Proposed Tender Offer & Shares Cancellation
VECTOR CAPITAL PLC
("Vector Capital" or the "Company")
Proposed return of up to £3.71 million to Shareholders by way of a tender offer,
Cancellation of admission of Ordinary Shares to trading on AIM
and
Notice of General Meeting
Vector Capital is today announcing that a circular (the "Circular") will be sent to Shareholders later today detailing the following Resolutions to be considered at a General Meeting scheduled for 2.00 p.m. on 20 August 2024:
· a Tender Offer for up to 11,244,385 Ordinary Shares at the Tender Price of 33 pence per Ordinary Share, representing up to £3.71 million to Shareholders; and
· the proposed cancellation of the admission to trading of the Ordinary Shares on AIM.
A General Meeting has been convened for 2.00 p.m. on 20 August 2024, at which Shareholders will be asked to consider and if thought fit, to approve the Resolutions. The Notice of General Meeting convening the General Meeting at which the Resolutions will be proposed is set out at the end of the Circular. Pursuant to Rule 41 of the AIM Rules, the Directors have notified the London Stock Exchange of the date of the proposed De-Listing.
The Tender Price of 33 pence per Ordinary Share represents:
· a premium of 22.2 per cent. to the closing price of 27 pence per Ordinary Share on 31 July 2024, being Latest Practicable Date; and
· a premium of 18.7 per cent. to the volume weighted average price of 27.8 pence per Ordinary Share over one month prior to the Latest Practicable Date.
As described below, an Irrevocable Undertaking to vote in favour of the Resolutions to be proposed at the General Meeting, and not to tender any of its Ordinary Shares, has been received from a Shareholder holding 75.15 per cent. of the issued share capital of the Company which means that both the Resolutions are expected to be passed. The Tender Offer is expected to become effective on 2 August 2024 and for those Eligible Shareholders that wish to sell their Ordinary Shares held in certificated form, cheques will be despatched on or around 10 September 2024 or, for those Eligible Shareholders that wish to sell their Ordinary Shares held in CREST, CREST accounts will be credited on or around 10 September 2024.
Shareholders should note that, if the Resolutions are approved at the General Meeting, it is possible that Vector Holdings might hold 100 per cent. of the Ordinary Shares following completion of the Tender Offer.
In the context of the Tender Offer, with the agreement of the Independent Directors of the Company, the Panel has granted certain dispensations such that the Circular does not need to comply with all of the requirements of an offer document and the Company is not in an offer period as defined in the Takeover Code.
The Company will currently remain subject to the Takeover Code for a period of at least ten years following the Delisting. It should be noted that the future scope of the application of the Takeover Code is currently under review by the Panel and is the subject matter of a public consultation paper (PCP 2024/1) which proposes a refocusing and significant narrowing of the types of companies that are subject to the Takeover Code. This public consultation closed on 31 July 2024. If these rule changes are adopted in the form and broadly in the timescale proposed, the Company would cease to be subject to the Takeover Code three years after the date of implementation of such changes.
Information on Vector Capital plc
Financial profile of the Group
The Group provides secured, business-to-business loans to small and medium-sized enterprises based in England and Wales. Loans are typically secured by a first legal charge against real estate. Customers typically borrow for general working capital purposes, bridging ahead of refinancing, land development and property acquisition. The loans provided by the Group are typically for renewable 12-month terms with fixed interest rates. The Company joined the AIM market in December 2020 and raised £2.6 million (net) and then returned to the market for a secondary fundraise of £1.4 million (net) in June 2021. The Company has been unable to raise additional capital on acceptable terms from the AIM market in the last three years.
Group revenue and earnings continued to grow throughout 2021 and 2022 in line with the rise in the loan book but, as a result of a combination of the adverse effects on borrowers of high interest rates, increases in inflation, particularly the costs of building materials, and a soft residential property market, revenue fell slightly in the year ended 31 December 2023 to £5.7 million and profit before tax fell from £2.8 million to £2.1 million. This was considered by the Board to be a good result for the year given the circumstances as the Group maintained a focus on responsible and cautious lending supported by a strong capital base. Shareholders' equity continued to grow, and the Board announced a final dividend of 1.53 pence per share, in line with 2022. The loan book stood at £47.9 million as at 31 December 2023, a reduction of £5.3 million over the year, reflecting a cautious approach to new lending in light of market conditions, and external funding lines from long terms wholesale bank providers stood at £45 million. The Group increased its provisions for doubtful debts by £704,000 during the year.
