TIDMR4E
RNS Number : 9993U
Reach4Entertainment Enterprises PLC
04 August 2020
4 August 2020
reach4entertainment enterprises plc
("r4e" or "the Company" or "the Group")
Proposed cancellation of admission of Ordinary Shares to trading
on AIM
Re-registration as a private company
Adoption of new Articles of Association
Notice of General Meeting
reach4entertainment enterprises plc (AIM: R4E), the integrated
international marketing group in the live performance and
entertainment markets, announces that it will be posting a circular
to shareholders (the "Circular") containing details of its
intention to cancel the admission of Ordinary Shares to trading on
AIM, re-register as a private company and accordingly, amend the
Company's Articles of Association to the extent that they are
suitable for a private company going forward, together (the
"Proposals").
Background to and rationale for the Proposals
Although trading to the year ended 31 December 2019 was strong,
with the Company's results being significantly ahead of market
expectations, the impact of the COVID-19 pandemic on the business
both financially and operationally has been severe. The closure of
all live venues in London's West End and on Broadway as well as the
cessation of all concerts and large scale live events has
materially affected the Group's trading since March and
consequently management were required to take swift action to
protect the Company and the workforce in order to mitigate the
financial impact of trading on a severely reduced basis.
During this unprecedented time, the Board has evaluated and
pursued a number of strategic options available to the Company and
determined that the most appropriate course of action is for the
Group to continue to operate and serve the live entertainment
industry as a private company. The Board believes that the theatre
and live entertainment market has the potential to recover but that
it is still not clear how long it may take trading performance to
recover to levels seen previously. After careful consideration, it
is the Board's belief that in a time where prospects for the future
are uncertain and where cash management is paramount, the costs of
maintaining a London listing outweigh the benefits afforded by
operating as a public company. The Board believes that these
permanent cost savings will strengthen the balance sheet and
provide a greater level of capital to deploy to drive the continued
growth of the Group.
In addition to the cost savings described above, the Board
believes that operating as a private company will provide a greater
degree of flexibility and allow for strategic decisions to be
implemented faster and more efficiently and ensure the Company's
cost base is sustainable in the longer term. The Board believes
that this will allow the Group to better serve its market, remain
more resilient to future events which may adversely affect the
industry and ultimately provide greater opportunity for value
creation for shareholders over the longer term.
The Board recognises that in the future there may be the need to
raise further capital, however set against the backdrop of the
global pandemic, the volatility observed in the market has
negatively impacted investor sentiment and therefore the Board is
of the view that there may be improved access to a greater variety
of funding sources and structures in the private environment than
have been made available to the Company in recent times in the
public arena. The Board has preserved the pre-emption rights of
Shareholders upon the cancellation resolution being passed.
The Board may revisit the decision in the future as to whether
it may be appropriate and in the best interests of the Company and
its shareholders to readmit to trading on AIM or another public
market, however in this current period of uncertainty and for the
reasons stated above, the decision has been made to seek
shareholder approval to cancel the Company's shares from trading on
AIM with effect from 3 September 2020.
The full timetable for the Cancellation is as follows:
2020
Announcement of proposed cancellation 4 August
Publication and posting of this Circular 4 August
Latest time and date for receipt of Proxy votes in 4:00 p.m. on 19
respect of the General Meeting August
Record time and date for those Shareholders on the 6:00 p.m. on 19
Register of Members entitled to attend or vote at August
the General Meeting
General Meeting 4:00 p.m. on 21
August
Announcement of results of General Meeting 21 August
Expected last day of dealings in Ordinary Shares 2 September
on AIM
Expected time and date of Cancellation(4) 7:00 a.m. on 3 September
Notes:
1. Each of the above times and/or dates is subject to change at
the absolute discretion of the Company, Grant Thornton and Dowgate
Capital. If any of the above times and/or dates should change, the
revised times and/or dates will be announced through a Regulatory
Information Service.
2. All of the above times refer to London time unless otherwise stated.
3. All events listed in the above timetable following the
General Meeting are conditional on the passing of the Resolutions
at the General Meeting.
4. The Cancellation requires approval of not less than 75 per
cent. of the votes cast by Shareholders (whether present in person
or by proxy) at the General Meeting or any adjournment thereof.
