5 Jun 2019 13:29
Sports Direct International plc
5 June 2019
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
SPORTS DIRECT INTERNATIONAL PLC
FINAL MANDATORY CASH OFFER
for
GAME DIGITAL PLC
1. Introduction
Sports Direct International plc ("Sports Direct") has today unconditionally agreed to acquire 14,869,666 ordinary shares of 1 pence each in the capital of GAME Digital plc ("GAME") at a price of 30 pence per GAME Share from a single shareholder, Marlborough UK Micro-Cap Growth Fund (the "Acquisition"). It is expected that the Acquisition will settle on 7 June 2019. Following the Acquisition Sports Direct will, in aggregate, hold 66,569,666 GAME Shares, representing 38.49 per cent. of the existing issued share capital, and voting rights, of GAME.
As a result of the Acquisition, under Rule 9 of the Takeover Code, Sports Direct is required to make a mandatory cash offer (the "Offer") for the GAME Shares not already held by Sports Direct (or any persons acting in concert with it), at a price of 30 pence per GAME Share (such price being no less than the highest price paid by Sports Direct (or any persons acting in concert with it) for any GAME Share during the 12 months prior to the date of this announcement).
The Offer of 30 pence in cash for each GAME Share is final and the offer price will not be increased.
Sports Direct will make the Offer through the despatch of the Offer Document and Form of Acceptance, both of which will be posted to GAME Shareholders (or made available electronically in accordance with the Takeover Code) no sooner than 14 days nor no later than 28 days after the date of this announcement (unless agreed otherwise with the Panel). The Offer Document will contain the formal terms of the Offer.
2. The Offer
Under the terms of the Offer, which will be subject to the Condition and further terms set out in Appendix I to this announcement and to the full terms and condition to be set out in the Offer Document and, in respect of GAME Shares held in certificated form, the Form of Acceptance, GAME Shareholders shall be entitled to receive:
30 pence in cash for each GAME Share
The Offer values the entire issued and to be issued share capital of GAME (not taking into account the exercise of any outstanding options which may have vested under the GAME Share Plans) at approximately £51.88 million and represents a premium of approximately 27.4 per cent to the Closing Price of a GAME Share of 23.55 pence on 4 June 2019 (being the last Business Day prior to this announcement).
The Offer of 30 pence in cash for each GAME Share is final and the offer price will not be increased.
The Offer will extend to all issued GAME Shares which are not held by Sports Direct (or any persons acting in concert with it) and any further GAME Shares which are unconditionally allotted or issued and fully paid before the Offer closes.
The Offer is subject to valid acceptances of the Offer being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. (London time) on the First Closing Date of the Offer (or such later time(s) and/or date(s) as Sports Direct may, in accordance with the Takeover Code or with the consent of the Panel, decide) in respect of such number of GAME Shares which, when aggregated with the GAME Shares held by Sports Direct (and any persons acting in concert with it) at the date of the Offer and any GAME Shares acquired or agreed to be acquired by Sports Direct or any person acting in concert with Sports Direct on or after such date, carry more than 50 per cent. of the voting rights then normally exercisable at a general meeting of GAME including for this purpose any such voting rights attaching to GAME Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise.
GAME Shares will be acquired fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and other third party rights or interests together with all rights attaching thereto including, without limitation, the right to receive all dividends and other distributions (if any) announced, declared, made or paid thereafter.
Sports Direct reserves the right to reduce the Offer consideration by the amount of any dividend (or other distribution) which is paid or becomes payable by GAME to the holders of GAME Shares.
There are no agreements or arrangements to which Sports Direct is a party which relate to the circumstances in which it may or may not invoke or seek to invoke a precondition or a condition to the Offer.
There are no inducement fees or similar arrangements between Sports Direct and GAME.
