Reverse Takeover, Placing & Subscription

RNS Number : 4516X

Barkby Group PLC (The)

19 December 2019

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

19 December 2019 

The Barkby Group PLC

("Barkby" or "the Company")

Reverse Takeover, Placing, Subscription and Notice of General Meeting

Further to the announcement of 11 November 2019, The Barkby Group PLC, the consumer-focused hospitality group, is pleased to announce that it has conditionally agreed to acquire the entire issued share capital of each of Tarncourt Ambit Properties Limited, Tarncourt Ambit Limited and Workshop Trading Holdings Limited (together the "Dickson Controlled Entities"), for total aggregate consideration of approximately £30.6 million through the issue of 102,086,167 Consideration Shares at the Issue Price, the sum of £0.75 million (of which £0.375 million is payable within 10 Business days following Admission and £0.375 million on a deferred basis) and the Contingent Deferred Consideration. The Board believes there is strong strategic, commercial and financial rationale for the Acquisitions. 

Alongside the Acquisitions, Barkby announces a conditional Placing and Subscription to raise £5.0 million through the issue of 16,666,667 New Ordinary Shares.

The Acquisition constitutes a reverse takeover under the NEX Exchange Rules, and therefore also requires Shareholder approval at a General Meeting of the Company. The Company intends that, following Shareholder approval of, inter alia, the Transaction at the General Meeting, the Enlarged Group will be delisted from NEX and admitted to trading on AIM.

At the same time as the Acquisition, the Placing and the Subscription, the Board is proposing other consequential proposals including the Share Consolidation and the Capital Reduction, further details of which are set out below.

Highlights:

·   The New Board believes that the Acquisitions will result in significantly accelerated growth for all businesses in the Enlarged Group, driven by a strong management team who will continue to focus on high growth opportunities.

·   The experienced and entrepreneurial management will continue to grow the Enlarged Group's market presence by investing in cash generative, exciting businesses with the ability to disrupt.

·   The Enlarged Group will operate within diverse markets and the New Board believes this will present Shareholders with a low risk investment with significant capital growth potential.

·     It is intended that the Enlarged Group will pay a dividend in the financial year ended 30 June 2020.

·   The Board proposes to appoint Charles Dickson, a director of each of the Dickson Controlled Entities, as Executive Chairman with effect from Admission. Rupert Fraser will remain as Group Managing Director of the Enlarged Group. Emma Dark will continue as Finance Director until the appointment of a new Group Chief Financial Officer, which is expected to be announced shortly after Admission.

·    Each of Giles Clarke, Stephen Cook and Duncan Harvey have agreed to stand down from the Board on Admission and Jonathan Warburton and Matt Wood will join the New Board as Independent Non-Executive Directors.

·    The proceeds from the Placing and the Subscription will be partly used to accelerate the growth within each of the portfolio businesses.

·    The market capitalisation of the Enlarged Group following admission will be approximately £40.6 million.

General Meeting

The Proposals are conditional, inter alia, on approval by Shareholders at a General Meeting of the Company. Accordingly, the Company has published an AIM admission document ("Admission Document") containing detailed information about Barkby, the Acquisitions and the Enlarged Group (further detail of which is included below) and giving notice to Shareholders of the General Meeting, to be held at 10.00 a.m. on 3 January 2020 at The Bull Hotel, Market Place, Fairford GL7 4AA.

The Admission Document can be viewed at www.barkbygroup.com and selected sections are set out below.

Share Consolidation and issue of equity

The Share Consolidation will comprise the consolidation of every 193 Existing Ordinary Shares into 74 New Ordinary Shares.

The Company has 42,164,167 Existing Ordinary Shares in issue. To effect the Share Consolidation, it was necessary to issue a further 157 Existing Ordinary Shares to increase this to 42,164,324, which is exactly divisible by 193. Since these additional Existing Ordinary Shares would only represent a fraction of an Existing Ordinary Share, this fraction will be sold pursuant to the arrangements for fractional entitlements.

Application has been made for 157 Existing Ordinary Shares to be admitted to trading on the NEX Exchange, which will rank pari passu with the Company's Existing Ordinary Shares, and admission to trading is expected to be effective on 24 December 2019.

Following admission of the 157 Existing Ordinary Shares, the Company will have 42,164,324 Existing Ordinary Shares in issue with each share carrying the right to one vote. This figure should be used by shareholders as the denominator for the calculations to determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Further information on the Share Consolidation is set out below.

Restoration of trading on NEX

Following publication of the Admission Document, the temporary suspension of trading in the Company's Existing Ordinary Shares on NEX is expected to be lifted today.

Rupert Fraser, CEO of The Barkby Group Plc said:

"This is a transformational acquisition for the Group. The Enlarged Group will consist of a diverse portfolio of high growth, high quality businesses, with exposure to two exciting pre-IPO businesses. Our strategy will enable us to accelerate and maximise opportunities within our existing businesses, whilst also continuing to source and invest in new cash generative businesses with the ability to disrupt.

"Charles has vast experience and an impressive track record of building profitable businesses. Together we look forward to growing our portfolio businesses and maximising shareholder value with the potential for successful exits to return capital to shareholders through dividends."

Enquiries: 

The Barkby Group PLC Rupert Fraser, Chief Executive Officer	[phone]
finnCap Ltd (Corporate Adviser and Broker) Carl Holmes/Simon Hicks (corporate finance) Tim Redfern/Richard Chambers (ECM)	[phone]
Camarco (Financial PR) Jennifer Renwick/Jane Glover	[phone]

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

 

The following text has been extracted from the Admission Document which has been published today.

Capitalised terms shall have the same meaning as in the Admission Document unless the context requires otherwise.

ADMISSION STATISTICS

Issue Price	30 pence
Number of Existing Ordinary Shares	42,164,324
Number of New Ordinary Shares immediately following the Share Consolidation	16,166,632
Number of Consideration Shares	102,086,167
Number of Placing Shares	6,023,333
Number of Subscription Shares	10,643,334
Number of Fee Shares	315,600
Enlarged Share Capital on Admission	135,235,066
Market capitalisation of the Company on Admission at the Issue Price (approximately)	£40.6 million
Consideration Shares expressed as a percentage of the Enlarged Share Capital	75.5 per cent.
Placing Shares and Subscription Shares expressed as a percentage of the Enlarged Share Capital	12.3 per cent.
Gross proceeds receivable by the Company pursuant to the Placing and Subscription	£5.0 million
Estimated net proceeds receivable by the Company pursuant to the Placing and Subscription	£4.4 million
TIDM on Admission	BARK
Current ISIN	GB00BDZ7FJ04
ISIN on Admission	GB00BL6TZZ70

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication of the Admission Document	19 December 2019
Latest time and date for receipt of Forms of Proxy	10.00 a.m. on 2 January 2020
General Meeting	10.00 a.m. on 6 January 2020
Last day of dealings on NEX Exchange	6 January 2020
Record Date for the Share Consolidation	6.00 p.m. on 6 January 2020
Cancellation of trading on NEX Exchange	7.00 a.m. on 7 January 2020
Share Consolidation effective	8.00 a.m. on 7 January 2020
Admission effective and dealings in the Enlarged Share Capital expected to commence on AIM	8.00 a.m. on 7 January 2020
CREST accounts expected to be credited	8.00 a.m. on 7 January 2020
Despatch of definitive share certificates (where applicable) by	20 January 2020

Note: References to time are to London time unless otherwise stated. Each of the dates in the above timetable is indicative only and is subject to change without further notice.

