2 August 2019
This announcement is not for release, publication or distribution, in whole or in part, into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.
IQGeo Group plc
(the "Company" or the "Group")
Announcement of Tender Offer and General Meeting
IQGeo Group plc (AIM: IQG), a leading developer of geospatial software for the telecommunications and utility industries, is pleased to announce today the launch of a proposed Tender Offer to return to Shareholders a portion of the surplus cash generated from the sale of the RTLS SmartSpace business. Pursuant to the Tender Offer, finnCap Ltd ("finnCap"), the Company's broker and Nomad, will purchase, as principal, up to a maximum of 28,260,869 of the Company's Ordinary Shares at a price of 46 pence per Ordinary Share, on the basis that the Ordinary Shares that finnCap purchase under the Tender Offer will be subsequently repurchased from it by the Company pursuant to the terms and conditions of the Repurchase Agreement.
If the maximum number of Ordinary Shares under the Tender Offer is acquired this will result in approximately £13.0 million being paid to Qualifying Shareholders.
The Tender Offer Price represents a premium of 5 per cent. to the middle market closing price of 43.5 pence per Ordinary Share on 31 July 2019, being the latest practicable date before the release of this announcement.
To enable the Tender Offer to take place, the Company is seeking Shareholders' approval of the Tender Offer Resolution at a General Meeting to be held at 10.00 a.m. on 22 August 2019. A circular, containing the formal terms and conditions of the Tender Offer and instructions to Shareholders on how to tender their Ordinary Shares should they choose to do so, together with a Tender Form and Form of Proxy, is expected to be posted to Shareholders later today (the "Circular").
Unless otherwise defined herein, capitalised terms used in this announcement shall have the same meanings as defined in the Circular, an extract of which is included below.
Background to and reasons for the Tender Offer
On 31 December 2018, the Company completed the sale of the RTLS SmartSpace division and Ubisense brand. The Company intends to make a return of a portion of the sale proceeds to Shareholders pursuant to the Tender Offer. In establishing the quantum of the Tender Offer, the Board has considered the controlled investment strategy required to support the Company's growth ambitions as well as the working capital needs of the business going forward.
To effect the Tender Offer, the Company is required to have sufficient distributable reserves on its balance sheet. Accordingly, pursuant to the Capital Reduction, the Company sought to create distributable reserves by reducing the amount standing to the credit of its share premium account by £28,948,000 and transferring that amount to its profit and loss account.
The Company received Shareholder approval to effect the Capital Reduction at its Annual General Meeting held on 5 June 2019 and court approval for the Capital Reduction was granted on 16 July 2019. The Capital Reduction has therefore created additional distributable reserves to enable the Company to buy back a proportion of its own Ordinary Shares. Accordingly, the Company is required to produce and file a new balance sheet with Companies House, demonstrating that it has sufficient distributable cash reserves. The Company will shortly file an unaudited Company balance sheet as at 16 July 2019, the date on which the Capital Reduction became effective. A further announcement will be made once this has been filed.
Details of the proposed Tender Offer
Subject to certain conditions (including the Tender Offer Resolution being passed at the General Meeting), the Tender Offer will be implemented by finnCap, acting as principal, and through a subsequent Repurchase of the tendered Ordinary Shares from finnCap by the Company, in both cases at the Tender Price. It is expected that Qualifying Shareholders who successfully tender their shares will receive payment for such shares by 13 September 2019.
To give effect to these arrangements, finnCap has entered into a Repurchase Agreement with the Company. The Company intends to cancel any Ordinary Shares repurchased in connection with the Tender Offer.
It is possible that finnCap will purchase, as principal, Ordinary Shares pursuant to the Tender Offer such that finnCap's interest in Ordinary Shares would carry 30% or more of the Company's voting rights. Such an acquisition would ordinarily trigger an obligation pursuant to Rule 9 of the Takeover Code. The Takeover Panel have, following consultation, granted a waiver from this obligation on the basis that the Repurchase Agreement sets out firm arrangements pursuant to which finnCap must sell, and the Company must repurchase, all Ordinary Shares purchased by finnCap pursuant to the Tender Offer within a very short period.
The Tender Offer will be open to all Qualifying Shareholders, being Shareholders on the Register on the Record Date, who are not subject to the securities laws of a Restricted Jurisdiction.
