SAF.L Regulatory News (SAF)

STRICTLY EMBARGOED UNTIL 7.00 a.m.: 8 April 2019

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR")

THE TENDER OFFER IS NOT BEING MADE, DIRECTLY OR INDIRECTLY, IN OR INTO, OR BY USE OF THE MAILS OF, OR BY ANY MEANS OR INSTRUMENTALITY OF INTERSTATE OR FOREIGN COMMERCE OF, OR ANY FACILITIES OF A NATIONAL SECURITIES EXCHANGE OF AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR THE UNITED STATES.

Safeland plc

("Safeland" or the "Company" or the "Group")

Proposed Tender Offer

and

Proposed cancellation of admission of Ordinary Shares to trading on AIM

Safeland (AIM: SAF), the property trading and investment company, announces a proposed tender offer and the proposed cancellation of the admission of its Ordinary Shares to trading on AIM conditional on approval by Shareholders.

The Tender Offer provides Shareholders who do not wish to remain as Shareholders after the Cancellation has taken place with an opportunity to realise their investment in the Company by accepting the Tender Offer pursuant to which the Company will, conditionally, offer to purchase up to 2,974,139 Ordinary Shares at the Tender Price of 42.5 pence per Ordinary Share, being the closing mid-market price per Ordinary Share on 5 April 2019 (being the last practicable date prior to this announcement).

Cancellation and the Tender Offer are conditional, among others, upon all of the Resolutions being passed at the General Meeting to be held at 10.00 a.m. on 1 May 2019.

In conjunction with this announcement, a circular will shortly be posted to Shareholders (the "Circular") setting out the reasons for, and implications of, the Cancellation and providing further details on each of the Cancellation and the Tender Offer as well as an update on current trading. A notice convening the General Meeting is set out at the end of the Circular. The Circular will be made available on the Company's website at www.safeland.co.uk.

Cancellation is conditional, pursuant to Rule 41 of the AIM Rules, upon the approval of not less than 75 per cent. of the votes cast by Shareholders (whether present in person or by proxy) at the General Meeting.

In accordance with Rule 41 of the AIM Rules, the Company has notified the London Stock Exchange of the date of Cancellation.

For further information:

For more information visit: www.safeland.co.uk

IMPORTANT NOTICE

If Shareholders are in any doubt about the contents of this announcement or the action they should take, they are recommended to seek advice from their stockbroker, solicitor, accountant, bank manager or other appropriately authorised independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) if they are in the United Kingdom or from another appropriately authorised independent financial adviser if they are in a territory outside the United Kingdom.

This announcement does not constitute, or form part of, any offer for or invitation to sell or purchase any securities, or any solicitation of any offer for, securities in any jurisdiction. Any acceptance or other response to the Tender Offer should be made only on the basis of information contained in or referred to in the Circular. The Circular will contain important information, including the full terms and conditions of the Tender Offer, which Shareholders are urged to read carefully. The Tender Offer is not being made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or any facilities of a national securities exchange of Australia, Canada, the Republic of South Africa, Japan or the United States.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "forecasts", "plans", "prepares", "anticipates", "projects", "expects", "intends", "may", "will", "seeks", "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Company's and the Directors' intentions, beliefs or current expectations concerning, amongst other things, the Company's prospects, growth and strategy. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual performance, achievements and financial condition may differ materially from those expressed or implied by the forward-looking statements in this Document. In addition, even if the Company's results of operations, performance, achievements and financial condition are consistent with the forward-looking statements in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Any forward-looking statements that the Company makes in this announcement speak only as of the date of such statement and (other than in accordance with their legal or regulatory obligations) neither the Company nor any of its associates, directors, officers or advisers undertakes any obligation to update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

2019

Notes:

(1) The dates and times specified are subject to change and will be notified by the Company through a Regulatory Information Service. All references to time are to UK time.

(2) Each of Cancellation and the Tender Offer requires the approval of not less than 75 per cent. of the votes cast by Shareholders at the General Meeting.

