Offer is the best way to enhance the Company's capital structure and achieve an immediate return of capital to Shareholders, something which the Board strongly and unanimously believes is in the best interests of the Company and its Shareholders as a whole (a view which is separately supported by the Independent Directors unanimously).

Accordingly, the Board unanimously recommends that Shareholders vote, or procure the vote, in favour of the Tender Offer Resolution to be proposed at the General Meeting. The Directors intend to vote in favour of the Tender Offer Resolution in respect of their holdings of Ordinary Shares amounting to 5,274,537 Ordinary Shares, in aggregate (representing approximately 28.7 per cent. of the Current Issued Ordinary Shares).

However, the Board is not making any recommendation to Shareholders as to whether tendering Ordinary Shares under the Tender Offer is in their own individual best interests.

Whether or not Qualifying Shareholders decide to accept the Tender Offer in respect of any or all of their Ordinary Shares is a decision solely for those individual Qualifying Shareholders.

Whether or not Shareholders decide to tender their Ordinary Shares will depend, amongst other factors, on their view of the Circular and their own individual circumstances, including their own financial and tax positions and investment objectives. Qualifying Shareholders are advised to take independent advice in relation to the tax implications for them of selling Ordinary Shares pursuant to the Tender Offer.

The Directors (other than Jeff Baryshnik) will not tender any of their own Ordinary Shares. Jeff Baryshnik and Cedarvale Holdings Ltd, a company owned and controlled by Jeff Baryshnik (for which he acts as a representative on the Board), have irrevocably undertaken to accept the Tender Offer in respect of their entire combined holdings of Ordinary Shares and to vote in favour of the Tender Offer Resolution.

The Board reserves the right not to proceed with the Tender Offer (and the resultant repurchases of Ordinary Shares) if it concludes, at any time prior to the announcement of the results of the Tender Offer and/or the Settlement Date, that the implementation of the Tender Offer (and the associated repurchases of Ordinary Shares) is or are no longer in the interests of the Company and the Shareholders as a whole and/or the Company is no longer in a position to carry out those repurchases in accordance with the requirements of the CA 2006.

 

DEFINITIONS

In this announcement, the following definitions apply unless the context requires otherwise:

AIM

means the market of that name (and formerly known as the Alternative Investment Market) which is operated by the London Stock Exchange.

AIM Rules

means the AIM Rules for Companies published by the London Stock Exchange (as amended, restated or replaced from time to time).

Articles

means the Company's articles of association (as in force for the time being).

Board or Directors

means the Company's board of directors for the time being (and/or, as the context requires, any individual director or committee of the directors to whom the Board has delegated any of its functions in accordance with the Articles).

Broker or Hybridan

means Hybridan LLP (as corporate broker to the Company).

Business Day

means any day (other than a Saturday, Sunday or public holiday in England) on which banks in the City of London are generally open for transaction business.

CA 2006

means the Companies Act 2006.

Certificated

means, in respect of any Ordinary Shares, that they are recorded in the Register as not being in Uncertificated Form (and reference to in Certificated Form or similar expression shall be construed accordingly).

Circular

means the Circular (including, all of its sections, parts and annexures).

Company or Northern Bear

means Northern Bear plc (incorporated and registered in England and Wales with company number 05780581).

CREST

means the relevant system (as defined in the CREST Regulations) for paperless settlement of share transfers and the holding of shares in uncertificated form which is administered by Euroclear.

CREST Manual

means the compendium of documents entitled  CREST  Manual issued by Euroclear from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, the CREST Rules, CCSS Operations Manual and the CREST Glossary  of  Terms.

CREST Member

means a    person    who    has    been    admitted    by    Euroclear    as    a system-member (as defined in the CREST Regulations).

CREST Participant

means a person who is, in relation to CREST, a  system-participant (as  defined  in  the  CREST Regulations).

CREST Regulations

means the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755).

CREST Rules

means the rules from time to time issued by Euroclear governing the admission of securities to and the operation of the CREST UK System.

CREST Sponsor

means a CREST Participant admitted to CREST as a CREST sponsor being a sponsoring system-participant (as defined in the CREST Regulations).

