TIDMQRT
RNS Number : 9520Z
Quarto Group Inc
15 January 2020
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE
UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE
OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA ("UNITED
STATES")), AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA
OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.
FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY SHARES OR
OTHER SECURITIES OF THE QUARTO GROUP INC. IN THE UNITED STATES (OR
TO ANY U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE US
SECURITIES ACT OF 1933, AS AMED ("SECURITIES ACT")), AUSTRALIA,
CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER
JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THIS ANNOUNCEMENT NOR ANYTHING CONTAINED HEREIN
SHALL FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, ANY
SUCH OFFER, SOLICITATION OR COMMITMENT WHATSOEVER IN ANY OF THOSE
JURISDICTIONS. NO MONEY, SECURITIES OR OTHER CONSIDERATION IS BEING
SOLICITED FROM ANY PERSON IN THOSE JURISDICTIONS AND, IF SENT IN
RESPONSE TO THE INFORMATION CONTAINED HEREIN, WILL NOT BE
ACCEPTED.
This announcement is an advertisement for the purposes of the
Prospectus Regulation Rules and does not constitute a prospectus
and investors must subscribe for or purchase any shares referred to
in this announcement only on the basis of information contained in
any prospectus published by The Quarto Group Inc. in connection
with the Open Offer to be made to shareholders and not in reliance
on this announcement. The information contained in this
announcement is for background purposes only and does not purport
to be full or complete. No reliance may or should be placed by any
person for any purpose whatsoever on the information contained in
this announcement or on its accuracy or completeness. The
information in this announcement is subject to change.
When published, a copy of the prospectus will be, subject to
certain access restrictions, available for inspection on the
Company's website (www.quarto.com) and at the Company's principal
place of business being The Old Brewery, 6 Blundell Street, London,
N7 9BH. This announcement does not constitute, and may not be
construed as, an offer to sell or an invitation to purchase,
investments of any description, or a recommendation regarding the
issue or the provision of investment advice by any party.
This announcement contains inside information for the purposes
of the Market Abuse Regulation (596/2014).
The Quarto Group Inc.
("Company", "Quarto" or "Group")
Intention to launch an Open Offer to raise GBP13.9 million
The Quarto Group Inc., the illustrated book publisher and
distribution group, today announces that it is in the late stages
of organising an equity fundraising by way of an open offer to the
Company's existing shareholders to raise approximately GBP13.9
million (approximately $18.2 million) in gross proceeds (GBP12.8
million (approximately $16.7 million) net of expenses) by the issue
of 20,444,550 new shares ("New Common Shares") of common stock, par
value $0.10 per share ("Common Shares"), of the Company at 68 pence
per share of Common Stock ("Open Offer"). It is expected that the
Open Offer will be conducted on the basis of 1 New Common Share for
every 1 existing Common Share held. The Open Offer is expected to
be fully underwritten by two groups of the Company's shareholders,
namely the 1010 Printing Limited ("1010 Printing") and Sergio
Giunti and Andrea Giunti Lombardo through an entity ultimately
controlled by them (together the "Giunti Parties" and with 1010
Printing, the "Underwriters"), who will be entering into separate
underwriting agreements with the Company ("Underwriting
Agreements").
The Group has also been in discussions with its banking
syndicate to extend the final repayment date of its existing
facilities agreement and to extend certain of its covenants. Such
amendments would be conditional on completion of the Open Offer.
Furthermore, the Group intends to use the net proceeds of the Open
Offer to reduce the Group's existing bank debt.
A further announcement in relation to the Open Offer will be
made in due course, including details of a prospectus and circular
setting out the reasons for and procedures for participating in the
Open Offer.