3. Background to and reasons for the Offer
Sports Direct has been an investor in GAME since July 2017, currently holds a 29.90 per cent. interest in GAME and is GAME's largest shareholder. Following the Acquisition, Sports Direct will, in aggregate, hold 66,569,666 GAME Shares, representing 38.49 per cent. of the existing issued share capital, and voting rights, of GAME. As a result of the Acquisition, and pursuant to Rule 9 of the Takeover Code, Sports Direct is required to make an offer for all the GAME Shares not already owned by it or by persons acting in concert with it.
In February 2018, Sports Direct and GAME entered into a collaboration agreement covering the rollout of BELONG and GAME retail stores, including the entering into of concession agreements regarding the siting of BELONG arenas and/or GAME retail stores in Sports Direct locations. BELONG is GAME's competitive gaming and eSports experience centred around physical 'arenas', bringing both casual and competitive gaming to communities nationwide, in city and town centres and in major shopping centres. As part of the agreement, the Sports Direct Group acquired a 50% interest in the BELONG intellectual property rights for a cash consideration of £3.2 million, and a 50% profit share of future profits of BELONG. Sports Direct has also provided GAME with a £35 million capital expenditure facility, which GAME may utilise to fund the venues envisaged under the collaboration agreement, including the costs for new venues and ongoing development of the BELONG website and its related tournament management system.
The retail and gaming sectors are fast moving and currently subject to challenging conditions. Sports Direct does not believe that, as a standalone business, GAME is able to weather the pressures that it is facing. Sports Direct believes that the Offer, in providing GAME with the wider benefit of Sports Direct's operating and other experience and increased support, will secure GAME's future and allow it to navigate these pressures whilst contributing to GAME's long-term sustainability by escalating the evolution of the BELONG business and accelerating the next stage of GAME's development.
4. Letter of intent
Sports Direct has received a letter of intent to accept the Offer from Marlborough UK Nano-Cap Growth Fund in respect of a total of 4,000,000 GAME Shares representing approximately 2.31 per cent. of the issued share capital of GAME on 4 June 2019, being the last practicable date prior to the date of this announcement.
5. Information about Sports Direct
Sports Direct is a public limited company incorporated in England and Wales on 21 December 2006 under the 2006 Act with registered number 06035106. Sports Direct is a subsidiary of MASH Holdings Limited, a company controlled by Mike Ashley.
Sports Direct is the UK's largest sporting goods retailer, founded as a single store in 1982. Sports Direct operates a diversified portfolio of sports, fitness, fashion and lifestyle fascias in over 20 countries. Sports Direct has approximately 26,500 staff across five business segments: UK Sports Retail, European Sports Retail, Premium Lifestyle, Rest of World Retail, and Wholesale & Licensing (formerly Brands). The Sports Retail segments supply sports and leisure equipment and apparel. The Premium Lifestyle segment offers a broad range of clothing, footwear, and accessories from global contemporary and luxury retail brands. The Wholesale & Licensing segment includes the wholesale, licensing, and distribution of the firm's own brand, as well as third party brands that are sold to sports retail and premium lifestyle products. Sports Direct's business strategy is to invest in its people, its business, and its key third party brand partners, in order to elevate Sports Direct's retail proposition across all of its channels to attain new levels of excellence. Sports Direct last reported revenues of £3,359.5 million and underlying EBITDA of £306.1 million, for the year ended 29 April 2018.
6. Information about GAME
GAME is a public limited company incorporated in England and Wales on 14 May 2014 under the 2006 Act with registered number 09040213.
Listed on the main market of the London Stock Exchange in June 2014, GAME delivers a range of specialist gaming products and services to the gaming communities of the UK and Spain. Its focus includes retail, events and sports, and live and online gaming services. GAME had gross assets of £250.1 million (as stated in its interim results for the 26 week period ended 26 January 2019) and last reported revenues of £782.3 million and a loss before tax of £7.4 million, for the year ended 28 July 2018.
