Source - RNS
RNS Number : 1707M
Jaguar Holdings Limited
11 October 2016
 

For immediate release

Not for release, publication or distribution, in whole or in part, DIRECTLY OR INDIRECTLY in, into or from any jurisdiction (including the united states of america) where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction. this announcement contains inside information.

11 October 2016

RECOMMENDED CASH OFFER

FOR

JOURNEY GROUP PLC

BY

JAGUAR HOLDINGS LIMITED

 

SUMMARY

·      Further to the announcement released on 4 October 2016, the board of directors of Jaguar Holdings Limited ("Jaguar Holdings") and the Independent Directors of Journey Group plc ("Journey" or the "Company") are pleased to announce that they have reached agreement on the terms of a recommended cash offer (the "Offer") pursuant to which Jaguar Holdings will acquire the entire issued and to be issued share capital of Journey.

·      This Offer is a new, separate, offer from that which was announced on 23 August 2016, which lapsed on 3 October 2016, despite the support of 68.77 per cent. of those Journey Shares voted by Journey Shareholders at the Court Meeting.

·      The Offer will be made on the basis of 240 pence in cash for each Journey Share (the "Offer Price"), which values the existing issued share capital of Journey at approximately £28.4 million.  Jaguar Holdings is to be funded for the purposes of the Offer by the Subscription Agreement and the Loan Note Instrument details of which are provided in sections 9 and 10 below.

·      Jaguar Holdings is a private limited company incorporated in England and Wales, which was formed at the direction of Harwood Capital LLP ("Harwood Capital"), on behalf of the Harwood Funds, and has been specifically designated for use in acquiring Journey.

·      The Offer is conditional on valid acceptances of the Offer being received in respect of Journey Shares carrying, in aggregate, more than 50 per cent. of the voting rights then normally exercisable at general meetings of the Company.

·      Jaguar Holdings intends to procure, should it receive acceptances to the Offer equal to, or greater than, 75 per cent. of the Journey Shares, that Journey makes an application to the appropriate authorities for the cancellation of the admission of Journey Shares to trading on AIM. Should Jaguar Holdings proceed with the intended cancellation a notice period of not less than 20 Business Days will be given on or after the date on which the Offer becomes, or is declared, unconditional in all respects. Should Jaguar Holdings not receive acceptances to the Offer equal to, or greater than, 75 per cent. of the Journey Shares, then Jaguar Holdings intends to seek the cancellation of the admission of Journey Shares to trading on AIM under the provisions set out in Rule 41 of the AIM Rules.

·      The Offer is subject to the Conditions and further terms set out in Appendix I to this announcement and to be set out in the Offer Document, which it is expected will be despatched to Journey Shareholders as soon as reasonably practicable and, in any event, within 28 days of this announcement.

·      If Journey Shareholders wish to accept the Offer it is important that they follow the instructions to be set out in the Offer Document and the accompanying Form of Acceptance. Any elections or forms of proxy submitted in connection with the Scheme will have no effect in relation to the Offer, which is to be made by way of the Offer Document.

·      The Offer Price of 240 pence per Journey Share represents a premium of approximately:

(i)   2.3 per cent. to the Closing Price of 234.5 pence per Journey Share on 10 October 2016 (being the last Business Day prior to the date of this announcement);

(ii)   12.9 per cent. to the Closing Price of 212.5 pence per Journey Share on 3 October 2016 (being the last Business Day prior to the commencement of the offer period relating to this Offer);  

(iii)  28.7 per cent. to the volume weighted average price of 186.5 pence per Journey Share for the twelve months up to and including 10 October 2016 (being the last Business Day prior to the date of this announcement); and

(iv)  30.1 per cent. to the volume weighted average price of 184.4 pence per Journey Share for the twelve months up to and including 22 August 2016 (being the last Business Day prior to Jaguar Holdings' announcement of its original offer).

·       Mr Christopher Mills, a non-executive director of Journey, is also a director and significant shareholder of certain of the Harwood Funds and a director and the sole shareholder of Harwood Capital Management which is a designated corporate member and the controller of Harwood Capital (the investment manager and/or adviser of the Harwood Funds). He is also a director of Jaguar Holdings.  In view of Mr Mills' significant interest in Harwood Capital, certain of the Existing Harwood Investors and the Harwood Funds, he is not considered to be independent for the purposes of the Offer.

·       Accordingly, the Independent Directors, who have been so advised by Stockdale Securities, consider the terms of the Offer to be fair and reasonable so far as Journey Shareholders are concerned. In providing its advice to the Independent Directors, Stockdale Securities has taken into account the commercial assessments of the Independent Directors.   

·       Accordingly, the Independent Directors have unanimously agreed to recommend that Journey Shareholders accept the Offer, as each of the Independent Directors (save for Joseph Golio) who currently holds or controls Journey Shares has irrevocably undertaken so to do (or procure to be done) in respect of their own beneficial shareholdings (or the shareholdings they control), amounting, in aggregate, to 1,236,353 Journey Shares (representing approximately 10.44 per cent. of the existing issued share capital of Journey). These figures include certain Journey Shares held in trust where Dimitri Goulandris is a named beneficiary, for which a separate irrevocable undertaking from the trustee has been obtained. The Offer is not being made available in any Restricted Jurisdiction and, consequently, as a US resident, Joseph Golio is unable to provide an irrevocable undertaking to accept the Offer in respect of his beneficial shareholding amounting to 91,045 Journey Shares (representing approximately 0.77 per cent. of the existing issued share capital of Journey).

·       At the date of this announcement, the Harwood Funds beneficially own, in aggregate, 3,546,311 Journey Shares representing approximately 29.94 per cent. of the existing issued share capital of Journey.

·       Accordingly, Harwood Capital advises and/or controls and has obtained irrevocable undertakings over, in aggregate, 4,782,664 Journey Shares, representing approximately 40.37 per cent. of Journey's existing issued share capital.

Commenting on the Offer on behalf of the Independent Directors, Stephen Yapp, Executive Chairman of Journey, said:

"This new Offer provides all Journey Shareholders with the opportunity of a cash exit, at the same price as was previously offered, which is at a meaningful premium to the price at which the Company's shares were trading before the announcement of the previous offer on 23 August 2016 and recognises the Company's underlying value. Importantly, the new Offer means that those shareholders who had supported the previous offer, which lapsed on 3 October 2016, will still have the opportunity to exit.  As the Independent Directors have previously stated, whilst the business has fared well in the public markets Journey will be better placed to deliver the next phase of its strategic objectives and to grow its US in-flight catering business as a private company."

Commenting on the Offer on behalf of Jaguar Holdings, Christopher Mills, Director of Jaguar Holdings, said:

 "We are delighted to be announcing this recommended cash offer for Journey. We believe that Journey, with its innovative in-flight catering service offering, has great potential but that, given the Company's size, operating environment and significant US focus, it would fare better as a private company with a more cost effective corporate structure.  Our Offer provides Journey Shareholders with a sizeable premium over the recent market value of their shares."

This summary should be read in conjunction with, and is subject to, the full text of the following announcement (including the Appendices).  The Acquisition will be subject to the Conditions set out in Appendix I to this announcement and the further terms and conditions to be set out in the Offer Document.  Appendix II contains the sources of information and bases of calculation used in this announcement.  Appendix III contains details of the irrevocable undertakings received by Harwood Capital for the benefit of Jaguar Holdings.  Certain definitions apply throughout this announcement (including this summary) and your attention is drawn to Appendix IV to this announcement where these definitions are set out in full.

Enquiries:

Jaguar Holdings Limited

Christopher Mills, Director

Tim Sturm, Director

 

Tel: +44 (0) 207 640 3200

Strand Hanson Limited

(Financial Adviser to Jaguar Holdings and Harwood Capital)

Stuart Faulkner

Matthew Chandler

Ritchie Balmer

James Dance

 

Tel: +44 (0) 207 409 3494

 

Journey Group plc

Stephen Yapp, Executive Chairman

Alison Whittenbury, Chief Financial Officer

 

Tel: +44 (0) 208 606 1300

Stockdale Securities Limited

(Financial adviser to Journey)

Tom Griffiths

Edward Thomas

 

Tel: +44 (0) 207 601 6100

Nplus1 Singer Advisory LLP

(Nominated Adviser and Broker to Journey)

Nic Hellyer

Alex Price

Lauren Kettle

 

Tel: +44 (0) 207 496 3000

The Offer will be subject to the Conditions and to the further terms and conditions to be set out in the Offer Document.  The Offer is being made solely through the Offer Document, which will contain the full terms and conditions of the Offer, including details of how to accept the Offer. Any acceptance in relation to the Offer should be made only on the basis of the information contained in the Offer Document.  Journey Shareholders are advised to read the Offer Document carefully, once it has been despatched.

Strand Hanson Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Jaguar Holdings and Harwood Capital and no-one else in connection with the Acquisition and other matters described in this announcement and will not be responsible to anyone other than Jaguar Holdings and Harwood Capital for providing the protections afforded to clients of Strand Hanson Limited or for providing advice in relation to the Acquisition, the contents of this announcement or any other matter referred to herein.

Stockdale Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Journey and no-one else in connection with the Acquisition and other matters described in this announcement and will not be responsible to anyone other than Journey for providing the protections afforded to clients of Stockdale Securities Limited or for providing advice in relation to the Acquisition, the contents of this announcement or any other matter referred to herein.

Nplus1 Singer Advisory LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as nominated adviser and broker to Journey and no-one else in connection with the Acquisition and other matters described in this announcement and will not be responsible to anyone other than Journey for providing the protections afforded to clients of Nplus1 Singer Advisory LLP or for providing advice in relation to the Acquisition, the contents of this announcement or any other matter referred to herein.