Terms of the Underwriting Agreements and sell down
undertakings
It is expected that each of the Underwriters will separately
agree with the Company to take up in full their pro-rata
entitlements under the Open Offer ("Open Offer Entitlements") but
not to take up any additional New Common Shares under an excess
application facility made available by the Company to enable
shareholders to take up New Common Shares in excess of their Open
Offer Entitlements. In addition under their Underwriting Agreement,
the Giunti Parties are expected to undertake to subscribe for up to
6,187,820 New Common Shares which will result in the Giunti Parties
holding up to a maximum of 20 per cent. of the Company's enlarged
share capital following admission of the New Common Shares
("Admission"). Pursuant to the terms of its Underwriting Agreement,
1010 Printing is expected to undertake to subscribe for all New
Common Shares which are not subscribed for by qualifying
shareholders under the Open Offer or by the Giunti Parties pursuant
to their Open Offer Entitlements or the terms of the Giunti
Parties' Underwriting Agreement.
If no qualifying shareholders (other than the Underwriters) take
up their Open Offer Entitlements, the Underwriters are expected to
subscribe for all of the New Common Shares available pursuant to
the Open Offer which will result in 1010 Printing, Lion Rock Group
Limited (parent company of 1010 Printing) ("Lion Rock") and Chuk
Kin Lau (the ultimate controller of Lion Rock and 1010 Printing and
CEO of the Company) (together, the "Lau Parties"), together,
holding such number of Common Shares so as to give them control of
49.25 per cent. of the enlarged share capital following Admission
and the Giunti Parties holding, together, such number of Common
Shares so as to give them control of 20 per cent. of the enlarged
share capital following Admission.
If this were to occur, it is likely that the Company may no
longer comply with the requirements set out in Listing Rule 6.14,
being that 25 per cent. of the Company's Common Shares must be held
in public hands. Failure to comply with the Listing Rule 6.14
without a dispensation from the FCA, could result in the FCA either
suspending or cancelling the trading of the Common Shares on the
premium segment of the Main Market of the London Stock
Exchange.
The Company has been in discussions with the FCA regarding these
matters and to counteract the risk that the FCA may suspend or
cancel the trading of the Common Shares after Admission. Chuk Kin
Lau (CEO and shareholder of Quarto) will undertake to the Company
to use reasonable endeavours to sell such number of Common Shares
as will result in the Company satisfying the Listing Rules' free
float requirement of 25 per cent. up to a maximum number of all of
the Common Shares held by him following Admission, and to the
extent he is unable to sell such Common Shares, to gift such Common
Shares as is required to satisfy the Listing Rules' free float
requirement to an unrelated third party by not later than the date
which falls six months immediately following the date of Admission.
To the extent that the sale or gift of Common Shares by Chuk Kin
Lau is insufficient to meet the Listing Rules' free float
requirement, 1010 Printing will undertake to sell and/or gift such
number of Common Shares as is required to satisfy the Listing
Rules' free float requirement up to a maximum number of 1,540,514
Common Shares by not later than the date which falls six months
following the date of Admission.
The Quarto Group Inc.
+44 (0)20 7700
Michael Clarke, Chief Administrative Officer 9006
About The Quarto Group
The Quarto Group (LSE: QRT) creates a wide variety of books and
intellectual property products, with a mission to inspire life's
experiences. Produced in many formats for adults, children and the
whole family, our products are visually appealing, information rich
and stimulating.
The Group encompasses a diverse portfolio of imprints and
businesses that are creatively independent and expert in developing
long-lasting content across specific niches of interest.
Quarto sells and distributes its products globally in over 50
countries and 40 languages, through a variety of sales channels,
partnerships and routes to market.
Quarto employs c.330 talented people in the US and the UK. The
group was founded in London in 1976. It is domiciled in the US and
listed on the London Stock Exchange.
For more information, visit quarto.com or follow us on Twitter
at @TheQuartoGroup.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (596/2014) ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
IMPORTANT NOTICE:
This announcement is for information purposes only and is not
intended to and does not constitute or form part of any offer or
invitation to purchase or subscribe for, or any solicitation to
purchase or subscribe for New Common Shares in any jurisdiction. No
offer or invitation to purchase or subscribe for, or any
solicitation to purchase or subscribe for Common Shares will be
made in any jurisdiction in which such an offer or solicitation is
unlawful. The information contained in this announcement is not for
release, publication or distribution to U.S. Persons or persons in
Australia, Canada, Japan or South Africa, and should not be
distributed, forwarded to or transmitted in or into or from any
jurisdiction, where to do so might constitute a violation of local
securities laws or regulations.