 

1.   INTRODUCTION

On 19 December 2019 Barkby announced that it had entered into conditional agreements to acquire the entire issued share capital of each of Tarncourt Ambit Properties Limited, Tarncourt Ambit Limited and Workshop Trading Holdings Limited, (together the Dickson Controlled Entities) for a total aggregate consideration of £30.6 million through the issue of 102,086,167 Consideration Shares at the Issue Price of 30 pence per Consideration Share, the cash sum of £0.75 million (of which £0.375 million is payable within 10 Business days following Admission and £0.375 million on a deferred basis as set out in paragraph 9 below) and the Contingent Deferred Consideration. The Board believes there is strong strategic, commercial and financial rationale for the Acquisitions.

Alongside the Acquisitions, Barkby announced a Placing and Subscription of £5.0 million, which is subject to Shareholder approval at a General Meeting of the Company.

The Acquisitions constitute a reverse takeover under the NEX Exchange Rules, and therefore also require Shareholder approval at a General Meeting of the Company. The Company intends that, following Shareholder approval of, inter alia, the Transaction at the General Meeting, the Enlarged Group will be delisted from NEX and admitted to trading on AIM.

The Board proposes to appoint Charles Dickson, a director of each of the Dickson Controlled Entities, as Executive Chairman with effect from Admission. Each of Giles Clarke, Stephen Cook and Duncan Harvey have agreed to stand down from the Board on Admission when Jonathan Warburton and Matt Wood will join the New Board as Independent Non-Executive Directors.

Rupert Fraser will remain as Group Managing Director of the Enlarged Group and Jeremy Sparrow will remain as an Independent Non-Executive Director. Emma Dark will continue as Finance Director until the appointment of a new Group Chief Financial Officer, which is expected to be announced shortly after Admission. Further details are set out in paragraph 13 below.

The Admission Document also seeks the approval of Independent Shareholders to a waiver, which the Panel has agreed to give (subject to such approval), of the obligation that might otherwise arise under Rule 9 of the Takeover Code for the Concert Party to make a mandatory offer for the entire issued and to be issued share capital of Barkby.

At the same time as the Acquisitions, the Placing and Subscription, the Board is proposing other consequential proposals including the Share Consolidation and the Capital Reduction.

The Proposals are conditional, inter alia, on approval by Shareholders at a General Meeting to be convened and held at 10.00 a.m. on 6 January 2020, and Admission taking place by no later than 7 January 2020. Admission is expected to occur at 8.00 a.m. on 7 January 2020, and the Acquisitions are also expected to complete on Admission.

The purpose of the Admission Document is to give you further information regarding the matters described above and to seek your approval of the Resolutions at the General Meeting. The Notice of General Meeting is set out at the end of the Admission Document.

2.   SUMMARY INFORMATION ON THE BARKBY GROUP

Barkby is currently admitted to trading on NEX. On 7 June 2018 Barkby announced the acquisition of the business and assets of Turf to Table Ltd, a boutique hospitality group focused on premium gastropubs, inns and function spaces in Gloucestershire and Oxfordshire. At the time of acquisition, the portfolio of pubs comprised The Five Alls in Filkins, The Plough Inn in Kelmscott and The Bull in Burpham. Since then, the Group has added The George in Fairford, The Queens Arms in East Garston and The Rose & Crown Inn in Ashbury to its portfolio.

The Company is in exclusivity and negotiations to acquire the freehold of The Star Inn at Sparsholt, Oxfordshire for total consideration of £1.2 million, which may be funded from the Bridging Facility.

Following the acquisition of The Star Inn at Sparsholt, Barkby Pubs will comprise seven gastropubs containing a total of 65 hotel rooms. Detailed information on Barkby Pubs is set out in Part II of the Admission Document.

On 13 February 2019 Barkby acquired Centurian, an automotive dealership focusing on luxury used vehicles with a fast growing online digital presence for a maximum consideration of £0.45 million. Detailed information on Centurian is set out in Part II of the Admission Document.

In the 17 month period to 31 May 2019, the Barkby Group generated revenue of £6.3 million, profit before tax of £0.075 million and had net assets of £1.5 million.

3.   SUMMARY INFORMATION ON THE DICKSON CONTROLLED ENTITIES

The Dickson Controlled Entities focus on two business areas:

Commercial Property Development

The New Board believes that the commercial property development business is a low risk business with a proven track record of sourcing and developing commercial property projects in South East England. The business is managed by Charles Dickson, Gary Langridge-Brown and Chris Reynolds and together the team has completed over 20 schemes in locations such as Tunbridge Wells, Stevenage, Evesham, St Albans and Basingstoke through various entities. The business specialises in projects with a gross development value of between £3.0 million and £20.0 million and targets an EBITDA margin of at least 18 per cent. on each project. The business model is to forward fund the development of its projects by securing long term anchor tenants (such as Aldi Limited, MKM Building Supplies Limited, Burger King Europe GmbH and Costa Limited) prior to development commencing and pre-selling the site to property funds such as Aberdeen Standard Fund Managers Limited and Canada Life Limited, making the business model, in the view of the New Board, capital light and low risk. The business has expanded from its initial developments of trade parks to include retail warehouses, car dealerships and storage. The business has close relationships with a number of anchor tenants and property funds and has a pipeline of future developments.

Workshop Coffee

Workshop Coffee was established in 2011 and focuses on selling coffee and coffee related hardware through its wholesale B2B business, retail shops and online. Workshop Coffee focuses on specialty coffee and its operations comprise roasting, wholesale and a small chain of four coffee shops. Workshop Coffee focuses on wholesale and B2B customers and the New Board believes there is a significant opportunity to grow the Workshop Coffee business both organically, by way of acquisition, to expand overseas using an overseas distribution model and a franchise model.

Detailed information on the Dickson Controlled Entities is set out in Part III of the Admission Document.

Investments

In addition to the operating businesses detailed above, the Enlarged Group has the right to participate in the upcoming fundraisings for two private companies: Transcend and VivoPlex. Part of the use of proceeds from the Placing and the Subscription together with cash resources generated by the Enlarged Group will enable the Enlarged Group to take up these rights and participate in the fundraisings for Transcend and VivoPlex.

Origination of investments

Transcend was introduced to the Dickson Family in November 2018 as a disruptive high growth, global opportunity to create a sustainable and ethical packaging manufacturer. Transcend required significant further funding for expansion and the Dickson Family led a £2.0 million equity round in January 2019 with follow on investment of £2.0 million in July 2019.

As part of this process the Dickson Family were able to negotiate the Transcend Facility Agreement for the benefit of Barkby.

VivoPlex was introduced to the Dickson Family via contacts at the University of Southampton in 2015. The academic founders required funding to commercialise the technology and develop a novel medical device. The Dickson Family formed VivoPlex with the academic founders and begun funding the project. In 2018 VivoPlex completed a £3.0 million Series A funding round led by the Dickson Family.

The Dickson Family were able to negotiate the VivoPlex Option in respect of the VivoPlex Loan Notes which, following completion of the DevCo Acquisition, will be for the benefit of the Enlarged Group.

Transcend Packaging

Transcend was founded by Lorenzo Angelucci in 2018 to take advantage of the 'Blue Planet' movement to eliminate single use plastics. In March 2020 and April 2021, the UK and EU Parliaments will respectively ban plastic cutlery, cotton buds, straws and stirrers, as part of a series of regulations to prevent plastic waste that spoils beaches, pollutes oceans and harms wildlife.

Transcend's first product was a fully compostable paper straw, made to a significantly higher standard than the majority of those currently available in the UK and for which Transcend was awarded a contract to supply straws to McDonalds UK. Transcend is currently trialing production of the first single use fully compostable and recyclable disposable coffee cup and has a strong track record of innovative sustainable packaging research and development, including the imminent launch of the first commercially available paper U-bend straw for Tetra Pak-style cartons.

Transcend's contracted customers include: McDonald's Restaurants Limited, Kentucky Fried Chicken Limited, Plastico Limited, Bunzl and Muller. Transcend Packaging's contracts tend to have a duration of three to five years.