The Company announced on 2 August 202comp4 its unaudited consolidated interim results for the six months ended 30 June 2024 recording income of £2.54 million (2023: £2.85 million) and profit before tax of £707,000 (2023: £1.27 million). During the period, the Group incurred a bad debt charge of £363,000 arising from redemption shortfalls and is carrying forward a provision of £928,000 against further bad debts. Although general inflation has fallen significantly, interest rates and market uncertainly remain high and property disposals remain slow for certain properties. A number of borrowers continue to be adversely impacted by these conditions with the result that, in these instances, the Group cannot redeem and recycle funds as quickly as we would wish. This impacts the Company's ability to generate income from the stressed loans and an acceptable return on capital.
Despite the current challenges within the lending market, the Board believes Vector retains a sound capital base and that eventually interest rates will fall and an expansion in bank lending will improve market conditions. However, the Board believes that the medium term growth potential is likely to be limited and the ability to redeem and recycle will continue to be impacted by customers liquidity constraints. Rather than continue to hold shareholders' funds during an indeterminate period while we wait for market conditions to improve, the Board is of the view that the right decision is to provide shareholders with the opportunity for a return of capital through the Tender Offer described below.
The Board believes that the decision to join the AIM market was correct at the time of admission in December 2020. However, for the reasons described in more detail below, the Board believes that the potential benefits arising from its continued admission on the AIM market are outweighed by the costs and disadvantages. As a consequence, the Board feels that no further purpose is served by remaining on the market and that a withdrawal from AIM is in the best interests of shareholders.
The Tender Offer
Introduction
The Company intends to proceed with the Tender Offer in order to distribute to Shareholders approximately £3.71 million.
The Tender Offer is designed to enable those Shareholders (other than certain Overseas Shareholders) who wish to realise Ordinary Shares to do so. Shareholders who successfully tender their Ordinary Shares will receive 33 pence per Ordinary Share. Further details of the Tender Offer are set out in the Circular.
Eligible Shareholders on the Register on the Record Date are being invited to tender all, some or none of their Ordinary Shares for purchase by Zeus, on the terms and subject to the conditions set out in the Circular and, in respect of Eligible Shareholders holding Ordinary Shares in certificated form, the accompanying Tender Form. Eligible Shareholders are not obliged to tender any Ordinary Shares under the Tender Offer.
Vector Holdings, a Shareholder representing 75.15 per cent. of the current issued share capital of the Company has given an Irrevocable Undertaking in connection with the Tender Offer not to tender any of the 34,000,000 Ordinary Shares held by it pursuant to the Tender Offer. Accordingly following completion of the Tender Offer, Vector Holdings will hold between 75.15 per cent. and 100 per cent. of the Ordinary Shares.
Upon the Tender Offer becoming unconditional and unless the Tender Offer has been terminated in accordance with the provisions set out in the Circular, Zeus will accept the applications of Eligible Shareholders validly made in accordance with these terms and conditions.
Subject to these terms and conditions, Zeus (acting as principal) will purchase all Ordinary Shares tendered by Eligible Shareholders under the Tender Offer at the Tender Price on or about 10 September 2024.
In accordance with the terms and subject to the conditions of the Repurchase Agreement, the Company has agreed to purchase at the Tender Price the Ordinary Shares purchased by Zeus (acting as principal) pursuant to the Tender Offer. All of the Ordinary Shares purchased by the Company will be cancelled.
Considerations as to whether or not to accept the Tender Offer
Shareholders should note that if they vote in favour of the Resolutions at the General Meeting, they are not obligated to accept the Tender Offer for their Ordinary Shares.
The Independent Directors are not making any recommendation to Eligible Shareholders as to whether or not they should tender their Ordinary Shares in the Tender Offer. Eligible Shareholders should consider whether the Ordinary Shares remain a suitable investment in light of their own personal circumstances and investment objectives, noting the future prospects of the Group as outlined in the Circular and the advantages and disadvantages of the Tender Offer outlined below.
In the opinion of the Independent Directors, in the absence of any immediate prospect to sell their Ordinary Shares once the Tender Offer closes, Shareholders should balance their desire for a cash realisation now or in the immediate foreseeable future, against the prospect of remaining Shareholders in the Company with changed financial prospects, a changed ownership structure and the De-Listing and the consequent impact on future marketability. The Independent Directors believe that the points below should be taken into account by Shareholders when considering whether to retain their Ordinary Shares or to tender their Ordinary Shares under the Tender Offer.