(3) References to close of business in this announcement shall refer to such time as the reconciliation exercise within CREST has been completed for that day.

1 Cancellation

Background to, and reasons for, the Cancellation

The Managing Director's Statement of 20 August 2018 published in the Company's Report and Financial Statements for the year ended 31 March 2018 noted that whilst the Company continued to seek out value adding opportunities, the generally negative environment with little current opportunity suggested that it would be prudent for the Board to review the Company's cost base, including the value of maintaining the Company's AIM quotation. The Board has now conducted this review and concluded that Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Directors have considered, among others, the following principal factors:

· the considerable costs, management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM are, in the Directors' opinion, materially disproportionate to the benefits to the Company and Cancellation will enable the Company to reduce significantly administrative costs;

· with regard to the costs, in particular, even though these have been, so far as reasonably possible, controlled and minimised by the Company, the Directors believe that these funds could be better utilised for the benefit of the Company; and

· the shareholding structure of the Company is such that it has a limited free float and liquidity in the Ordinary Shares, with the consequence that the AIM quotation does not offer investors the opportunity to trade in meaningful volumes or with frequency within an active market.

Following careful consideration, the Directors believe that it is in the best interests of the Company and Shareholders to seek Cancellation at the earliest opportunity.

Process for the Cancellation

Under the AIM Rules, it is a requirement that Cancellation must be approved by not less than 75 per cent. of votes cast by Shareholders at a general meeting. Accordingly, the Notice of General Meeting set out at the end of the Circular contains a special resolution to approve the Cancellation.

Furthermore, Rule 41 of the AIM Rules requires any AIM company that wishes the London Stock Exchange to cancel the admission of its shares to trading on AIM to notify shareholders and to separately inform the London Stock Exchange of its preferred cancellation date at least 20 Business Days prior to such date. In accordance with AIM Rule 41, the Directors have notified the London Stock Exchange of the Company's intention, subject to Resolution 1 being passed at the General Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM on 10 May 2019. Cancellation will not take effect until at least five clear Business Days have passed following the passing of Resolution 1. If Resolution 1 is passed at the General Meeting, it is proposed that the last day of trading in Ordinary Shares on AIM will be 9 May 2019 and that Cancellation will take effect at 7.00 a.m. on 10 May 2019.

Principal effects of Cancellation

The principal effects that Cancellation will have on Shareholders include the following:

· there will no longer be a formal market mechanism enabling Shareholders to trade their Ordinary Shares on AIM (or any other recognised market or trading exchange);

· while the Ordinary Shares will remain freely transferable and a matched bargain facility is intended to be set up following Cancellation (see below for further details), the Ordinary Shares may be more difficult to sell compared to shares of companies traded on AIM (or any other recognised market or trading exchange);

· it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;

· the Company will no longer be required to comply with the AIM Rules (and accordingly, Shareholders will no longer be afforded the protections given by the AIM Rules). In particular:

o the Company will not be bound to make any public announcements of material events, or to announce interim or final results, comply with any of the corporate governance practices applicable to AIM companies, announce substantial transactions and related party transactions, or comply with the requirement to obtain shareholder approval for reverse takeovers and fundamental changes in the Company's business;

o Stockdale Securities Limited will cease to be the Company's nominated adviser and broker and the Company will cease to retain a nominated adviser and broker;

· the Company will no longer be subject to the Market Abuse Regulation regulating inside information;

· the Company will no longer be subject to the Disclosure Guidance and Transparency Rules and will therefore no longer be required to publicly disclose major shareholdings in the Company;

· whilst the Company's CREST facility will remain in place following the Cancellation, the Company's CREST facility may be cancelled in the future and, although the Ordinary Shares will remain transferable, they may cease to be transferable through CREST. In this instance, Shareholders who hold Ordinary Shares in CREST will receive share certificates; and

· Cancellation might have either positive or negative taxation consequences for Shareholders (Shareholders who are in any doubt about their tax position should consult their own professional independent adviser immediately).

The above considerations are not exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of Cancellation on them.

