Angle Regulatory News (AGL)

18 Jul 2008 15:09



18 July 2008

Braveheart Investment Group plc ("Braveheart")

Update on Possible Offer for ANGLE plc

The board of Braveheart notes the announcement by ANGLE plc ("ANGLE") this morning that it has unilaterally withdrawn from discussions with Braveheart. 

In the past 18 months, ANGLE's share price has fallen from 73p to 26p on 18 July 2008 and its cash balances have reduced from £4.3m at 31 October 2006 to £0.9m at 30 April 2008. The board of Braveheart note that the last public announcement of any material funding into the ANGLE portfolio was made over a year ago (£2m commitment into Geomerics Ltd). In its preliminary results announcement dated 10 July 2008, the chairman of ANGLE stated that "cash will continue to need careful management".

By contrast, Braveheart's investment model allows it to maintain strong cash balances whilst facilitating funding into its investment portfolio. Since discussions began with ANGLE last year, Braveheart has continued to invest in its own portfolio companies.

Braveheart initially approached the board of ANGLE in the autumn of 2007. The board of ANGLE consistently refused to enter into meaningful dialogue with Braveheart. This led Braveheart to speak with ANGLE's leading institutional shareholders to determine whether they would support an approach by Braveheart. Braveheart's approach to ANGLE in April 2008 was supported by ANGLE's leading institutional shareholders representing 35.76 per cent. of ANGLE's issued shares. The letters of support from these shareholders were shared with ANGLE and its advisers. On the basis of this support, ANGLE reluctantly entered into discussions with Braveheart and shared some very high level information with Braveheart which included some written responses to questions from Braveheart and information on certain portfolio companies, much of which was out of date and of limited value to Braveheart in its understanding of the ANGLE investment portfolio. 

Braveheart also notes the reference to there being substantial shareholders not in favour of the Braveheart approach. According to the latest published shareholder analysis, ANGLE has eight substantial shareholders (i.e. shareholders with greater than 3 per cent. of the share capital of ANGLE). Braveheart received written support from five of these substantial shareholders. The remaining three comprise one institutional investor, one individual investor (together representing less than 10 per cent. of the issued share capital) and the Chief Executive Officer of the company, Andrew Newland, (representing 25.26 per cent. of the issued share capital).

ANGLE subsequently offered Braveheart a period of exclusivity, but only on the basis that certainty of funds would be required by the ANGLE board prior to being in a position to considering making a recommendation of the proposed offer by Braveheart. Notwithstanding Braveheart's clear track record in procuring funds for its own investments in difficult market conditions and ANGLE's inability to raise funding for its own portfolio, the ANGLE board refused to move from this position, thereby effectively placing a barrier to Braveheart making its formal proposal to all shareholders. Braveheart firmly believes that ANGLE's institutional shareholders do not require such absolute certainty of funding and believe that Braveheart, as enlarged by ANGLE, will be significantly better placed to fund the ANGLE portfolio than is currently the case. 

The board of Braveheart notes that ANGLE makes reference to Braveheart being focused on Scotland and relying on the Scottish co-investment fund and EIS funds. Braveheart has and continues to make a large number of investments throughout the UK, drawing on a wide range of retail, institutional and non-governmental funding partners.

The board of Braveheart notes the announcement by ANGLE this morning that it has unilaterally withdrawn from discussions with Braveheart. The board of Braveheart is now considering its options, which may include making an offer 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 (in the opinion of the Board of Braveheart) no material adverse findings arose from due diligence. Should 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. This precondition is capable of being waived at the discretion of the Board of Braveheart. Even if the precondition is 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.