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18 Jun 2008 07:00
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18 June 2008
CSS StellarΒ Plc
Disposal of interest in subsidiary
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The Directors ofΒ CSS Stellar plcΒ ("CSS")Β are pleased to announce that CSSΒ hasΒ agreed toΒ dispose of itsΒ whollyΒ owned subsidiary,Β The Peters Fraser &Β Dunlop Group Limited ("PFD")Β to PFDH Limited, a newly formed company backed by a consortium of investorsΒ led by Andrew Neil.Β PFD is one of theΒ UK's oldest and largest talent management agencies with offices inΒ LondonΒ andΒ New York.
The decision to dispose of PFD followed an operational review by the CSS board, in which it became clear that thereΒ are noΒ benefits to continuing to develop the activities of PFD and CSS's other operations within the same group.Β TheΒ Directors concluded that it is in the best interests of CSS shareholdersΒ for the GroupΒ toΒ focus on the core business of Sports Marketing and Events and toΒ effect a disposal of PFD.
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Total consideration isΒ a maximum ofΒ Β£4.0 million, of which Β£3.75 million is payable in cash on completion, with the balance of Β£0.25 million payable inΒ cash inΒ 2011 dependent on PFD's earnings in the three years to 2010.
PFD's operating profit for the year ended 31 December 2007 was Β£0.4 millionΒ (2006: Β£0.7 million)Β on turnover of Β£9.4Β millionΒ (2006: Β£9.3 million), with net assets at 31 December 2007 of Β£1.7 millionΒ (2006: Β£1.4 million).Β The disposal is expected to generate a profit of Β£3.4Β million before write off ofΒ goodwill of Β£3.6Β million.
Due to the size of PFD relative to the CSS Group, the sale is conditional on the approval of the CSS shareholdersΒ at an Extraordinary General MeetingΒ ("EGM")Β toΒ be held on Monday 7thΒ July 2008.Β AΒ circularΒ containing further details of the transaction and formally convening theΒ EGMΒ is expected toΒ beΒ postedΒ to shareholdersΒ onΒ Friday 20thΒ June 2008.Β
Subject to the approval of the shareholders, it is expected that completion will take placeΒ followingΒ the EGM.Β The proceeds from the sale will be used to reduce the Group's borrowings and for reinvestment in group activities.
CSS expects toΒ issue its preliminary statement ofΒ its 2007 results on Friday 20thΒ June 2008.
David Buchler, Chairman,Β CSS StellarΒ said:
"Following a review of the Group's direction, it was decided that CSS Stellar's future is best served by focussing on our core business of SportsΒ MarketingΒ andΒ Events.Β This disposal comes at the right time for CSS, providing value for shareholders and creating a more streamlined business which is in a good position to now move forward.
PFD has been a valuable contributor to the Group, and the Board would like to thank Caroline Michel and her team for the hard work they have put in, and wishes them well in the future. PFD has been through a traumatic period of change and this sale will provide a platform for the business to return to a market leading position."
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Enquiries
David Buchler,Β Chairman,Β CSS Stellar Plc
Telephone: 020 7647 9903
John Craven,Β Landsbanki Securities (UK) LtdΒ
Telephone:Β 020 7426 9000
Stephen Benzikie/ Andrew Benbow, Bell Pottinger Corporate and Financial
Telephone: 020 7861 3232
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