In accordance with Rule 30.3 of the Code, you may request a hard copy of this announcement by contacting the Receiving Agent, Capita Asset Services, during business hours on 0371 664 0321 from within the UK or +4420 8639 3399 if calling from outside the UK or by submitting a request in writing to Capita Asset Services at The Registry, 34 Beckenham Road, Kent, BR3 4TU. It is important that you note that unless you make a request, a hard copy of this announcement and any such information incorporated by reference in it will not be sent to you. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be sent in hard copy form.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTENDED TO, AND DOES NOT, CONSTITUTE OR FORM ANY PART OF, AN OFFER TO SELL OR AN INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES OR THE SOLICITATION OF ANY VOTE OR APPROVAL IN ANY JURISDICTION, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW.

The availability of the Offer and the release, publication and distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by the laws of those jurisdictions and therefore persons who are not resident in the United Kingdom into whose possession this announcement comes should inform themselves about and observe any such restrictions.  Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person. Copies of this announcement and any formal documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction.

This announcement has been prepared for the purpose of complying with English law, the Code and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

This announcement, oral statements made regarding the Offer, and other information published by Jaguar Holdings and Journey may contain certain statements that are or may be forward looking with respect to the financial condition, results of operations and business of Journey and certain plans and objectives of the Journey Board and the Jaguar Holdings Board with respect thereto.  These forward looking statements can be identified by the fact that they do not relate to historical or current facts.  Forward looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of a similar meaning.  These estimates are based on assumptions and assessments made by the Journey Board and/or the Jaguar Holdings Board in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. 

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and service of this announcement shall not give rise to any implication that there has been no change in the facts set forth in this announcement since such date.  By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward looking statements in this announcement could cause actual results or developments to differ materially from those expressed or implied by such forward looking statements.  Although Journey and Jaguar Holdings believe that the expectations reflected in such forward looking statements are reasonable, neither Journey nor Jaguar Holdings, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this announcement will actually occur. Other than in accordance with their legal or regulatory obligations (including under the AIM Rules and the Disclosure and Transparency Rules of the FCA), neither Jaguar Holdings nor Journey is under any obligation, and Jaguar Holdings and Journey expressly disclaim any intention or obligation to update or correct the information contained in this announcement and Journey and Jaguar Holdings therefore caution you not to place undue reliance on these forward looking statements which speak only as at the date of this announcement.

Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of Journey or of any securities exchange 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 securities exchange 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) Journey and (ii) any securities exchange 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 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified.  Relevant persons who deal in the relevant securities of Journey or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of Journey or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of Journey or of any securities exchange 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) Journey and (ii) any securities exchange offeror(s), 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 p.m. (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 Journey or a securities exchange 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 Journey and by any offeror and Dealing Disclosures must also be made by Journey, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

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 Takeover 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.  You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Please be aware that addresses, electronic addresses and certain information provided by Journey Shareholders, persons with information rights and other relevant persons for the receipt of communications from Journey may be provided to Jaguar Holdings during the Offer Period as requested under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c).

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

In accordance with Rule 2.9 of the Code, Journey confirms that, as at the date of this announcement, it has 11,845,879 ordinary shares of 25 pence each in issue and admitted to trading on AIM under the ISIN reference GB00B909HR51.

In accordance with Rules 26.1 and 26.2 of the Code, a copy of this announcement and any other announcements or documents required to be published on a website will be available free of charge (subject to any applicable restrictions with respect to persons resident in Restricted Jurisdictions) on the website of Journey at www.journeygroup.plc.uk by no later than 12 noon (London time) on 12 October 2016. For the avoidance of doubt, the content of this website is not incorporated by reference and does not form part of this announcement.

This announcement does not constitute a prospectus or prospectus equivalent document.



Not for release, publication or distribution, in whole or in part, DIRECTLY OR INDIRECTLY in, into or from any jurisdiction (including the united states of america) where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction. this announcement contains inside information.

for immediate release

11 October 2016

RECOMMENDED CASH OFFER

FOR

JOURNEY GROUP PLC

BY

JAGUAR HOLDINGS LIMITED

 

1.     Introduction

Further to the announcement released on 4 October 2016, the board of directors of Jaguar Holdings and the Independent Directors of Journey are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Jaguar Holdings will acquire the entire issued and to be issued share capital of Journey.  The Offer Price of 240 pence per Journey Share values the existing issued share capital of Journey at approximately £28.4 million.

This Offer is a new, separate, offer from that which was announced on 23 August 2016, which lapsed on 3 October 2016, despite the support of 68.77 per cent. of those Journey Shares voted by Journey Shareholders at the Court Meeting.

The Offer, when made, will be conditional on valid acceptances of the Offer being received in respect of Journey Shares carrying, in aggregate, more than 50 per cent. of the voting rights then normally exercisable at general meetings of the Company.

Mr Christopher Mills is a non-executive director of Journey, a director and significant shareholder of certain of the Harwood Funds and is a director and the sole shareholder of Harwood Capital Management which is a designated corporate member and the controller of Harwood Capital (the investment manager and/or adviser of the Harwood Funds). He is also a director of Jaguar Holdings. In view of Mr Mills' significant interest in Harwood Capital, certain of the Existing Harwood Investors and the Harwood Funds, he is not considered to be independent for the purposes of the Offer. Accordingly, only the Independent Directors, being Stephen Yapp, Alison Whittenbury, Joseph Golio, Dimitri Goulandris and Graham Bird, have reviewed and considered the terms of the Offer.

 

2.     The Offer

Under the terms of the Offer, which will be subject to the Conditions and further terms set out in Appendix I to this announcement and to be set out in the Offer Document, each Journey Shareholder will be entitled to receive 240 pence in cash for each Journey Share.

The Offer Price is set on the basis that no dividends will be declared by Journey following the date of this announcement and, accordingly, if the Offer completes, no final dividend will be paid to Journey Shareholders in respect of Journey's financial year ended 31 December 2015.

The Offer Price values the entire existing issued share capital of Journey at approximately £28.4 million and represents a premium of approximately:

•  2.3 per cent to the Closing Price per Journey Share of 234.5 pence on 10 October 2016 (being the last Business Day prior to the date of this announcement);

•  12.9 per cent. to the Closing Price of 212.5 pence per Journey Share on 3 October 2016 (being the last Business Day prior to the commencement of the offer period relating to this Offer);

•  28.7 per cent. to the volume weighted average price of 186.5 pence per Journey Share for the twelve months up to and including 10 October 2016 (being the last Business Day prior to the date of this announcement); and 30.1 per cent. to the volume weighted average price of 184.4 pence per Journey Share for the twelve months up to and including 22 August 2016 (being the last Business Day prior to Jaguar Holdings' announcement of its original offer).

It is expected that the Offer Document will be published as soon as reasonably practicable and, in any event, within 28 days of this announcement.

 

3.     Reasons for the Offer and future plans for Journey

Jaguar Holdings maintains its confidence in the overall prospects for Journey's operating businesses and the in-flight catering and products sector within which it operates, but firmly believes that in order to maximise its future potential the Company will be better suited to a private company environment, where, with Jaguar Holdings' support and assistance, management will be able to concentrate on the more efficient delivery of their medium term business plan, within a simplified corporate structure, free from the requirement to meet the public equity market's shorter term expectations.

In addition, Jaguar Holdings believes that, as a relatively small UK quoted company, with principally overseas operations and trading activities in the USA, Journey will struggle to attract and retain sufficient research coverage, stock liquidity and level of market rating that would make retaining its existing AIM quotation worthwhile.

Furthermore, Jaguar Holdings regards the lower margin Products Division as being non-core, and, subject to the outcome of a strategic review process to be undertaken by the Company and/or Jaguar Holdings following the completion of the Acquisition, Jaguar Holdings' current intention is to dispose of this division in the short to medium term and is already in discussions with a potential purchaser. 

Jaguar Holdings intends to seek to continue to grow the Journey Group's contracted revenue base and roll-out of the proven Air Fayre model in the USA, whilst maintaining a tight control of costs within a simplified corporate structure and eliminating the regulatory burden, constraints and numerous expenses associated with maintaining a UK public quotation, thereby enhancing value for its investors in the longer term.

Jaguar Holdings intends to procure, should it receive acceptances to the Offer equal to, or greater than, 75 per cent. of the Journey Shares, that Journey makes an application to the appropriate authorities for the cancellation of the admission of Journey Shares to trading on AIM. Should Jaguar Holdings proceed with the intended cancellation a notice period of not less than 20 Business Days will be given on or after the date on which the Offer becomes, or is declared, unconditional in all respects. Should Jaguar Holdings not receive acceptances to the Offer of equal to, or greater than, 75 per cent. of the Journey Shares, then Jaguar Holdings intends to seek the cancellation of the admission of Journey Shares to trading on AIM under the provisions set out in Rule 41 of the AIM Rules.

 

4.     Background to and reasons for the recommendation of the Offer

On 23 August 2016, the board of directors of Jaguar Holdings and the Independent Directors of Journey announced that they had reached agreement on the terms of a recommended cash offer to be made by Jaguar Holdings for the entire issued and to be issued share capital of Journey to be effected by way of a Court-sanctioned scheme of arrangement between Journey and its shareholders under Part 26 of the Companies Act 2006 (the "Scheme").

At the Court Meeting, held at 10:00 a.m. on 3 October 2016, to approve the Scheme, the requisite resolution was not passed despite the support of 68.77 per cent. of those Journey Shares voted by Journey Shareholders and the offer to be implemented under the Scheme lapsed. With the consent of the Panel, Harwood Capital, Jaguar Holdings and the Company have therefore elected to implement the Acquisition by way of a recommended takeover offer under Part 28 of the Companies Act 2006 and the Code.

The Independent Directors recommend that Journey Shareholders accept the Offer. The Offer provides the certainty of a cash exit for all Journey Shareholders at a meaningful premium to the prevailing price of a Journey Share, which the Independent Directors believe to be attractive, given that there remain risks and uncertainties inherent in progressing the Company's business and delivering its strategy.