7. Intentions of Sports Direct
In addition to its general intention to secure the future of GAME and navigate the challenging conditions GAME faces by providing financial support and the wider benefit of Sports Direct's operating and other experience, Sports Direct intends to work with the GAME management team to develop and review GAME's existing strategic programme of repositioning and right sizing GAME's retail business (including via its store optimisation programme), whilst investing in, and expanding, BELONG. Sports Direct's aim is to ensure GAME's long-term sustainability and to escalate the evolution of the BELONG business to accelerate the next stage of GAME's development.
The review will cover areas including the location, size and lease terms of GAME's sites, its headquarters and distribution centre, its product and services mix, and other key aspects of GAME's business and operations. In particular, the review will focus on whether the existing GAME sites should be consolidated with others in the Sports Direct Group, re-purposed or closed, including by looking to consolidate GAME sites into Sports Direct's and open BELONG stations and arenas within Sports Direct, House of Fraser or other Sports Direct Group locations, focussing on the customer experience and experiential retail offering.
The review is expected to be ongoing for the first year after completion and to result in cost savings associated with GAME no longer being a public company. The review could result in consolidation or closure of GAME sites and a consequent reduction or relocation in the employment of GAME's employees and management (and those of its subsidiaries) and a change in the balance of skills and functions. The review may also result in changes to the headquarters, headquarters functions and distribution centre and to the general operations of GAME.
Sports Direct has no intention of changing the research and development functions of GAME, of making any material change to the conditions of employment or making any changes to employer contributions into GAME's pension schemes, the accrual of benefits for existing members and the admission of new members, nor the redeployment of the fixed assets of GAME.
Except for the potential consolidation of GAME sites into Sports Direct's sites mentioned above, Sports Direct does not believe that the Offer will affect the Sports Direct Group.
Sports Direct has confirmed that there is no agreement, arrangement or understanding for the transfer of its GAME Shares to any third party.
8. GAME Shares to which the Offer relates
The Offer shall extend to the GAME Shares not already owned by Sports Direct or any person acting in concert with it, which represent approximately 61.51 per cent. of GAME's existing issued ordinary share capital.
In addition, the Offer shall extend to any GAME Shares which are unconditionally allotted or issued and fully paid (or credited as fully paid) on or before the date on which the Offer closes as to acceptances (or such earlier date as Sports Direct may, subject to the Takeover Code, decide) including any such GAME Shares allotted or issued pursuant to the GAME Share Plans before the date on which the Offer closes.
If the Offer becomes unconditional in all respects, Sports Direct intends to make such appropriate proposals as it is required to make pursuant to Rule 15 of the Takeover Code to participants in the GAME Share Plans.
9. Financing of the Offer
The Offer will be financed from the existing cash resources of Sports Direct.
Numis, as financial adviser to Sports Direct, is satisfied that sufficient cash resources are available to Sports Direct to satisfy the cash consideration payable to GAME Shareholders in the event of full acceptance of the Offer.
10. Disclosure of Interests in Relevant Securities
In this paragraph 10, "Relevant Securities'' means GAME Shares and securities convertible into, or rights to subscribe for, options (including traded options) in respect thereof and derivatives referenced thereto.
As at the close of business on 4 June 2019 (being the last Business Day prior to the publication of this announcement), Sports Direct had the following interests in or rights to subscribe for Relevant Securities:
Name | Nature of interest | Number of GAME Shares interested in | Interest as a percentage of issued GAME Shares |
Sports Direct |
Owner of GAME Shares |
51,700,000 |
29.90% |
It has not been practicable, in the time available, to have made enquiries of all persons acting in concert with Sports Direct in order to include all relevant details in respect of such persons in this announcement.
As at the close of business on 4 June 2019 (being the last business day prior to the publication of this announcement), save as disclosed in this announcement:
(a) Sports Direct does not have an interest in, or right to subscribe for, any Relevant Securities;(b) Sports Direct does not have any short position (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of Relevant Securities; (c) Sports Direct has not borrowed or lent (including, for these purposes, entering into any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Takeover Code) any Relevant Securities; or(d) Sports Direct does not have any outstanding irrevocable commitment or letter of intent with respect to Relevant Securities.Furthermore, save as disclosed in this announcement, no arrangement exists with Sports Direct in relation to Relevant Securities. For these purposes, an "arrangement" includes any indemnity or option arrangement, any agreement or any understanding, formal or informal, of whatever nature, relating to Relevant Securities which may be an inducement to deal or refrain from dealing in such securities.