Qualifying Shareholders may participate in the Tender Offer by tendering a proportion of their registered holdings of Ordinary Shares. Each Qualifying Shareholder will be entitled to sell their Maximum Entitlement under the Tender Offer, but will not be able to submit offers in excess of their Maximum Entitlement.
The Tender Offer is subject to, amongst other things, the passing of the Tender Offer Resolution.
The Tender Offer will close at 1.00 p.m. on 30 August 2019 and tenders received after that time will not be accepted unless otherwise approved by finnCap (with the consent of the Company).
The Tender Price for Ordinary Shares tendered by Qualifying Shareholders under the Tender Offer is £0.46. The Tender Price represents a premium of 5 per cent. to the closing mid-market price of £0.435 per Ordinary Share on 31 July 2019 (being the Latest Practicable Date).
The issued share capital of the Company at the Latest Practicable Date was 73,302,119 Ordinary Shares. If the Tender Offer is implemented in full, this will result in the purchase of up to 28,260,869 Ordinary Shares (approximately 38.55 per cent. of the Ordinary Shares). The issued Ordinary Share capital of the Company following cancellation of these shares will be 45,041,250.
Kestrel Partners LLP, represented on the Board by Oliver Scott, is the Company's largest Shareholder, with an interest of 25.98% in the Company's issued share capital, and has irrevocably undertaken to fully participate in the Tender Offer with respect to its Maximum Entitlement as at the Record Date.
Robert Sansom, a director of IQGeo, with an interest of 8.51% in the Company's issued share capital, has irrevocably undertaken to fully participate in the Tender Offer with respect to his Maximum Entitlement as at the Record Date.
As a consequence, there will be no increase in the percentage holdings of Ordinary Shares of Kestrel Partners or Robert Sansom as a result of the Tender Offer and should the Tender Offer not be taken up in full their percentage holdings will fall.
Directors' intentions regarding the Tender Offer
Paul Taylor, Richard Petti, Tim Gingell and Ian Kershaw, being Directors who hold Ordinary Shares, do not intend to tender any of their Ordinary Shares in the Tender Offer.
Robert Sansom will fully participate in the Tender Offer with respect to his Maximum Entitlement, as set out above.
Oliver Scott is a partner of Kestrel Partners LLP, which will fully participate in the Tender Offer with respect to its Maximum Entitlement, as set out above.
The General Meeting
Notice of a General Meeting of the Company to be held at the offices of Mills & Reeve LLP, Botanic House, 100 Hills Road, Cambridge CB2 1PH on 22 August 2019 at 10.00 a.m. is set out at the end of the Circular.
At this meeting, the Tender Offer Resolution will be proposed to authorise the Company to make the repurchase of Ordinary Shares which is necessary to enable the Tender Offer to be implemented. The Tender Offer Resolution will be proposed as a special resolution requiring the approval of at least 75 per cent. of the votes cast at the General Meeting.
Each Shareholder registered on the Register at 5.00 p.m. on 20 August 2019 is entitled to vote on the Tender Offer Resolution.
The Directors unanimously recommend Shareholders to vote in favour of the Tender Offer Resolution to be proposed at the General Meeting as they intend to do so in respect of their beneficial holdings amounting, in aggregate, to 25,589,221 Ordinary Shares, representing approximately 34.91 per cent. of the existing issued ordinary share capital of the Company as at 31 July 2019 (being the Latest Practicable Date) and any additional beneficial holdings which they may subsequently acquire.
The Directors are making no recommendation in relation to participation in the Tender Offer itself. Whether or not Qualifying Shareholders decide to tender their Ordinary Shares will depend, amongst other things, on their view of the Company's prospects and their own individual circumstances (including their own tax position). If you are in any doubt as to the action you should take, you are recommended to seek your own independent advice.