Advantages of the Tender Offer
The Independent Directors believe that making the Tender Offer on the terms set in the Circular is in the interests of Shareholders as a whole because:
· a tender offer provides an opportunity for an exit for those Shareholders who wish to receive cash;
· a tender offer conducted at 33 pence represents a premium to the prevailing share price of 27 pence as at close of trading on 31 July 2024 (being the latest practicable date prior to the publication of this announcement);
· there can be no guarantee as to the level of dividends or other distributions which would be paid by the Company to Shareholders in future or if any such dividends or distributions would be made.
Disadvantages of the Tender Offer
In considering the Tender Offer, the Independent Directors believe Shareholders should have regard to the following disadvantages that they may experience if they opt to accept the Tender Offer and if they opt to retain their Ordinary Shares and not accept the Tender Offer (as applicable):
· In order to pay the consideration to which Shareholders are entitled pursuant to valid tenders of Ordinary Shares accepted by Zeus (and which the Company will then be obliged to repurchase from Zeus), the Company will use a significant amount of its available cash and other liquid funds which will then be unavailable for deployment in achieving the Company's aims;
· As a result of the Tender Offer, the number of Ordinary Shares in issue will be reduced and the value of the assets of the Company will reduce in size. As a result, the fixed costs of the Company will be spread over fewer Ordinary Shares;
· Shareholders tendering Ordinary Shares for sale under the Tender Offer will receive the Tender Price, which may be less than the price at which they bought their Ordinary Shares; and
· Tender Forms and TTE Instructions, once submitted, are irrevocable. The price of the Ordinary Shares and the Company's net asset value may rise or fall following submission of a Tender Form or TTE Instruction. After settlement of a TTE Instruction, the Shareholder will not be able to access the Ordinary Shares concerned in CREST for any transaction or for charging purposes.
If Eligible Shareholders are in any doubt as to what action they should take, they should seek their own independent professional advice from their stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000, as amended, if they are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser. Eligible Shareholders are also strongly advised to consult their professional advisers regarding their own tax position.
The De-Listing
Reasons for the De-Listing
The Board is very much focused on strengthening the Company's financial performance and has carefully considered over an extensive period of time the benefits and drawbacks to the Company retaining its quotation on AIM. The Board has now concluded that the De-Listing, linked to the Tender Offer referred to above is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Board has considered the following key factors:
· the scale and structure of the UK Small Cap market has changed for the foreseeable future and Vector Capital is too small to be of interest to the vast majority of a reducing number of investors in UK publicly-quoted companies;
· following its admission to AIM in December 2020 and a further fundraise in June 2021, the Company has been unable to access new equity capital on acceptable terms;
· trading in the Ordinary Shares is highly illiquid resulting in share price volatility. In the opinion of the Board, the Tender Offer represents a near term opportunity for Eligible Shareholders to realise their entire investment in the Company for cash;
· in the opinion of the Board, the level of free float in the shares of the Company is not of a scale to attract sufficient interest from institutional and other investors and therefore it is difficult to create a more liquid market for its Ordinary Shares to effectively or economically utilise its AIM quotation;
· in light of the limited trading in the Ordinary Shares, with an average daily volume over the past 12 months of approximately 33,439 Ordinary Shares representing 0.07 per cent. of the current issued share capital, the costs associated with maintaining the AIM quotation are considered by the Directors to be disproportionately high when compared to the benefits, and the Board believes that these funds could be better utilised; and
· the management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM is, in the Directors' opinion, disproportionate to the benefits to the Company.
If the De-Listing Resolution is not approved by Shareholders the Company will remain liable for the ongoing professional and associated costs associated with maintaining its admission to AIM, which amounted to approximately £220,000 during FY2023.