Since launching its business in the USA, the Company has been successful in recovering from challenging financial circumstances and in growing both its earnings and cash generation as a publicly quoted company.  However, in the opinion of the Independent Directors, the next phase of the Company's strategic development is likely to be delivered more effectively as a private company. Reasons for this include, inter alia:

·       a significant proportion of the Company's revenues continue to be derived from one substantial contract with a US airline, representing an ongoing customer concentration risk for the Company and its shareholders;

·       historic growth in earnings has been generated from the US Division largely from incrementally utilising available capacity at the Los Angeles facility.  However, this facility is now operating at full capacity, thereby limiting the US Division's further growth and ability to win significant new business without investing in additional operational capacity;

·       historically, contract turnover within the airline catering services industry has been low and the sales cycle for winning new contracts has been lengthy. This means that there is inherent uncertainty and risk in forecasting future revenue growth which is dependent on converting a limited sales pipeline; 

·       the industry in which the Company operates is highly competitive and clients and operators tend to be sensitive to disclosure of information on contracts. The concentrated nature of the Company's earnings coupled with its public disclosure obligations could potentially be disadvantageous in certain bid situations;

·       it is difficult to win new business without the necessary operational capacity and, in the Independent Directors' belief, expansion of existing capacity, without contract backing, would be inherently speculative, would likely reduce the return on capital achieved and would likely reduce earnings until the new capacity reaches operational breakeven;

·       the lower margin Products Division has suffered from declining revenues in recent years. In the Independent Directors' belief and experience, the industry in which it operates continues to face challenges within the supply chain, where there is an increasing tendency for airlines to go direct to suppliers for volume products. This, coupled with the fact that the division's largest contract was not renewed, means that the outlook for the division is difficult to forecast and could, in the Independent Directors' opinion, be better managed in a private company environment; and

·       since the disposals of Media on the Move Limited, Alpha-Airfayre Limited and MNH Sustainable Cabin Services Limited, head office costs have been reduced. However, as a result, Journey's revenues are now substantially more concentrated and the proportion of overseas trading and revenues has increased. With the majority of its trading activities now in the USA, the Independent Directors believe that it is less appropriate for the Company's shares to be quoted in the UK, incurring the relevant costs associated with maintaining a UK public quotation.

Within a private company environment, the Independent Directors consider that Journey's management will be able to take a longer term view on the investment decisions required to grow the US Division, free from the public equity market's shorter term expectations and the Company's need to achieve market forecasts. In addition, the Independent Directors believe that the necessary disclosure requirements of a publicly quoted company can be a limiting factor on the Company's ability to win business and, without such obligations, the Company's management might be better placed to win new business in a private company environment.

The Independent Directors believe that the Company is at an inflexion point where future growth will require new contract wins and additional, potentially speculative, investment to be made.  The Independent Directors believe that this alters the future risk profile for investors and, consequently, that the Offer represents an attractive exit point for all Journey Shareholders. 

When considering the Offer, the Independent Directors have taken into account that the Offer Price of 240 pence per Journey Share in cash represents a premium of approximately 2.3 per cent. to the Closing Price of 234.5 pence per Journey Share on 10 October 2016, being the last Business Day prior to the date of this announcement, and a premium of approximately 28.7 per cent. to the volume weighted average price of 186.5 pence per Journey Share for the twelve months up to and including the same date.

The Independent Directors believe that the Offer provides Journey Shareholders with a meaningful cash premium for their shareholdings.  In the opinion of the Independent Directors, the concentrated nature of the market and the Company's significant reliance on a single contract mean that at the current time, it is unlikely that an alternative buyer would pay a strategic premium for the business and the Offer therefore represents a valuable exit opportunity for Journey Shareholders.

 

5.     Recommendation

The Independent Directors, who have been so advised by Stockdale Securities, consider the terms of the Offer to be fair and reasonable so far as Journey Shareholders are concerned. In providing its advice to the Independent Directors, Stockdale Securities has taken into account the commercial assessments of the Independent Directors.

Accordingly, the Independent Directors have unanimously agreed to recommend that Journey Shareholders accept the Offer, as each of the Independent Directors (save for Joseph Golio) who currently hold Journey Shares has irrevocably undertaken to do (or procure to be done) in respect of their own beneficial shareholdings (or the shareholdings they control), amounting, in aggregate, to 1,236,353 Journey Shares (representing approximately 10.44 per cent. of the existing issued share capital of Journey). These figures include certain Journey Shares held in trust where Dimitri Goulandris is a named beneficiary, for which a separate irrevocable undertaking from the trustee has been obtained. The Offer is not being made available in any Restricted Jurisdiction and, consequently, as a US resident, Joseph Golio is unable provide an irrevocable undertaking to accept the Offer in respect of his beneficial shareholding amounting to 91,045 Journey Shares (representing approximately 0.77 per cent. of the existing issued share capital of Journey).

Therefore, the Independent Directors strongly urge all Journey Shareholders to accept the Offer as soon as possible following the despatch of the Offer Document.

If Journey Shareholders wish to accept the Offer it is important that they follow the instructions to be set out in the Offer Document and the accompanying Form of Acceptance as any elections or forms of proxy submitted in connection with the Scheme will have no effect in relation to the Offer, which is to be made by way of the Offer Document. The Offer Document, which it is expected will be dispatched to Journey Shareholders as soon as reasonably practicable and, in any event, within 28 days of this announcement, will contain, inter alia, details of the Offer and procedure for acceptance.

 

6.     Irrevocable undertakings

Harwood Capital, for the benefit of Jaguar Holdings, has received irrevocable undertakings to accept (or procure the acceptance of) the Offer from the Independent Directors (save for Joseph Golio) who beneficially hold or control Journey Shares as at the date of this announcement in respect of their entire beneficial shareholdings (or shares which they are able to control) in the capital of Journey, amounting, in aggregate, to 1,236,353 Journey Shares, representing approximately 10.44 per cent. of the existing issued share capital of Journey. These figures include certain Journey Shares held in trust where Dimitri Goulandris is a named beneficiary, for which a separate irrevocable undertaking from the trustee has been obtained. The Offer is not being made available in any Restricted Jurisdiction and, consequently, as a US resident, Joseph Golio is unable to provide an irrevocable undertaking to accept the Offer in respect of his beneficial shareholding amounting to 91,045 Journey Shares (representing approximately 0.77 per cent. of the existing issued share capital of Journey).

These irrevocable undertakings shall lapse and cease to become binding, inter alia, (i) if a competing offer from a third party for the entire issued and to be issued share capital of Journey is made which becomes or is declared wholly unconditional, or otherwise becomes effective (if implemented by way of a scheme of arrangement) at a price of at least 275 pence per Journey Share; (ii) Jaguar Holdings fails to post the Offer Document within 28 days of this announcement; (iii) the Offer lapses or is withdrawn without becoming or being declared unconditional in all respects; or (iv) Jaguar Holdings announces that it will not proceed with the Acquisition.

In addition, the Existing Harwood Investors have irrevocably undertaken to accept (or procure the acceptance of) the Offer in respect of their entire existing holdings of Journey Shares, amounting, in aggregate, to 3,546,311 Journey Shares, representing approximately 29.94 per cent. of the existing issued share capital of Journey. 

Further details of these irrevocable undertakings received by Harwood Capital for the benefit of Jaguar Holdings (including the circumstances in which the irrevocable undertakings will cease to remain binding) are set out in Appendix III to this announcement.

A copy of the irrevocable undertakings will be on display on Journey's website, at www.journeygroup.plc.uk by no later than 12 noon on 12 October 2016 until the end of the Offer Period.

 

7.     Information relating to the Journey Group          

Journey (formerly named Watermark Group plc) was incorporated in 1985 and is a provider of in-flight catering services to the international and domestic airline industry in the USA, and in-flight products principally to the international airline industry on a global basis. It is a UK publicly quoted company, headquartered in Heston, Middlesex whose shares have been admitted to trading on AIM since 29 August 2008.

The group's operations are organised into two divisions, the Products Division and the US Division. The Products Division offers amenity kits, children's kits, meal service items (such as trays, cutlery and glassware), textiles, cosmetics and retail and promotional gift with purchase items under the Watermark Products brand to the air, sea, rail and hotel sectors. The US Division provides in-flight catering services to the international and domestic airline industry under the Air Fayre brand based at its facilities in Los Angeles and Memphis in the United States.

In its latest financial year to 31 December 2015, Journey reported audited total revenue of US$63.57 million (2014: US$64.25 million) and a profit after taxation of US$2.30 million (2014: US$2.54 million).  As at 31 December 2015, total assets were US$26.05 million (2014: US$25.87 million) with net assets of US$14.56 million (2014: US$16.80 million) and net cash of US$3.64 million (2014: US$6.67 million).

The total number of Journey Shares in issue as at the date of this announcement is 11,845,879 and there are approximately 800 registered shareholders.  The market capitalisation of Journey, based on the Closing Price of a Journey Share of 234.5 pence on 10 October 2016 (being the last Business Day prior to the date of this announcement), was approximately £27.8 million.

Current trading and prospects

On 8 September 2016, the Company announced its unaudited interim results for the six months to 30 June 2016 which reported that the Journey Group delivered an excellent half-year performance overall, with strong growth in profitability reflecting the impact of new customers launched in 2015 and had continued to make good progress on its strategic objectives.

Revenue for the six months to 30 June 2016 grew by 7 per cent. to US$32.7 million (2015: US$30.5 million), EBITDA increased by 50 per cent. to US$2.7 million (2015: US$1.8 million), profit before tax was US$1.8 million (2015: US$1.0 million) resulting in a basic earnings per share of 11.32 cents (2015: 5.27 cents). Net cash as at 30 June 2016 was US$2.62 million (2015: US$7.2 million).

Further financial and other information on Journey will be set out in the Offer Document.  

 

8.     Information relating to Jaguar Holdings, Harwood Capital and the Harwood Funds

8.1   Jaguar Holdings

Jaguar Holdings is a private company incorporated in England and Wales with limited liability on 5 February 2016 under the registration number 09990680. It was established by Harwood Capital (on behalf of the Harwood Funds) and has been designated specifically for use in making and implementing the Offer.

