THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY, AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT.
For immediate release
15 August, 2017
The Deltic Group Limited
Possible Proposal for a Merger with Revolution Bars Group plc
Deltic (https://delticgroup.co.uk/) is the leading specialist late-night operator in the UK. Since it was acquired by its current shareholders out of the administration of Luminar plc, its predecessor firm, in 2011, management has refurbished the majority of its estate of 57 clubs, including those operating under the PRYZM, Bar&Beyond, Steinbeck&Shaw, ATIK, and Fiction brands. It is a highly cash generative and growing business of similar size to Revolution, its major competitor in the UK late-night market. Trading at Deltic continues to reflect confidence in the late-night market and its future prospects.
Revolution’s recent poor share price performance resulted in its 31 July, 2017 announcement of the possible and opportunistic offer by Stonegate Pub Company Limited (“Stonegate”) to acquire the entire issued and to be issued share capital of Revolution at 200p per share. Deltic believes that if a firm offer by Stonegate is made, and is recommended by the Revolution Board, it would be a disappointing outcome after two years of roll out and investment to merely return to its shareholders the same value of the business as at its 2015 IPO.
As a competitor, Deltic has observed in Revolution a business with solid growth potential and some great trading outlets that has been negatively impacted by financial management setbacks, whilst having limited scale to retain investor support for a publicly traded company. Deltic believes that a combination of its business with Revolution would transform the scalability of the enlarged group, provide scope for material synergies and enable the operational issues within Revolution to be better addressed through Deltic’s management team taking responsibility for both businesses, creating a powerhouse group in its sector that can exploit further opportunities to both expand and consolidate the market.
Accordingly, Deltic has proposed to Revolution that they explore on an expedited timescale an all share merger subject to negotiation of appropriate merger terms, reciprocal due diligence and Revolution shareholder approval, a transaction which would be effected through an acquisition of Deltic by Revolution using Revolution shares as consideration. Any such transaction would be subject to the grant of a whitewash waiver by The Panel on Takeovers and Mergers. The combined business would continue to be listed on the London Stock Exchange, which Deltic believes could create significant medium-term value potentially of greater attraction to Revolution shareholders than the possible Stonegate 200p per share offer.
Revolution has determined that it does not wish to engage in discussions with Deltic on this basis, so denying its own shareholders the opportunity to consider a choice between exploring the benefits of a potential merger with Deltic and the possible Stonegate offer. Deltic is disappointed by this outcome and believes that Revolution shareholders should be aware of alternatives to the possible Stonegate offer.
Subsequent to this announcement, Deltic would encourage Revolution to reconsider its position and engage in meaningful discussions with Deltic towards the pursuit of a potential merger.
In accordance with the relevant terms of The City Code on Takeovers and Mergers (the “Code”), the deadline for Deltic either to make an announcement pursuant to Rule 2.7 of the Code regarding its entry into a transaction, or to announce that it does not intend to enter into such transaction, shall be no later than 5.00p.m. on 12 September 2017.
Deltic Group plc
Peter Marks, CEO 01908 544100
Bob Brannan, Chairman
Stifel Nicolaus Europe Ltd (Financial Advisor to Deltic)
Tim Medak 020 7710 7600
Hudson Sandler (Public Relations Advisor to Deltic)
Nick Lyon 020 7796 4133
The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its completeness, accuracy or fairness.
This announcement does not constitute an offer of securities for sale in the United States or any other jurisdiction. The securities referred to in this announcement have not been, and will not be, registered under the U.S. Securities Act or the securities laws of any state of the United States or any other jurisdiction and such securities may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state or local securities laws.
This announcement is only addressed to and directed at persons in member states of the European Economic Area (“EEA”) who are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC), as amended (“Qualified Investors”). In addition, in the United Kingdom, this announcement is addressed and directed only at Qualified Investors who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order and (iii) to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as “relevant persons”). Any investment or investment activity to which this announcement relates is available only to relevant persons in the United Kingdom and Qualified Investors in any member state of the EEA other than the United Kingdom and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.
Forward Looking Statements
This announcement may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts and involve predictions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect Deltic’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to Deltic’s business, results of operations, financial position, liquidity, prospects, growth or strategies and the industry in which it operates. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. Save as required by law or regulation, Deltic disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect events or circumstances after the date of this announcement.
Deltic and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.
Disclosure Requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company 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) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company 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 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company 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) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the 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.
Stifel Nicolaus Europe Ltd (“Stifel“), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser and broker exclusively for Deltic and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Deltic for providing the protections afforded to clients of Deltic, nor for providing advice in relation to any matter referred to herein. This announcement is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction. Stifel nor any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to Deltic, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.