9 Dec 2021 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
Electra Private Equity PLC
Related Party Transaction and Update on Circular to Shareholders relating to the proposed cancellation of listing on the main market of the London Stock Exchange and Admission to listing on AIM as Unbound Group PLC and Notice of General Meeting
9 December 2021
Electra Private Equity PLC ("Electra" or the "Company") is pleased to announce that it has submitted to the FCA for approval a shareholder circular (the "Circular") relating to the proposed cancellation of the Company's ordinary shares to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities ("Delisting") and proposed application for admission to listing on the London Stock Exchange AIM market (''AIM'') as Unbound Group PLC ("Admission") and related matters (the ''Proposals''). The Company expects to receive approval from the FCA and to publish the Circular later today and it will be posted to shareholders shortly thereafter.
The Circular contains a Notice of General Meeting ("GM") at which the resolutions to approve the Proposals will be put to shareholders. The GM will be held at 11:00am on 30 December 2021 at the offices of Hogan Lovells International LLP at Atlantic House, 50 Holborn Viaduct, London, EC1A 2FG.
Subject to the passing of the necessary shareholder resolutions at the GM, it is expected that the Delisting will occur at 8.00am on 31 January 2022 at which time the Company's ordinary shares are expected to be admitted to trading on AIM.
As part of the arrangements, Electra has today entered into a related party transaction (within the meaning of Listing Rule 11.1.5R) (the "Related Party Transaction") with Ian Watson who is currently the Chief Executive Officer of Electra's Hotter business (and, as a consequence, a statutory director of a subsidiary company of Electra) and who will become an executive director of Unbound Group PLC on Admission, summary details of which are included in Appendix 1 and further details of which will be included in the Circular. Completion of the Related Party Transaction will be conditional upon receiving shareholder approval to the Proposals at the GM.
Appendix 1
SUMMARY OF TERMS OF RELATED PARTY TRANSACTION (WITHIN THE MEANING OF LISTING RULE 11.1.5R)
It is proposed that Ian Watson, who is currently Chief Executive Officer of Hotter Shoes, will become Chief Executive Officer of Unbound Group PLC on Admission. Ian is currently a statutory director of companies within the Electra Group (being Electra and its subsidiary undertakings from time to time) and, as such, he is considered a "related party" of Electra for the purposes of the Listing Rules.
Hotter MIPCO Limited ("MIPCO"), an entity within the Electra Group, originally issued 10,000 A ordinary shares to certain members of Hotter management (including Ian Watson) pursuant to a management incentive plan ("MIP") with an unrestricted market value at the time of issue of £10,000 in aggregate (the "MIP Shares"). Under the terms of the MIP, the MIP Shares were designed for a sale exit scenario, on the assumption that the MIP Shares would be acquired as part of a sale of Hotter Shoes and that Hotter management would be paid out in cash accordingly for the value of their MIP Shares at that time. The MIP arrangements have today been conditionally amended, in connection with the implementation of the Proposals, such that the MIP payments that would have been payable in cash in a sale exit scenario will instead be satisfied by the issue of new shares in Unbound Group PLC to management prior to Admission.
The amendment to the MIP arrangements, as they relate to Ian Watson, is a related party transaction for the purposes of LR 11.1.5 based on the application of the relevant class tests, the completion of which requires shareholder approval in accordance with the provisions of LR11.1.7.
For the purposes of establishing the value of the MIP Shares, the Board considered Electra's current market capitalisation and the implied look-through valuation of Hotter Shoes as Electra's sole remaining corporate investment as well as the internal valuation of Hotter Shoes. As such, Electra and Hotter management have agreed an equity value of £32.5 million for Hotter Shoes in order to establish the value of the payment under the Hotter MIP in accordance with the pre-existing valuation formula under MIPCO's articles of association.
Under the terms of the Related Party Transaction, Ian Watson, who is the holder of 6,353 MIP Shares, will, following the GM and subject to shareholder approval of the resolutions at the GM, be issued with 2,086,833 shares in the Company (representing a value of £1.4 million based on the closing price of Electra shares of 65 pence per share on 8 December 2021) prior to Admission accounting for approximately 4.94% of the total number of Unbound Group PLC shares anticipated to be in issue at Admission.
As a related party transaction for the purposes of LR11 this element of the Proposals requires the approval of shareholders of Electra in order to complete and is being put to shareholders for consideration at the GM as the Ian Watson MIP Settlement Resolution.
The shares issued to Ian Watson form part of an issuance in satisfaction of MIP awards to wider Hotter management of 7.8% of the issued share capital of Unbound Group PLC on Admission. In prior Electra reporting periods the estimated value of MIP awards was treated as a minority interest in the value of each asset and deducted prior to disclosure of the value attributable to Electra shareholders.