11. Opening position disclosure
Sports Direct confirms that it will make a public Opening Position Disclosure setting out all the relevant details required to be disclosed by it under Rule 8.1(a) of the Takeover Code by no later than 12 noon on 19 June 2019.
12. Further terms and Condition of the Offer
The Offer is to be effected by means of a takeover offer within the meaning of Part 28 of the 2006 Act.
The Offer will be subject to the Condition and further terms set out in this announcement and to the full terms and condition to be set out in the Offer Document and, in respect of GAME Shares held in certificated form, the Form of Acceptance.
The Offer and acceptances thereof will be governed by English law and will be subject to the jurisdiction of the English courts. The Offer will be subject to the applicable requirements of the Takeover Code and the Listing Rules.
13. The Acquisition
On the date of this announcement, Sports Direct acquired the following GAME Shares:
Marlborough UK Micro-Cap Growth Fund: 14,869,666 GAME Shares at a price of 30 pence per share.
14. Cancellation of admission of GAME Shares, compulsory acquisition and re-registration
If the Offer becomes, or is declared, unconditional in all respects and Sports Direct receives valid acceptances in respect of GAME Shares which, together with the GAME Shares owned, or agreed to be acquired, before or during the Offer by Sports Direct and its concert parties, represent not less than 75 per cent. of the voting rights attaching to the GAME Shares, Sports Direct intends to procure that GAME will make an application for the cancellation of the admission of GAME Shares to the Official List and to cancel trading in GAME Shares on the London Stock Exchange's main market for listed securities.
If such an application is made, it is expected that cancellation of admission to trading on the London Stock Exchange's main market for listed securities will take effect no earlier than 20 Business Days after the date on which Sports Direct has, by virtue of its shareholdings and acceptances of the Offer, acquired, or agreed to acquire, 75 per cent. of the voting rights attaching to the GAME Shares. Sports Direct will request that GAME makes a regulatory announcement when the necessary 75 per cent. threshold has been reached confirming that the notice period has commenced and the anticipated date of cancellation.
Cancellation of the admission to trading on the London Stock Exchange's main market for listed securities is likely to reduce significantly the liquidity and marketability of any GAME Shares in respect of which the Offer has not at such time been accepted. Any remaining GAME Shareholders would become minority shareholders in a majority controlled private limited company and may therefore be unable to sell their GAME Shares. There can be no certainty that GAME would pay any further dividends or other distributions or that such minority GAME Shareholders would again be offered an opportunity to sell their GAME Shares on terms which are equivalent to or no less advantageous than those under the Offer.
If the Offer becomes, or is declared, unconditional in all respects and Sports Direct receives acceptances of the Offer in respect of, and/or otherwise acquires (together with those acting in concert with it), 90 per cent. or more of the GAME Shares to which the Offer relates and 90 per cent. or more of the voting rights attaching to such shares, Sports Direct intends to exercise its rights pursuant to sections 974 to 991 of the 2006 Act to acquire compulsorily, on the same terms as the Offer, the remaining GAME Shares in respect of which the Offer has not at such time been accepted.
It is also intended that, if the Offer becomes, or is declared, unconditional in all respects, and Sports Direct receives valid acceptances in respect of GAME Shares which, together with the GAME Shares acquired, or agreed to be acquired, before or during the Offer by Sports Direct, represent not less than 75 per cent. of the voting rights attaching to the GAME Shares, Sports Direct will seek to re-register GAME as a private limited company.
15. Overseas GAME Shareholders
The availability of the Offer to GAME Shareholders who are not resident in the UK may be affected by the laws and/or regulations of their relevant jurisdiction. Therefore, such persons should inform themselves about and observe any applicable legal or regulatory requirements in their jurisdiction. Further details in relation to overseas GAME Shareholders will be set out in the Offer Document. If you are in any doubt, you should consult your professional adviser in the relevant jurisdiction without delay.
16. Documents on display
Copies of this announcement will, by no later than 12 noon on the Business Day following the date of this announcement, be published on Sports Direct's website at http://www.sportsdirectplc.com/investor-relations.aspx and will be available for inspection on such website until the end of the Offer Period.
Copies of further announcements and other documents in connection with the Offer will, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, be made available on Sports Direct's website by no later than 12 noon (London time) on the Business Day following the date of the relevant announcement or document, pursuant to Rule 26.1 of the Takeover Code.
The contents of the website referred to in this announcement are not incorporated into, and do not form part of, this announcement.
17. Requesting hard copy documents
Pursuant to Rule 30.3 of the Takeover Code, a person so entitled may request a copy of this announcement in hard copy form by contacting Numis on +44 (0)20 7260 1000. A person may also request that all future documents, announcements and information to be sent to that person in relation to the Offer should be in hard copy form. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested.
18. Expected timetable
It is intended that the Offer Document containing further details of the Offer and the Form of Acceptance will be despatched to GAME Shareholders (other than to persons in a Restricted Jurisdiction) no sooner than 14 days nor no later than 28 days after the date of this announcement (unless agreed otherwise with the Panel).
19. General
Your attention is drawn to the further information contained in the Appendices, which form part of, and should be read in conjunction with, this announcement.
Please be aware that addresses, electronic addresses and certain other information provided by GAME Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from GAME may be provided to Sports Direct during the course of the Offer Period as required under Section 4 of Appendix 4 of the Takeover Code.
Enquiries:
Numis (Financial adviser to Sports Direct) Tel: 020 7260 1000
Luke Bordewich
Stuart Ord
Tom Ballard
George Fry
Sports Direct
Cameron Olsen, Company Secretary Tel: 0344 245 9200
LEI: 213800JEGHHEAXIJDX34
IMPORTANT NOTES
Numis Securities Limited ("Numis"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively for Sports Direct and no-one else in connection with the matters referred to in this announcement and will not regard any other person as its client in relation to such matters and will not be responsible to anyone other than Sports Direct for providing the protections afforded to clients of Numis, nor for providing advice in relation to any matter referred to in this announcement.
The Sports Direct Directors accept responsibility for the information contained in this announcement relating to Sports Direct, save that the only responsibility accepted by the Sports Direct Directors in respect of the information in this announcement relating to the GAME Group, which has been compiled from published sources, is to ensure that such information has been correctly and fairly reproduced and presented. To the best of the knowledge and belief of the Sports Direct Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.
This announcement is for information purposes only. It is not intended to and does not constitute, or form part of, any offer or invitation or the solicitation of any offer to sell or purchase any securities or the solicitation of any offer to otherwise acquire, subscribe for, sell or otherwise dispose of any security pursuant to the Offer or otherwise. The Offer will be made solely by the Offer Document (together with, in the case of GAME Shares in certificated form, the Form of Acceptance), which will contain the full terms and condition of the Offer, including details of how the Offer may be accepted. GAME Shareholders should carefully read the Offer Document (and, if they hold their GAME Shares in certificated form, the Form of Acceptance) in its entirety before making a decision with respect to the Offer.
The Offer will be subject to the Condition and further terms set out in this announcement and to the full terms and condition that will be set out in the Offer Document and, in respect of GAME Shares held in certificated form, the Form of Acceptance.
It is intended that the Offer Document and Form of Acceptance containing further details of the Offer will be despatched to GAME Shareholders (other than to persons in a Restricted Jurisdiction) no sooner than 14 days nor no later than 28 days after the date of this announcement (unless agreed otherwise with the Panel).
This announcement does not constitute a prospectus or prospectus equivalent document.
Overseas jurisdictions
The release, publication or distribution of this announcement in, and the availability of the Offer to persons who are residents, citizens or nationals of, jurisdictions other than the United Kingdom may be restricted by laws and/or regulations of those jurisdictions. Therefore any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements in their jurisdiction. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. In particular, copies of this announcement and any formal documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction. Unless otherwise permitted by applicable law and regulation, the Offer may not be made, directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.
This announcement has been prepared for the purpose of complying with English law, the Takeover Code and the Listing Rules, and information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England and Wales.
Forward-looking statements
This announcement, including the information included in this announcement, contains certain forward-looking statements. The forward-looking statements contained herein include statements about the expected effects of the Offer on Sports Direct and the GAME Group, strategic options, the expected timing and scope of the Offer, and all other statements in this announcement other than historical facts. These statements are based on the current expectations and are naturally subject to uncertainty and changes in circumstances. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "budget", "schedule", "forecast", "project", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", "subject to", or other words of similar meaning. By their nature, forward-looking statements involve known and unknown risks and uncertainties, because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results, outcomes and developments to differ materially from those expressed in, or implied by, such forward-looking statements and such statements are therefore qualified in their entirety by the risks and uncertainties surrounding these future expectations. Many of these risks and uncertainties relate to factors that are beyond the entities' ability to control or estimate precisely, such as, but not limited to, general business and market conditions both globally and locally, political, economic and regulatory forces, industry trends and competition, future exchange and interest rates, changes in government and regulation including in relation to health and safety, the environment, labour relations and tax rates and future business combinations or dispositions. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, Sports Direct cannot give any assurance, representation or guarantee that such expectations will prove to have been correct and such forward-looking statements should be construed in light of such factors and you are therefore cautioned not to place reliance on these forward-looking statements which speak only as at the date of this announcement. Sports Direct assumes no obligation to update or correct the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law or regulation.
No profit forecasts
No statement in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for GAME for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for GAME.
Dealing and Opening Position Disclosure requirements
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) GAME and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of GAME or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of GAME or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of GAME or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) GAME and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Takeover Code.
Opening Position Disclosures must also be made by GAME and by any offeror and Dealing Disclosures must also be made by GAME, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Takeover Code).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Purchases outside the Offer
Sports Direct or its nominees or brokers (acting as agents) may purchase GAME Shares otherwise than under the Offer, such as in the open market or through privately negotiated purchases. Such purchases shall comply with the Takeover Code and the rules of the London Stock Exchange.
Publication on website
A copy of this announcement and other documents in connection with the Offer will, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, be made available on Sports Direct's website at http://www.sportsdirectplc.com/investor-relations.aspx by no later than 12 noon (London time) on the Business Day following the date of the relevant announcement or document, pursuant to Rule 26.1 of the Takeover Code. The contents of the website referred to in this announcement are not incorporated into, and do not form part of, this announcement.
Requesting hard copy documents
Pursuant to Rule 30.3 of the Code, a person so entitled may request a copy of this announcement in hard copy form by contacting Numis on +44 (0)20 7260 1000. A person may also request that all future documents, announcements and information to be sent to that person in relation to the Offer should be in hard copy form. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested.
Information relating to GAME Shareholders
Please be aware that addresses, electronic addresses and certain information provided by GAME Shareholders, persons with information rights and other relevant persons for the receipt of communications from GAME may be provided to Sports Direct during the Offer Period as requested under Section 4 of Appendix 4 of the Takeover Code.
Appendix I
The Condition of the Offer and Certain Further Terms of the Offer
Part A: Condition
The Offer is subject to valid acceptances of the Offer being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. (London time) on the First Closing Date of the Offer (or such later time(s) and/or date(s) as Sports Direct may, in accordance with the Takeover Code or with the consent of the Panel, decide) in respect of such number of GAME Shares which, when aggregated with the GAME Shares held by Sports Direct (and any persons acting in concert with it) at the date of the Offer and any GAME Share acquired or agreed to be acquired by Sports Direct or any person acting in concert with Sports Direct on or after such date, carry more than 50 per cent. of the voting rights then normally exercisable at a general meeting of GAME including for this purpose any such voting rights attaching to GAME Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise.
For the purposes of this condition: (i) GAME Shares which have been unconditionally allotted shall be deemed to carry the voting rights they will carry upon being entered into the register of members of GAME;(ii) GAME Shares that cease to be held in treasury are GAME Shares to which the Offer relates; and(iii) the expression "GAME Shares to which the Offer relates" shall be construed in accordance with Chapter 3 of Part 28 of the 2006 Act.
Part B: Certain Further Terms of the Offer
1. GAME Shares will be acquired by Sports Direct pursuant to the Offer fully paid with full title guarantee and free from all liens, charges, encumbrances, equitable interests, pre-emption rights and other interests and rights of whatsoever nature and together with all rights now or hereafter attaching thereto, including the right to receive and retain in full all dividends and other distributions (if any) declared, paid or made after the date of this announcement.
2. In deciding whether or not to accept the Offer in respect of their GAME Shares, GAME Shareholders should rely on the information contained in, and follow the procedures described in, the Offer Document and (if they hold their GAME Shares in certificated form) the Form of Acceptance which will be posted to GAME Shareholders in due course (other than to any GAME Shareholders with addresses in any Restricted Jurisdiction).
3. Save to the extent provided in this announcement, Sports Direct will have the right to reduce the consideration payable to GAME Shareholders under the terms of the Offer by the amount of any dividend (or other distribution) payable by GAME to GAME Shareholders.
4. The Offer will be made on the terms and will be subject to the Condition and terms which are set out in this Appendix I, those terms which will be set out in the formal Offer Document and Form of Acceptance and such further terms as may be required to comply with the Takeover Code and applicable law.
5. The Offer will comply with the applicable rules and regulations of the London Stock Exchange and the Takeover Code. The Offer and any acceptances thereunder will be governed by English law and will be subject to the jurisdiction of the English Courts.
6. The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.
7. The Offer will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or e-mail) of interstate or foreign commerce of, or of any facility of a national securities exchange of, any Restricted Jurisdiction and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within, any Restricted Jurisdiction.
8. The Offer will lapse if:
(i) in so far as the Offer or any matter arising from or relating to the Offer constitutes a concentration with a European Community dimension within the scope of the EUMR, the European Commission either initiates proceedings under Article 6(1)(c) of the EUMR or makes a referral to a competent authority in the United Kingdom under Article 9(1) of the EUMR and there is then a CMA Phase 2 reference; or(ii) the Offer or any matter arising from or relating to the Offer becomes subject to a CMA Phase 2 reference,in each case, before the later of 1:00 p.m. on the First Closing Date or the date when the Offer becomes or is declared unconditional as to acceptances.
Appendix II
Bases of Calculation and Sources of Information
In this announcement, unless otherwise stated or the context otherwise requires, the bases of calculation and sources of information are used as described below:
1. Unless otherwise stated, financial information relating to GAME has been extracted or derived (without any adjustment) from the Annual Report and Accounts of GAME for the year ended 28 July 2018.
2. Unless otherwise stated, financial information relating to Sports Direct has been extracted or derived (without any adjustment) from the Annual Report and Accounts of Sports Direct for the year ended 29 April 2018.
3. References to the existing issued ordinary share capital of GAME and the existing issued GAME Shares are to the number of GAME Shares in issue as at 4 June 2019 (being the last Business Day prior to this announcement), which was 172,938,108 ordinary shares. For the avoidance of doubt, none of the GAME Shares were held in treasury at that date.
4. The International Securities Identification Number for GAME Shares is GB00BMP36W19.
5. Unless otherwise stated, all Closing Prices have been derived from the London Stock Exchange Daily Official List.
Appendix III
Definitions
The following definitions apply throughout this announcement, unless otherwise stated or the context otherwise requires.
"2006 Act" | the Companies Act 2006, as amended from time to time; |
"Business Day" | a day (excluding Saturdays, Sundays and public holidays) on which banks are open for business in the City of London; |
"Closing Price" | the closing middle market price as derived from the Daily Official List of the London Stock Exchange; |
"CMA" | the Competition and Markets Authority, a UK statutory body established under the Enterprise and Regulatory Reform Act 2013; |
"Condition" | the Condition to the Offer set out in Part A of Appendix I to this announcement; |
"EUMR" | means the EU Merger Regulation (No 139/2004); |
"FCA" | the UK Financial Conduct Authority; |
"First Closing Date" | the date which falls 21 days after the posting of the Offer Document; |
"Form of Acceptance" | the form of acceptance and authority relating to the Offer to be despatched to GAME Shareholders with the Offer Document; |
"GAME" or the "Company" | GAME Digital plc, a public limited company incorporated in England and Wales with registered number 09040213; |
"GAME Group" | GAME and its subsidiary undertakings; |
"GAME Share Plans" | the GAME performance share plan, the GAME share incentive plan and the GAME share save plan; |
"GAME Shareholders" | holders of GAME Shares; |
"GAME Shares" | the unconditionally allotted or issued and fully paid up (or credited as fully paid up) ordinary shares of 1 pence each in the capital of GAME, and "GAME Share" shall be construed accordingly; |
"Listing Rules" | means the rules and regulations made by the UK Listing Authority under Part VI of the Financial Services and Markets Act 2000, as amended, and contained in the UK Listing Authority's publication of the same name (as amended from time to time);
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"London Stock Exchange" | London Stock Exchange Group PLC; |
"Numis" | Numis Securities Limited, sole financial adviser to Sports Direct; |
"Offer" | the mandatory offer to be made by Sports Direct to acquire the whole of the issued and to be issued share capital of GAME not otherwise held by Sports Direct (or any person acting in concert with it) on the terms to be set out in the Offer Document and (in the case of GAME Shares held in certificated form) Form of Acceptance, including, where the context so requires, any subsequent revision, variation, extension or renewal of such offer; |
"Offer Document" | the document to be despatched on behalf of Sports Direct containing the terms and conditions of the Offer and, where appropriate, any other document(s) containing terms and conditions of the Offer constituting the full terms and conditions of the Offer; |
"Offer Period" | the offer period (as defined in the Takeover Code) relating to the Company that commenced on 5 June 2019 and ending on the earlier of the date on which the Offer becomes or is declared unconditional as to acceptances and/or the date on which the Offer lapses or is withdrawn (or such other date as the Panel may decide); |
"Official List" | means the official list maintained by the UK Listing Authority; |
"Opening Position Disclosure" | an announcement containing details of interests or short positions in, or rights to subscribe for, any relevant securities of a party to the offer if the person concerned has such a position; |
"Panel" | The Panel on Takeovers and Mergers; |
"Relevant Securities" | has the meaning given in paragraph 10; |
"Restricted Jurisdiction" | any jurisdiction where the release, publication or distribution in whole or in part, in, into or from or where the extension of the Offer would constitute a violation of the relevant laws of the jurisdiction, in particular the United States of America, Canada, Japan or Australia; |
"Sports Direct" | Sports Direct International plc, a public limited company incorporated in the United Kingdom with registered number 06035106; |
"Sports Direct Directors" | the board of directors of Sports Direct at the date of this announcement; |
"Sports Direct Group" | Sports Direct and its subsidiary undertakings; |
"Takeover Code" | the City Code on Takeovers and Mergers; |
"UK" or "United Kingdom" | the United Kingdom of Great Britain and Northern Ireland; and |
"UK Listing Authority" | means the FCA acting in its capacity as the authority for listing in the UK. |