EXPECTED TIMETABLE OF EVENTS
Publication of the Circular
2 August 2019
Tender Offer opens
2 August 2019
Latest time and date for receipt of Forms of Proxy and CREST voting instructions in respect of the General Meeting
10.00 a.m. on 20 August 2019
Time and date of General Meeting
10.00 a.m. on 22 August 2019
Outcome of General Meeting announced by
22 August 2019
Latest time and date for receipt of Tender Forms and TTE instructions from CREST Shareholders
1.00 p.m. on 30 August 2019
Record Date for the Tender Offer
5.00 p.m. on 30 August 2019
Outcome of Tender Offer announced by
2 September 2019
Purchase of Ordinary Shares under the Tender Offer
9 September 2019
Cheques despatched for certificated Ordinary Shares purchased pursuant to the Tender Offer and payment through CREST for uncertificated Ordinary Shares purchased pursuant to the Tender Offer
By 13 September 2019
CREST accounts credited with uncertificated Ordinary Shares unsuccessfully tendered and despatch of balance share certificates for unsold certificated Ordinary Shares and share certificates for unsuccessful tenders of certificated Ordinary Shares
By 13 September 2019
For further information contact:
IQGeo Group plc +44 1223 606655
finnCap Ltd +44 20 7220 0500
Henrik Persson, Anthony Adams (Corporate Finance)
Tim Redfern, Richard Chambers (ECM)
Tulchan Communications LLP +44 20 7353 4200
James Macey White, Matt Low, Deborah Roney
Notes to Editors
IQGeo™ (AIM: IQG) is a leading developer of geospatial software for the telecommunications and utility industries, accelerating productivity and collaboration across enterprise planning, design, construction and maintenance processes. Our reality-centric solutions create and maintain a real-time, accurate view of complex network assets, dramatically improving data quality and currency. IQGeo's open, mobile-first architecture streamlines operational processes using any device, in the office or in the field, enabling greater business collaboration. We help network operators meet their digital transformation ambitions, saving time and money, while improving safety and enhancing customer satisfaction. Headquartered in Cambridge UK, with offices in Denver USA, Frankfurt Germany and Tokyo Japan we work with some of the largest network infrastructure operators in the world. For more information visit: https://www.iqgeo.com/
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014
This announcement does not constitute or form part of an offer or invitation, or a solicitation of any offer or invitation, to purchase any Ordinary Shares or other securities.
The full terms and conditions of the Tender Offer will be set out in the Circular, which Shareholders are advised to read in full. Any response to the Tender Offer should be made only on the basis of the information in the Circular.
finnCap, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for IQGeo Group plc and no one else in connection with the Tender Offer and will not regard any other person as a client in relation to the Tender Offer and will not be responsible to anyone other than IQGeo Group plc for providing the protections afforded to its clients, nor for providing advice, in relation to the Tender Offer, or any other matter referred to in this announcement. finnCap's responsibilities as the Company's nominated adviser and broker under the AIM Rules and the AIM Rules for Nominated Advisers are owed to the London Stock Exchange and the Company and not to any other person. No representation or warranty, express or implied, is made by finnCap as to any of the contents of this announcement.
Apart from the responsibilities and liabilities, if any, which may be imposed on finnCap by FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, neither finnCap nor any of its affiliates, directors, officers, employees or advisers accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this announcement, including its accuracy or completeness or for any other statement made or purported to be made by it, or on behalf of it, the Company, the Directors or any other person, in connection with the Company or the Tender Offer, and nothing in this announcement should be relied upon as a promise or representation in this respect, whether or not to the past or future. finnCap and its respective affiliates, directors, officers, employees and advisers accordingly disclaims to the fullest extent permitted by law all and any responsibility or liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this announcement or any such statement.
The availability of the Tender Offer to Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction in which they are located. Persons who are not resident in the United Kingdom should read the paragraph headed ''Overseas Shareholders'' set out in paragraph 6 of Part II of the Circular and should inform themselves about, and observe, any applicable legal or regulatory requirements.
The Tender Offer is not being made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone and e-mail) of interstate or foreign commerce of, or any facilities of a national securities exchange of, any Restricted Jurisdiction and the Tender Offer cannot be accepted by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction. Accordingly, unless otherwise determined by the Company and permitted by applicable law and regulation, neither the Circular nor the Tender Form nor any related document is being, nor may it be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed, or sent in, into or from any Restricted Jurisdiction, and persons receiving the Circular, the Tender Form and/or any related document (including, without limitation, trustees, nominees or custodians) must not mail or otherwise forward, distribute or send it in, into or from such Restricted Jurisdiction, as to do so may invalidate any purported acceptance of the Tender Offer. Any person (including, without limitation, trustees, nominees or custodians) who would or otherwise intends to, or who may have a contractual or legal obligation to, forward the Circular, the Tender Form and/or any related document to any jurisdiction outside the United Kingdom, should seek appropriate advice before taking any action.
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