The current issued share capital of Jaguar Holdings comprises 1 Jaguar Holdings Ordinary Share and 1 Jaguar Holdings Preference Share, which are held by HPE IV. Jaguar Holdings is to be funded for the purposes of the Offer by the Subscription Agreement and the Loan Note Instrument details of which are provided in sections 9 and 10 below.

Jaguar Holdings has not traded since its date of incorporation, has paid no dividends and has not entered into any obligations other than in connection with the Scheme, the Offer and the financing of the Offer.  The directors of Jaguar Holdings are Mr Christopher Mills, Mr Jeremy Brade and Mr Timothy Sturm, appointees of Harwood Capital. Jaguar Holdings does not currently have any subsidiaries or subsidiary undertakings. Further information concerning Jaguar Holdings will be set out in the Offer Document.

8.2   Harwood Capital LLP

Harwood Capital is a UK limited liability partnership authorised to conduct investment business by the FCA since 23 September 2003. Its principal activity is the provision of discretionary investment management and advisory services. The funds it manages and/or advises typically take an active interest in the running of the companies that they invest in with the aim of adding significant value by changing or improving various aspects of the investee company's business.  As at 31 March 2016, the Harwood Capital Management Group had approximately £1,473 million in funds under management (including advisory clients) and £3,173 million of funds under management, advice and influence. 

8.3   The Harwood Funds

The Existing Harwood Investors currently hold, in aggregate, 3,546,311 Journey Shares, representing approximately 29.94 per cent. of the existing issued share capital of Journey, as set out below:

Shareholder


Journey Shares held



Number


%

Oryx International Growth Fund Limited ("Oryx")


3,277,575


27.67

Other discretionary private clients ("Discretionary Private Clients")


268,736


2.27

Total


3,546,311


29.94

Brief descriptions of the specific Harwood Funds that are investing in or financing Jaguar Holdings are set out below:

North Atlantic Smaller Companies Investment Trust Plc

NASCIT is a UK investment trust listed on the Main Market of the London Stock Exchange. Its objective is to provide capital appreciation through investment in a portfolio of smaller companies principally based in countries bordering the North Atlantic Ocean.  It invests in both listed and unlisted companies. Mr Mills has been a director of NASCIT since 1984 and is currently its Chief Executive and investment manager. He is its largest shareholder being interested in approximately 25.06 per cent. of its issued ordinary share capital.  Until August 2014, the joint managers of NASCIT were Mr Mills (through Growth Financial Services Limited of which he is a director) and Harwood Capital. Following the implementation of the Alternative Investment Fund Managers Directive in July 2014, NASCIT became a small registered Alternative Investment Fund Manager with effect from 26 August 2014, such that it now deals with investment decisions internally. Mr Mills, as Chief Executive, has control of investment decisions in relation to NASCIT's investment portfolio subject to oversight by the board of NASCIT.

Harwood Private Equity IV L.P.

HPE IV is an English limited partnership incorporated on 9 October 2014 under registration number LP016260. The fund's commencement date was 12 June 2015 and it has total committed capital of £152.5 million. Harwood Capital is the investment manager and the fund's objective is to generate high absolute returns from investing in a portfolio of unquoted small and medium sized companies across a range of sectors principally in the United Kingdom. It focuses on leveraged buyouts and similar transactions including public-to-private investments. NASCIT has committed £40.0 million to the fund representing approximately 26.2 per cent. of the total commitments.

Oryx International Growth Fund Limited

Oryx is a closed-ended investment company incorporated in Guernsey and listed on the Main Market of the London Stock Exchange. It invests in small and mid-size quoted companies in the United Kingdom and the United States.  Mr Mills is a director and investment manager of Oryx, and Harwood Capital is Oryx's manager and investment adviser. As at the date of this announcement, Mr. Mills (2.18 per cent.) and NASCIT (47.05 per cent.) were interested, in aggregate, in 49.23 per cent. of the issued ordinary share capital of Oryx.

Discretionary Private Clients

Harwood Capital is the discretionary manager of two private client accounts which hold the 268,736 Journey Shares set out in the table above, and which currently have assets of approximately £6.0 million and £21.2 million respectively.

Further information concerning Harwood Capital and the Harwood Funds that are investing in Jaguar Holdings will be set out in the Offer Document.

 

9.     Financing of the Acquisition

Strand Hanson, financial adviser to Jaguar Holdings, is satisfied that sufficient financial resources are available to Jaguar Holdings to enable it to implement the Offer in full. Accordingly, full implementation of the Offer would require a maximum cash payment of approximately £28.43 million by Jaguar Holdings which will be funded entirely out of Jaguar Holdings' cash resources made available by way of:

(i)    the issue of unsecured Loan Notes in Jaguar Holdings to NASCIT in an aggregate amount of up to £13,500,000 in US Dollars pursuant to the NASCIT Subscription Agreement; and

(ii)    subscriptions for Jaguar Holdings Share Units by certain of the Harwood Funds pursuant to the Subscription Agreement details of which are provided in section 10 below.

The Loan Notes have been constituted by the Loan Note Instrument. The Loan Notes will be unsecured, repayable on the earlier of the first anniversary of the Offer becoming wholly unconditional or on a change of control of Jaguar Holdings and carry an interest rate of 10 per cent. per annum, which shall be payable in arrears in cash on the date on which the Loan Notes are redeemed or repaid. The Loan Notes will be issued for a cash subscription of, in aggregate, an amount up to £13,500,000 in US Dollars (at such mid-market foreign exchange rate prevailing on the Business Day preceding the First Closing Date).  The purpose of the Loan Notes is to finance (in part) the consideration payable under the Offer.

There is no requirement for any funding from third party providers of finance to the Jaguar Holdings Group.

 

10.   Subscription Agreement

Pursuant to the Subscription Agreement, Harwood Capital has procured the subscription by:

(i)    Oryx of 981,264 Jaguar Holdings Share Units at the Subscription Price, which will be satisfied by Oryx releasing Jaguar Holding's obligation to pay an equivalent amount of cash consideration under the Offer in respect of the acquisition of Oryx's existing holding of shares in Journey;

(ii)    Harwood Capital Nominees Limited ("Nominees") of 268,736 Jaguar Holdings Share Units at the Subscription Price, which will be satisfied by Nominees releasing Jaguar Holding's obligation to pay an equivalent amount of cash consideration under the Offer in respect of the acquisition of Nominees' existing holding of shares in Journey; and

(iii)   HPE IV of up to 6,354,167 Jaguar Holdings Share Units at the Subscription Price.

In addition, the Existing Harwood Investors have irrevocably agreed to accept the Offer once the Offer Document is published. Such subscriptions, alongside the Loan Note funding from NASCIT (further details of which are set out in section 9 above), will ensure that Jaguar Holdings has the amount required to satisfy the maximum aggregate cash consideration payable in accordance with the Offer and to fund appropriate proposals to be made to participants in the Journey Share Option Schemes in due course.

 

11.   Journey Share Option Schemes

The Acquisition will impact on awards held by participants in the Journey Share Option Schemes. Participants will be contacted regarding the effect of the Offer on their rights under the Journey Share Option Schemes and appropriate proposals will be made to such participants in due course.

 

12.   Structure and implementation of the Acquisition

Process

It is intended that the Acquisition will be implemented by means of a takeover offer under Part 28 of the Companies Act 2006 and the Code.

The Journey Shares shall be acquired under the Offer fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement.

The Offer Document and the accompanying Form of Acceptance will be published as soon as reasonably practicable and, in any event, within 28 days of this announcement (subject to any extension agreed by Jaguar Holdings and Journey with the consent of the Panel). Journey Shareholders are urged to read the Offer Document and the accompanying Form of Acceptance carefully once they have been dispatched.

Compulsory Acquisition

If Jaguar Holdings receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Journey Shares by nominal value, and voting rights attaching to such shares, to which the Offer relates and assuming that all of the other Conditions of the Offer have been satisfied or waived (if capable of being waived), Jaguar Holdings intends to exercise its rights pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act 2006 to acquire compulsorily the remaining Journey Shares in respect of which the Offer has not been accepted on the same terms as the Offer.

Anticipated timetable

Journey currently anticipates that it will despatch the Offer Document, together with the Form of Acceptance, to Journey Shareholders and, for information only, to the holders of Options granted under the Journey Share Option Schemes as soon as reasonably practicable and, in any event, within the next 28 days (or such later date as may be agreed with the Panel).

A full timetable of the anticipated principal events will be set out in the Offer Document.

 

13.   Journey's Directors, management, employees and locations

The Jaguar Holdings Directors believe that the Offer, if successfully completed, will provide a stable and well capitalised future for Journey. The Jaguar Holdings Directors have not sought to create a new strategic plan for the Journey Group and instead intend to support Journey's executive management in continuing to develop and execute management's existing medium term strategy for the Journey Group. However, the Jaguar Holdings Board regards the lower margin Products Division as being non-core and, subject to the outcome of a strategic review process, to be undertaken by the Company and/or Jaguar Holdings following completion of the Acquisition, Jaguar Holdings' current intention is to dispose of this division in the short to medium term. 

Save for simplifying the UK corporate structure and potentially divesting of the Products Division, the Jaguar Holdings Directors currently have no intention to change Journey's principal business locations or to redeploy Journey's fixed asset base. The Jaguar Holdings Directors have given assurances to the Journey Board that, following the Offer becoming, or being declared, wholly unconditional, the existing rights and terms and conditions of employment, including pension obligations, of the management and employees of Journey and its subsidiaries will be fully safeguarded. Accordingly, the Journey Directors believe that the prospects of the employees of Journey will not be adversely affected by the Acquisition

There are no agreements or arrangements between Jaguar Holdings and management or employees of Journey in relation to their on-going involvement in the business and the Offer will not be conditional on reaching agreement with such persons. It has been agreed that the appointment of Graham Bird, a non-executive director of Journey, will terminate with effect from the Offer becoming, or being declared, wholly unconditional. He will receive remuneration in line with the termination provisions of his letter of appointment by way of compensation. In addition, the remuneration committee of Journey has agreed that Graham Bird be entitled to a cash bonus of £15,000 that is not conditional or otherwise contingent upon the Offer, such bonus being paid in recognition of the significant additional work carried out in respect of the Offer. Stockdale Securities has advised Journey that it considers the terms of this bonus to be fair and reasonable.  Further details of this bonus will be set out in the Offer Document.