A total amount of approximately £6.5 million of equity has been invested into Transcend to date from various investors and the last funding round was at a post-money valuation of £13 million. The Dickson Family has invested a total of £0.54 million (£0.47 million in January 2019 and the balance in July 2019), meaning that they hold approximately 4 per cent. of the current issued share capital of Transcend (prior to the issue of the convertible loan being invested by the Enlarged Group).

The Enlarged Group has agreed to invest up to £4.0 million as a convertible loan with a coupon of 5 per cent. which is secured against Transcend by the Transcend Security entered into with other investors but with DevCo as the security trustee. This loan converts into equity at a discount of 25 per cent. at the next equity funding round where the share price is greater than £4.00 a share.

The Transcend Facility Agreement is assignable to any member of the Enlarged Group, and the benefit of the Transcend Security is freely assignable. Further details of the Transcend Facility Agreement and Transcend Security are set out in paragraph 16.8.2 of Part VIII of the Admission Document.

VivoPlex

VivoPlex is a digital health company that has developed a wireless, battery free medical device that will measure pH, temperature and dissolved oxygen level in the uterus continuously for up to seven days.

The data from VivoPlex's device allows clinicians to optimise and personalise current fertility treatments, enabling improvements in IVF success rates. VivoPlex has successfully completed multiple animal trials and one human trial with a final human safety study planned for Q2 2020 with regulatory approval expected by the end of 2020.

The Series B investment round is ongoing at a pre-money valuation of £25.0 million. VivoPlex intends to raise a total of £6.0 million.

To date, the Dickson Family has invested approximately £1.0 million over the last four years in VivoPlex, representing approximately 45 per cent. of the current issued share capital.

Approximately £2.0 million from the proceeds of the Placing and Subscription will be invested in VivoPlex through the exercise of the VivoPlex Option which grants the right to DevCo to subscribe for up to £2.0 million of the Vivoplex Loan Notes and which is assignable to any member of the Enlarged Group. Further details of the VivoPlex Option and VivoPlex Loan Notes are set out in paragraph 16.8.1 of Part VIII of the Admission Document.

4.   ABOUT THE DICKSON FAMILY

The Dickson Family has been investing in, growing and exiting businesses for over 35 years, including the following:

Yates Group PLC

Yates is a British pub chain that was founded as Yates Wine Lodge in 1884 and is Britain's oldest chain of pubs. Peter Dickson (father of Charles Dickson) led Yates through a high growth period between 1984 and 2001, taking the business public on the London Stock Exchange in 1994. The business was sold in June 2004 to GI Partners in a deal valuing the company at approximately £93.0 million.

The Medical Property Investment Fund Limited

Alongside Richard Burrell, Peter Dickson floated The Medical Property Investment Fund Limited on the London Stock Exchange in November 2003, raising £140 million of new capital. The business went on to become the largest owner of primary health property in the UK and remains listed as Assura PLC with a market capitalisation of approximately £1.75 billion.

Portland Hotel Group

Alongside the Paton family, the Dickson Family invested in Portland Hotels in 2003, building a business with 536 rooms across five properties in Scotland. The business was sold to Leonardo Hotels for £42.5 million in August 2017. The business received approximately £0.85 million of funding from the founders and total returns to shareholders, including dividends, were approximately £29.0 million. Charles Dickson was a non-executive director for 11 years.

Tarncourt Group

Charles Dickson founded Tarncourt Group, the Dickson family office, in 2006 following the death of his father. He has built this into a diverse and successful business generating significant returns and value creation for the Dickson Family. The business is split into three arms: commercial property development; commercial property investment and venture capital investment.

Apache Capital Partners Limited

Alongside John Dunkerley, Richard Jackson and Paul Orchard-Lisle, Charles Dickson co-founded Apache Capital Partners in 2009 with a total investment of approximately £0.7 million. Apache Capital Partners is a private real estate investment manager specialising in the alternative real estate sectors. Apache Capital Partners now has assets under management ("AUM") in excess of £2.0 billion. Charles Dickson remains a non-executive director and shareholder. The initial investment was returned to the founders a number of years ago.

5.   THE ENLARGED GROUP MARKET AND MARKET OPPORTUNITY STRATEGY

The New Board believes that the Acquisitions will result in significantly accelerated growth for all businesses in the Enlarged Group, driven by a strong management team who will continue to focus on high growth opportunities.

The experienced and entrepreneurial management will continue to grow the Enlarged Group's market presence by investing in cash generative, exciting businesses with the ability to disrupt.

The Enlarged Group will operate within diverse markets and the New Board believes this will present Shareholders with a low risk investment with significant capital growth potential. It is intended that the Enlarged Group will pay a dividend in the financial year ended 30 June 2020 subject to the dividend policy summarised in paragraph 15 below.

6.   USE OF PROCEEDS

The Placing and Subscription will raise gross proceeds for the Company of £5.0 million and net proceeds for the Company of approximately £4.4 million (after the deduction of estimated fees and expenses of approximately £0.6 million) whilst the Company will also have the benefit to draw down up to £3.5 million pursuant to the Bridging Facility. The New Board intends to use the net proceeds of the Placing, the Subscription and the Bridging Facility as follows:

Investment in commercial property development - working capital	£0.375m
Cash consideration to be paid to certain of the SPVCo Sellers on Completion in respect of the SPVCo Sellers	£0.375m
Payment to buy out earn out consideration pursuant to the acquisition of T2T on Admission	£0.08m
Centurian Automotive	£0.25m
Workshop Coffee - working capital and growth	£0.5m
Transcend Facility Agreement	£0.75m*
VivoPlex Group - Convertible Loan Note	£2.0m
Additional working capital	£0.07m
Re-finance of existing Tarncourt Investments LLP facilities	£1.75m
Total	£6.15m

*The Enlarged Group has committed to invest £3.5 million as a convertible loan note into Transcend Packaging Limited, £0.25 million of this has already been drawn, £0.75 million will be made available on completion of the Placing and Subscription and the remaining £2.5 million is expected to be drawn by Transcend Packaging Limited in May 2020, with the intention being that this will be funded by the Enlarged Group's cash balances at that time.

7.   SUMMARY FINANCIAL INFORMATION

Summary historical financial information on Barkby

	For the 17 months ended 31 May 2019
	£'000
Revenue	6,286
Gross profit	2,657
Profit from operations	323
Profit after tax	75

Summary historical financial information on the Dickson Controlled Entities

Summary historical financial information on DevCo:

	For the year ended 31 March 2018	For the year ended 31 March 2019
	£	£
Revenue	1,587,954	9,948,073
Operating profit	117,899	3,642,714
Profit before payments to related parties	97,556	3,372,126
Profit after tax	79,214	437,495

 

Summary historical financial information on SPVCo:

	For the year ended 31 March 2018	For the year ended 31 March 2019
	£	£
Administrative expenses	(36,054)	(25,148)
Operating loss	(36,054)	(25,148)
Finance costs	(208,150)	(195,000)
Loss for the year	(244,204)	(220,148)

Summary historical financial information on Workshop:

	For the year ended 31 March 2018	For the year ended 31 March 2019
	£	£
Revenue	2,365,207	2,563,450
Operating loss	(1,261,641)	(1,003,585)
Loss for the year	(1,272,676)	(1,003,585)

8.   CURRENT TRADING AND PROSPECTS

Barkby

Since the publication of the Company's results for the seventeen months ended 31 May 2019 on 23 September 2019, the Barkby Pubs have continued to trade well, albeit as is traditionally the case in the Directors' experience in the pub and hospitality industry, October and November this has been a quieter period resulting in trading marginally behind budget. However, the occupancy and cover bookings visibility coming into the critical Christmas trading period is encouraging. The level of bookings for December is ahead of last year and visibility and revenue expectation is slightly ahead of budget, which should compensate for the softer trading experienced pre-Christmas.