Trading in the Ordinary Shares before and after Cancellation
Prior to Cancellation
If Shareholders wish to buy or sell Ordinary Shares on AIM they
must do so prior to the Cancellation becoming effective. As noted
above, in the event that Shareholders approve the Cancellation, it
is anticipated that the last day of dealings in the Ordinary Shares
on AIM will be 2 September 2020 and that the effective date of the
Cancellation will be 7.00 a.m. on 3 September 2020.
Dealing and settlement arrangements
The Directors are aware that the proposed Cancellation, should
it be approved by the Shareholders at the General Meeting, would
make it difficult to buy and sell Ordinary Shares should they wish
to do so. Accordingly, the Company intends to implement a Matched
Bargain Facility to assist Shareholders to trade in the Ordinary
Shares with effect from the date of Cancellation.
The Matched Bargain Facility will be provided by J P Jenkins. J
P Jenkins is part of Peterhouse Capital Limited, which is
authorised and regulated by the FCA, a Member of the London Stock
Exchange and a NEX Exchange Corporate Adviser. Under the Matched
Bargain Facility, Shareholders or persons wishing to acquire or
dispose of Ordinary Shares will be able to leave an indication with
J P Jenkins, through their stockbroker (J P Jenkins is unable to
deal directly with members of the public), of the number of
Ordinary Shares that they are prepared to buy or sell at an agreed
price. In the event that J P Jenkins is able to match that order
with an opposite sell or buy instruction, they would contact both
parties and then effect the bargain.
It is intended that this facility will be put in place as soon
as practicable after the date of Cancellation and will be reviewed
periodically thereafter.
Further details will be made available after Cancellation on the
Company's website at www.r4e.com and at www.jpjenkins.com .
Process for Re-registration
Following the proposed Cancellation, the Directors consider that
there is little benefit to maintaining the Company's status as a
public limited company together with the extra costs and
administrative burdens associated with such status. Assuming the
resolution to approve the Re-registration is passed, the Company
intends to make an application to be re-registered as a private
limited company under the Act by the name of reach4entertainment
enterprises Limited. Application will be made to the Registrar of
Companies for the Company to be re-registered as a private limited
company. Re-registration will take effect when the Registrar of
Companies issues a certificate of incorporation on Re-registration.
The Registrar of Companies will issue the certificate of
incorporation on Re-registration when it is satisfied that no valid
application can be made to cancel the resolution to re-register as
a private limited company or that any such application to cancel
the resolution to reregister as a private limited company has been
determined and confirmed by the Court.
Upon the re-registration of the Company as a private limited
company taking effect and the passing of resolution 3, the
Directors will be authorised under the Companies Act 2006, (as the
Company will have only one class of shares in issue), to exercise
without limit any power of the Company to allot shares of that
class and to grant rights to subscribe for or to convert any
security into such shares. In that connection, a conditional
resolution will also be proposed at the General Meeting empowering
the Directors to allot such shares for cash in relation to any
rights issue or other offer to Shareholders in proportion to their
respective holdings of Ordinary Shares and otherwise than on such
basis, up to an aggregate nominal amount equal to 20 per cent. of
the current issued share capital of the Company. Further details
are set out under the heading "General Meeting" below.
The Board believes disapplication of the statutory pre-emption
rights in relation to offers of shares for cash is important in
order to maintain flexibility in addressing the future funding
requirements of the Company.
New Articles
Under the Act, as part of the Re-registration, the Company is
required to make such changes to its Articles of Association as are
required in connection with its becoming a private company limited
by shares. The proposed New Articles are based on the current
Articles of Association but with a number of changes to reflect the
change in the Company's status to a private limited company. The
principal effects of the Re-registration and the adoption of the
New Articles on the rights and obligations of Shareholders and the
Company are summarised in Part II of the Circular.
The approval of Shareholders to the Re-registration and adoption
of the New Articles is being sought at the General Meeting. The
Notice, which convenes the General Meeting at which the Resolutions
will be proposed, is set out at the end of the Circular.
A draft of the proposed New Articles may be inspected on the
Company's website at www.r4e.com from the date of this announcement
up to and including the date of the General Meeting.
Both the Re-registration and adoption of the New Articles will
require the approval of not less than 75 per cent. of the votes
cast by Shareholders on at the General Meeting.
General Meeting
The Company is seeking Shareholder approval for the Proposals,
including the Cancellation, at the General Meeting, which has been
convened for 4:00 p.m. on 21 August 2020 by means of electronic
communication. The Notice of General Meeting containing the full
text of the Resolutions is set out in the Circular. Subject to the
Cancellation Resolution being passed at the General Meeting, it is
anticipated that the Cancellation will become effective at 7.00
a.m. on 3 September 2020.
