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Advancedadvt Limited - Potential Merger

07/01/2022
RNS Number : 7587X
Advancedadvt Limited
07 January 2022
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

 

THIS IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE, NOR AS TO THE TERMS ON WHICH ANY OFFER WILL BE MADE.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

 

7 JANUARY 2022

 

 

AdvancedAdvT Limited

(the "Company")

 

Potential merger

 

Further to the announcement made by AdvancedAdvT Limited (LSE:ADVT) on 5 January 2022 confirming that the Company had acquired 12,000,000 ordinary shares in M&C SAATCHI PLC ("M&C"), the Board of AdvancedAdvT Limited now confirms it is interested in exploring a share exchange merger between M&C and the Company.

 

The Board believes the enlarged group would have the opportunity to create significant value for its then shareholders.  A merger would create an opportunity to build a data, analytics and digitally focussed creative marketing business with a strong balance sheet and additional management expertise in transforming businesses at pace and execute on complementary M&A. This would allow the enlarged group to continue its evolution and, crucially, accelerate the implementation of its growth strategy and therefore be increasingly relevant to its customers. 

 

The Board believes the enlarged group would be well-positioned to take advantage of the structural changes arising from an acceleration of digitalisation, affecting the way businesses operate, engage and sell to customers, and would offer benefits to employees, customers and shareholders.

 

The merger, combined with a focus on a data, analytics and digital creative marketing strategy plus M&A, would enable the enlarged group to capitalise on the heightened opportunity to 'navigate, create and lead meaningful change' whilst guiding companies on their new digital journey.  It would defend M&C's traditional creative base against disruptive competitors and enable the enlarged group to grow market share against its peers. 

The merger would also enable M&C to resolve the legacy put option issue as well as providing the cash to accelerate investment in the business and transformational digital led M&A.

The Company brings additional management skills with considerable expertise and experience to complement, accelerate and grow the enlarged group through strategic and bolt-on acquisitions in fragmented international markets.  The Company's management has proven previous success in identifying, realising and harnessing latent value within businesses.

 

The combination of the M&C brand and platform with the Company's funding and experience is expected to increase the M&A opportunity pipeline. The combined reach and renewed appeal of the platform could attract many more quality assets.

 

The outperformance and valuation of data-led digital marketing agencies and consultancy peers demonstrates investor support for companies who successfully capitalise on the perceived market opportunity. Other digital marketing groups have been successful in using M&A to acquire digital capability.  We see a significant opportunity for the enlarged group, with an accelerated data, analytics and digital strategy and combined stewardship, to achieve similar valuation multiples, improve the liquidity of the shares, implement a progressive re-instatement of the dividend policy which we believe will enhance the business' attractiveness to investors.

 

Vin Murria OBE, Chairman of the Company and a non-executive director of M&C, owns 15,237,985 ordinary shares in M&C, representing 12.46% and 17,500,000 ordinary shares in the Company, representing 13.26%. The Company owns 12,000,000 ordinary shares in M&C, representing c.9.82%.

 

There can be no certainty that any formal offer for M&C will be forthcoming, nor as to the terms of any such formal offer. 

 

Suspension of Listing

 

As previously announced, the Company purchased the 12,000,000 shares in M&C on 5 January 2022 and this purchase constitutes a reverse takeover under Listing Rule 5.6.4.

 

Consequently, the Company has requested that the listing in its shares is suspended with effect from 7.30 a.m. today until the FCA has approved the eligibility of the Company following the purchase, in accordance with Listing Rule 5.6.21 . The Company would have to request that the listing be cancelled and would have to re-apply for the shares to be re-admitted, subject to the FCA's approval.

 

Should the potential merger be launched and subsequently complete, it would also constitute a reverse takeover under Listing Rule 5.6.4 and accordingly, the Company would apply for the re-admission of its shares to the Official List and the Main Market of the London Stock Exchange and on the basis that the FCA approves the eligibility of the group, as enlarged by the merger, as a result of this further reverse takeover, in accordance with Listing Rule 5.6.21.  The Company would have to request that the listing be cancelled and would have to re-apply for the shares to be re-admitted, subject to the FCA's approval.