Given pre-bookings and reservations received to date, it is expected that there will be particularly strong trading days on Christmas Day and Boxing Day. Therefore, the Barkby Pubs as a whole is currently trading in line with management expectations and management is excited for the upcoming busy Christmas trading period.

Centurian is trading in line with management expectations, with the strategy being focused on continued destocking. Centurian's stock is down to around 105 cars and the business is seeing increasing online trade while executing its strategy of carrying less inventory.

This information relates to past performance. Past performance is not a reliable indication of future results.

The Dickson Controlled Entities

The financial year end for each of the Dickson Controlled Entities is 31 March 2019. This financial information is contained in Part VI of the Admission Document.

Trading since 1 April 2019 has been in line with the Board's expectations.

This information relates to past performance. Past performance is not a reliable indication of future results.

9.   PRINCIPAL TERMS AND CONDITIONS OF THE ACQUISITIONS

Under the Acquisition Agreements, the Company has conditionally agreed to purchase the entire issued share capital of each of the Dickson Controlled Entities for a total aggregate consideration of approximately £30.6 million through the issue and allotment of 102,086,167 New Ordinary Shares (being the Consideration Shares) at the Issue Price of 30 pence per Consideration Share, cash consideration of £0.75 million of which £0.375 million is payable within 10 Business days of Admission to certain of the SPVCo Sellers, with the remaining £0.375 million being payable within 10 Business Days of DevCo receiving a final payment in respect of the Hastings site and the Contingent Deferred Consideration. The consideration payable in respect of each of the Dickson Controlled Entities is apportioned as follows:

Target	Total Consideration	Number of Consideration Shares	Cash
	£		£
Workshop Trading Holdings Limited	4,750,850	15,936,166	-
Tarncourt Ambit Properties Limited	14,645,000	48,816,667	-
Tarncourt Ambit Limited	11,200,000	37,333,334	750,000
Total	30,595,850	102,085,167	750,000

Completion of each of the Acquisition Agreements is conditional, inter alia, on Admission and completion of the Placing Agreement and all of the Acquisition Agreements.

The Dickson Family are not receiving any cash consideration in respect of the Acquisitions and will have converted existing debt owed to them and/or entities connected to them by the Dickson Controlled Entities amounting in aggregate to £3.145 million into equity prior to the Acquisitions.

As part of the acquisition of SPVCo £0.75 million will be paid to the non-Dickson Family co-founders (being Chris Reynolds, Gary Langridge-Brown and Peter Clayden) in equal proportions in return for their profit share in the commercial property development business in the financial year ending 30 June 2020, with £0.375 million being payable within 10 Business Days of Admission and £0.375 million being payable within 10 Business days of DevCo receiving a final payment in respect of its Hastings site.

Further details of the Acquisition Agreements are set out in paragraphs 16.1.1 to 16.1.3 of Part VIII of the Admission Document.

10. SHARE CONSOLIDATION

The Share Consolidation will take effect at 8.00 a.m. on 7 January 2020, assuming the Resolutions are passed at the General Meeting. The Share Consolidation will comprise the consolidation of every 193 Existing Ordinary Shares into 74 New Ordinary Shares.

Immediately prior to the date of the Admission Document, the Company had 42,164,167 Existing Ordinary Shares in issue. To effect the Share Consolidation, it was necessary to issue a further 157 Existing Ordinary Shares to increase this to 42,164,324, which is exactly divisible by 193. Since these additional Existing Ordinary Shares would only represent a fraction of an Existing Ordinary Share, this fraction will be sold pursuant to the arrangements for fractional entitlements.

An application has been made for the additional 157 Existing Ordinary Shares to be admitted to trading on NEX which is expected to occur by 24 December 2019.

Any fractional entitlements to New Ordinary Shares arising upon the consolidation of Existing Ordinary Shares will be aggregated and sold in the market following Admission and the proceeds of sale applied for the benefit of the Company or as it may direct.

Immediately following the Share Consolidation and before Admission, Shareholders will own the same proportion of ordinary shares in the capital of the Company as they did prior to the Share Consolidation (subject to fractional entitlements) but will hold fewer New Ordinary Shares than the number of Existing Ordinary Shares currently held.

The rights attaching to the New Ordinary Shares will be the same as the rights attaching to the Existing Ordinary Shares.

The Company will issue new share certificates to those Shareholders holding shares in certificated form to take account of the Share Consolidation. The share certificates will be dispatched by first class post at the risk of the shareholder entitled to them. Shareholders will still be able to trade in Existing Ordinary Shares using certificates for the Existing Ordinary Shares up until the record date being 6.00 p.m. on 6 January 2020 on the day of the General Meeting. Following the issue of new certificates, share certificates in respect of Existing Ordinary Shares will no longer be valid.

11. PROPOSED CAPITAL REDUCTION

Under the Act, save in certain limited circumstances, a public company may only declare dividends out of distributable profits. In the Company's accounts to 31 May 2019, the Company's called up share capital was £139,141.7511, its share premium account was £6,347,000, and its capital redemption reserve was £3,078,000 while the deficit on its profit and loss account was £8,301,000.

It is proposed that a capital reduction is undertaken to reduce the amount standing to the credit of the share premium account and to cancel such amount standing to the credit of capital redemption reserve so as to offset against the profit and loss account in order to eliminate all of the deficit on the profit and loss account and create £1,124,000 of reserves. This would bring forward the time when the Company may be in a position to pay dividends pursuant to its dividend policy as summarised in paragraph 15 below and will also align the Company's share capital more closely with its available assets. This is subject to the protection of the interests of the Company's creditors.

Accordingly, at the General Meeting, Resolutions 7 and 8 will be proposed to approve the Capital Reduction and associated reduction of the share premium account and the cancellation of the capital redemption reserve. These are special resolutions which requires the approval of not less than three quarters of Shareholders who vote in person or by proxy. Voting will be on a show of hands, unless a poll is demanded, in which case those present in person or by proxy will be entitled to one vote for each Existing Ordinary Share held by them. Provided the Resolutions are duly passed, an application will then be made immediately to Court to approve the Capital Reduction. The Court will only approve the Capital Reduction once satisfied that the interests of the Company's creditors are not thereby prejudiced and the Company intends to put into place such form of creditor protection as the Court may require, if any. It is anticipated that the relevant Court approval will take approximately two months to obtain. The Capital Reduction will take effect upon registration of the Court order confirming it with the Registrar of Companies.

If the Resolutions are not all passed or the Court does not approve the Capital Reduction, the Capital Reduction will not take effect.

12. INFORMATION ON THE PLACING AND SUBSCRIPTION

The Company has conditionally raised £5.0 million (before fees and expenses) by way of a placing of 6,023,333 New Ordinary Shares and a Subscription for 10,643,334 New Ordinary Shares at an Issue Price of 30 pence per New Ordinary Share. The Placing Shares and Subscription Shares will represent approximately 12.3 per cent. of the Enlarged Share Capital. The Issue Price represents a premium of approximately 95.6 per cent. to the equivalent Closing Price of 15.34 pence per New Ordinary Share (as if the Share Consolidation has taken place) on 10 November 2019 (being the last Business Day before suspension of the Existing Ordinary Shares from trading on NEX). The Placing and Subscription are not being underwritten.

finnCap has agreed, as the Company's agent, on the terms and subject to the conditions of the Placing Agreement to use its reasonable endeavours to procure investors for the Placing Shares at the Issue Price. The Placing Agreement contains provisions (including customary market related provisions) entitling finnCap to terminate the Placing Agreement in certain limited circumstances at any time prior to Admission.

