View all news

Advancedadvt Limited - Potential merger – improved terms

24/01/2022
RNS Number : 3521Z
Advancedadvt Limited
24 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.

 

24 January 2022

 

AdvancedAdvT Limited

("AdvancedAdvT" or the "Company")

 

Potential merger - improved terms

 

Further to its announcement of 7 January 2022 regarding its interest in exploring a share exchange merger with M&C Saatchi plc ("M&C" or "M&C Saatchi") (the "Potential Merger"), the Company confirms that, having met with M&C on 17 January 2022 and reflected on the feedback M&C provided on our Original Proposal (defined below), the Company proposed an improved set of terms on 19 January 2022 (the "Improved Terms").

 

The Board of AdvancedAdvT believe this is a truly beneficial merger; it provides significant investment and additional expertise to build on the existing M&C platform, seeking to drive M&C's future growth at significantly greater pace for the benefit of all stakeholders.

 

The Company was informed yesterday evening that the independent directors of M&C Saatchi had rejected the Improved Terms. The Company is considering its options.

 

The Improved Terms for the M&C shares subject to the Potential Merger proposed to M&C were:

 

either:

 

2.245 new AdvancedAdvT Limited shares for each M&C Saatchi ordinary share

·      This represents a 20.7 per cent increase on the 1.86 share exchange ratio proposed in a confidential letter to the Board of M&C Saatchi dated 6 January 2022 (the "Original Proposal")

·      M&C Saatchi shareholders, excluding the 12 million M&C shares already owned by AdvancedAdvT, would own approximately 65 per cent. of the Company as enlarged by the Potential Merger.

 

or:

 

1.633 new AdvancedAdvT Limited shares and 40 pence in cash for each M&C Saatchi ordinary share

·      M&C Saatchi shareholders would own approximately 57 per cent. of the Company as enlarged by the Potential Merger, excluding the 12 million M&C shares already owned by AdvancedAdvT

·      With a mix and match facility to allow shareholders an element of choice in the form of consideration they could receive.

 

Merger rationale

As outlined in its announcement of 7 January 2022, the Board of the Company believes that the enlarged group would have the opportunity to create significant value for its then shareholders and that 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 with expertise in transforming businesses at pace and execute on complementary M&A. These attributes would enable the evolution, and most importantly, the acceleration, of the enlarged group's digital and data capabilities, creating adjacent addressable market opportunity and strengthening the strategic ongoing relationship and commitments with its customers and prospective customers.

 

Proposed board structure

The Improved Terms reaffirmed the proposed board structure as set out in the Company's Original Proposal, albeit the Company notes M&C Saatchi's announcement of 19 January 2022 regarding the resignation of CFO, Mickey Kalifa.

 

Reflecting this change, the proposed board structure as enlarged by the Potential Merger would comprise Moray MacLennan as CEO, an Executive Director responsible for Data, Analytics & Digital Transformation, a CFO to be appointed and Gavin Hugill as COO. The rest of the board would comprise Vin Murria as Chairperson and a number of the current Non-Executive Directors from the current boards of AdvancedAdvT and M&C Saatchi. The Company's intention would be for the board as enlarged by the Potential Merger to comprise a majority of independent directors.

 

AIM

The Company had also proposed to commit to moving AdvT's listing to AIM as soon as is practicable, with the intention that consideration shares provided to current M&C Saatchi shareholders would be AIM listed.

 

 

The Company believes the merger provides M&C with significant investment capital at a significant premium to the undisturbed 30 day (to 5 January 2022) trading volume weighted average price of 160 pence, even before taking into account any issue discount. We believe M&C has executed well in recent years, with particular focus on addressing issues raised in 2019. However, we view the capital provided for the enlarged group is important to fuel investment, and subsequent growth, in existing business lines alongside the growing data and digital opportunity, whilst simultaneously also enabling the enlarged group to address the put options and their ongoing drag on performance and cash flow.

 

 

The Company has a Long Term Incentive Plan ("LTIP"), to ensure an alignment with all shareholders, that is performance based on the long term performance of the Company's shares and will only reward the participants if shareholder value is created. Participants are expected to include senior executives of acquired companies. The Company believes such schemes deliver benefit to all stakeholders including shareholders, being: proportionate, transparent, performance based and driving sustainable value creation. Further details of the LTIP were included in the Company's prospectus dated 18 March 2021.

 

 

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

 

 

There can be no certainty that any formal offer for M&C will be forthcoming. 

 

 

Notes

 

As announced on 5 January 2022, AdvancedAdvT acquired 12,000,000 ordinary shares of M&C for a price of £2.00 per share, representing c.9.82 per cent. of the current issued share capital of M&C. If the Company makes a formal offer, a value of at least equivalent to £2.00 per share must be offered under the Code. 

 

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's pre suspension share price was 98 pence per share.

 

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 is 254900WYO35S1T334A28.

 

 

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

 

 

Further information on the Company can be found on its website at www.advancedadvt.com. Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website or any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a regulatory information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.

 

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 Saatchi; and (iii) the effects of global economic conditions and governmental regulation on the Company's, or M&C Saatchi 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 Saatchi, 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 Saatchi, as appropriate.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
OFDSELSMLEESEIF

Multimedia Files:

View all news