The Proposals are conditional, pursuant to Rule 41 of the AIM
Rules, upon the approval of not less than 75 per cent. of the votes
cast by Shareholders (whether present in person or by proxy) at the
General Meeting. Pursuant to Rule 41 of the AIM Rules, the Company
(through its nominated adviser, Grant Thornton) has notified the
London Stock Exchange of the date of the proposed Cancellation.
COVID-19
The Board cannot stress strongly enough its wish that
Shareholders do not put themselves at risk of becoming infected
with COVID-19 as a result of travelling to or attending the General
Meeting.
With effect from 10 July 2020, the UK Government eased the stay
at home and travel restrictions originally introduced in March in
light of COVID-19. Whilst certain restrictions have been lifted,
permitting gatherings of up to certain numbers to take place, the
safety of shareholders and the observance of Government regulations
and guidance in the present circumstances is of paramount
importance to the Board. The Board has therefore concluded that
shareholders should not be permitted to attend the General Meeting.
Equally, our advisers and other guests will not be invited to
attend the General Meeting.
Given that in the present circumstances shareholders will not be
permitted to attend the General Meeting, the Chairman of the
meeting will propose that each of the resolutions to be considered
at the meeting should be voted on by way of a poll, so that all
voting rights exercised by Shareholders who are entitled to do so
at the General Meeting will be counted.
Whilst Shareholders will not be permitted to attend the General
Meeting, they will still be able to ensure their votes are counted
by submitting their proxies in advance. Shareholders wishing to
appoint a proxy for this purpose should appoint the Chairman of the
meeting. Any Shareholder appointing someone other than the Chairman
of the meeting to be their proxy, should note that person will not
be permitted to attend the General Meeting and will therefore be
unable to cast the Shareholder's vote.
As the situation and resulting government guidance has the
ability to change rapidly, Shareholders should note that further
changes may need to be put in place at short notice in relation to
the General Meeting. Updates on the status of the General Meeting
and any changes to the proceedings of the meeting will be notified
by announcement through a regulatory information service.
It is the Company's intention to facilitate the establishment
and participation of the necessary quorum by electronic means.
Any Shareholders wishing to ask questions relating to the
Proposals, are requested to email their questions to the Company
(info@r4e.com) by no later than 5:00 p.m. on 14 August 2020.
Answers will be posted on the Company's website by no later than
5:00 p.m. on 20 August 2020.
Copies of the Circular and the Notice of General Meeting are
available on the Company's website ( www.r4e.com ) and the text of
the Letter from the Chairman of the Company is set out in the
Appendix to this announcement.
Recommendation
The Directors consider that the Cancellation and the
Re-registration as a private company is in the best interests of
the Company and its Shareholders as a whole. Accordingly, the
Directors unanimously recommend that Shareholders vote in favour of
the Resolutions to be proposed at the General Meeting as the
Directors intend to do in respect of their own beneficial
shareholdings amounting, in aggregate, to 142,997,613 Ordinary
Shares, representing approximately 11.2 per cent. of the issued
share capital of the Company at the date of this letter.
Unless the context otherwise requires, capitalised terms in this
announcement shall have the same meaning ascribed to them in the
Circular.
For information, please contact:
reach4entertainment enterprises Phone: +44 (0)20 3978 8590
plc
Marc Boyan, CEO
Paul Summers, COO
Luther Pendragon Phone: +44 (0)20 7618 9100
Harry Chathli Email: r4e@luther.co.uk
Alexis Gore
Joe Quinlan
Grant Thornton, NOMAD Phone: +44 (0)20 7383 5100
Philip Secrett
Jen Clarke
Seamus Fricker
Dowgate Capital, Broker Phone: +44 (0)20 3903 7715
James Serjeant
David Poutney
About r4e
reach4entertainment enterprises plc ("r4e") operates a
collection of theatrical, film and live entertainment marketing,
PR, advertising and display agencies, across the world. The Company
uses its extensive experience in the live entertainments space to
create value through investing in innovative and established
agencies that provide communications services to a range of clients
involved with theatre, film, concerts and more. For further
information on r4e, you are invited to visit the Company's website
at www.r4e.com .
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.
END
NOGUPUQPRUPUGRW
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August 04, 2020 02:00 ET (06:00 GMT)
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