Effect of De-Listing
The principal effects of the De-Listing will be that:
· there will not be a formal market mechanism enabling the Shareholders to trade Ordinary Shares;
· while the Ordinary Shares will remain freely transferrable, it is possible that the liquidity and marketability of the Ordinary Shares will, in the future, be more constrained than at present and the value of such shares may be adversely affected as a consequence;
· Vector Holdings currently holds 75.15 per cent. of the Company's voting rights and, following completion of the Tender Offer, will hold between 75.15 per cent. and 100 per cent. As a result, the free float and liquidity of the Ordinary Shares is limited and will be further reduced following the completion of the Tender Offer;
· in the absence of a formal market and quote, it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;
· the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply and the Company will no longer be subject to UK MAR or the Disclosure Guidance and Transparency Rules and so will therefore no longer be required to disclose significant shareholdings in the Company;
· shareholders will no longer be afforded the protections given by the AIM Rules and the requirement that the Company seek Shareholder approval for certain corporate actions, where applicable, including substantial transactions, reverse takeovers, related party transactions and fundamental changes in the Company's business;
· the levels of transparency and corporate governance within the Company may not be as stringent as for a company quoted on AIM;
· Zeus will cease to be the Company's nominated adviser and the Company will cease to have a broker;
· stamp duty will be payable on transfers of Ordinary Shares as the Ordinary Shares will no longer be traded on AIM; and
· the De-Listing may have personal taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.
Shareholders should also note that the Takeover Code may continue to apply to the Company following the De-Listing for a period of ten years, provided the Company continues to have its place of central management and control in the UK, Channel Islands or Isle of Man. However, in the event that, subsequent to the De-Listing further Board changes result in the Company's place of central management and control being outside the UK, Channel Islands or Isle of Man, then the Company may not be subject to the Takeover Code. Shareholders should also note that the Panel has recently issued a public consultation regarding possible changes to the Takeover Code which, if adopted, would amongst other things shorten the period during which the Takeover Code potentially continues to apply to a company following its delisting. If these rule changes are adopted in the form and broadly in the timescale proposed, the Company would cease to be subject to the Takeover Code three years after the date of implementation of such changes.
The Company will also continue to be bound by the Companies Act (which requires shareholder approval for certain matters) following the De-Listing.
The above considerations are not exhaustive, and Shareholders should seek their own independent advice when assessing the likely impact of the De-Listing on them.
Process for De-Listing
Under the AIM Rules, the De-Listing can only be effected by the Company after securing a special resolution of Shareholders in a general meeting and the expiry of a period of 20 clear Business Days from the date on which notice of the De-Listing is given to the London Stock Exchange. In addition, a period of at least five clear Business Days following Shareholders' approval of the De-Listing is required before the De-Listing may become effective. The Notice of General Meeting contains a special resolution which seeks the approval of Shareholders for the De-Listing. Assuming that the De-Listing Resolution is approved, the earliest date that the De-Listing could take place is 7.00 a.m. on 16 September 2024.
Ordinary Share dealing following De-Listing
If a Shareholder retains their Ordinary Shares following the De-Listing, although the Ordinary Shares will remain freely tradeable, they will no longer be tradeable on AIM. The Board is aware that following the De-Listing (should the De-Listing Resolution be approved by Shareholders at the General Meeting) liquidity in, and marketability of, the Ordinary Shares will be very limited and holdings of Ordinary Shares will be difficult to value and to trade. Therefore, whilst there will be no formal dealing facility, Shareholders seeking to buy or sell Ordinary Shares can email the Company Secretary at mail@vectorcapital.co.uk, who will seek to facilitate contact between potential buyers and sellers of Ordinary Shares. Shareholders should also be aware that the arrangements set out above could be withdrawn at a later date.
Board intentions following execution of the Tender Offer and De-Listing
The total cost to the Company of the Tender Offer will depend on the level of tenders by Shareholders. However, if the Tender Offer were to be fully taken up then the total cost of the Tender Offer would be approximately £3.71 million. This will be funded from the cash balances of the Company.
Following the Tender Offer, remaining cash resources will be deployed for working capital purposes. Following completion of the Tender Offer, the Board has no current intention to return further capital to Shareholders in the foreseeable future.
If the Tender Offer proceeds, Vector Holding's percentage holding in the Company will increase to between 75.15 per cent. of the issued share capital (assuming that no Shareholder tenders any Ordinary Shares and 100 per cent. of the issued share capital (assuming that the Tender Offer is taken up in full).
The composition of the Board, and the extent to which (if at all) the Company will continue to comply with the QCA Corporate Governance Code will be considered following completion of the De-Listing.
Irrevocable Undertaking of major Shareholder
Vector Holdings, a Shareholder representing 75.15 per cent. of the current issued share capital has given an Irrevocable Undertaking in connection with the Tender Offer as described below.
