Angle Regulatory News (AGL)

11 Jul 2008 08:10



11 July 2008

Braveheart Investment Group plc ("Braveheart" or the "Group") 

Update on Possible Offer for ANGLE plc 

On 9th April 2008 Braveheart announced that it was considering making a recommended all-share offer for the entire issued and to be issued share capital of ANGLE. The terms under which Braveheart had proposed to consider making a recommended offer for ANGLE were based on publicly available information and further limited information provided to Braveheart by ANGLE late last year.

Since this time, ANGLE has been unwilling to open its books to allow Braveheart to access sufficient information to carry out meaningful due diligence, despite Braveheart's approach being supported by ANGLE's major institutional shareholders, The Board of ANGLE has further indicated that in its opinion the ANGLE portfolio companies require significant investment amounting to several million pounds and it will not consider recommending Braveheart's proposal until it receives a commitment from Braveheart to fund certain of its portfolio companies.

Braveheart's approach to each ANGLE investment will be the one that has been successfully deployed with its own portfolio. This involves an assessment of incumbent management and its plans for the business, the milestones to be achieved and the capital resources needed to achieve them. Only then can a clear determination be made of the amount of capital required for each investment and the investment timetable. Accordingly, decisions with regard to investment in the ANGLE portfolio can only be reached when that portfolio is within Braveheart's control.

Braveheart's understanding of the capital requirement of the ANGLE portfolio is contradicted by ANGLE's statement yesterday that "there is now a reduced demand on ANGLE's cash". Braveheart believes that the ANGLE investment portfolio has been starved of cash over the past year and contrasts with Braveheart's record over the same period of steady investment in its existing portfolio and new investments, as demonstrated below.

The Board of Braveheart is concerned that the ANGLE portfolio has received insufficient funding for at least a year and that without further funding, potential technological advantages and optimal exit opportunities will be prejudiced. ANGLE's Preliminary Results suggest that the ANGLE business is being actively managed for cash at the present time and not to maximise the longer term value of its investment portfolio for its shareholders. The ANGLE Preliminary Results also suggest that the ANGLE business continues to be severely cash constrained. It is clear that until further information is made available to the Group it will not be able to put its proposal for a recommended offer formally to ANGLE shareholders. 

Braveheart's core business is that of actively managing and realising value from investments in early stage technology companies. Braveheart has an 11 year track record in this regard. From 16 exits the Group has achieved six IPO's and three trade sales.

In the year to 31 March 2008 Braveheart made 12 investments totalling £3m on behalf of the Group and its clients. During the year the Group also announced the acquisition of W L Ventures Ltd. and the admission to AIM of The Capital Pub Company plc resulting in an initial market capitalisation of £32 million.

Since the Group's year end to 31 March 2008, Braveheart has led the following investments, totalling £3.1m:

AppShare Ltd. - £180k

(includes funding from University of Strathclyde)

Conjunct Limited - £300k

Cascade Technologies Ltd. - £1m 

(includes funding from PUK Ventures, Bank of Scotland Corporate and Scottish Enterprise's Scottish Co-investment Fund)

Spiral Gateway Ltd. - £730k 

(includes funding from Imperial Innovations, Bank of Scotland Corporate and Scottish Enterprise's Scottish Co-investment Fund

IM-Sense Ltd. - £1m

(includes funding from IQ Capital and a number of the Group's HNW individuals)

The UK is currently experiencing a weakening economy which has led to increased investor caution. This has impacted on the liquidity and pricing of small cap companies in particular. As a result Braveheart expects to see consolidation in the Group's sector. The Board of Braveheart believes that at the present time it is vital for businesses in the Group's sector to be properly capitalised and to have sufficient economies of scale to withstand difficult market conditions.

In light of the Preliminary Results announced by ANGLE yesterday, and the support shown for Braveheart's proposal by ANGLE's leading institutional shareholders, the Board of Braveheart urges the Board of ANGLE to grant Braveheart access to further information without delay with a view to obtaining a recommendation for an offer by Braveheart for ANGLE.

There can be no certainty that an offer will be made at all. It would be a precondition to making an offer that Braveheart receive a recommendation from the Board of ANGLE and that (in the opinion of the Board of Braveheart) no material adverse findings arose from due diligence. Were a recommendation not forthcoming and/or due diligence on ANGLE give rise to any such material adverse findings then the Board of Braveheart reserve the right not to proceed with an offer. These preconditions are capable of being waived at the discretion of the Board of Braveheart. Even if the preconditions are satisfied or waived there can be no certainty that an offer will be made. An offer, if made, will require the publication of a prospectus or prospectus equivalent document for Braveheart, as enlarged by the acquisition of ANGLE.

For further information please contact: 

Noble & Company Limited

David Ovens, Director Tel: 0131 225 9677

Seymour Pierce Limited (nomad/broker to Braveheart)

Jeremy Garrett-Cox, Director Tel: 020 7107 8000

Tavistock Communications

Simon Hudson Tel: 020 7920 3150

Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the 'Code'), if any person is, or becomes, 'interested' (directly or indirectly) in 1 per cent. or more of any class of 'relevant securities' of ANGLE or Braveheart, all 'dealings' in any 'relevant securities' of that company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of ANGLE or Braveheart, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant securities' of ANGLE or Braveheart, by ANGLE or Braveheart or by any of their 'associates', must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.

'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, you should consult the Panel.

Rule 2.10 Requirement

In accordance with Rule 2.10 of the City Code on Takeovers and Mergers, Braveheart Investment Group plc confirms that it currently has in issue 13,403,895 ordinary shares of 2 pence each. The International Securities Identification Number for the ordinary shares is GB00B13XV322.