This announcement is not for release, publication or
distribution, directly or indirectly, in or into or from the United
States. This announcement is not an offer of securities for sale in
the United States. The New Common Shares have not been and will not
be registered under the Securities Act or under any securities laws
of any state or other jurisdiction of the United States and may not
be offered, sold, taken up, exercised, resold, renounced,
transferred or delivered, directly or indirectly, within the United
States, or offered, sold, taken up, exercised, resold, renounced,
transferred or delivered to, or for the account or benefit of, U.S.
Persons, except pursuant to an applicable exemption from or in a
transaction not subject to the registration requirements of the
Securities Act and in compliance with any applicable securities
laws of any state or other jurisdiction of the United States.
Hedging transactions in the New Common Shares may not be conducted,
directly or indirectly, unless in compliance with the Securities
Act. No public offering of securities is being made in the United
States. No money, securities or other consideration from any person
in the United States is being solicited and, if sent in response to
the information contained in this announcement, will not be
accepted.
The New Common Shares have not been and will not be registered
under the applicable securities laws of Australia, Canada, Japan,
South Africa or any other jurisdiction where the offer, sale or
advertisement of the New Common Shares (or any other transaction
contemplated by the Open Offer) would breach applicable law or
regulation and, subject to certain limited exceptions, the New
Common Shares may not be offered or sold in such jurisdictions or
to, or for the account or benefit of, any U.S. Person or resident
of such jurisdictions, and there will be no public offer of
securities in such jurisdictions.
The distribution of this announcement into jurisdictions other
than the United Kingdom may be restricted by law, and, therefore,
persons into whose possession this announcement comes should inform
themselves about and observe any such restrictions. Any failure to
comply with any such restrictions may constitute a violation of the
securities laws of such jurisdiction. In particular, subject to
certain limited exceptions, this announcement should not be
distributed, forwarded to or transmitted in or into or from the
Australia, Canada, Japan, South Africa, the United States or any
other jurisdiction where the offer, sale or advertisement of the
New Common Shares (or any other transaction contemplated by the
Open Offer) would breach applicable law or regulation.
This announcement contains forward-looking statements that are
based on current expectations or beliefs, as well as assumptions
about future events. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as "anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "will", "may", "should", "would", "could", "is
confident", or other words of similar meaning. Undue reliance
should not be placed on any such statements because they speak only
as at the date of this announcement and, by their very nature, they
are subject to known and unknown risks and uncertainties and can be
affected by other factors that could cause actual results, and
Quarto's plans and objectives, to differ materially from those
expressed or implied in the forward-looking statements.
There are a number of factors which could cause actual results
to differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are: increased competition, the loss of
or damage to one or more key customer relationships, changes to
customer ordering patterns, delays in obtaining customer approvals
for engineering or price level changes, the failure of one or more
key suppliers, the outcome of business or industry restructuring,
the outcome of any litigation, changes in economic conditions,
currency fluctuations, changes in interest and tax rates, changes
in raw material or energy market prices, changes in laws,
regulations or regulatory policies, developments in legal or public
policy doctrines, technological developments, the failure to retain
key management, or the key timing and success of future acquisition
opportunities or major investment and research and development
projects.
The Company is not under any obligation to update or revise
publicly any forward-looking statement contained within this
announcement, whether as a result of new information, future events
or otherwise, other than in accordance with their legal or
regulatory obligations (including under the Listing Rules, the
Disclosure Guidance and Transparency Rules and the Prospectus
Rules).
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
OFDBAMPTMTBBBFM
(END) Dow Jones Newswires
January 15, 2020 13:26 ET (18:26 GMT)
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