Tavistock Regulatory News (TAVI)

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR"). In addition, market soundings (as defined in MAR) were taken in respect of the Placing and the Subscription with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

The announcement is for information purposes only and shall not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any new ordinary shares of Tavistock Investments plc in any jurisdiction in which any such offer or solicitation would be unlawful. Please see the important notice later in this announcement.

23 November 2016

Tavistock Investments plc

("Tavistock", the "Company" or the "Group")

Proposed Placing and Subscription to raise up to £2.1 million

Proposed Acquisition of Price Bailey Financial Services Limited

Tavistock Investments Plc ("Tavistock" or the "Company") today announces its intention to raise up to £2.1 million (before expenses) by way of a placing (the "Placing") and subscription (the "Subscription") of up to 70,000,000 new Ordinary Shares of 1p each (the "Placing and Subscription Shares") with certain institutional and other investors. It is intended that the price at which all new ordinary shares are to be issued (the "Placing and Subscription Price") will be at or around 3 pence per new ordinary share. The Placing and Subscription is not being underwritten.

The Placing and Subscription, which will be undertaken within the Company's existing share authorities, will be conducted by way of an accelerated bookbuild ("Bookbuild"), which will be launched immediately following this announcement. Allenby Capital Limited ("Allenby Capital") will be acting as sole bookrunner in connection with the Placing.

The number of Placing Shares and Subscription Shares, pricing and the aggregate proceeds to be raised through the Placing and Subscription will be finally determined following completion of the Bookbuild process. A further announcement in respect of these details will be made following completion of the Bookbuild process. The timing of the closing of the book and allocations are at the discretion of Allenby Capital (after discussion with the Company).

Certain of the directors have indicated an intention to participate in the Subscription. In addition, certain of the Company's significant shareholders have also indicated their intention to participate in the Placing and Subscription. Members of the public will not be entitled to participate in either the Placing or the Subscription.

The Placing is being undertaken in order to satisfy the cash consideration for the acquisition of the entire share capital of Price Bailey Financial Services Limited ("PBFS") (the "Acquisition"), further details of which are set out below.

Further details and terms of the Placing and Subscription are described below.

Expected timetable

Information on the Acquisition

The Company is pleased to announce that it has entered into a conditional agreement to acquire PBFS.

PBFS is the independent financial advisory arm of Price Bailey LLP, a successful firm of Chartered Accountants with UK offices in London, Bishop's Stortford, Cambridge, Ely and Norwich. Post completion, PBFS will continue to share offices with, and benefit from client introductions from Price Bailey LLP. PBFS currently employs eight advisors and fourteen support staff and brings with it approximately £313 million of new Funds under Advice ("FUA"), including £166 million of funds being managed on a discretionary basis ("FUM").

The acquisition of this multi award winning business will enhance the Group's profile and will provide a platform from which to launch the Group's investment management services to higher net worth clients. The Group will also benefit from a significant enhancement to its earnings as a consequence of PBFS' profitable trading and the additional FUM being introduced to the Group.

Completion of the Acquisition and the Placing and Subscription remains conditional on change of control consent from the Financial Conduct Authority, which the Company expects to be forthcoming shortly.

Financial performance

In the year ended 31 March 2016 the business of PBFS reported unaudited earnings before interest, taxation, depreciation and amortisation (EBITDA) of £391,000 on turnover of £2.1 million. As the business was previously operated through different entities within the Price Bailey business no net asset figure can be stated for past financial years, however, the vendors have contracted to deliver a minimum of £500,000 of net assets with the business at completion.

Consideration payable

The consideration payable for PBFS is a maximum of £3,600,000, satisfied as to £2,000,000 in cash and the issue of 21,263,462 new Ordinary Shares at a deemed price of 4.4678 pence per share upon completion, together with a fixed second payment in cash upon the first anniversary of completion of £150,000 and a further variable second payment in cash upon the first anniversary of up to £500,000 ("Second Cash Consideration").

The variable second cash payment of the Second Cash Consideration will be reduced in the event of certain agreed circumstances, being more than one upheld complaint, either by way of admission of liability or ruling by the FCA, between the date of completion and the first anniversary.

