Feedback Regulatory News (FDBK)

24 Apr 2008 07:55

Feedback PLC24 April 2008 Feedback plc (the "Company" or the "Group") Acquisition of Freehold Property, Placing of New Ordinary Shares ("Placing") and Update on Trading The Company announces that yesterday it agreed to acquire the entire issuedshare capital of Brickshield Limited which also yesterday completed thepurchase of the freehold premises in Crowborough, East Sussex, currentlyoccupied by the Group, for a total consideration of £1.35 million, payable incash (the "Acquisition"). The consideration for the Acquisition is being met from the Company's existingworking capital resources and the proceeds of the Placing, as detailed below.The Placing is conditional upon the Company obtaining approval from Shareholdersto allot the Placing Shares and to disapply statutory pre-emption rights whichwould otherwise apply. Accordingly, the Group will shortly be posting acircular to Shareholders that will contain a notice convening a General Meeting. Background to the Acqusition The light industrial premises at Park Road, Crowborough were previously sold bythe Group in March 2005 for £955,000, conditional upon full residential planningpermission for the re-development of the site, and was part of the restructuringproposals undertaken by the Group to address its historic pension fundliabilities. Planning permission was granted in February 2007 and at that timeit was envisaged that the Group would vacate the premises by December 2007. Although the Company subsequently obtained consent to remain at the premisesuntil April 2008 the Board has been unable to identify suitable alternativepremises for the Group within the local area. The Board considered that thiswas not in the interests of the Company and Shareholders and accordinglyresolved to remain at the current premises, at least in the medium term. Thiswas only possible via the repurchase of the Crowborough site. The Directors believe that this situation will be resolved in due course,whereupon it is expected that the premises will be sold. Remaining at the ParkRoad premises will, in the Directors' opinion, provide for a further period ofstability for the Group's operations, whilst allowing the continued ongoingreview of costs that the Board regards as an integral part of Feedback's futuresuccess. The Placing As part of the funding for the Acquisition, the Group has placed 26,666,686 newordinary shares ("Placing Shares") at a price of 2.625 pence per share withcertain of the Directors and existing Shareholders. The Placing is not a rights issue or open offer and New Ordinary Shares will notbe offered generally to Shareholders, whether on a pre-emptive basis orotherwise. The Board believes that the considerable extra cost and delayinvolved in a rights issue or open offer would not be in the best interests ofthe Company in the circumstances. As referred to above, the Placing is conditional upon the Company obtainingapproval from Shareholders to allot the Placing Shares. The Company intends toconvene a General Meeting to increase the Directors' authority to allot furtherOrdinary Shares, disapply pre-emption rights over such Ordinary Shares, and toadopt new Articles of Association. Michael Burt, Executive Chairman, Peter Smith, Finance Director, David Bartonand John Westcott, both Non-Executive Directors, have committed to subscribe for8,952,550, 1,904,761, 8,857,000 and 761,900 Placing Shares respectively. Inaddition, Tom Charlton, who currently holds 13.82 per cent. of the Company'sOrdinary Share, has committed to subscribe for 5,238,095 Placing Shares. The placing of the Placing Shares with Mr Burt and Mr Barton is regarded as arelated party transaction for the purposes of the AIM Rules. In the opinion ofthe Independent Directors (being Professor Westcott and Mr Smith), havingconsulted with Charles Stanley Securities, the Company's Nominated Adviser, thePlacing is fair and reasonable insofar as the Company's shareholders areconcerned. The Directors also believe that it is in the Company's interests to adopt newArticles of Association to reflect current law and practice provisions, inparticular changes required in relation to the Companies Act 2006. Application will be made for the Placing Shares to be admitted to trading on AIMand it is anticipated that Admission will become effective and that dealingswill commence on the day following the General Meeting. Following this therewill be 109,146,746 ordinary shares in issue. Update on Trading The Directors are pleased to announce that the strategy, implemented followingthe resolution reached regarding the Group's historic pension fund liabilities,continues to deliver the anticipated benefits. Trading across the Group'ssubsidiaries has, to date, been pleasing in the second half of the financialyear ended 31 May 2008 and the Board is particularly encouraged with the Group'scash flow generation. Combined with the recent board changes already announced, the Board believesthat Feedback is now in a stronger position than it has been for some years andremains on track to becoming a leading participant in its chosen markets. Copies of the Circular will be available free of charge to the public duringnormal working hours on any weekday (except Saturdays and public holidays) fromthe registered office of the Company and from the offices of the Company'ssolicitors, Lawrence Graham LLP, during normal business hours on any weekday(Saturdays and public holidays excepted) and on the Company's website http://www.feedback.plc.uk. 24 April 2008 Enquiries: Feedback PlcMichael Burt 01892 653322Executive Chairman Nominated Adviser & BrokerCharles Stanley Securities 0207 149 6000Philip Davies / Carl Holmes This information is provided by RNS The company news service from the London Stock Exchange