An application will be made to the London Stock Exchange for the Enlarged Share Capital to be admitted to trading on AIM. The Placing Shares and Subscription Shares will rank pari passu with the New Ordinary Shares on Admission. The Placing is conditional on the Placing Agreement becoming unconditional in all respects and not being terminated prior to Admission. The Placing Agreement is conditional, among other things, on the Acquisition Agreements and the Subscription Letters becoming unconditional (other than as regards any condition relating to the Placing Agreement or Admission having taken place) and on Admission becoming effective by no later than 8.00 a.m. on 7 January 2020 (or such later time, not being later than 8.00 a.m. on 31 January 2020, as the Company and finnCap may agree). The Subscription is conditional on the Subscription Letters becoming unconditional in all respects and not being terminated prior to Admission. The Subscription Letters are conditional, amongst other things, on completion of the Acquisitions and the Placing and on Admission becoming effective by no later than 8.00 a.m. on 7 January 2020 (or such later time as the Company may determine, being no later than 31 January 2020). Admission is expected to become effective, and dealings in the Placing Shares and the Subscription Shares to commence, at 8.00 a.m. on 7 January 2020. Neither the Placing Agreement nor the Subscription Letters are subject to any right of termination after Admission.

Upon Admission, the Company's Enlarged Share Capital will comprise 135,235,066 New Ordinary Shares with voting rights. The Company does not hold any Ordinary Shares in treasury. This figure of 135,235,066 New Ordinary Shares may be used by Shareholders following Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Of the 10,643,334 Subscription Shares, 3,499,999 Subscription Shares will be settled on a delayed basis, by no later than 31 January 2020.

Further details of the Placing Agreement and the Subscription Letters are set out in paragraph 16.2.1 and paragraph 16.2.2 respectively of Part VIII of the Admission Document.

Related party transactions

Giles Clarke and Rupert Fraser have subscribed at the Issue Price for 250,000 and 666,667 New Ordinary Shares in the Placing and Subscription respectively.

Giles Clarke and Rupert Fraser are each considered a "related party" as defined under the NEX Rules due to their Board positions. Giles Clarke and Rupert Fraser's participation in the Placing and Subscription respectively constitute related party transactions for the purposes of Rule 52 of the NEX Rules.

13. DIRECTORS, PROPOSED DIRECTORS AND SENIOR MANAGEMENT

On Admission, the Board will be enhanced by the addition of the Proposed Directors, while Giles Clarke, Stephen Cook and Duncan Harvey will step down from the Board. Stephen Cook will remain with the Enlarged Group as Operations Director of Barkby Pubs.

Therefore, on Completion, the New Board will comprise three executive directors and three non-executive directors as follows:

Charles Dickson         (Executive Chairman)

Rupert Fraser                         (Group Managing Director)

Emma Dark                (Finance Director)

Jeremy Sparrow         (Independent Non-Executive Director)

Jonathan Warburton   (Independent Non-Executive Director)

Matt Wood                   (Independent Non-Executive Director)

New Group Chief Financial Officer

The New Board has identified a high calibre candidate to join the New Board to become Group CFO following Admission. The candidate gained his qualification with a 'big four' accounting firm, where his client focus was UK hospitality businesses, including managing the audit of a large AIM listed pub company.

He left to join an international quick food service business where he held roles of Chief Accountant and Group Financial Controller, reporting directly to the CFO. During this period, revenues and EBITDA increased significantly.

The candidate subsequently joined the management team of a fast-growing UK SME following external investment. He has held the board-level position of Finance Director for three years.

Biographical details

The biographical details of the Board, the Proposed Directors and the Senior Management are set out below:

Directors

The Board currently comprises the following Directors:

Giles Clarke, Non-Executive Chairman (age 66)

Mr Clarke is Chairman of Westleigh Investments Holdings Limited, Amerisur Resources PLC, and of several private organisations, in addition to being Non-Executive Chairman of Ironveld PLC and Kennedy Ventures PLC. He founded Majestic Wine Plc in 1981 and built it into a national chain of wine warehouses. He also co-founded Pet City Limited in 1990, which he expanded nationwide before it was listed and subsequently sold in 1996 for £150.0 million and co-founded Safestore Holdings Plc which was sold in 2003 for £40.0 million.

On Admission he will step down as a Director.

Rupert Fraser, currently Chief Executive officer to become Group Managing Director on Admission (age 51)

Mr Fraser has over 25 years of experience in the investment banking industry involving exposure to leading UK, US and international institutions. He was Head of Equities at Evolution Securities Limited from 2009 to 2011, prior to which he spent 16 years Dresdner Kleinwort Limited, where in 2005 he was appointed Managing Director, Global Head of Equity Distribution. Rupert was founding partner of Kildare Partners where he was responsible for investment origination across Europe and the United Kingdom. Rupert is a non-executive director of Woodforde's Brewery.

Stephen Cook, currently Group Operations Director to become Operations Director of Barkby Pubs (age 38)

Mr Cook has previously held several senior roles in the hospitality industry including, most recently, at the New Inn, Coln St Aldwyns and The Park Pub and Kitchen, Bedford. Mr Cook is highly experienced in running all operational aspects of hospitality businesses and has built a strong reputation within the industry for driving and delivering growth.

On Admission he will step down as a Director.

Emma Dark, Finance Director and Company Secretary (age 40)

Ms Dark is a chartered accountant with 18 years' experience across varied industries including hospitality, manufacturing and asset management. Her previous roles have required leadership across general ledger, cost and variance analysis, cash management, compliance and forecasting. She has also spent 11 years as a specialist in streamlining processes and implementing best practices across organisations. Emma has strong internal auditing skills and experience in implementation of numerous financial IT systems.

Duncan Harvey, Non-Executive Director (age 40)

Mr Harvey is an independent management consultant with 15 years' experience across strategy, operating model design and business development. Formerly a strategy consultant with Accenture Plc, he has worked across numerous industries including financial services, manufacturing, resources, technology, FMCG and hospitality. As an independent advisor Duncan is focused on helping management teams to increase shareholder value.

On Admission he will step down as a Director.

Jeremy Sparrow, Non-Executive Director (age 52)

Mr Sparrow is an adviser to Black Swan Equity Partners, the independent multi-family office, and has over 25 years of extensive deal making experience leading equity teams that have raised a combined total of over $23 billion. He was most recently head of Investec Resource Investment Banking for Asia and Australia, after serving as CEO of Renaissance Capital, where he established the company's first Asian office. Previously, he spent 12 years with Renaissance Capital, as a Managing Director being head of Equity Products in New York and the UK and has also served a Vice President at Morgan Stanley & Co International Plc.

Proposed Directors

On Admission, it is proposed that the following individuals will be appointed to the New Board:

Charles Dickson, Executive Chairman (age 37)

Mr Dickson has over 15 years' experience running the Dickson family office, Tarncourt Group, which he has built into a successful and diverse business. Charles began his career with Ernst & Young LLP, where he qualified as a Chartered Accountant before moving to work in Corporate Finance with McQueen Limited (now Houlihan Lokey Limited). Charles is a non-executive director of Apache Capital Partners Limited.

Jonathan Warburton, Non-Executive Director (age 62)

Mr Warburton assumed control of the Warburton bakery business in 1991. He first joined the company at the age of 23 after spending time in organisations outside Warburtons to gain insight into the baking industry, as well as experience in sales and marketing experience through his time spent with Unilever. He joined the family business as a member of the Sales Team, progressing to National Account Manager and to Sales Director before he set up the Marketing Team. As Marketing Director, he led the development of Warburtons first ever TV advert. In the decade that followed, Jonathan held the role of Commercial Director and joint Managing Director. Since Jonathan became Chairman in 2001, Warburtons has grown from a small, regional business into the second biggest UK grocery brand behind Coca-Cola Plc. Jonathan has also held non-executive director positions with AG Barr and Samworth Brothers.