Following Cancellation:

· the Company will remain a public company registered with the Registrar of Companies in England and Wales in accordance with and subject to the Companies Act 2006. The Board will consider re-registering the Company as a private company in due course and will update the Shareholders further on this matter as appropriate;

· the Takeover Code will continue to apply to the Company (although it should also be noted that as the Major Shareholders own in excess of 50 per cent. of the existing Ordinary Shares, they are free to acquire further Ordinary Shares without incurring any obligation under Rule 9 of the Takeover Code);

· the Board intends to continue to maintain the Company's website (https://safeland.co.uk/) and to post updates on that website from time to time, although as described above, Shareholders should be aware that there will be no obligation on the Company to include the information required under Rule 26 of the AIM Rules or to update the website as required by the AIM Rules; and

· the Board confirms that there is currently no intention to change the existing Directors.

Matched bargain facility

Shareholders should note that they are able to trade in the Ordinary Shares on AIM prior to Cancellation.

The Board is aware that Cancellation, should it be approved by Shareholders at the General Meeting, would make it more difficult for Shareholders to buy and sell Ordinary Shares should they wish to do so. Therefore, the Company has made arrangements for a matched bargain facility to assist Shareholders to trade in the Ordinary Shares to be put in place from the day of Cancellation.

Following Cancellation becoming effective, the Company is appointing Asset Match Limited ("Asset Match") to facilitate trading in the Ordinary Shares. Asset Match, a firm authorised and regulated by the Financial Conduct Authority, will operate an electronic off-market dealing facility for the Ordinary Shares. This facility will allow Shareholders to trade their Ordinary Shares by matching buyers and sellers through quarterly auctions. Shareholders will continue to be able to hold their shares in uncertificated form (i.e. in CREST) and should check with their stockbroker that they are able to trade in unquoted shares.

The Asset Match trading facility operates under its own code of practice which governs the behaviour of participants and the running of the auctions. Asset Match operates an open auction system where volumes of bids and offers at different prices are displayed on its website. The platform uses a non-discretionary algorithm that determines a "fair" share price based on supply and demand and allocates transactions accordingly. Bids and offers may be made, amended or withdrawn at any time before the end of the quarterly period. Shareholders wanting to trade shares through Asset Match must do so through a stockbroker. The preferred broker is The Share Centre www.share.com. Full details of Asset Match can be found at www.assetmatch.com.

Shareholders should note that there can be no guarantee that the matched bargain facility will remain available on a continuous basis or at all.

2 The Tender Offer

The Board recognises that not all Shareholders will wish to continue to own Ordinary Shares in the Company following Cancellation. Eligible Shareholders will therefore have the opportunity to tender, pursuant to the Tender Offer some or all of their Ordinary Shares at the Record Date.

At the Company's 2018 annual general meeting, the Shareholders authorised the Company to make market purchases of up to 2,234,616 Ordinary Shares. Of that authority, the Company has purchased, in aggregate, 125,285 Ordinary Shares (as announced in November 2018), leaving it with authority to purchase a further 2,109,331 Ordinary Shares.

There are currently 14,782,095 Ordinary Shares in issue, and the Major Shareholders own 11,807,956 Ordinary Shares, representing approximately 79.88 per cent. of the Company's issued share capital. As described in paragraph 4 below, the Major Shareholders have irrevocably undertaken not to participate in the Tender Offer. In order for the Tender Offer to allow all remaining Shareholders the opportunity to tender all of their Ordinary Shares, Resolution 2 has been proposed, which, if passed, will provide the Company with the authority to make market purchases of an additional 864,808 Ordinary Shares.

Under the terms of the Tender Offer, Eligible Shareholders are entitled to tender some or all of the Ordinary Shares held by them on the Record Date.

The Tender Offer will close at 1.00 p.m. on 7 May 2019.

The Tender Price will be paid to Eligible Shareholders in Sterling and will be effected by the despatch of cheques or the crediting of CREST accounts as appropriate.