Save as referred to above, the Jaguar Holdings Directors do not currently have any plans to make any other material changes either to the continued employment or the terms and conditions of employment of the management and employees of the Journey Group.

Jaguar Holdings has not entered into, and is not in discussions on proposals to enter into, any form of incentivisation arrangements with members of Journey's management who are interested in Journey Shares and has no current plans to do so.  Following completion of the Acquisition, Jaguar Holdings may put in place incentive arrangements for certain members of the Journey management team. No proposals have been made on the terms of any incentive arrangements for relevant managers.

Following completion of the Acquisition, Jaguar Holdings may, in the future, invite executive directors of Journey to join the board of Jaguar Holdings; however no proposals have been made on the terms of any such potential appointments.

 

14.   Cancellation of admission to trading on AIM and re‑registration

Following the Offer becoming, or being declared, unconditional in all respects and if Jaguar Holdings has by virtue of its shareholdings and acceptances of the Offer acquired, or agreed to acquire, Journey Shares representing at least 75 per cent. of the voting rights of Journey, Jaguar Holdings intends to procure that Journey makes an application to the appropriate authorities for the cancellation of the admission of Journey Shares to trading on AIM. Should Jaguar Holdings proceed with the intended cancellation a notice period of not less than 20 Business Days will be given on or after the date on which the Offer becomes, or is declared, unconditional in all respects. Should Jaguar Holdings not receive acceptances to the Offer of equal to, or greater than, 75 per cent. of the voting rights of Journey, then Jaguar Holdings intends to seek the cancellation of the admission of Journey Shares to trading on AIM under the provisions set out in Rule 41 of the AIM Rules.

Delisting would significantly reduce the liquidity and marketability of any Journey Shares not assented to the Offer.

It is also proposed that following the Offer becoming or being declared unconditional in all respects and admission to trading on AIM of Journey Shares having been cancelled, Journey will be re-registered as a private company under the relevant provisions of the Companies Act 2006.

 

15.   Overseas Shareholders

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law.  Persons who are not resident in the United Kingdom or who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves of, and observe, any applicable requirements.  Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.  This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful.  This announcement has been prepared for the purposes of complying with the laws of England and Wales, the rules of the London Stock Exchange and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of any jurisdiction outside England and Wales.

Unless otherwise determined by Jaguar Holdings or required by the Code, and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may elect to accept the Offer by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction.  Accordingly, copies of this announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. 

The Offer (unless otherwise permitted by applicable law and regulation) will not be made, directly or indirectly, in or into, or by the use of the mails, or by any means of instrumentality (including without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national securities exchange of any Restricted Jurisdiction, and the Offer will not be capable of acceptance from or within any Restricted Jurisdiction.

The availability of the Offer to Journey Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident.  Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements.

 

16.   Disclosure of interests in Journey

Jaguar Holdings confirms that it is making on the date of this announcement an Opening Position Disclosure, setting out the details required to be disclosed by it under Rule 8.1(a) of the Code. Save for a total of 3,546,311 Journey Shares held by the Existing Harwood Investors which represent, in aggregate, approximately 29.94 per cent. of Journey's issued share capital (as set out in section 8 above) and the irrevocable undertakings referred to in section 6 above, as at the close of business on 10 October 2016, the last Business Day prior to the date of this announcement, neither Jaguar Holdings or Harwood Capital nor any of the directors or members (as applicable) of Jaguar Holdings or Harwood Capital, nor so far as the directors or members (as applicable) of Jaguar Holdings and Harwood Capital are aware, any person acting, or deemed to be acting, in concert with Jaguar Holdings for the purposes of the Offer has:

(a)   any interest in, or right to subscribe for, any relevant securities of the Journey Group;

(b)   any short positions in respect of any securities of the Journey Group (whether conditional or absolute and whether in-the-money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, relevant securities of the Journey Group;

(c)   borrowed or lent any relevant Journey Group securities (save for any borrowed shares which have been either on-lent or sold);

(d)   procured an irrevocable commitment or letter of intent to accept the Offer in respect of any relevant Journey Group securities; or

(e)   any arrangement in relation to any relevant Journey Group securities. 

For these purposes, "arrangement" also includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to relevant Journey Group securities which is, or may be, an inducement to deal or refrain from dealing in such securities.

 

17.   General

Jaguar Holdings and Journey intend to post the Offer Document and the accompanying Form of Acceptance are intended to be posted to Journey Shareholders as soon as reasonably practicable and, in any event, within 28 days of the date of this announcement, unless otherwise agreed with the Panel.

The Offer will be made on the terms and subject to the Conditions set out in Appendix I to this announcement and to be set out in the Offer Document and the Form of Acceptance.  The Offer Document will include full details of the Acquisition, together with the expected timetable of principal events and will be accompanied by a Form of Acceptance. The Offer will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange, the AIM Rules and the FCA.

In deciding whether or not to accept the Offer, Journey Shareholders should rely on the information contained in, and follow the procedures described in, the Offer Document and the accompanying Form of Acceptance.

 

18.   Documents on display

Copies of the following documents will be made available, subject to certain restrictions relating to persons resident in any Restricted Jurisdiction, on Journey's website at www.journeygroup.plc.uk by no later than 12 noon (London time) on 12 October 2016 until the end of the Offer Period:

·      this announcement;

·      the irrevocable undertakings referred to in section 6 above and summarised in Appendix III to this announcement; and

·      the Subscription Agreement, the Loan Note Instrument and the NASCIT Subscription Agreement referred to in sections 9 and 10 above.

Enquiries:

Jaguar Holdings Limited

Christopher Mills, Director

Tim Sturm, Director

 

Tel: +44 (0) 207 640 3200

Strand Hanson Limited

(Financial Adviser to Jaguar Holdings and Harwood Capital)

Stuart Faulkner

Matthew Chandler

Ritchie Balmer

James Dance

 

Tel: +44 (0) 207 409 3494

 

Journey Group plc

Stephen Yapp, Executive Chairman

Alison Whittenbury, Chief Financial Officer

 

Tel: +44 (0) 208 606 1300

Stockdale Securities

(Financial Adviser to Journey)

Tom Griffiths

Edward Thomas

 

Tel: +44 (0) 207 601 6100

Nplus1 Singer Advisory LLP

(Nominated Adviser and Broker to Journey)

Nic Hellyer

Alex Price

Lauren Kettle

 

Tel: +44 (0) 207 496 3000

The Acquisition will be subject to the Conditions and to the further terms and conditions to be set out in the Offer Document.  The Acquisition is being made solely through the Offer Document, which will contain the full terms and conditions of the Acquisition, including details of how to accept the Offer.  Acceptance in relation to the Acquisition should be made only on the basis of the information contained in the Offer Document.  Journey Shareholders are advised to read the Offer Document carefully, once it has been despatched.

Strand Hanson Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Jaguar Holdings and Harwood Capital and no-one else in connection with the Acquisition and other matters described in this announcement and will not be responsible to anyone other than Jaguar Holdings and Harwood Capital for providing the protections afforded to clients of Strand Hanson Limited or for providing advice in relation to the Acquisition, the contents of this announcement or any other matter referred to herein.

Stockdale Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Journey and no-one else in connection with the Acquisition and other matters described in this announcement and will not be responsible to anyone other than Journey for providing the protections afforded to clients of Stockdale Securities Limited or for providing advice in relation to the Acquisition, the contents of this announcement or any other matter referred to herein.

Nplus1 Singer Advisory LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as nominated adviser and broker to Journey and no-one else in connection with the Acquisition and other matters described in this announcement and will not be responsible to anyone other than Journey for providing the protections afforded to clients of Nplus1 Singer Advisory LLP or for providing advice in relation to the Acquisition, the contents of this announcement or any other matter referred to herein.

In accordance with Rule 30.3 of the Code, you may request a hard copy of this announcement by contacting the Receiving Agent, Capita Asset Services, during business hours on 0371 664 0321 from within the UK or +4420 8639 3399 if calling from outside the UK or by submitting a request in writing to Capita Asset Services at The Registry, 34 Beckenham Road, Kent, BR3 4TU. It is important that you note that unless you make a request, a hard copy of this announcement and any such information incorporated by reference in it will not be sent to you. You may also request that all future documents, announcements and information to be sent to you in relation to the Acquisition should be sent in hard copy form.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTENDED TO, AND DOES NOT, CONSTITUTE OR FORM ANY PART OF, AN OFFER TO SELL OR AN INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES OR THE SOLICITATION OF ANY VOTE OR APPROVAL IN ANY JURISDICTION, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW.

The availability of the Offer and the release, publication and distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by the laws of those jurisdictions and therefore persons who are not resident in the United Kingdom into whose possession this announcement comes should inform themselves about and observe any such restrictions.  Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person. Copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction.

This announcement has been prepared for the purpose of complying with English law, the Code and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Cautionary Note Regarding Forward Looking Statements

This announcement, oral statements made regarding the Offer, and other information published by Jaguar Holdings and Journey may contain certain statements that are or may be forward looking with respect to the financial condition, results of operations and business of Journey and certain plans and objectives of the Journey Board and the Jaguar Holdings Board with respect thereto.  These forward looking statements can be identified by the fact that they do not relate to historical or current facts.  Forward looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of a similar meaning.  These estimates are based on assumptions and assessments made by the Journey Board and/or the Jaguar Holdings Board in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. 