The Irrevocable Undertaking given by Vector Holdings contains undertakings to:
· exercise the voting rights attaching to such Ordinary Shares in favour of the Resolutions. Accordingly, the Resolutions are expected to be passed at the General Meeting. Shareholders should note that the Relationship Agreement includes, amongst other undertakings, an undertaking from Vector Holdings not to exercise its voting rights in respect of any resolution to cancel Vector Capital's admission to trading on AIM except where one of certain exceptions including the giving of the written consent of the majority of the independent directors applies. The independent directors have unanimously given the required consent; and
· not to tender any of the 34,000,000 Ordinary Shares held by it pursuant to the Tender Offer. Accordingly following completion of the Tender Offer Vector Holdings will hold between 75.15 per cent. and 100 per cent. of the Ordinary Shares.
Further details of the Irrevocable Undertaking are set out in the Circular.
General Meeting and Resolutions
The Notice of General Meeting convening the General Meeting is set out at the end of the Circular. The General Meeting has been convened for 2.00 p.m. on 20 August 2024, at 6th Floor, First Central 200, 2 Lakeside Drive, London, NW10 7FQ.
The Tender Offer Resolution will be proposed as an ordinary resolution requiring the approval of more than 50 per cent. of the votes cast at the General Meeting. The De-Listing Resolution will be proposed as a special resolution requiring the approval of 75 per cent. or more of the votes cast at the General Meeting. The votes will be carried out by way of a poll. All Shareholders are eligible to vote on the Resolutions.
The attention of Shareholders is drawn to the undertakings to vote in favour of the Resolutions contained in the Irrevocable Undertaking given by Vector Holdings as set out in the Circular.
The De-Listing will enable the Company to further reduce its cost base and reduce the management time and the regulatory burden associated with maintaining the Company's admission to trading on AIM. The Board believes the Company is not of a scale to attract sufficient interest from institutional and other investors and therefore it is difficult to create a more liquid market for its shares to effectively or economically utilise its quotation. Furthermore, the Company has not utilised its admission to AIM to raise fresh capital or issue paper consideration to fund acquisitions since June 2021.
As such, the Independent Directors believe that, in the context of the Proposals, the De-Listing is in the best interests of the Company and accordingly that Shareholders should vote in favour of the De-Listing Resolution.
Recommendation
The Independent Directors unanimously recommend that: (a) Shareholders vote in favour of the Resolutions as the Independent Directors intend to do in respect of their own Ordinary Shares (where they are held); and (b) all Eligible Shareholders consider tendering their Ordinary Shares in the Tender Offer. However, as described in more detail above, the Independent Directors are not making any recommendation to Eligible Shareholders as to whether or not they should tender their Ordinary Shares in the Tender Offer. Shareholders should consider whether the Ordinary Shares remain a suitable investment in light of their own personal circumstances and investment objectives, noting the non-exhaustive list of risks that Vector Capital is subject to, and the advantages and disadvantages of tendering Ordinary Shares under the Tender Offer outlined above.
Ross Andrews (being the only Independent Director who is a Shareholder), intends to tender his Entitlement amounting to 263,158 Ordinary Shares, representing 0.58 per cent. of the Company's issued share capital as at the Latest Practicable Date.
Taxation
Shareholders should be aware that there will be tax considerations that they should take into account when deciding whether or not to participate in the Tender Offer. Summary details of certain UK taxation considerations are set out in the Circular.
Shareholders are strongly advised to obtain independent tax advice regarding their own tax position.
Shareholders who are in any doubt as to their tax position or who are subject to tax in a jurisdiction other than the United Kingdom should consult an appropriate professional adviser.
The De-Listing may also have certain tax consequences for Shareholders and those Shareholders who are in any doubt about their tax position should consult their professional advisers as to their tax position before taking any action relating to the De-Listing.
Overseas Shareholders
The attention of Shareholders who are resident in, or a citizen of, a jurisdiction outside of the United Kingdom ("Overseas Shareholders") is drawn to the Circular.
Action to be taken
Set out at the end of the Circular you will find a notice convening a General Meeting to be held at 6th Floor, First Central 200, 2 Lakeside Drive, London, NW10 7FQ at 2.00 p.m. on 20 August 2024 to consider and, if thought fit, approve the Resolutions.