 

A further announcement will be made in due course.

 

This announcement has been made without the prior consent of M&C.

 

 

Enquiries:  

 

Company Secretary

Antoinette Vanderpuije   020 7004 2743

 

Meare Consulting (Financial PR to the Company)

Adrian Duffield 07990 858548

 

Investec Bank plc (Financial adviser to the Company)

Christopher Baird   020 7597 5970

Alex Wright

Carlton Nelson

 

 

Notes

 

The person responsible for arranging the release of this announcement on behalf of the Company is Antoinette Vanderpuije, the Company Secretary of the Company.  The LEI of the Company: 254900WYO35S1T334A28.

 

 

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

 

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

 

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

 

Website

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available free of charge on the Company's website: www.advancedadvt.com promptly following its publication and in any event by no later than 12 noon on the following business dayThe content of the websites referred to in this announcement is not incorporated into and does not form part of this announcement.

 

Important notices

Investec Bank plc, which is authorised in the United Kingdom by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, is acting as financial adviser to the Company and no-one else in connection with the subject matter of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

 

This announcement is for information purposes only.  It does not constitute an offer or form part of any offer or an invitation to purchase, subscribe for, sell or issue any securities or a solicitation of any offer to purchase, subscribe for, sell or issue any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful.  The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe such restrictions.  Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

 

Overseas Shareholders

The release, publication or distribution of this announcement in or into certain jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements.

To the fullest extent permitted by applicable law, the Company disclaims any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England and Wales.

Copies of this announcement shall not be, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction or any jurisdiction where to do so would violate the laws of that jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction.

Forward Looking Statements

This announcement (including any information incorporated by reference in this announcement), oral statements made regarding this announcement, and other information published by the Company may contain statements which are, or may be deemed to be, "forward looking statements". Such forward looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and on numerous assumptions regarding the business strategies and the environment in which the Company or the enlarged group shall operate in the future and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. The forward-looking statements contained in this announcement relate to the Company or the enlarged group's future prospects, developments and business strategies. In some cases, these forward looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "will look to", "would look to", "plans", "prepares", "anticipates", "expects", "is expected to", "is subject to", "budget", "scheduled", "forecasts", "synergy", "strategy", "goal", "cost-saving", "projects" "intends", "may", "will" "shall" or "should" or their negatives or other variations or comparable terminology. Forward-looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects of the Company or the enlarged Group; (ii) business and management strategies and the expansion and growth of the Company's operations and potential synergies resulting from a merger with M&C; and (iii) the effects of global economic conditions and governmental regulation on the Company's, or M&C's business. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that shall occur in the future. These events and circumstances include changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or disposals. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions prove incorrect, actual results may differ materially from those expected, estimated or projected. Such forward looking statements should therefore be construed in the light of such factors. Neither the Company, nor any of its respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement shall actually occur. Given these risks and uncertainties, potential investors should not place any reliance on forward looking statements.

Specifically, statements of estimated cost savings and synergies relate to future actions and circumstances which, by their nature involve, risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. Due to the scale of the enlarged group, there may be additional changes to the enlarged group's operations. As a result, and given the fact that the changes relate to the future, the resulting cost synergies may be materially greater or less than those estimated.

The forward-looking statements speak only at the date of this announcement. All subsequent oral or written forward-looking statements attributable to any member of the Company, or any of its respective associates, directors, officers, employees or advisers, are expressly qualified in their entirety by the cautionary statement above.

The Company expressly disclaims any obligation to update such statements other than as required by law or by the rules of any competent regulatory authority, whether as a result of new information, future events or otherwise.

No profit forecasts or estimates

No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for the Company or M&C, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for the Company or M&C, as appropriate.

 

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