ENDS
ENQUIRIES
Electra Private Equity PLC
Gavin Manson, Chief Financial and Operating Officer
020 3874 8300
Vico Partners
John Sunnucks, Sofia Newitt
020 3957 5045
Financial Adviser and Sponsor to Electra Private Equity PLC
Stifel
Ash Burman, Nick Adams, Stewart Wallace, Francis North
020 7710 7600
NOTES TO EDITORS
Electra Private Equity PLC
Electra is a private equity investment trust which has been listed on the London Stock Exchange since 1976. Electra's investment objective is to follow a realisation strategy, which aims to crystallise value for shareholders, through balancing the timing of returning cash to shareholders with maximisation of value. Since 1 October 2016, Electra has distributed over £2 billion to shareholders through ordinary dividends, special dividends and share buybacks.
Unbound Group PLC
Unbound Group PLC will be the parent company for a range of brands focused on the 55+ demographic. Initially focused on Hotter Shoes, Unbound Group will provide a broader range of products and services to support and enhance the active lifestyles and wellbeing of its targeted customer community. This online e-commerce platform will be based on the foundations of Hotter as a trusted brand, cloud-based digital infrastructure, and strong customer personalisation through data insight. Unbound Group's expanded offering beyond Hotter footwear will feature apparel and wellness products and services, alongside third-party complementary brands.
Hotter Shoes
Hotter Shoes has been transformed from a retail to a multi-channel business with a strong and growing digital focus over the last 2 years, and is now a fast-growing, profitable and cash-generative e-commerce focused footwear brand. Hotter provides footwear with uncompromising focus on comfort and fit through the use of differentiating technology, to a targeted demographic that values its brand and products. Hotter's direct-to-consumer channels now reach 29% of the female population in the UK over the age of 55, providing them with footwear that allows them to do more of what they love. Cultural and demographic shifts now provide an opportunity to further monetise the existing Hotter customer database and grow it through the addition of similarly themed products beyond footwear.
FURTHER INFORMATION
This communication is being made for information purposes only in connection with the Related Party Transaction, Delisting and Admission and related matters, and does not purport to be full or complete.
The distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and persons into whose possession this document comes should inform themselves about and observe any relevant restrictions. In particular, this document may not be published or distributed, directly or indirectly, in or into the United States of America, Canada, Australia, Japan or South Africa.
The contents of this announcement have been prepared by and are the sole responsibility of Electra.
This announcement does not constitute an offer or invitation to sell or issue, or a solicitation of an offer or invitation to purchase or subscribe for any securities in any jurisdiction nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with any contract therefor. This announcement may not be relied upon for the purpose of entering into any transaction and should not be construed as, nor be relied on in connection with, any offer, invitation or inducement to purchase or subscribe for, or otherwise acquire, hold or dispose of any securities of Electra and shall not be regarded as a recommendation in relation to any such transaction whatsoever.
Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated in the UK by the FCA, is acting as sponsor and nominated adviser to Electra exclusively in connection with the Related Party Transaction, the Delisting and Admission and for no one else in connection with the Related Party Transaction, the Delisting and Admission or any other matters described in this announcement and will not regard any other person as a client in connection with the Related Party Transaction, the Delisting and Admission or any other matters described in this announcement or be responsible to anyone other than Electra for providing the protections afforded to clients of Stifel nor for providing advice in connection with the Related Party Transaction, the Delisting and Admission or any other matters referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Stifel by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, neither Stifel nor any of its affiliates, directors, officers or employees owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, consequential, whether in contract, in tort, in delict, under statute or otherwise) to any person who is not a client of Stifel for the contents of this announcement or its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, or by any other person(s) in connection with the Related Party Transaction, the Delisting and Admission, this announcement, any statement contained herein, or otherwise.
Certain statements made in this announcement are forward-looking statements and by their nature, all such forward-looking statements involve risk and uncertainty. Forward-looking statements include all matters that are not historical facts and often use words such as "expects", "may", "will", "could", "should", "intends", "plans", "predicts", "envisages" or "anticipates" or other words of similar meaning. These forward-looking statements are based on current beliefs and expectations based on information that is known to Electra at the date of this announcement. Actual results of the Electra Group (being Electra and its subsidiary undertakings from time to time), and/or their respective industries may differ from those expressed or implied in the forward-looking statements as a result of any number of known and unknown risks, uncertainties and other factors, including, but not limited to, the effects of the COVID-19 pandemic and uncertainties about its impact and duration, many of which are difficult to predict and are generally beyond the control of Electra. Persons receiving this announcement should not place undue reliance on any forward-looking statements. Unless otherwise required by applicable law or regulation Electra and its advisers (including Stifel) disclaims any obligation or undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.