Shareholders will find enclosed with the Circular, a Form of Proxy for use in connection with the General Meeting. Whether or not Shareholders intend to be present at the General Meeting, they are requested to complete and return the Form of Proxy in accordance with the instructions printed thereon as soon as possible and, in any event, so as to be received by the Company's registrars, Neville Registrars Limited, not later than 48 hours (excluding non-working days) before the General Meeting is scheduled to begin, meaning it should be returned by 2.00 p.m. on 16 August 2024. The completion and return of the Form of Proxy will not preclude the Shareholders from attending the General Meeting and voting in person should they so wish.
If you hold Shares in CREST you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Neville Registrars Limited (CREST Participant ID: 7RA11) so it is received by CREST no later than 2.00 p.m. on 16 August 2024 or, if the meeting is adjourned, no later than 48 hours (excluding non-working days) before the time for holding the adjourned meeting. The completion and return of a CREST Proxy Instruction will not preclude Shareholders who hold their Shares in CREST from attending and voting in person at the General Meeting, or any adjournment thereof, should you wish to do so.
If you have any questions relating to the Circular or the completion and return of the Form of Proxy or CREST Proxy Instruction, please call Neville Registrars Limited on telephone number 0121 585 1131 or, if telephoning from outside the United Kingdom, on +44 (0) 121 585 1131. Please note that no advice on the contents of the Circular nor on the matters to be voted upon at the General Meeting nor any financial, legal or tax advice can be given by Neville Registrars Limited and accordingly for such advice you should consult your stockbroker, solicitor, accountant, bank manager or other independent professional adviser
If you wish to participate in the Tender Offer
If you hold your Ordinary Shares in certificated form and you wish to participate in the Tender Offer, you should complete the Tender Form in accordance with the instructions printed on it and in the Circular and return it by post in the accompanying reply-paid envelope (for use in the UK only) to Neville Registrars Limited, together with your share certificate(s) in respect of the Ordinary Shares tendered.
If you hold your Ordinary Shares in uncertificated form and you wish to tender some or all of your Ordinary Shares, you should send a TTE Instruction and follow the procedures set out in the Circular in respect of tendering uncertificated Ordinary Shares.
If you have any questions about the procedure for tendering Ordinary Shares or making a TTE Instruction, you require extra copies of the Circular or the Tender Form or you want help filling in the Tender Form, please telephone the Shareholder Helpline on +44 (0) 121 585 1131. Lines are open from 9.00 a.m. to 5.00 p.m. (London time) Monday to Friday (except public holidays in England and Wales). Please note that calls to these numbers may be monitored or recorded for security and training purposes.
Please note that for legal reasons the Shareholder Helpline will only be able to provide information contained in the Circular and the accompanying Tender Form and will be unable to give advice on the merits of the Tender Offer or to provide financial, investment or taxation advice.
You are advised to read all of the information contained in the Circular before deciding on the course of action you will take in respect of the General Meeting and the Tender Offer.
The results of the General Meeting will be announced through a Regulatory Information Service and the Company's website as soon as possible once known. It is expected that this will be on 6 September 2024.
Expected Timetable for Principal Events
2024Announcement of Tender Offer and De-Listing 2 August
Publication and posting of Circular, Form of Proxy and Tender Form 2 August
Tender Offer opens 2 August
Latest time and date for receipt of Forms of Proxy for the General Meeting 2.00 p.m. on 16 August
General Meeting 2.00 p.m. on 20 August
Latest time and date for receipt of Tender Forms and settlement of 1.00 p.m. on 3 September
TTE Instructions (i.e. Closing Date of the Tender Offer)3
Record Date for the Tender Offer 6.00 p.m. on 3 September
Announcement of the result of the Tender Offer 6 September
Expected purchase of Ordinary Shares under the Tender Offer and 10 September
completion of the repurchase from Zeus
CREST accounts credited with Tender Offer proceeds 10 September
Despatch of cheques for Tender Offer proceeds in respect of successfully 10 September
tendered certificated Ordinary Shares and despatch of balance share
certificates in respect of unsold certificated Ordinary Shares
Last day of dealings in the Ordinary Shares on AIM 13 September
Cancellation of admission of the Ordinary Shares to trading on AIM 16 September
Notes
1. All references to times throughout this document are to London time.
2. If any of the above times and/or dates change, the revised times and/or dates will be notified by the Company by an announcement through a Regulatory Information Service.
3. This date may be extended in accordance with the terms and conditions of the Tender Offer set out in Part V of the Circular.