A final deferred payment will be made upon the third anniversary of completion of the acquisition if the highest average closing price per Ordinary Share over any five consecutive business day period in the three months prior to the third anniversary date is below 7.5 pence per share. In this case a payment, satisfied in cash or by the issue of new Ordinary Shares, will be made on the basis of 7.5 pence minus the greater of the highest average closing price over any five consecutive business day period in the three months prior to the third anniversary of completion and 4.75 pence. This adjustment payment is only applicable to 16,000,000 of the Consideration Shares and accordingly the maximum adjustment payment will be £440,000.

Information on the Placing and Subscription

The Company proposes to raise up to £2.1 million (before expenses, assuming the Placing and Subscription is fully subscribed) through the issue of the Placing Shares and Subscription Shares at the Placing and Subscription Price, which represents a discount of 23.6 per cent. per Ordinary Share to the closing middle market price of 3.925 pence per Ordinary Share on 22 November 2016, being the latest business day prior to the release of this announcement. Assuming the Placing and Subscription is fully subscribed, the Placing Shares and Subscription Shares will represent 14.4 per cent. of the Enlarged Share Capital immediately following Admission. The Placing Shares and Subscription Shares will be issued under the Company's existing allotment authorities granted at the Company's Annual General Meeting held on 29 September 2016.

The Placing Shares and Subscription Shares will, when issued, rank pari passu in all respects with the Existing Ordinary Shares including the right to receive dividends and other distributions declared following Admission.

A further announcement in respect of the total number of Placing Shares and Subscription Shares to be issued, the final issue price of the Placing Shares and the Subscription Shares, the aggregate proceeds to be raised through the Placing and Subscription and the timing of the admission of the Placing Shares and the Subscription Shares to trading on AIM will be made in due course, as soon as is practicable, once these details have been finally determined.

Neither the Placing or Subscription is being underwritten.

Use of proceeds

The Directors intend that the net proceeds of the Placing and Subscription received by the Company (being approximately £2.03 million, assuming the Placing and Subscription is fully subscribed) will be used by the Group primarily for the following purposes:

· £2.0 million to satisfy the payment due to the vendors of PBFS as per the terms of the Share Purchase Agreement; and

· the balance for general working capital purposes.

Trading update

Each of the Group's advisory businesses is trading profitably. The Group's investment management business, Tavistock Wealth, is also trading profitably and currently has over £520 million of FUM, £350 million of which is managed on a discretionary basis with the balance managed on an advisory basis.

In recent months the Group has increased its focus on organic growth and has invested significantly in both recruitment and the marketing of its investment proposition to advisory firms outside of the Group. Notwithstanding this investment, the Group anticipates continued growth in reported EBITDA for the full year to 31 March 2017. The introduction of a dividend stream remains a priority for the Board and the timing of this will be determined principally by the speed at which returns are achieved from the investment referred to above.

Market Abuse Regulation

The Market Abuse Regulation ("MAR") became effective from 3 July 2016. Market soundings, as defined in MAR, were taken in respect of the Placing and the Subscription, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

Important notice

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

This announcement does not constitute, or form part of, a prospectus relating to the Company, nor does it constitute or contain any invitation or offer to any person, or any public offer, to subscribe for, purchase or otherwise acquire any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it form the basis of or be relied on in connection with any contract or as an inducement to enter into any contract or commitment with the Company.

The content of this announcement has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 ("FSMA").

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States. This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa, Japan or any jurisdiction where to do so might constitute a violation of local securities laws or regulations (a "Prohibited Jurisdiction"). This announcement and the information contained herein are not for release, publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction. This announcement has been issued by and is the sole responsibility of the Company.

Allenby Capital Limited is acting solely as broker exclusively for the Company and no one else in connection with the contents of this announcement and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the contents of this announcement nor will it be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Allenby Capital Limited by FSMA or the regulatory regime established thereunder, Allenby Capital Limited accepts no responsibility whatsoever, and makes no representation or warranty, express or implied, for the contents of this announcement including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on behalf of it, the Company or any other person, in connection with the Company and the contents of this announcement, whether as to the past or the future. Allenby Capital Limited accordingly disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of the contents of this announcement or any such statement.