CREST Sponsored Member

means a CREST Member admitted to CREST as a sponsored member.

CREST UK System

means the facilities and procedures of the  relevant  systems  of which Euroclear  is  the  approved  operator  pursuant  to  the  CREST Regulations.

Current Issued Ordinary Shares

means the Issued Share Capital as at the Latest Practicable Date, being 18,725,276 Ordinary Shares (excluding the 292,040 Ordinary Shares held in treasury).

Euroclear

means Euroclear UK & International Limited.

Existing Buyback Authority

the existing general authority to purchase up to 936,263 Ordinary Shares (representing 5 per cent of the Current Issued Ordinary Shares) granted to the Company by the Shareholders by a special resolution passed at the annual general meeting of the Company held on 12 September 2023.

FCA

means the Financial Conduct Authority of the UK.

Form of Proxy

means the form of proxy relating to the General Meeting which accompanies the Circular.

FSMA

means the Financial Services and Markets Act 2000.

General Meeting

means the general meeting of the Company to be held at the Company's registered office, A1 Grainger, Prestwick Park Prestwick, Newcastle Upon Tyne, NE20 9SJ at 10:00 a.m. on 15 November 2023  (and includes any adjournment of it).

Group

means the Company and each of its subsidiary undertakings.

Independent Directors

means the Directors excluding:

(a)          Jeff Matthew Baryshnik;

(b)          Thomas Edward Hayes; and

(c)           Keith Soulsby

 

(Jeff Matthew Baryshnik, Thomas Edwards Hayes and Keith Soulsby, being Directors and Shareholders who have provided irrevocable undertakings in respect of their participation in the Tender Offer).

 

Issued Share Capital

means the Company's issued ordinary share capital from time to time (excluding any treasury shares).

ITA 2007

means the Income Tax Act 2007.

Latest Practicable Date

means 20 October 2023, being the latest practicable date prior to the publication of the Circular.

London Stock Exchange

means London Stock Exchange plc.

Member Account ID

means the   identification   code   or   number   attached   to   any  member account in CREST.

Nomad or Strand Hanson

means Strand Hanson Limited (as Nominated Adviser to the Company).

Notice of General Meeting

the notice of the General Meeting forming part of, and appended to, the Circular (and includes any notice of any adjournment of that meeting).

Ordinary Shares

means ordinary shares of £0.01 each in the capital of the Company.

Overseas Shareholders

means Shareholders who are citizens or nationals of, or resident in, jurisdictions  outside  the United Kingdom

Participant ID

means the identification code or membership number used in CREST to identify a particular CREST Member or other CREST Participant.

PDMR

means any person discharging managerial responsibilities within the Company and/or its Group for the purposes of UK MAR.

Qualifying Ordinary Shares

means, in respect of a Qualifying Shareholder, all those Ordinary Shares held by them at the Record Date.

Qualifying Shareholders

means the Shareholders who are entitled to participate in the Tender Offer, being those such persons who are on the Register on the Record Date and who are not subject to the securities laws of a Restricted Jurisdiction.

Receiving Agent or Registrar or Link Group

means Link Market Services Limited.

Record Date

means 6:00 p.m. on the Tender Deadline Date.

Register

means the Company's register of members.

Restricted Jurisdictions

means each and any of Australia, Canada, Japan, New Zealand, the USA, Singapore, the Republic of South Africa and any other jurisdiction where the mailing of the Circular into or inside or from such jurisdiction would breach any applicable law, legislation or other regulations.

RIS

means a Regulatory Information Service for the purposes of FSMA.

Sanctions

has the meaning given in paragraph 2.17 of Part 4 (Details of the Tender Offer) of the Circular.

Settlement Date

means the date notified by the Receiving Agent to the Company and the relevant tendering Qualifying Shareholders by which: (i) the tendered Ordinary Shares under the Tender Offer shall be purchased by the Company; and (ii) the consideration for Ordinary Shares tendered under the Tender Offer will be settled and discharged by payment to the Receiving Agent as nominee for those tendering Qualifying Shareholder in accordance with paragraph 6 of Part 4 (Details of the Tender Offer) of the Circular, which date must be not less than five (5) Business Days following the date on which the results of the Tender Offer are announced via an RIS.

Share Plans

means the share option plans established by the Company (or a member of its Group) for the benefit of its officers and/or employees prior to or on the Latest Practicable Date and which remain outstanding and in force at that date.

Shareholders

means those persons who are holders or Ordinary Shares.

Tender Cap

means 5,000,000 (five million) Ordinary Shares.

Takeover Code

means the City Code on Takeovers and Mergers (as amended, restated or replaced from time to time).

Tender Conditions

means has the meaning given in paragraph 2.1 of Part 4 (Details of the Tender Offer) of the Circular.

Tender Deadline Date

means 22 November 2023 (or such later date as the Company or the Receiving Agent (acting with the Company's consent) may notify as being the date on which the Tender Offer closes through an announcement via an RIS and/or the Company's website).

Tender Form

means the tender form which accompanies the Circular and is for use by those Qualifying Shareholders who wish to tender all or some of their Ordinary Shares and who hold those Ordinary Shares in Certificated Form.

Tender Offer

means the invitation by the Company (acting via its agent, the Receiving Agent) to Qualifying Shareholders to tender their Ordinary Shares for purchase by the Company (acting via is agent, the Receiving Agent) on and subject to the terms and conditions set out in the Circular and, in the case of Certificated Ordinary Shares only, the Tender Form.

Tender Offer Resolution

means the ordinary resolution to be proposed at the General Meeting to implement the Tender Offer by authorising the proposed purchase by the Company of Ordinary Shares pursuant to it (in the form set out in the Notice of General Meeting).

Tender Price

means 62 pence (£0.62) per Ordinary Share.

TFE Instruction

means a transfer from escrow instruction (as defined in the CREST Manual).

TTE Instruction

means a transfer to escrow instruction (as defined in the CREST Manual).

UK MAR

means the retained EU law version of the Market Abuse Regulation (596/2014) (MAR) that has applied in the UK from the end of the Brexit transition period (that is, 11:00 pm on 31 December 2020).

Uncertificated Form

means, in respect of any Ordinary Shares, that they are recorded on the Register as being held in CREST in uncertificated form such that the title to them is capable of being transferred by means of CREST under the CREST Regulations (and reference to in Uncertificated Form or similar expression shall be construed accordingly).

United Kingdom or UK

means the United Kingdom or Great Britain and Northern Ireland.

United States or USA

means the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction.

 

 

NOTICE IN RELATION TO OVERSEAS PERSONS

The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law, legislation or regulation and therefore any person who is subject to the laws of any jurisdiction other than the UK should inform and satisfy themselves about, and observe and comply with, any of those restrictions. Any failure to comply with any of those restrictions might constitute a violation of the relevant laws, legislation or regulations of such jurisdiction.

FORWARD-LOOKING STATEMENTS

This announcement includes "forward-looking statements" which include all statements other than statements of historical fact, including, without limitation, those regarding the Group's financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would, "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results, performance or achievements of the Group to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. These forward-looking statements speak only as at the date of this announcement. Whilst the Directors consider these statements to be reasonable based upon information currently available, they may prove to be incorrect. However, the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules.

NO PROFIT FORECAST OR ESTIMATES

Unless otherwise stated, no statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings, earnings per share or income, cash flow from operations or free cashflow for the Group, for the current or future financial years would necessarily match or exceed the historical published earnings, earnings per share or income, cash flow from operations or free cash flow from the Group.

Hybridan LLP ("Hybridan"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for Northern Bear and no one else in connection with the proposed Tender Offer and will not be responsible to anyone other than Northern Bear for providing the protections afforded to clients of Hybridan nor for providing advice in relation to the proposed Tender Offer or any other matter referred to herein. Neither Hybridan nor any of its group undertakings or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Hybridan in connection with the proposed Tender Offer or any matter referred to herein.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
TENDDBDGGDDDGXD