4. All events in the above timetable following the General Meeting that relate to: (i) the Tender Offer are conditional, inter alia, upon the approval of the Tender Offer Resolution; and (ii) the De-Listing are conditional upon the approval of the De-Listing Resolution. The Tender Offer Resolution requires the approval of more than 50 per cent. of the votes cast by Shareholders in person or by proxy at the General Meeting and the De-Listing Resolution requires the approval of not less than 75 per cent. of the votes cast by Shareholders in person or by proxy at the General Meeting. It should be noted that an Irrevocable Undertaking to vote in favour of the Resolutions has been received from a Shareholder holding 75.15 per cent. of the issued share capital of the Company meaning that both the Resolutions are expected to be passed. See paragraph 6 of Part IV and paragraph 4 of Part X of the Circular for further details.
5. Subject to and following the Tender Offer becoming unconditional, settlement of the consideration to which any Eligible Shareholder is entitled pursuant to valid tenders accepted by Zeus will be made within 14 days of the Closing Date.
For further information please contact:
Vector Capital plc
Robin Stevens
Agam Jain
c/o IFC Advisory Limited
Zeus Capital Limited
Hugh Morgan, Chris Hardie and Darshan Patel
+44 (0) 20 3829 5000
IFC Advisory Limited
Graham Herring, Florence Chandler, Zach Cohen
+44 (0) 20 3934 6630
About Vector Capital:
Vector Capital provides secured, business-to-business loans to SMEs based principally in England and Wales. Loans are typically secured by a first legal charge against real estate. The Group's customers typically borrow for general working capital purposes, bridging ahead of refinancing, land development and property acquisition. The loans provided by the Group are typically for renewable 12-month terms with fixed interest rates.
The information contained within this announcement is deemed to constitute inside information as stipulated under Article 7 of the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.
SCHEDULE - DEFINITIONS
The following definitions apply in the Circular unless the context otherwise requires:
AIM the AIM market operated by the London Stock Exchange;
AIM Rules the AIM Rules for Companies published by the London Stock Exchange from time to time;
Business Day a day not being a Saturday, Sunday or public holiday on which banks are generally open for business in the City of London;
certificated or in certificated the description of a share or other security which is not in
form uncertificated form (that is not in CREST);
Circular this document;
Closing Date the latest time and date for receipt of Tender Forms and settlement of TTE Instructions being 1.00 p.m. on 3 September 2024 or such other date as may be notified through a Regulatory Information Service in accordance with the terms of the Tender Offer;
Company or Vector Capital Vector Capital Plc;
CREST the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK & International Limited is the Operator (as defined in the CREST Regulations);
CREST Manual the rules governing the operation of CREST as published by Euroclear and as amended from time to time;
CREST Regulations the Uncertificated Securities Regulations 2001, as amended;
De-Listing the cancellation of admission of the Ordinary Shares to trading on AIM;
De-Listing Resolution Resolution 2, which is proposed as a special resolution, to approve the De-Listing, as set out in the Notice of General Meeting;
Directors or Board the directors of the Company whose names are set out in Part I of the Circular, or any duly authorised committee thereof, and "Director" means any one of them;
Eligible Shareholder Shareholders who are entitled to participate in the Tender Offer, being those who are on the Register on the Record Date and excluding those with registered addresses in a Restricted Jurisdiction and Vector Holdings Limited (which has undertaken not to participate in the Tender Offer);
Entitlement the entitlement of each Shareholder to tender for purchase by Zeus up to 100 per cent. of the Ordinary Shares registered in such Shareholder's name on the Record Date;
Escrow Agent the Receiving Agent, Neville Registrars Limited, in its capacity as escrow agent;
Euroclear Euroclear UK & International Limited, a company incorporated in England and Wales with registered number 02878738, whose registered office is at 33 Cannon Street, London EC4M 5SB, the operator of CREST;
Form of Proxy the form of proxy accompanying the Circular for use in connection with the General Meeting;
FY2023 the twelve-month period ending on 31 December 2023;
General Meeting the general meeting (or any adjournment thereof) of the Shareholders of the Company to be convened for 2.00 p.m. on 20 August 2024 pursuant to the Notice of General Meeting;
Group the Company and its subsidiaries (construed in accordance with section 1162 of the Companies Act 2006) at the date of the Circular;