Northland Capital Partners Limited is acting solely as nominated adviser exclusively for the Company and no one else in connection with the contents of this announcement and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the contents of this announcement nor will it be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Northland Capital Partners Limited by FSMA or the regulatory regime established thereunder, Northland Capital Partners Limited accepts no responsibility whatsoever, and makes no representation or warranty, express or implied, for the contents of this announcement including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on behalf of it, the Company or any other person, in connection with the Company and the contents of this announcement, whether as to the past or the future. Northland Capital Partners Limited accordingly disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of the contents of this announcement or any such statement.

For further information:

Tavistock Investments plc Tel: 01753 867000

Oliver Cooke, Executive Chairman

Brian Raven, Group Chief Executive

Northland Capital Partners Limited Tel: 020 3861 6625

William Vandyk

Gerry Beaney 

Allenby Capital Limited Tel: 020 3328 5656

Nick Naylor

Nick Athanas

Templars Communications Limited Tel: 020 3642 3140

Kitty Parry

Alice Osborn 

DEFINITIONS

In this Appendix to the Announcement and, as the context shall admit, in the Announcement:

"Acquisition" means the conditional acquisition of PBFS;

"Admission" means the admission of the Placing Shares, Subscription Shares and Consideration Shares to trading on AIM becoming effective in accordance with the AIM Rules for Companies;

"AIM" means the market of that name operated by the London Stock Exchange;

"AIM Rules" means the AIM Rules for Companies published by the London Stock Exchange from time to time;

"Allenby Capital" means Allenby Capital Limited, the Company's broker;

"Announcement" means this announcement;

"Company" means Tavistock Investments Plc, a company incorporated and registered in England and Wales with company number 05066489;

"Consideration Shares" means the 21,263,462 new Ordinary Shares issued to the vendors of Price Bailey as part consideration for the Acquisition.

"CREST" means the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in those regulations);

"CREST Regulations" means the Uncertificated Securities Regulations 2001 (SI 2001/3755) as amended from time to time;

"Directors" or "Board" the directors of the Company or any duly authorised committee thereof;

"Enlarged Share Capital" means the issued ordinary share capital of the Company as enlarged by the Placing Shares, the Subscription Shares and the Consideration Shares;

"Euroclear" means Euroclear UK & Ireland Limited, the operator of CREST;

"Existing Ordinary Shares" means the 395,886,314 Ordinary Shares in issue at the date of this Announcement, all of which are admitted to trading on AIM and being the entire issued ordinary share capital of the Company;

"FCA" means the UK Financial Conduct Authority;

"FSMA" means the Financial Services and Markets Act 2000 (as amended);

"Group" means the Company and its subsidiaries as at the date of this Announcement;

"London Stock Exchange" means the London Stock Exchange plc;

"New Ordinary Shares" means new ordinary shares of 1 pence each in the capital of the Company;

"Ordinary Shares" means the ordinary shares of 1 pence each in the capital of the Company;

"PBFS" means Price Bailey Financial Services Limited, a company incorporated in England and Wales with registered number 10020871

"Placing" means the conditional placing of the Placing Shares by Allenby, as agent on behalf of the Company, further details of which are set out in this Announcement;

"Placing and Subscription Price" means the price at which the New Ordinary Shares are intended to be issued, being 3.0 pence per New Ordinary Share;

"Placing Shares" means New Ordinary Shares to be issued pursuant to the Placing;

"Shareholders" means holders of Ordinary Shares;

"Share Purchase Agreement" means the agreement entered into between the Company and Price Bailey in connection with the Acquisition;

"Subscription" means the conditional subscription for the Subscription Shares, further details of which are set out in this announcement;

"Subscription Shares" means New Ordinary Shares to be issued pursuant to the Subscription;

"UK" means the United Kingdom of Great Britain and Northern Ireland; and

"uncertificated" or "in uncertificated form" means an Ordinary Share recorded on a company's share register as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST.