GUSC.L Regulatory News (GUSC)

12 August 2014 Talent Group PLC ("Talent" or the "Company" or the "Group) Disposal, Capital Reorganisation, Subscription to raise £50,000, Issue ofWarrants, new Investing Policy, Change of Name, new Articles of Association and Notice of General Meeting For all defined terms within this announcement please refer to Appendix 2 at the end of this announcement The Company announces that it had entered into conditional Sale and PurchaseAgreements to dispose of its wholly owned subsidiaries Talent Holdings andTalent South, and that it intends to raise £50,000 before expenses by means ofa subscription for 1,694,911 New Ordinary Shares (with 1,694,911 SubscriptionWarrants attached), following the implementation of the Capital Reorganisation.The Company intends to utilise those funds in connection with implementing aproposed new Investing Policy for the Company, further details of which are setout below. Disposal Pursuant to the Talent South Sale and Purchase Agreement, Stitchcombe, acompany which is beneficially owned and controlled by Bob Benton, Non-ExecutiveDirector of the Company, and his wife, has conditionally agreed to acquire theentire issued share capital of Talent South for a maximum cash consideration of£96,000. Of the consideration, £30,000 will be payable on completion and theremainder will be paid in eight monthly instalments amounting to £8,250 permonth, starting one month from the date of completion of the disposal. Thepayment of deferred consideration is conditional on certain maximum liabilitiesnot being exceeded at the completion date. Following completion of the disposal of Talent South, the company will berenamed Woodcut Media and Kate Beal and her husband, Matt Blyth, are expectedto acquire a 20 per cent. holding from Stitchcombe. In addition, pursuant to the Talent Holdings Sale and Purchase Agreement,Talent 2014 Limited has conditionally agreed to acquire the entire issued sharecapital of Talent Holdings in consideration for which certain intercompanydebts directly owed by the Company to Talent Holdings and also to itssubsidiary Talent Television Limited, amounting to £270,500 in aggregate, willbe assumed by Talent 2014. Furthermore loans provided by Terry Bate to theGroup, totalling £944,000, will remain a liability of the Talent Holdings groupof companies, and will therefore no longer be a liability of the Companyfollowing completion of the Proposals. Stephen Callen is also a director ofTalent 2014 Limited. The amount of intercompany debt to be novated to and assumed by Talent 2014Limited assumes that the consideration monies that become due and payable tothe Company under the Talent South Sale and Purchase Agreement will be utilisedto reduce the amount of inter-company debt owed to Talent Television Limited, asubsidiary of Talent Holdings. Following the Disposals the Company will be left with only one subsidiary, RMRDesign Associates Limited, which is a dormant company. Due to the fact that Bob Benton is a Director of the Company and a substantialShareholder, the entry into the Talent South Sale and Purchase Agreement withStitchcombe constitutes a related party transaction as defined by the AIMRules. In addition, the entry into the Talent Holdings Sale and PurchaseAgreement with Talent 2014 Limited also constitutes a related party transactionin accordance with the AIM Rules due to it being beneficially owned by TerryBate, a Director and a substantial Shareholder of Talent, and Stephen Callen, aDirector of Talent, also being on the board. As it is intended that Kate Beal and her husband, Matt Blythe, will acquire 20per cent. of the issued share capital of Talent South, to be renamed WoodcutMedia following completion of the Disposals, Kate Beal is deemed to beconflicted for the purposes of the proposals and has taken no part in thedeliberations regarding the Proposals. The Independent Director, having consulted with Sanlam Securities, theCompany's Nominated Adviser, considers that the terms of the Disposals are fairand reasonable insofar as Shareholders are concerned. Proposed New Investing Policy If the Disposals are approved, the Company will have disposed of all of itstrading businesses. Under Rule 15 of the AIM Rules the Company will bereclassified as an Investing Company. Under the AIM Rules, Investing Companiesare required to adopt an Investing Policy that must be approved byShareholders. The Company's proposed new Investing Policy is to invest in and/or acquiretechnology and media companies and/or assets where the New Board believes thereare opportunities for growth which, if achieved, will be earnings enhancing forShareholders. Where appropriate, the New Board may seek to invest in businesses where it mayinfluence the business at a board level, add their expertise to the managementof the business, and utilise their significant industry relationships andaccess to finance. The ability to work alongside a strong management team tomaximise returns through revenue growth will be something the New Board willfocus upon initially. The Company's interests in a proposed investment and/or acquisition may rangefrom a minority position to full ownership and may comprise one investment ormultiple investments. The proposed investments may be in either quoted orunquoted companies; and may be in companies, partnerships, debt or other loanstructures, joint ventures or direct or indirect interests in assets orprojects. The New Board may focus on investments where intrinsic value can beachieved from the restructuring of investments or merger of complementarybusinesses. The New Board will place no minimum or maximum limit on the length of time thatany investment may be held. The Company may be both an active and a passiveinvestor depending on the nature of the individual investment. There is no limit on the number of projects into which the Company may invest,and the Company's financial resources may be invested in a number ofpropositions or in just one investment, which may be deemed to be a reversetakeover under the AIM Rules. The Directors intend to mitigate risk byappropriate due diligence and transaction analysis. Any transactionconstituting a reverse takeover under the AIM Rules will also requireShareholder approval. The New Board considers that as investments are made, andnew promising investment opportunities arise, further funding of the Companymay also be required. Investments may be made in all types of assets and there will be no investmentrestrictions on the type of investment that the Company might make or the typeof opportunity that may be considered. The Company may consider possibleopportunities anywhere in the world. The New Board will conduct initial due diligence appraisals of potentialbusiness or projects and, where they believe further investigation iswarranted, intend to appoint appropriately qualified persons to assist. The NewBoard believes it has a broad range of contacts through which they are aware ofvarious opportunities which may prove suitable, although at this point onlypreliminary due diligence has been undertaken. The New Board believes itsexpertise will enable it to determine quickly which opportunities could beviable and so progress quickly to formal due diligence. The Company will nothave a separate investment manager. The Company proposes to carry out acomprehensive and thorough project review process in which all material aspectsof a potential project or business will be subject to rigorous due diligence,as appropriate. As an Investing Company, the Company will be required to make an acquisition oracquisitions which constitutes a reverse takeover under the AIM Rules orotherwise implement its proposed Investing Policy on or before the date falling12 months from Admission and the adoption of the Investing Policy failingwhich, the New Ordinary Shares would then be suspended from trading on AIM. Inthe event that the New Ordinary Shares are so suspended and the Company failsto make an acquisition or acquisitions which constitute a reverse takeoverunder the AIM Rules or otherwise implement its proposed Investing Policy, theadmission to trading on AIM would be cancelled six months from the date ofsuspension. Change of Name In order to reflect the change in the Company's business and the disposal ofTalent South and Talent Holdings, the Company is also proposing to change itsname to Guscio PLC. Accordingly, the Notice of General Meeting at the end ofthe Circular includes a resolution to approve this name change. Subscription Under the terms of the Subscription, the Subscribers have agreed to subscribefor 1,694,911 Subscription Shares, in aggregate, at the Subscription Price,raising £50,000 before expenses for the benefit of the Company. The Subscriberswill be issued with one Subscription Warrant for each Subscription Share andthese warrants will be exercisable at the Subscription Price at any time duringthe five year period from the date of issue. The Subscription is conditional, inter alia, upon the passing of theResolutions, the admission of the Enlarged Issued Ordinary Share Capital totrading on AIM and the Independent Director, having consulted with SanlamSecurities as the Company's nominated adviser, declaring that the Disposals areconsidered fair and reasonable insofar as shareholders are concerned.Accordingly, the Company has convened the General Meeting, notice of which isset out at the end of the Circular. The Subscription Shares, when issued and fully paid, will rank equally in allrespects with the New Ordinary Shares. The Subscription Warrants will not beadmitted to trading on any market but will be freely transferable. It is expected that Admission will become effective and dealings in theEnlarged Issued Ordinary Share Capital will commence on 9 September 2014. Following the Subscription and Admission, the Company will have 3,384,163 NewOrdinary Shares in issue and admitted to trading on AIM. Capital Reorganisation The Subscription Price (which is the equivalent of 0.227p per share prior tothe Capital Reorganisation) is below the present nominal value of the ExistingOrdinary Shares and the Company is prohibited by law from issuing fully paidshares at a discount to the nominal, or par, value of its shares. Therefore, inorder to carry out the Subscription, it is necessary to reduce the nominalvalue of the Company's issued Existing Ordinary Shares to an appropriate levelwhich is less than the Subscription Price. Accordingly, the Directors havedecided that a share reorganisation should be effected on the following basis: a. the Existing Ordinary Shares of 1p each will be consolidated into ordinary shares of 13p each at a ratio of 13 Existing Ordinary Shares for every 1 new ordinary share of 13p each; and b. each of the new ordinary shares of 13p each will then be subdivided into and reclassified as one New Ordinary Share (being an ordinary share in the capital of the Company with a nominal value of 0.1p each) and one New Deferred Share (being a B deferred share in the capital of the Company of 12.9p nominal value). The New Deferred Shares will carry negligible value as they will not carry anyrights to vote or dividend rights and will not be admitted to trading on AIMand will not be transferable. The New Deferred Shares shall have limitedrights, and shall be subject to the restrictions, set out in the Company's NewArticles. No share certificates will be issued in respect of the New DeferredShares nor will CREST accounts of shareholders be credited. It is intended thatin due course, all deferred shares in the capital of the Company will berepurchased by the Company for an aggregate of £1 and cancelled. The Existing Ordinary Shares are currently admitted to CREST. Application willbe made for the New Ordinary Shares arising from the Capital Reorganisation, tobe admitted to CREST, all of which may then be held and transferred by means ofCREST. The record date of the Capital Reorganisation is 5.00 p.m. on 8September 2014. The rights attaching to the New Ordinary Shares will be identical in allrespects to those of the Existing Ordinary Shares. Shareholders with a holding of less than 13 Existing Ordinary Shares will notbe entitled to any New Ordinary Shares and any fractions of Ordinary Sharesarising from the Capital Reorganisation will be aggregated and sold for thebenefit of the Company. It is anticipated that new certificates for the new redenominated shares willbe issued and dispatched at the Shareholder's risk by 16 September 2014 andthat CREST holders will have their CREST accounts credited with their newholdings on 9 September 2014. Application will be made for the New OrdinaryShares to be admitted to AIM at the same time as the Subscription Shares and itis expected that Admission will become effective and that dealings in theseshares will commence on 9 September 2014. The ISIN for the New Ordinary Shareswill be GB00BPT23R97. Warrants It is intended that as part of the Proposals, Tony Humphreys and Marcus Yeomanwill each be granted warrants to subscribe for 338,416 New Ordinary Shares. TheWarrants will be granted on the same terms as the Subscription Warrants. TheWarrants are being issued in lieu of fees. Both Tony Humphreys and MarcusYeoman have agreed to waive all fees and entitlements until such time as atransaction or an additional fundraising is completed. Due to the fact that Tony Humphreys is a Director of the Company, the grant ofWarrants to him constitutes a related party transaction as defined by the AIMRules. The Independent Director, having consulted with Sanlam Securities, theCompany's Nominated Adviser, considers that the receipt of Warrants by MrHumphreys is fair and reasonable insofar as Shareholders are concerned. The New Board Conditional on Admission, Marcus Yeoman will be appointed to the Board. TerryBate will resign from the board as will Kate Beal, Stephen Callen, GeorgeKynoch and Bob Benton, all conditional on Admission. Tony Humphreys will remainon the Board. Following Admission, the New Board will consist of Tony Humphreysand Marcus Yeoman. Further information on Marcus Yeoman is set out below. Marcus Yeoman (proposed Director), aged 51, is a non-Executive Director ofReach4entertainment Enterprises Plc, 1 Spatial Plc and Enables IT PLC. He isalso a non-executive director of a number of private companies which haveengaged him principally to assist them with their growth strategies. His earlycareer started with the formation of three companies in IT infrastructure anddistribution, after which he moved into small company broking and corporatework with Rathbone Stockbrokers Limited and Cheviot Capital (Nominees) Limited.In 2003, Marcus established Springtime Consultants Ltd and has been acting as aconsultant or non-executive director to a number of listed companies and SMEventures. The New Articles The Company proposes adopting new articles of association (the "New Articles")in order to update the Company's current articles of association (the "CurrentArticles") primarily to take account of changes in English company law broughtabout by the implementation on 1 October 2009 of the remaining parts of the Actand the implementation on 3 August 2009 of The Companies (Shareholders' Rights)Regulations 2009. The New Articles will include the rights and restrictionsattaching to the New Deferred Shares. A copy of the proposed New Articles maybe obtained from the Company's registered office. Annual General Meeting As announced on the 1 April 2014, the Company's AGM was adjourned on 31 March2014. The Company announces that the AGM has now been reconvened for 2.30pm on8 September 2014 to consider and approve the resolutions which were included inthe notice of AGM which was published on 12 August 2014 and sent toshareholders on that date. A copy of the AGM notice is available on theCompany's website http://www.talenttv.com/group/intro.php Notice of General Meeting A notice convening a General Meeting to be held at No 1 Duchess Street, Suite2, Fifth Floor, London W1W 6AN on 8 September 2014 at 2.40 p.m., or such latertime as the Annual General Meeting of the Company convened for 2.30 p.m. on thesame day has concluded or been adjourned, for the purpose of considering and,if thought fit, passing the following resolutions, of which resolutions 1 to 5will be proposed as ordinary resolutions and resolutions 6 to 8 will beproposed as special resolutions. Copies of the Shareholder Circular and Notice of General Meeting are availablefrom the Company's registered office and on the Company's website http://www.talenttv.com/group/intro.php FURTHER ENQUIRIES Talent Group PLCTony Humphreys (Managing Director) 020 3053 1897 Sanlam Securities UK LimitedSimon Clements / Virginia Bull 020 7628 2200 Appendix 1 Expected timetable of principal events Posting of the Circular to Shareholders 12 August2014 Latest time for receipt of Forms of Proxy for the 2.40 p.m. on 4 SeptemberGeneral Meeting 2014 Annual General Meeting 2.30 p.m. on 8 September 2014 General Meeting 2.40 p.m. on 8 September 2014 (or such later time as the Annual General Meeting has been concluded or adjourned) Record date for the Capital Reorganisation 5.00 p.m. on 8 September 2014 Admission effective and trading expected to 8.00 a.m. on 9 Septembercommence in the Enlarged Issued Ordinary Share 2014Capital CREST accounts credited with New Ordinary Shares 9 September 2014and Subscription Shares Share certificates in respect of New Ordinary 16 September 2014Shares and the Subscription Shares expected to bedespatched by no later than (where applicable) Appendix 2 Definitions The following definitions apply throughout the Circular, unless the contextrequires otherwise. "Act" the Companies Act 2006 (as amended) "Admission" admission of the New Ordinary Shares in issue immediately following the Capital Reorganisation and the Subscription Shares to trading on AIM becoming effective in accordance with the AIM Rules "AGM" or "Annual General the rescheduled annual general meeting of theMeeting" Company to be held at 2.30 p.m. on 8 September 2014, or any adjournment to that meeting "AIM" the AIM Market of London Stock Exchange "AIM Rules" the rules published by London Stock Exchange from time to time governing the admission to and operation of AIM "Capital Reorganisation" the proposed consolidation and sub-division of every 13 Existing Ordinary Shares into one New Ordinary Share and one New Deferred Share "Circular" a document posted to shareholders by the Company on the 12 August 2014 and can be found online at: http://www.talenttv.com/group/intro.php "Company" or "Talent" Talent Group plc, a public limited company registered in England and Wales under registered number 2350901 "CREST" the system for paperless settlement of trades and the holding of uncertificated shares administered through Euroclear UK & Ireland Limited "Directors" or "Board" the existing directors of the Company as at the date of the Circular "Disposals" the proposed disposals of Talent South and Talent Holdings pursuant to the Sale and Purchase Agreements "Enlarged Issued Ordinary the 3,384,163 New Ordinary Shares in issue atShare Capital" Admission "Existing Ordinary Shares" the 21,960,284 issued ordinary shares of 1p each in the capital of the Company "Form of Proxy" the form of proxy accompanying the Circular for use in connection with the General Meeting "GM" or "General Meeting" the general meeting of the Company, notice of which is set out at the end of the Circular, to be held at 2.40 p.m. (or such later time as the Annual General Meeting has been concluded or adjourned) on 8 September 2014, or any adjournment to that meeting "Independent Director" George Kynoch, who is not interested in the Proposals "Investing Company" has the meaning described to the definition of "Investing Company" set out in the AIM Rules, that is, any AIM company which has as its primary business or objective, the investing of its funds in securities, businesses or assets of any description "Investing Policy" the investing policy proposed to be adopted by the Company at the GM, subject to shareholder approval at the GM "New Articles" the new articles of association proposed to be adopted at the General Meeting "New Board" Anthony Humphreys and Marcus Yeoman "New Deferred Shares" the new B deferred shares of 12.9p each arising from the Capital Reorganisation "New Ordinary Shares" the new ordinary shares of 0.1p each in the capital of the Company arising from the Capital Reorganisation "Notice of GM" the notice of General Meeting which forms part of the Circular "Proposals" the Disposals, the Subscription, the issue of the Warrants and implementation of the proposed Investing Policy "Resolutions" the resolutions set out in the Notice of GM at the end of the Circular "Sale and Purchase the Talent South Sale and Purchase Agreement andAgreements" the Talent Holdings Sale and Purchase Agreement "Sanlam Securities" Sanlam Securities UK Limited, the Company's Nominated Adviser and Broker "Shareholders" holders of Existing Ordinary Shares "Stitchcombe" Stitchcombe Productions Limited, a company which is beneficially owned and controlled by Bob Benton, Non-Executive Director of the Company, and his wife "Subscribers" the subscribers for New Ordinary Shares and Subscription Warrants pursuant to the Subscription "Subscription" the Subscription by the Subscribers for the Subscription Shares with Subscription Warrants attached "Subscription Share Price" 2.95p per New Ordinary Share "Subscription Shares" the 1,694,911 New Ordinary Shares to be issued by the Company pursuant to the Subscription "Subscription Warrants" the warrants to subscribe for up to 1,694,911 New Ordinary Shares at the Subscription Price to be granted by the Company pursuant to the Warrant Instrument 2014 in connection with the Subscription "Talent Holdings" Talent Holdings Limited "Talent Holdings Sale and the conditional sale and purchase agreement datedPurchase Agreement" 12 August 2014 between (1) the Company; and (2) Talent 2014 Limited (a company owned by Terry Bate) relating to the sale and purchase of the entire issued share capital of Talent Holdings (together with all its subsidiaries) "Talent South" Talent Television South Limited "Talent South Sale and the conditional sale and purchase agreement datedPurchase Agreement" 12 August 2014 between (1) the Company; and (2) Stitchcombe relating to the sale and purchase of the entire issued share capital of Talent South "Warrants" the warrants to subscribe for up to 676,832 New Ordinary Shares at the Subscription Price proposed to be granted by the Company pursuant to the Warrant Instrument 2014 to Marcus Yeoman and Anthony Humphreys "Warrant Instrument 2014" the warrant instrument to be adopted by the Company pursuant to which the Subscription Warrants and the Warrants will be granted