Wynnstay Regulatory News (WYN)

12 September 2013

AIM:WYN

Wynnstay Group plc

("Wynnstay" or the "Group" or the "Company")

Update on Potential Acquisition

and

Conditional Placing to Raise £9.0m

Further to its announcement of 22 August 2013, Wynnstay, the agricultural supplies and specialist retail group, is pleased to provide an update on its proposed acquisition of all of the business and assets of Carmarthen and Pumsaint Farmers Limited (the "Society") except for its freehold properties (the "Acquisition"). At the Society's second special general meeting, held yesterday, its ordinary members passed a resolution to confirm the conversion of the Society from its current status as an industrial and provident society into a private limited company (the "Conversion"). Following the passing of this resolution, the Society has obtained all the necessary approvals of its members required to be obtained in accordance with the agreement entered into between the Company and the Society to effect the Acquisition (the "Acquisition Agreement"). Accordingly, Wynnstay expects, subject to the satisfaction or waiver of the remaining conditions to completion of the Acquisition which do not relate to the approval by members of the Society, that the Acquisition will complete on or around 30 September 2013. 

Additionally, further to its announcement of 30 July 2013, Wynnstay has assessed the cash resources available to fund the consideration for the Acquisition and has concluded that it is in the best interests of the Company to undertake an equity fundraising. Accordingly, the Company is pleased to announce that it has conditionally raised £9.0 million, before expenses by way of a significantly oversubscribed conditional placing of new ordinary Shares of 25 pence each in the capital of the Company ("Ordinary Shares") with both new and existing investors (the "Placing"). The net proceeds of the Placing will be used partly to fund the consideration payable for the Acquisition, with the balance used to support Wynnstay's long term strategy to act as a consolidator in the agricultural sector as well as for working capital. The equity fundraising was arranged by Shore Capital, as defined below.

The Placing

The Company proposes to raise £9.0 million, before expenses, by way of a placing of 1,682,242 new Ordinary Shares (the "Placing Shares") at a price of 535 pence per share (the "Placing Price") to fund the consideration payable for the Acquisition, provide support to Wynnstay's position as a consolidator in the agricultural sector and for general working capital. The consideration payable for the Acquisition is set out in detail in the Company's announcement of 30 July 2013.

The Placing Shares would represent approximately 9.11 per cent. of the Company's issued share capital as enlarged by the Placing Shares. The Placing Price is at a discount of approximately 4.86 per cent. to the closing middle market price on 11 September 2013, being the last practicable date prior to the publication of this announcement. The net proceeds of the Placing are expected to be approximately £8.7 million.

Shore Capital Stockbrokers Limited and Shore Capital and Corporate Limited ("Shore Capital") have entered into a placing agreement ("the Placing Agreement") with the Company, whereby Shore Capital has agreed to use its reasonable endeavours, as agent for the Company, to procure placees for the Placing Shares.

The Placing Agreement is conditional upon, inter alia: certain conditions in the Acquisition Agreement having been satisfied or waived; and admission of the Placing Shares to trading on AIM ("Admission") becoming effective on or before 8.30 a.m. on 30 September 2013 (or such later time or date as the Company and Shore Capital may agree, being not later than 15 October 2013). The Placing Agreement contains warranties from the Company in favour of Shore Capital in relation to, inter alia, matters relating to the Company and its business and the Acquisition. In addition, the Company has agreed to indemnify Shore Capital in relation to certain liabilities it may incur in respect of the Placing. Shore Capital has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event of a breach of the warranties. Subject to those conditions in the Acquisition Agreement which remain outstanding after Admission being satisfied or waived, completion of the Acquisition is expected to take place following Admission on 30 September 2013.

Settlement and dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that such Admission will occur at 8:00 am on 30 September 2013. Admission is subject to the Placing Agreement becoming unconditional in all respects (save only for Admission) and not being terminated in accordance with its terms.

The Placing Shares will, when issued, rank in full for all dividends with a record date on or after the date of Admission and otherwise equally with the existing Ordinary Shares from the date of Admission. The Placing Shares are not being made available to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.

Placing statistics

Ken Greetham, Chief Executive of Wynnstay, said,

"I am delighted that our proposed acquisition of Carmarthen and Pumsaint Farmers has been approved by an overwhelming majority of members. The addition of the Society's seven stores in South West Wales represents an excellent fit with our existing Wynnstay Country Stores activities and enables us to extend our presence in an area where we have been under-represented. We intend to enhance the products and services available to farmers and country dwellers in the region, and the location of our feed mill at Carmarthen will bring additional advantages as we do this.

I am also very pleased that the fundraising we have undertaken to finance the acquisition has been very well supported by both new and existing investors. Due to very strong investor demand, we are delighted to have been able to raise additional funds above the amount we needed to fund the acquisition, which will help to support our position as a consolidator in the agricultural sector."

Enquiries:

Shore Capital Stockbrokers Limited and Shore Capital and Corporate Limited, each of which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, are acting exclusively for the Company in connection with the Placing and will not be responsible to any person other than the Company for providing the protections afforded to their customers or for advising any other person on the contents of this announcement or any matter, transaction or arrangement referred to herein. The responsibilities of Shore Capital and Corporate Limited as the Company's nominated adviser under the AIM Rules for Nominated Advisers are owed solely to the London Stock Exchange and are not owed to the Company or to any Director, Shareholder or any other person. Shore Capital makes no representation or warranty, express or implied, as to the contents of this announcement and Shore Capital does not accept any liability whatsoever for the accuracy of or opinions contained in this announcement (or for the omission of any material information) and shall not be responsible for the contents of this announcement.

The distribution of this announcement in or into jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, such restrictions. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, except pursuant to certain limited exceptions which will be determined solely by the Company and/or its advisers, this announcement may not be published, distributed, forwarded or transmitted directly or indirectly, in whole or in part, in or into the United States, Canada, Australia, the Republic of South Africa or Japan or any jurisdiction where to do so might constitute a violation of local securities laws or regulations. Nor, subject to certain exceptions, may the Placing Shares be offered directly or indirectly in, or into, the United States, Canada, Australia, the Republic of South Africa or Japan. The Placing Shares have not been and will not be registered under the US Securities Act of 1933, as amended or under the securities legislation of any state of the United States, Canada, Australia, the Republic of South Africa or Japan and they may not be sold directly or indirectly within the United States, Canada, Australia, the Republic of South Africa or Japan or to or for the account of any national, citizen or resident of the United States, Canada, Australia, the Republic of South Africa or Japan or to a US Person (within the definition of Regulation S made under the US Securities Act of 1933, as amended). Nothing in this announcement is effective to limit or exclude any liability which, by law or regulation, cannot be so limited or excluded.