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and service of this announcement shall not give rise to any implication that there has been no change in the facts set forth in this announcement since such date.  By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward looking statements in this announcement could cause actual results or developments to differ materially from those expressed or implied by such forward looking statements.  Although Journey and Jaguar Holdings believe that the expectations reflected in such forward looking statements are reasonable, neither Journey nor Jaguar Holdings, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this announcement will actually occur. Other than in accordance with their legal or regulatory obligations (including under the AIM Rules and the Disclosure and Transparency Rules of the FCA), neither Jaguar Holdings nor Journey is under any obligation, and Jaguar Holdings and Journey expressly disclaim any intention or obligation to update or correct the information contained in this announcement and Journey and Jaguar Holdings therefore caution you not to place undue reliance on these forward looking statements which speak only as at the date of this announcement.

Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of Journey or of any securities exchange 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 securities exchange 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) Journey and (ii) any securities exchange 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 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified.  Relevant persons who deal in the relevant securities of Journey or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of Journey or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of Journey or of any securities exchange 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) Journey and (ii) any securities exchange offeror(s), 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 p.m. (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 Journey or a securities exchange 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 Journey and by any offeror and Dealing Disclosures must also be made by Journey, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

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 Takeover 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.  You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Please be aware that addresses, electronic addresses and certain information provided by Journey Shareholders, persons with information rights and other relevant persons for the receipt of communications from Journey may be provided to Jaguar Holdings during the Offer Period as requested under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c).

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

In accordance with Rule 2.9 of the Code, Journey confirms that, as at the date of this announcement, it has 11,845,879 ordinary shares of 25 pence each in issue and admitted to trading on AIM under the ISIN reference GB00B909HR51.

In accordance with Rules 26.1 and 26.2 of the Code, a copy of this announcement and any other announcements or documents required to be published on a website will be available free of charge (subject to any applicable restrictions with respect to persons resident in Restricted Jurisdictions) on the website of Journey at www.journeygroup.plc.uk by no later than 12 noon (London time) on 12 October 2016. For the avoidance of doubt, the content of this website is not incorporated by reference and does not form part of this announcement.

This announcement does not constitute a prospectus or prospectus equivalent document.

Appendix I

Conditions and further terms OF THE OFFER

1.         The Offer shall be subject to the following Conditions:

(a)          valid acceptances being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. (London time) on the First Closing Date of the Offer (or such later time(s) and/or dates(s) as Jaguar Holdings may, with the consent of the Panel or in accordance with the Code, decide) in respect of Journey Shares which, together with all other Journey Shares which Jaguar Holdings acquires or agrees to acquire (whether pursuant to the Offer or otherwise), carry more than 50 per cent. in nominal value of the Journey Shares to which the Offer relates and of the voting rights normally exercisable at general meetings of Journey including for this purpose (to the extent, if any, required by the Panel) any such voting rights attaching to any Journey Shares that are unconditionally allotted or 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.

for the purposes of this Condition (a):

(i)            Journey 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 shall carry upon issue,

(ii)           the expression "Journey Shares to which the Offer relates" shall be construed in accordance with Chapter 3 of Part 28 of the Companies Act 2006;

(iii)          Journey Shares that cease to be held in treasury before the Offer becomes or is declared unconditional as to acceptances are Journey Shares to which the Offer relates; and

(iv)          valid acceptances shall be deemed to have been received in respect of Journey Shares which are treated for the purposes of Part 28 of the Companies Act 2006 as having been acquired or contracted to be acquired by Jaguar Holdings by virtue of acceptances of the Offer;

(b)          no Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same), or having required any action to be taken, or otherwise having done anything, or having enacted, made or proposed any statute, regulation or order (and there not continuing to be outstanding any such statute, regulation, decision or order) or taken any other step that would or might reasonably be expected to:

(i)            make the Acquisition, its implementation or the acquisition or the proposed acquisition by Jaguar Holdings or any member of the Wider Jaguar Holdings Group of any shares or other securities in, or control or management of, Journey or any member of the Wider Journey Group void, illegal and/or unenforceable in any relevant jurisdiction, or otherwise directly or indirectly restrain, prevent, prohibit, restrict, delay or otherwise materially adversely interfere with the same or impose material additional conditions or obligations with respect to the Acquisition (or its implementation) or such acquisition, or otherwise impede, materially challenge or interfere with the Acquisition (or its implementation) or such acquisition, or require material adverse amendment to the terms of the Acquisition or the acquisition or proposed acquisition of any Journey Shares or the acquisition of control or management of Journey or any member of the Wider Journey Group by Jaguar Holdings or any member of the Wider Jaguar Holdings Group;

(ii)           materially limit or delay the ability of any member of the Wider Jaguar Holdings Group or any member of the Wider Journey Group to acquire or to hold or to exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise voting or management control over, any member of the Wider Journey Group or any member of the Wider Jaguar Holdings Group, as the case may be, taken as a whole;

(iii)          require, prevent or materially delay any divestiture or alter the terms envisaged for any proposed divestiture by any member of the Wider Jaguar Holdings Group of any shares or other securities in Journey or any member of the Wider Journey Group (in any case to an extent which is or reasonably likely to be material in the context of the Wider Jaguar Holdings Group or the Wider Journey Group, as the case may be, taken as a whole);

(iv)          require, prevent or materially delay any divestiture or alter the terms envisaged for any proposed divestiture by any member of the Wider Jaguar Holdings Group or by any member of the Wider Journey Group of all or any part of their respective businesses, assets or properties or limit the ability of any of them to conduct all or any part of their respective businesses or to own or control any of their respective assets or properties or any part thereof (in any case to an extent which is or is reasonably likely to be material in the context of the Wider Jaguar Holdings Group or the Wider Journey Group, as the case may be, taken as a whole);

(v)           other than in connection with the implementation of the Acquisition, require any member of the Wider Jaguar Holdings Group or of the Wider Journey Group to subscribe for or acquire, or to offer to subscribe for or acquire, any shares or other securities (or the equivalent) or interest in, or any asset owned by, any member of the Wider Journey Group or any Third Party;

(vi)          materially limit the ability of any member of the Wider Jaguar Holdings Group or of the Wider Journey Group to integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider Jaguar Holdings Group and/or of the Wider Journey Group in each case in a manner which is material in the context of the Acquisition, or as the case may be, in the context of the Wider Jaguar Holdings Group or the Wider Journey Group, as the case may be, taken as a whole;

(vii)          result in any member of the Wider Jaguar Holdings Group or the Wider Journey Group ceasing to be able to carry on business under any name under which it presently does so (in any case to an extent which is material in the context of the Wider Jaguar Holdings Group or the Wider Journey Group, as the case may be, taken as a whole); or

(viii)         save as Disclosed, otherwise adversely affect the business, assets, profits, financial or trading position or prospects of any member of the Wider Jaguar Holdings Group to a material extent, or, of the Wider Journey Group, taken as a whole, to a material extent;

and all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could decide to take, institute, implement or threaten such actions, proceedings, suit, investigation, enquiry or reference or take any other step under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as the case may be);

(c)          all material notifications, filings and/or applications which are necessary having been made, all appropriate waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or terminated (as appropriate) and all statutory or regulatory obligations in any relevant jurisdiction having been complied with, in each case in connection with the Acquisition or the acquisition or proposed acquisition of any shares or other securities in, or control of, Journey or any other member of the Wider Journey Group by any member of the Wider Jaguar Holdings Group or the carrying on by any member of the Wider Journey Group of its business; and

(d)          all Authorisations which are necessary in any relevant jurisdiction for or in respect of the Acquisition (or its implementation) or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Journey or any other member of the Wider Journey Group by Jaguar Holdings or any member of the Wider Jaguar Holdings Group or the carrying on by any member of the Wider Journey Group of its business having been obtained, in terms and in a form satisfactory to Jaguar Holdings from all appropriate Third Parties or from any persons or bodies with whom any member of the Wider Jaguar Holdings Group or any member of the Wider Journey Group has entered into contractual arrangements and such Authorisations together with all authorisations necessary for any member of the Wider Journey Group to carry on its business remaining in full force and effect, and there being no notice or other intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same having been made in connection with the Acquisition or any other matter directly, or indirectly, arising from the Acquisition (or its implementation), in each case where the absence of such Authorisation would have a material adverse effect on the Wider Journey Group or the Wider Jaguar Holdings Group taken as a whole and all necessary statutory or regulatory obligations in any relevant jurisdiction having been complied with.



 

Part B: Waiver of Conditions and further terms of the Offer

1.   Subject to the requirements of the Panel, Jaguar Holdings reserves the right to waive the Conditions in paragraphs (b) to (d) of Part A above, in whole or in part.

2.   If the Panel requires Jaguar Holdings to make an offer or offers for any Journey Shares under the provisions of Rule 9 of the Code, Jaguar Holdings may make such alterations to the Conditions of the Offer as are necessary to comply with the provisions of that Rule.

3.   The Offer will lapse unless all Conditions to the Offer are fulfilled or (if capable of waiver) waived or, where appropriate, determined by Jaguar Holdings to have been or remain satisfied by midnight (London time) on the date which is 21 days after the later of the First Closing Date and the date on which the Offer becomes, or is declared, unconditional as to acceptances (or such later date (if any) as Jaguar Holdings may, with the consent of the Panel or in accordance with the Code, decide).

4.   The Offer will lapse if, before the First Closing Date or the date on which the Offer becomes, or is declared, unconditional as to acceptances (whichever is later), the European Commission initiates proceedings under Article 6(1) (c) of Council Regulation (EC) 139/2004 or there is a Phase 2 CMA Reference following a referral to a competent authority of the United Kingdom under Article 9(3)(b) of that Regulation or there is a Phase 2 CMA Reference with respect to any matter arising from or relating to the Offer.  If the Offer does so lapse, not only will the Offer cease to be capable of further acceptance but also Journey Shareholders and Jaguar Holdings will thereafter cease to be bound by prior acceptances.