Matthew ("Matt") Wood, Non-Executive Director (age 46)

An experienced plc non-executive director, Mr Wood graduated with a First Class honours degree in Economics in 1996 and qualified as a chartered accountant in 1999. He subsequently joined the corporate finance department of Beeson Gregory in 2000 where he advised growing companies on transactions including IPOs, secondary fundraisings, M&A and corporate restructuring. Matt also advised corporate clients on the UK regulatory framework including the Listing Rules, the AIM Rules, the Takeover Code and general corporate governance matters. He left Beeson Gregory, by then Evolution Securities, in 2006 to set up ONE Advisory Group, a London-based corporate advisory group providing its Plc clients with corporate administration, Company Secretarial services, outsourced finance function, IFRS conversions, FPPP preparation and FCA regulated activities.

Senior Management

On Admission the following will comprise the senior management of the Enlarged Group:

Stephen Cook, Operations Director of Barkby Pubs

See above

Paul Harding, Managing Director of Centurian

Mr Harding was the founder of Centurian Automotive and has spent his 25-year career in the supply of leather and vehicles to the high-end luxury sector, working with brands such as Fairline Yachts Limited, Sunseeker International Limited, Princess Yachts Limited, Koenigsegg, Aston Martin Plc and Ascari Limited.

James Dickson, CEO of Workshop Coffee

Mr Dickson qualified as a Chartered Surveyor and subsequently moved into the specialty coffee sector by founding Workshop Coffee. As CEO of Workshop Coffee, he oversees the planning and execution of the business strategy across all departments, as well as identifying new areas for development and expansion. James holds a Bachelor of Arts degree in Politics from the University of Nottingham and a Master of Science degree in Corporate Real Estate Finance and Strategy from Cass Business School.

Gary Langridge-Brown, Director of Commercial Property Development

Mr Langridge-Brown is responsible for site acquisitions, planning and lettings. He has specialist knowledge of the trade occupier market, developed over the past 18 years, and more recently has used his acquisition skills in other sectors, including retail warehousing and leisure.

He has over 25 years' of experience with a background in commercial agency before moving to the client side with Wickes Building Supplies Limited and then as a director of a specialist retail warehousing and leisure practice.

Chris Reynolds, Director of Commercial Property Development

Chris has over 25 years of diverse experience starting in investment agency and then moving to fund management, with Guardian, playing a key role in expanding the development programme of a fund there.

In addition to investment and site acquisitions, he is responsible for appraisal and funding of development and investment projects and coordinates joint venture relationships.

14. IRREVOCABLE UNDERTAKINGS

The Company has received irrevocable undertakings from Duncan Harvey (or persons connected with him) to vote in favour of all the Resolutions in respect of 2,777,778 Existing Ordinary Shares, representing approximately 6.6 per cent. of the Existing Share Capital.

The Company has received irrevocable undertakings from the following Directors (or persons connected with them) to vote in favour of Resolutions 1, 3, 4, 5, 6, 7, 8 and 9 in respect of the following number of Existing Ordinary Shares:

Director	Aggregate number of Existing Ordinary Shares voted in favour	% of Existing Share Capital
Giles Clarke	3,585,859	8.5
Rupert Fraser	2,818,181	6.7

In addition to the Directors (and persons connected to them), certain other Shareholders have irrevocably undertaken to vote in favour of the Resolutions in respect of Existing Ordinary Shares in which they are interested, as follows:

Name of Shareholder	Aggregate number of Existing Ordinary Shares voted in favour	% of Existing Share Capital
Turf to Table Ltd	5,777,778	13.7
Michinoko Limited	4,033,333	9.6
Sir David Ord*	3,770,706	8.9
Paul James Harding	2,108,208	5.0
Rachael Michala Harding	2,108,208	5.0

* Including Existing Ordinary Shares registered in the name of David Ord Limited, a company controlled by Sir David Ord.

15. DIVIDEND POLICY

Declaration and payment of dividends by the Company will be dependent upon the financial position, cash requirements, future prospects and profits available for distribution of the Enlarged Group and other factors regarded by the New Board as relevant at the time. It is expected (assuming the Capital Reduction is approved by the Court) that the Enlarged Group will generate sufficient distributable reserves and free cash flow to allow the New Board to consider paying dividends for the financial year to 30 June 2020 and beyond, and it is the New Board's intention to put in place a progressive dividend policy.

There can be no assurance as to whether dividend distributions will occur as expected, the amount of dividend payments or the timing of any such payment.

The New Board will consider the following general principles when recommending dividends for approval by Shareholders or when declaring any interim dividends:

a)   the Enlarged Group's level of cash, marketable financial assets and level of indebtedness;

b)   the Enlarged Group's required and expected cashflows, interest expenses, profit, return on equity and retained earnings;

c)   the Enlarged Group's expected results from operations and the anticipated future level of operations; and

d)   the Enlarged Group's projected levels of capital expenditure and other investment plans including future acquisitions.

In the event that the Company receives a supernormal profit, such as from the successful exit from one of its businesses or investments, the New Board will evaluate the needs of the Enlarged Group at that time and may choose to declare a special dividend. The declaration of a special dividend will be subject to the factors listed above.

16. LOCK-IN ARRANGEMENTS

Each member of the Dickson Family, the other SPVCo Sellers (being Christopher Mark Reynolds, Peter Richard Hector Clayden and Gary Mark Langridge-Brown and the Locked-In Director has given lock-in and orderly market undertakings pursuant to the terms of the Lock-in Agreements so that, subject to certain specified exemptions:

·     they cannot dispose of any interest in New Ordinary Shares for a period of 12 months from Admission; and

·     then for a further period of 12 months they will only dispose of any New Ordinary Shares through finnCap (or the broker for the time being of the Company) in such manner as to ensure an orderly market in the New Ordinary Shares.

Each of the Locked-in and Orderly Market Parties have also undertaken to use all reasonable endeavours to ensure that their associates (as defined in paragraph (c) of the definition of 'relevant party' in the AIM Rules) comply with these restrictions.

Further details of these Lock-in Agreements are set out in paragraph 16.3 of Part VIII of the Admission Document.

17. CORPORATE GOVERNANCE

AIM quoted companies are required to adopt a recognised corporate governance code on Admission, however there is no prescribed corporate governance regime in the UK for AIM companies. The Directors recognise the importance of sound corporate governance commensurate with the size and nature of the Group and the interests of its Shareholders.

The QCA has published the QCA Corporate Governance Code 2018 (the "QCA Code"), a set of corporate governance guidelines, which include a code of best practice, comprising principles intended as a minimum standard, and recommendations for reporting corporate governance matters. The Board has adopted the QCA Code with effect from Admission.

The New Board

Following Admission, the New Board will comprise six Directors, three of whom will be Executive Directors and three of whom will be Non-Executive Directors reflecting a blend of different experience and backgrounds.

Three of the Non-Executive Directors - Jonathan Warburton, Jeremy Sparrow and Matt Wood - are considered to be independent.

The New Board will meet monthly and will be responsible for strategy, performance, approval of any major capital expenditure and the framework of internal controls. Briefing papers will be distributed to all Directors in advance of board meetings and all Directors will have access to the advice and services of the Finance Director and Company Secretary, who will be responsible for ensuring that board procedures are followed and that applicable rules and regulations are complied with, in accordance with the QCA Code.

The Board has delegated specific responsibilities to the committees referred to below all of which have written terms of reference and formally delegated duties.

Audit Committee

The Group has established an Audit Committee, which will comprise Jonathan Warburton as Chairman, Jeremy Sparrow and Matt Wood with effect from Admission. It will meet at least three times each year and at any other time when it is appropriate to consider and discuss audit and accounting related issues. The Audit Committee is responsible for determining the application of the financial reporting and internal control principles, including reviewing regularly the effectiveness of the Enlarged Group's financial reporting, internal control and risk-management procedures and the scope, quality and results of the external audit.

Remuneration Committee

The Group has established a Remuneration Committee, which will comprise Jonathan Warburton as Chairman, Jeremy Sparrow and Matt Wood with effect from Admission, which will review the performance of the Executive Directors and set the scale and structure of their remuneration and the basis of their service agreements with due regards to the interests of Shareholders. In determining the remuneration of Executive Directors, the Remuneration Committee will seek to enable the Enlarged Group to attract and retain executives of the highest calibre. The Remuneration Committee also makes recommendations to the board concerning the allocation and administration of Options. No Director is permitted to participate in discussions or decisions concerning their own remuneration.

Nomination Committee

The Group has established a Nomination Committee, which will comprise Charles Dickson as Chairman, Jeremy Sparrow, Jonathan Warburton and Matt Wood with effect from Admission and will be responsible for reviewing the structure, size and composition of the board, preparing a description of the role and capabilities required for a particular appointment and identifying and nominating candidates to fill board positions as and when they arise.

18. SHARE DEALING CODE

The Company has adopted, with effect from Admission, a share dealing code for all its directors and employees for the purpose of ensuring compliance with the provisions of Rule 21 of the AIM Rules for Companies and the Market Abuse Regulation (MAR) which relates to dealings in the Company's securities. The New Board consider that this share dealing code is appropriate for a Company whose ordinary shares are admitted to trading on AIM. The Company will take all reasonable steps to ensure compliance by its directors and any other applicable employees with the terms of this code.

19. TAXATION

The attention of investors is drawn to the information regarding taxation which is set out at paragraph 12 of Part VIII of the Admission Document. These details are, however, only intended as a guide to the current taxation law position in the UK.

Investors who are in any doubt as to their tax position or who are subject to tax in jurisdictions other than the UK are strongly advised to consult their own independent financial adviser immediately.

20. THE TAKEOVER CODE AND THE RULE 9 WAIVER

20.1 Background

As a UK plc which has its registered office in the UK and has shares admitted to trading on NEX, the Company is subject to the Takeover Code. Under Rule 9 of the Takeover Code, any person who acquires an interest in shares (as defined in the Takeover Code) which, taken together with shares in which he/she is already interested and shares in which persons acting in concert with him/her are interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code, is normally required to make a general offer to all the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with him/her, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of such a company but does not hold shares carrying more than 50 per cent. of such voting rights, a general offer will normally be required if any further interests in shares are acquired by any such person. An offer under Rule 9 must be made in cash and at the highest price paid by the person required to make the offer, or any person acting in concert with him/her, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

Shareholders in a private company who sell their shares in that company in consideration for the issue of new shares in a company to which the Takeover Code applies, or who, following the re-registration of that company as a public company in connection with an initial public offering or otherwise, become shareholders in a company to which the Takeover Code applies.

When members of a concert party hold more than 50 per cent. of the voting rights in a company, no obligations under Rule 9 normally arise from acquisitions of further interests in shares by any member of the concert party. They may accordingly increase their aggregate interests in shares without incurring any obligation under Rule 9 to make a general offer, although individual members of a concert party will not be able to increase their percentage interests in shares through or between a Rule 9 threshold without Panel consent.

20.2 Outline of the Concert Party

For the purposes of the Takeover Code, the Concert Party is the Dickson Family together with certain other individuals with whom they have a close association.

Charles Dickson, Davina Dickson, James Dickson, Tarncourt Properties Limited, Mark Lewis and Alan Halsall are regarded to be acting in concert as they are shareholders in one of the Dickson Controlled Entities who are selling their shares in one of those companies in consideration for the issue of New Ordinary Shares in Barkby, a company to which the Takeover Code applies.

Apache Capital Partners Limited are participating in the Subscription. They have been adjudged to be part of the Concert Party due to their close relationship with Charles Dickson.

Richard Burrell is participating in the Subscription. He has been adjudged to be part of the Concert Party due to his close relationship with the Dickson Family.

David Holdsworth is participating in the Subscription. He has been adjudged to be part of the Concert Party due to his close relationship with Charles Dickson.

Charles Dickson, Davina Dickson, James Dickson, Tarncourt Properties Limited, Apache Capital Partners Limited, Mark Lewis, Alan Halsall, Richard Burrell and David Holdsworth are regarded by the Company and finnCap to together form the "Concert Party" and would, if the Transaction completes, hold in aggregate following Admission 90,726,256 New Ordinary Shares, representing approximately 67.1 per cent. of the Enlarged Share Capital as follows:

	Current interests in Barkby		Proposed interests in Barkby on Admission
	Number of Existing Ordinary Shares	% of Existing Share Capital	Number of New Ordinary Shares	% of Enlarged Share Capital
Charles Dickson	469,696	1.1	33,279,757	24.6
Davina Dickson	-	-	27,802,167	20.6
James Dickson	-	-	17,803,167	13.2
Tarncourt Properties Limited	-	-	4,166,667	3.1
Apache Capital Partners Limited	-	-	3,333,333	2.5
Mark Lewis	-	-	1,762,666	1.3
Alan Halsall	-	-	1,411,833	1.0
Richard Burrell	-	-	833,333	0.6
David Holdsworth	-	-	333,333	0.2

While the Concert Party holds more than 50 per cent. of the voting rights in the Company, no obligations under Rule 9 normally arise from acquisitions of further interests in shares by any member of the Concert Party unless the acquisition by the individual member of the Concert Party results in their individual percentage interests in shares passing through or between a Rule 9 threshold without Panel consent.

Further information on the Concert Party is set out in Part IV of the Admission Document.

20.3 Panel Waiver

The Panel has agreed that, subject to the approval of the Independent Shareholders of the Waiver Resolution at the General Meeting, it will waive the obligation on any member of the Concert Party to make a general offer that would otherwise arise as a result of the issue of the New Ordinary Shares to the Concert Party upon Admission.

Accordingly, the Waiver Resolution is being proposed at the General Meeting and will be taken on a poll to be called at the General Meeting.

21. INDEPENDENCE

Charles Dickson, as a member of the Concert Party and a Shareholder of the Company, will not be entitled to vote on the Waiver Resolution.

Giles Clarke, Rupert Fraser and Sir David Ord will not be entitled to vote on the Waiver Resolution as they are existing Shareholders and participants in the Placing or Subscription.

THE CONCERT PARTY HAS NO RELATIONSHIPS (PERSONAL, FINANCIAL AND COMMERCIAL), ARRANGEMENTS AND/OR UNDERSTANDINGS WITH ANY OF THE SHAREHOLDERS OR ANY PERSON WHO IS, OR IS PRESUMED TO BE, ACTING IN CONCERT WITH ANY SUCH SHAREHOLDER.

22. RELATIONSHIP AGREEMENT

Conditional on Admission, the Dickson Family will control the voting rights attached to an aggregate of 83,051,758 New Ordinary Shares representing approximately 61.4 per cent. of the Company's Enlarged Share Capital and will exercise control over the Company. Accordingly, conditional on Admission they will enter into a relationship agreement with the Company and finnCap to regulate the relationship between the parties on an arm's length and normal commercial basis following (and conditional on) Admission.

Pursuant to the Relationship Agreement, the Dickson Family have agreed, inter alia, to certain restrictions on the exercise of the voting rights attached to the New Ordinary Shares in which they have an interest and to ensure that at all times there are not less than two independent directors on the New Board. In addition, for such time as the members of the Dickson Family (together with their associates) hold not less than 20 per cent. of the voting rights attached to the New Ordinary Shares, they are entitled to nominate one director for appointment to the New Board. The initial such nominated director is Charles Dickson.

The terms of the Relationship Agreement apply until the members of the Dickson Family (together with their associates) cease to hold an interest in 20 per cent. or more of the voting rights attached to the New Ordinary Shares or there are only independent directors on the New Board.

Further details of the terms of the Relationship Agreement are set out in paragraph 16.2.5 of Part VIII of the Admission Document.

23. WARRANTS AND OPTIONS

The Company has granted warrants to subscribe for an aggregate 8,242,422 Existing Ordinary Shares, exercisable at subscription prices from 3.3 pence to 7.59 pence. Following the Share Consolidation, these warrants will apply in respect of, in aggregate, 3,160,306 New Ordinary Shares and will have a subscription price of 8.60 to 19.79 pence per New Ordinary Share. Further details of these warrants are set out in paragraphs 5.16 to 5.19 of Part VIII of the Admission Document

At the General Meeting, the Company is passing a resolution to adopt the rules of a company share option plan ("CSOP"), further details of which are set out in paragraph 10 of Part VIII of the Admission Document. Following Admission, the New Board intends to review and consider whether any options should be granted to senior employees of the Enlarged Group in order to incentivise and motivate them.

24. GENERAL MEETING

Set out at the end of the Admission Document is a notice convening the General Meeting to be held at The Bull Hotel, Market Place, Fairford GL7 4AA at 10.00 a.m. on 6 January 2020 at which the following Resolutions will be proposed, of which Resolutions 1 to 5 (inclusive) will be proposed as ordinary resolutions and Resolutions 6 to 9 will be proposed as special resolutions, with all the Resolutions being inter-conditional:

·     Resolution 1 is an ordinary resolution to approve the Acquisitions for the purposes of the NEX Exchange Rules.

·     Resolution 2 is an ordinary resolution to approve the waiver of the obligation on the Concert Party which would otherwise arise under Rule 9 of the Takeover Code in relation to the issue of the New Ordinary Shares to the Concert Party pursuant to the Acquisition, Placing and the Subscription, respectively. This Resolution will be taken on a poll and must be approved by Independent Shareholders entitled to vote who together represent a simple majority of the Existing Ordinary Shares held by such Independent Shareholders being voted (whether in person or by proxy) at the General Meeting.

IMPORTANT NOTE: Shareholders who are members of the Concert Party or participants in the Placing or Subscription are not entitled to vote on Resolution 2. All Shareholders are entitled to vote on the other Resolutions.

·     Resolution 3 is an ordinary resolution to approve the consolidation of every 193 Existing Ordinary Shares into 74 New Ordinary Shares as described in paragraph 10 above.

·     Resolution 4 is an ordinary resolution to authorise the Directors under section 551 of the Act to allot equity securities up to an aggregate nominal amount of (i) £878,630.81 for the issue of the Consideration Shares; (ii) £143,445.95 for the issue of the Placing Shares and Subscription Shares; (iii) £2,716.30 for the issue of the Fee Shares; (iv) £116,393.53 in respect of the grant of any options or other subscription rights; (v) £174,590.29 otherwise following Admission; and (vi) £174,590.29 in connection with an offer by way of rights issue.

·     Resolution 5 is an ordinary resolution to approve the adoption by the Company of the new company share option plan described in more detail in paragraph 10 of Part VIII of the Admission Document.

·     Resolution 6 is a special resolution to approve the disapplication of statutory pre-emption provisions to allot equity securities for cash other than on a non pre-emptive basis (i) in connection with an offer by way of rights issue; (ii) up to an aggregate nominal amount of £878,630.81 in connection with the issue of the Consideration Shares; (iii) up to an aggregate nominal amount of £143,445.95 in connection with the Placing and Subscription Shares; (iv) up to an aggregate nominal amount of £2,716.30 in connection with the Fee Shares; (v) up to an aggregate nominal amount of £116,393.53 in respect of the grant of any options or other subscription rights and (vi) up to an aggregate nominal amount of £174,590.20 otherwise following Admission.

·     Resolution 7 is a special resolution to approve the reduction of the Company's share premium account by £6,347,000, further details of which are set out in paragraph 11 above.

·     Resolution 8 is a special resolution to approve the reduction of the Company's capital redemption reserve from £3,078,000 to £0.00, further details of which are set out in paragraph 11 above.

·     Resolution 9 is a special resolution to approve the cancellation of the Company's Ordinary Shares from trading on NEX.

The attention of Shareholders is also drawn to the recommendations by and voting intentions of the Directors as set out in paragraph 28 below.

25. ADMISSION, SETTLEMENT AND CREST

As the Acquisitions constitute a reverse takeover of the Company under the NEX Exchange Rules, Shareholder consent to the Acquisitions is required at the General Meeting. If the Resolutions are duly passed at the General Meeting, the admission of the Company's Existing Ordinary Shares to trading on NEX will be cancelled (immediately prior to Admission) and the Enlarged Share Capital will be admitted to trading on AIM.

Application has been made to the London Stock Exchange for the Enlarged Share Capital to be admitted to trading on AIM. Admission is expected to take place at 8.00 a.m. on 7 January 2020.

The Placing Shares are eligible for CREST settlement. CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by a written instrument in accordance with the requirements of CREST. The Articles permit the holding and transfer of Ordinary Shares to be evidenced in uncertificated form in accordance with the requirement of CREST. Accordingly, following Admission, settlement of transactions in the Placing Shares may take place within the CREST system if the relevant Shareholder so wishes. CREST is a voluntary system and Shareholders who wish to receive and retain share certificates will be able to do so.

26. RISK FACTORS

Your attention is drawn to the Risk Factors set out in Part V of the Admission Document.

27. ACTION TO BE TAKEN

Please check that you have received a Form of Proxy for use in relation to the General Meeting with the Admission Document.

Whether or not you intend to be present in person at the General Meeting, you are strongly encouraged to complete, sign and return your Form of Proxy in accordance with the instructions printed on it so as to be received, by post or, during normal business hours only, by hand to Share Registrars Limited, The Courtyard, 17 West Street, Farnham, Surrey GU9 7DR as soon as possible but in any event so as to arrive by not later than 10.00 a.m. on 2 January 2020 (or, in the case of an adjournment of the General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any part of a day that is not a Business Day)).

Appointing a proxy will enable your vote to be counted at the General Meeting in the event of your absence.

The completion and return of a Form of Proxy will not preclude you from attending and voting in person at the General Meeting, or any adjournment thereof, should you wish to do so.

28. RECOMMENDATIONS

Resolutions 1, 3, 4, 5, 6, 7, 8 and 9

The Directors, having been so advised by finnCap, consider Resolutions 1, 3, 4, 5, 6, 7, 8 and 9 to be fair and reasonable and in the best interests of the Shareholders and the Company as a whole.

Accordingly the Directors unanimously recommend Shareholders vote in favour of Resolutions 1, 3, 4, 5, 6, 7, 8 and 9 to be proposed at the General Meeting as they have irrevocably undertaken to do in respect of their holdings of Existing Ordinary Shares, representing approximately 21.8 per cent. of the Existing Issued Share Capital.

Resolution 2

Giles Clarke and Rupert Fraser, as participants in the Placing and Subscription respectively, are deemed not to be independent for the purposes of making a recommendation to Shareholders on Resolution 2.

As a result the Independent Directors in respect of Resolution 2 are Stephen Cook, Emma Dark, Duncan Harvey and Jeremy Sparrow, who, having been so advised by finnCap, are satisfied that the waiver granted by the Panel of any obligation that would otherwise arise under Rule 9 of the Takeover Code as a result of the issue of New Ordinary Shares to the Concert Party pursuant to the Acquisitions, the Subscription and the Placing is fair and reasonable and in the best interests of the Company and the Independent Shareholders as a whole. In so doing, finnCap has taken into account the Independent Directors' commercial assessments.

Accordingly the Independent Directors unanimously recommend Independent Shareholders vote in favour of Resolution 2 to be proposed at the General Meeting, as they have irrevocably undertaken to do in respect of their holdings of Existing Ordinary Shares, representing approximately 6.6 per cent. of the Existing Issued Share Capital.

29. FURTHER INFORMATION

You should read the whole of the Admission Document and not just rely on the information contained in Part I of the Admission Document. Your attention is drawn to the additional information set out in Parts II to VIII of the Admission Document.

 

END

 

 

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