Independent Directors the Directors other than Agam Jain (who is not regarded as independent by virtue of his indirect shareholding in Vector Capital);
Irrevocable Undertaking the irrevocable undertaking from: Vector Holdings: (i) not to accept (and to procure that the relevant registered holder(s) do not accept) the Tender Offer in respect of its 34,000,000 Ordinary Shares; and (ii) to vote (and to procure that the relevant registered holder(s) vote) in favour of the Resolutions in respect of its 34,000,000 Ordinary Shares;
Latest Practicable Date 31 July 2024, being 2 Business Days prior to the date of the Circular;
London Stock Exchange London Stock Exchange plc;
Notice of General Meeting the notice convening the General Meeting as set out in Part XI of the Circular;
Ordinary Shares ordinary shares of 0.5 pence each in the capital of the Company;
Overseas Shareholders a Shareholder who is a resident in, or a citizen of, a jurisdiction outside the United Kingdom;
Panel the Panel on Takeovers and Mergers;
Participant ID the identification code or membership number used in CREST to identify a particular CREST Member or other CREST Participant;
Proposals the proposed Tender Offer, the buyback of Ordinary Shares pursuant to the Tender Offer and the Repurchase and the De-Listing, all as described in the Circular;
Record Date 6.00 p.m. on 3 September 2024;
Registrar or Receiving Agent Neville Registrars Limited;
Register the Company's register of members;
Regulatory Information Service has the meaning given to it in the AIM Rules;
Relationship Agreement the relationship agreement relating to the Company, made between Vector Holdings, the Company and Allenby Capital Limited dated 18 December 2020, as assigned on 26 July 2024 by Allenby Capital Limited to Zeus in accordance with its terms.
Repurchase or Repurchased the purchase by the Company of Ordinary Shares from Zeus pursuant to the Repurchase Agreement;
Repurchase Agreement the agreement dated on or around the date of the Circular entered into between the Company and Zeus for the repurchase by the Company as a market purchase (within the meaning of section 693(4) of the Companies Act) of the Ordinary Shares purchase by Zeus pursuant to the Tender Offer;
Resolutions the resolutions to be proposed at the General Meeting which are set out in full in the Notice of General Meeting (and each of which shall be a "Resolution");
Restricted Jurisdictions each of the United States of America, Australia, Canada, Japan, New Zealand and the Republic of South Africa and any other jurisdiction where the mailing of the Circular or the accompanying documents into or inside such jurisdiction would constitute a violation of the laws of such jurisdiction;
Shareholders holders of Ordinary Shares and "Shareholder" shall be construed accordingly;
Sterling pounds sterling, being the lawful currency of the UK;
Takeover Code the City Code on Takeovers and Mergers;
Tender Conditions has the meaning given in Part V of the Circular;
Tender Form the form enclosed with the Circular for use by Eligible Shareholders who hold Ordinary Shares in certificated form in connection with the Tender Offer;
Tender Offer the invitation by Zeus to Eligible Shareholders to tender Ordinary Shares to Zeus on the terms and conditions set out in the Circular and also, in the case of certificated Ordinary Shares only, the Tender Form (Vector Holdings has undertaken not to tender its Ordinary Shares under the Tender Offer and any tender from such Shareholder will be treated as invalid);
Tender Offer Resolution Resolution 1, which is proposed as an ordinary resolution, to approve the market purchases of Ordinary Shares by the Company in connection with the Tender Offer and the Repurchase, as set out in the Notice of General Meeting;
Tender Price 33 pence being the price per Ordinary Share at which Ordinary Shares will be purchased pursuant to the Tender Offer;
TFE Instruction a transfer from escrow instruction (as defined by the CREST manual);
TTE Instruction a transfer to escrow instruction (as defined by the CREST manual);
UK MAR the Market Abuse Regulation (EU) No. 596/2014 as it forms part of English law by virtue of the European Union (Withdrawal) Act 2018;
Uncertificated or in uncertificated form recorded on a register of securities maintained by Euroclear UK & International Limited in accordance with the CREST Regulations as being in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;
Vector Holdings Vector Holdings Limited, a company incorporated in England and Wales with company number 01375226 and having its registered office at 2 Claridge Court, Lower Kings Road, Berkhamsted, HP4 2AF; and
Zeus Zeus Capital Limited, a company incorporated in England and Wales with company number 04417845 and having its registered office at 82 King Street, Manchester, M2 4WQ, who at the date of this document is appointed as nominated adviser and broker to the Company.
References to "pounds", "sterling", "pence" and "£" are to the lawful currency of the United Kingdom.
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