5.   The Journey Shares which are the subject of the Offer will be acquired, fully paid, free from all liens, charges, encumbrances, rights of pre-emption and any other third party rights of any nature whatsoever and together with all rights now or hereafter attaching thereto, including the right to receive and retain in full all dividends and other distributions, if any, declared, made or paid after the date hereof.

6.   The Offer will comply with the AIM Rules and the provisions of the Code. The Offer and any acceptances under it will be governed by English law and be subject to the jurisdiction of the courts of England.

7.   Under Rule 13.5 of the Code, Jaguar Holdings may only invoke a Condition to the Offer so as to cause the Acquisition not to proceed, to lapse or to be withdrawn where the circumstances which give rise to the right to invoke the Condition are of material significance to Jaguar Holdings in the context of the Acquisition.  The Condition contained in paragraph (a) of Part A of this Appendix I is not subject to this provision of the Code.

8.   The Offer is not being made, directly or indirectly, in, into or from, or by use of the mails of, or by any means of instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any jurisdiction where to do so would violate the laws of that jurisdiction.

9.   The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

10. For the purpose of these Conditions, a Third Party shall be regarded as having "intervened" if it has taken, instituted, implemented or threatened any action, proceeding, suit, investigation, enquiry or reference or made, proposed or enacted any statute, regulation, decision, notice or order or taken any measures or other steps or required any action to be taken or information to be provided or otherwise having done anything and "intervene" shall be construed accordingly.

11. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.



APPENDIX II

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this announcement, unless otherwise stated, or the context otherwise requires, the following bases and sources have been used:

1.         The value attributed to the existing issued share capital of Journey is based upon the 11,845,879 Journey Shares in issue on 10 October 2016 (being the last Business Day prior to the date of this announcement). 

2.         The Closing Prices are closing middle market quotations derived from the AIM Appendix of the Daily Official List for the particular date(s) concerned.

3.         The volume weighted average prices of 186.5 and 184.4 pence per Journey Share for the twelve months up to and including 10 October 2016 and for the twelve months up to and including 22 August 2016, respectively, is derived from Capital IQ's daily volume weighted average price data. 

4.         Unless otherwise stated, the financial information concerning the Journey Group has been extracted or derived (without material adjustment) from Journey's audited consolidated financial statements for the year ended 31 December 2015 and its unaudited interim results for the six months to 30 June 2016.

5.         All information relating to Jaguar Holdings has been provided by persons duly authorised by the Jaguar Holdings Board.

6.         All information relating to Harwood Capital and the Harwood Funds has been extracted from published sources and/or provided by persons duly authorised by Harwood Capital and the Harwood Funds.

7.         The maximum cash consideration payable under the Acquisition is based on the 11,845,879 Journey Shares in issue on 10 October 2016 (being the last Business Day prior to the date of this announcement).

 

Appendix III

DETAILS OF IRREVOCABLE UNDERTAKINGS

1.    Journey Directors' Irrevocable Undertakings

Each of the following Journey Directors has entered into irrevocable undertakings with Harwood Capital, for the benefit of Jaguar Holdings, whereby the following Journey Directors have irrevocably undertaken to accept or procure the acceptance of the Offer in relation to Journey Shares representing, in aggregate, approximately 10.44 per cent. of the share capital of Journey in issue on 10 October 2016 (being the last Business Day prior to the date of this announcement). The information provided in the below table, in respect of Dimitri Goulandris, includes 298,526 Journey Shares held in a trust for which he is a named beneficiary. A separate irrevocable undertaking from the trustee has been obtained in respect of these Journey Shares.

 

Name of Journey Director

Number of Journey Shares in respect of which undertaking is given*

Percentage of Journey's existing issued share capital

Stephen Yapp

411,700

3.48%

Dimitri Goulandris

812,306

6.86%

Graham Bird

12,347

0.10%

Total:

1,236,353

10.44%

* the undertakings and the numbers referred to above refer only to those Journey Shares to which the relevant director is beneficially entitled or any share such director is otherwise able to control the exercise of in terms of the rights attaching to such share, including the ability to procure the transfer of such share. The numbers referred to in this table exclude any award that may be outstanding under the Journey Share Option Schemes, however any such shares awarded would be included in the scope of the undertakings.

These irrevocable undertakings given by the Independent Directors shall lapse and cease to be binding, inter alia, if (i) a competing offer from a third party for the entire issued and to be issued share capital of Journey is made which becomes or is declared wholly unconditional, or otherwise becomes effective (if implemented by way of a scheme of arrangement) at a price of at least 275 pence per Journey Share; (ii) Jaguar Holdings fails to post the Offer Document within 28 days of this announcement; (iii) the Offer lapses or is withdrawn without becoming or being declared unconditional in all respects; or (iv) Jaguar Holdings announces that it will not proceed with the Acquisition.

 

2.    The Existing Harwood Investors' Irrevocable Undertakings

The Existing Harwood Investors have irrevocably undertaken to accept or procure the acceptance of the Offer in relation to Journey Shares representing approximately 29.94 per cent. of the share capital of Journey in issue on 10 October 2016 (being the last Business Day prior to the date of this announcement). In addition, the Existing Harwood Investors have irrevocably undertaken to accept or procure the acceptance of the Offer in relation to Journey Shares issued to (or beneficially for) them or acquired by them after 10 October 2016 (being the last Business Day prior to the date of this announcement), or otherwise attributable to or derived from such shares.

These irrevocable undertakings shall lapse and cease to become binding if the Offer does not become or be declared unconditional in all respects by 30 November 2016. These irrevocable undertakings will also cease to be binding if the Offer lapses or Jaguar Holdings announces that it will not proceed with the Acquisition.



 

APPENDIX IV

DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise:

 

"Acquisition"

the acquisition of the entire issued and to be issued share capital in Journey to be effected by way of the Offer;

"AIM"

the AIM market of the London Stock Exchange;

"AIM Rules"

the AIM Rules for Companies as published by the London Stock Exchange (as amended from time to time);

"Air Fayre" or "US Division"

Air Fayre USA Inc., incorporated in Delaware, USA, a wholly owned subsidiary of the Company, and the holding company of Air Fayre CA Inc., a provider of catering and logistics to the international travel sector;

"Appendices"

the appendices to this announcement;

"Articles"

the articles of association of Journey as at the date of the Offer and "Article" shall mean any article of those Articles;

"Australia"

the Commonwealth of Australia, its states, territories and possessions and all areas subject to its jurisdiction or any potential subdivision thereof;

"Authorisation"

authorisation, grant, order, recognition, confirmation, lease, arrangement, consent, licence, clearance, certificate, permission or approval;

"Board"

the board of directors of Journey or the board of directors of Jaguar Holdings (as the case may be) and the terms "Journey Board" and "Jaguar Holdings Board" shall be construed accordingly;

"Business Day"

a day (other than a Saturday, Sunday or UK public holiday) on which clearing banks in the City of London are open for the transaction of general commercial business;

"Capita Asset Services"

a trading name of Capita Registrars Limited, whose registered office is at The Registry, 34 Beckenham Road, Kent, BR3 4TU, being Journey's registrar;

"Capital IQ"

S&P Capital IQ, a part of McGraw Hill Financial Inc.;

"certificated" or "in certificated form"

the description of a share or other security which is not in uncertificated form (that is, not in CREST);

"Closing Price"

the closing middle market price of a Journey Share on a particular trading day as derived from the AIM Appendix of the Daily Official List or from Capital IQ in the case of the volume weighted average Closing Price for the twelve months ended on 10 October 2016;

"Code"

The City Code on Takeovers and Mergers issued by the Panel;

"Companies Act 2006"

the Companies Act 2006 (as amended from time to time);

"Competition and Markets Authority"

a UK statutory body established under the Enterprise and Regulatory Reform Act 2013;

"Conditions"

the conditions to implementing the Acquisition as set out in Appendix I to this announcement and to be set out in the Offer Document;

"Court Meeting"

the meeting of voting scheme shareholders convened by order of the Court under section 899 of the Companies Act 2006 for the purposes of considering and, if thought fit, approving the Scheme;

"CREST"

the computerised settlement system (as defined in the CREST Regulations) operated by Euroclear UK & Ireland Limited which facilitates the transfer of title to shares in uncertificated form;

"CREST Regulations"

the Uncertificated Securities Regulations 2001 (SI2001 No. 3755), including (i) any enactment or subordinate legislation which amends or supersedes those regulations and (ii) any applicable rules made under those regulations or any such enactment or subordinate legislation for the time being in force;

"Daily Official List"

the Daily Official List published by the London Stock Exchange;

"Dealing Disclosure"

has the same meaning as in Rule 8 of the Code;

"Disclosed"

as publicly announced by or on behalf of Journey through (i) a Regulatory Information Service on or before the date of this announcement, (ii) the publication of such information on the main website maintained by Journey before the date of this announcement,  (iii) filings made with the Registrar of Companies and appearing on Journey's or any member of the Wider Journey Group's file at Companies House within the last two years, or (iv) as fairly disclosed by any member of the Journey Group or any of its professional advisers, including any of its legal advisers and any of its financial advisers, to a member of the Jaguar Holdings Group or any of its professional advisers, including to any of its legal advisers and any of its financial advisers, before the date of this announcement (including all matters contained in the written replies, correspondence, documentation and information provided in an electronic data room or sent to any member of the Jaguar Holdings Group or any of its professional advisers during the due diligence process and whether or not in response to any specific request for information made by any member of the Jaguar Holdings Group or any of its professional advisers);

"Discretionary Private Clients"

two private client accounts under the discretionary management of Harwood Capital;

"Existing Harwood Investors"

the funds managed and/or advised by or otherwise associated with Harwood Capital which currently hold Journey Shares, as detailed in section 8.3 of this announcement;

"Financial Conduct Authority" or "FCA"

the Financial Conduct Authority in its capacity as the competent authority for the purposes of Part VI of the FSMA, including its successor(s) from time to time;

"First Closing Date"

the date which falls 21 days after the date of posting of the Offer Document;

"Form of Acceptance"

the form of acceptance and authority relating to the Offer, which will accompany the Offer Document;

"FSMA"

the Financial Services and Markets Act 2000 (as amended from time to time);

"Harwood Capital"

Harwood Capital LLP, a UK limited liability partnership incorporated under the Limited Liability Partnerships Act 2000 with registered number OC304213;

"Harwood Capital Management"

Harwood Capital Management Limited, a company incorporated in England and Wales under registration number 7667924 with limited liability having its registered office at 6 Stratton Street, Mayfair, London, W1J 8LD;

"Harwood Capital Management Group"

Harwood Capital Management and its subsidiaries;

"Harwood Funds"

certain discretionary investment management and/or advisory clients of Harwood Capital, including, inter alia, NASCIT, Oryx, HPE IV and the Discretionary Private Clients;

"HPE IV"

Harwood Private Equity IV L.P., an English limited partnership incorporated on 9 October 2014 under registration number LP016260;

"Independent Directors"

the independent directors of Journey able to recommend the Acquisition, being Stephen Yapp, Alison Whittenbury, Joseph Golio, Graham Bird and Dimitri Goulandris;

"Jaguar Holdings"

Jaguar Holdings Limited, a company incorporated in England and Wales under registration number 09990680 with limited liability having its registered office at 50 Broadway, London SW1H 0BL;

"Jaguar Holdings Directors"

members of the Jaguar Holdings board of directors;

"Jaguar Holdings Group"

Jaguar Holdings and its direct and indirect holding companies (including, for the avoidance of doubt the Harwood Funds);

"Jaguar Holdings Ordinary Shares"

ordinary shares of 12 pence each in the capital of Jaguar Holdings;

"Jaguar Holdings Preference Shares"

zero-dividend redeemable preference shares of 228 pence each in the capital of Jaguar Holdings having the rights set out in the articles of association of Jaguar Holdings;

"Jaguar Holdings Share Unit"

a unit comprising one Jaguar Holdings Ordinary Share and one Jaguar Holdings Preference Share;

"Journey" or the "Company"

Journey Group plc, a company incorporated in England and Wales with registered number 01944667 whose registered office is at Building One, The Square, Southall Lane, Southall, Middlesex, UB2 5NH;

"Journey Directors"

members of the Journey board of directors;

"Journey Group"

Journey and its subsidiary undertakings;

"Journey Share Option Schemes"

the share option schemes, operated by Journey;

"Journey Shareholders"

registered holders of Journey Shares from time to time;

"Journey Shares"

the existing unconditionally allotted or issued and fully paid ordinary shares of 25 pence each in the capital of Journey and any further such ordinary shares which are unconditionally allotted or issued fully paid, or credited as fully paid, before the date on which the Offer closes (or such earlier date as Jaguar Holdings may, subject to the Code, decide, not being earlier than (a) the date on which the Offer becomes or is declared unconditional as to acceptances or (b), if later, the First Closing Date);

"Loan Notes"

the 10 per cent. fixed rate US$1 nominal amount unsecured loan notes, created by the Loan Note Instrument;

"Loan Note Instrument"

the instrument constituting the Loan Notes, executed by Jaguar Holdings on 11 October 2016;

"London Stock Exchange"

London Stock Exchange plc, a public company incorporated in England and Wales under number 2075721, together with any successors thereto;

"Main Market"

the main market of the London Stock Exchange;

"NASCIT"

North Atlantic Smaller Companies Investment Trust plc, whose shares are traded on the Main Market, whose registered number is 01091347;

"NASCIT Subscription Agreement"

the agreement dated 11 October 2016 and made between Jaguar Holdings and NASCIT, under which NASCIT has agreed to subscribe in cash at par for up to £13,500,000 million nominal amount in US Dollars of Loan Notes;

"Offer"

the recommended offer of 240 pence in cash to be made by Jaguar Holdings for the entire issued and to be issued share capital of Journey on the terms and conditions to be set out in the Offer Document and the Form of Acceptance including, where the context so requires, any subsequent revision, variation, extension or renewal of such offer;

"Offer Document"

the formal document setting out the full terms and conditions of the Offer to be posted to Journey Shareholders and others containing, inter alia, the terms and conditions of the Offer;

"Offer Period"

the period beginning on and including 4 October 2016 and ending on the latest of: (i) 1.00 p.m. (London Time) on the First Closing Date; (ii) the time and date on which the Offer becomes or is declared unconditional as to acceptances; and (iii) the time and date on which the Offer lapses or is withdrawn;

"Offer Price"

240 pence per Journey Share;

"Opening Position Disclosure"

has the same meaning as in Rule 8 of the Code;

"Options"

subsisting options or awards to acquire or subscribe for Journey Shares granted in accordance with the terms of any of the Journey Share Option Schemes;

"Oryx"

Oryx International Growth Fund Limited, a closed-ended investment company incorporated in Guernsey, whose shares are traded on the Main Market, whose registered number is GG28917;

"Overseas Shareholders"

Journey Shareholders (or nominees of, or custodians or trustees for, Journey Shareholders) not resident in, or nationals or citizens of, the United Kingdom;

"Panel"

the Panel on Takeovers and Mergers;

"pence", "penny" or "p"

UK pence sterling, the lawful currency of the United Kingdom;

"Phase 2 CMA Reference"

a reference of the Offer to the chair of the Competition and Markets Authority for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013;

"pounds" or "£"

UK pounds sterling, the lawful currency of the United Kingdom;

"Receiving Agent"

Capita Asset Services;

"Registrar of Companies"

the Registrar of Companies in England and Wales;

"Regulatory Information Service"

any information service authorised from time to time by the FCA for the purpose of disseminating regulatory announcements;

"Relevant Authority"

any central bank, government or governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, association, institution, environmental body, employee representative body or any other body or person whatsoever in any jurisdiction;

"Restricted Jurisdiction"

United States, Australia or any other jurisdiction where the relevant actions may constitute a violation of the relevant laws and regulations of such jurisdiction if information concerning the Acquisition is sent or made available to Journey Shareholders in such jurisdictions;

"Restricted Overseas Shareholders"

a person holding Journey Shares (including, without limitation, an individual, partnership, unincorporated syndicate, limited liability company, unincorporated organisation, trust, trustee, executor, administrator or other legal representative) in, or resident in, or any person whom Journey (following consultation with Jaguar Holdings) reasonably believes to be in a Restricted Jurisdiction and persons in any other jurisdiction whom Journey (following consultation with Jaguar Holdings) is advised to treat as restricted overseas persons in order to observe the laws of such jurisdiction or to avoid the requirement to comply with any governmental or other consent or any registration, filing or other formality which Journey (following consultation with Jaguar Holdings) regards as unduly onerous;

"Rule"

a rule of the Code;

"Scheme"

the lapsed scheme of arrangement under Part 26 of the Companies Act 2006 between Journey and the scheme shareholders, which lapsed on 3 October 2016;

"Strand Hanson"

Strand Hanson Limited, the financial adviser to Jaguar Holdings and Harwood Capital;

"Stockdale Securities"

Stockdale Securities Limited, the financial adviser to Journey;

"Subscription Agreement"

the agreement made between (i) Jaguar Holdings and (ii) Harwood Capital, dated 11 October 2016;

"Subscription Price"

the sum of 240 pence per Jaguar Holdings Share Unit;

"Takeover Offer"

an offer by Jaguar Holdings to acquire the entire issued and to be issued ordinary share capital of Journey by way of a takeover offer under the Code;

"Third Party"

any government, government department, governmental or quasigovernmental, supranational, statutory, regulatory, environmental or investigative body or association (including, for the avoidance of doubt, the UK's Serious Fraud Office or the US Department of Justice (or any analogous body)), institution or agency (including, without limitation, any trade agency) or authority (including, without limitation, any anti-trust or merger control authority), any court or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction;

"uncertificated" or "in uncertificated form"

recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;

"United Kingdom" or "UK"

the United Kingdom of Great Britain and Northern Ireland;

"United States", "USA" or "US"

the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all areas subject to its jurisdiction or any political sub-division thereof;

"US$" or "US Dollars"

US dollars, the currency of the United States;

"Watermark" or "Products Division"

the Watermark division operating out of: (i) Watermark Limited, a company incorporated in England and Wales under registration number 01475938, with limited liability having its registered office at Building One, The Square, Southall Lane, Southall, Middlesex, UB2 5NH; (ii)  Watermark Asia Limited, a company incorporated in Hong Kong under registration number 0038959 with limited liability and having its registered office at Unit 910, 9/F, New Kowloon Plaza, 38 Tai Kok Tsui Road, Kowloon, HK; (iii) Watermark Asia Pacific Pty Limited, a company incorporated in Australia under registration number 129 132 805 with limited liability and having its registered office at Spaces, 111 Flinders Street, Surrey Hills NSW, and (iv) Watermark Asia Holdings Limited, a company incorporated in Hong Kong under registration number 0848546 with limited liability and having its registered office at Unit 910, 9/F, New Kowloon Plaza, 38 Tai Kok Tsui Road, Kowloon, HK, all indirectly 100 per cent. owned by the Company;

"Wider Jaguar Holdings Group"

the Jaguar Holdings Group and associated undertakings of Jaguar Holdings and any other body corporate, partnership, joint venture or person in which members of the Jaguar Holdings Group (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or the equivalent; and

"Wider Journey Group"

the Journey Group and associated undertakings of Journey and any other body corporate, partnership, joint venture or person in which members of the Journey Group (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or the equivalent.

For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "parent undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act 2006.

All times referred to in this announcement are London times unless otherwise stated.

In this announcement, references to the singular include the plural and vice versa, unless the context otherwise requires and words importing the masculine gender shall include the feminine or neutral gender.

All references to legislation in this announcement are to English legislation unless the contrary is stated. Any references to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.

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This information is provided by RNS
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