The Tender Offer is not being made available to Shareholders with a registered address in a Restricted Jurisdiction. Overseas Shareholders should note that they should satisfy themselves that they have fully observed any applicable legal requirements under the laws of their relevant jurisdiction if they tender Ordinary Shares in the Tender Offer. The attention of Shareholders with registered addresses outside the United Kingdom is drawn to the paragraph headed "Overseas Shareholders" in Part 2 of the Circular.

Eligible Shareholders who hold Ordinary Shares in certificated form will also find accompanying the Circular a personalised Tender Form for use in connection with the Tender Offer. Eligible Shareholders who wish to tender some or all of the Ordinary Shares registered in their name on the Record Date should complete the Tender Form in accordance with the instructions printed thereon and in Part 2 of the Circular and return it by post or by hand (during normal business hours) to Link Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU by no later than 1.00 p.m. on 7 May 2019. Shareholders who hold Ordinary Shares in certificated form should also return their share certificate(s) in respect of the Ordinary Shares tendered with the Tender Form.

Shareholders whose Ordinary Shares are held in uncertificated form who wish to participate in the Tender Offer should send the TTE instruction through CREST so as to settle by no later than 1.00 p.m. on 7 May 2019. Such Shareholders should comply with those procedures set out in Part 2 of the Circular in respect of transferring uncertificated Shares to escrow through CREST.

Further details of the terms and conditions of the Tender Offer and how an Eligible Shareholder is able to tender Ordinary Shares are set out in Part 2 of the Circular.

3 Current trading

During the year ended 31 March 2019, the Group sold five investment properties in North London for an aggregate book loss of approximately £0.145 million.

The Group took possession of four houses as part and final consideration for the sale of the Chandos Tennis Club. The consideration payable for the sale of the tennis club in 2014 comprised £4.0 million in cash (which was received in 2014) and the balance was to be satisfied by way of transfer to the Company of four detached houses (valued at the time by the Company's directors, in aggregate, at £9.2 million) in the completed development. The Group has sold two of the houses for a total of £2.1 million each after fees. The other two houses have been let to third parties at an aggregate annual rental of £0.28 million.

All three houses in the Edeleny Close development and all eighteen apartments in the Raglan Hall development have been let to third parties at an annual rent of £0.525 million.

In October 2018, the Group acquired North Downs Golf Club ("North Downs" or the "Club") based in Woldingham, Surrey. North Downs is a well-established 18-hole golf course with a 664 square metre clubhouse together with a golf shop and reception. The total consideration payable for this freehold property was £1.065 million in cash. The Company intends to invest in developing the Club's existing facilities to enhance the Club's appeal to both existing and new members.

In November 2018, the Group acquired Market Walk, a shopping mall in Northampton, for £0.646 million plus fees in cash.

The site at 12-18 High Road, East Finchley on which planning permission was granted, continues to be held for either onward sale or development.

Current trading continues to be constrained by the current economic conditions and political outlook. While the Company continues to pursue acquisition opportunities, the Directors believe that the cautious environment verges on stagnation which may continue for some time.

4 Irrevocable Undertakings

The Board has received irrevocable undertakings from the Major Shareholders (together, representing approximately 79.88 per cent. of the Ordinary Shares), to vote in favour of the Resolutions and not to participate in the Tender Offer. Accordingly, if the Tender Offer is accepted in full, their aggregate shareholdings in the Company will increase to 100 per cent.

5 Recommendation

The Board considers that the Tender Offer and Cancellation to be in the best interests of Shareholders as a whole. Accordingly, the Board recommends that Shareholders vote in favour of the Resolutions, as they have undertaken to do in respect of their own holdings of Ordinary Shares and Ordinary Shares under their control representing, in aggregate, approximately 79.88 per cent. of the issued share capital of the Company. 

The Board is making no recommendation to Shareholders in relation to participation in the Tender Offer. Whether or not Shareholders decide to tender their Ordinary Shares will depend, amongst other things, on their own individual circumstances, including their own tax position. Shareholders are recommended to consult an appropriately authorised independent adviser in determining whether or not to participate in the Tender Offer and to the extent of such participation.

DEFINITIONS