RNS Number:0077O
Hot Group PLC
28 July 2003
For immediate release
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, IN OR INTO THE UNITED STATES, CANADA, JAPAN,
THE REPUBLIC OF IRELAND OR AUSTRALIA
Certain definitions apply throughout the following announcement and your
attention is drawn to the table at the end of this announcement where these
definitions are set out in full.
28 July 2003
Hot Group Plc
Proposed acquisition of Parkside Recruitment Limited
Proposed Placing by Numis Securities Limited and Open Offer by Strand Partners
Limited of 85,000,000 New Ordinary Shares at 12 pence per share
Admission to trading on AIM
Hot Group Plc ("Hot Group" or the "Company") announces today that it has
conditionally agreed to acquire the entire issued share capital of Parkside
Recruitment Limited ("Parkside") for an aggregate consideration of #5.5 million
(subject to a net asset adjustment following Completion). The Company further
announces that it proposes to raise #10.2 million gross (approximately #9.0
million net of expenses) by way of a Placing and Open Offer of New Ordinary
Shares at the Issue Price.
Highlights
* Placing and Open Offer to raise approximately #10.2 million gross
(approximately #9.0 million net of expenses) by the issue of, in aggregate,
85,000,000 New Ordinary Shares at 12 pence per share. Of the New Ordinary
Shares, 67,935,594 have been placed firm and 17,064,406 have been conditionally
placed subject to clawback to satisfy valid applications under the Open Offer.
* Under the Placing, the Directors have agreed to subscribe for a
total of 5,702,778 New Ordinary Shares at 12 pence per share.
* Open Offer of 17,064,406 New Ordinary Shares at 12 pence per share
on the basis of 3 New Ordinary Shares for every 8 Existing Ordinary Shares
currently held.
* The Placing and the Open Offer have been fully underwritten by
Numis, which has been appointed as Hot Group's broker with immediate effect.
* The funds raised pursuant to the Placing and the Open Offer will be
used to finance the Acquisition, to repay an outstanding loan of #0.5 million,
and to provide additional funding for the ongoing working capital requirements
of the Enlarged Group and potentially to exploit further acquisition
opportunities.
* The principal activity of Parkside is the provision of permanent
and temporary staff. The consideration payable in respect of the Acquisition is
to be satisfied as to #5.0 million in cash, which will be payable on Completion
(and may be adjusted following agreement of the net assets of Parkside on
completion of the Acquisition) and further consideration of #0.5 million to be
satisfied by the issue of the Guaranteed Loan Notes.
* The renewal rate for the new 3-month access licences is currently
running at over 70 per cent. since launch
* Revenues from Hotonline have shown quarter on quarter growth during
the current financial year.
* Hotonline currently has approximately 1000 employment agencies and
200 companies as customers.
* Incremental costs to support additional revenues are expected to be
limited.
* In view of the size of Parkside relative to the Company, the
Acquisition will constitute a reverse takeover of Hot Group under the AIM Rules
and therefore requires the prior approval of Shareholders at an extraordinary
general meeting.
Tony Reeves, Chairman and Chief Executive Officer of Hot Group Plc, commented:
"This is another major step forward in the development of the Company and
represents the beginning of the second phase of our three-phase growth strategy.
Having succeeded in growing the on-line business we are now expanding into the
traditional agency business. The acquisition of Parkside will provide the
cornerstone for our planned expansion into this arena."
Background information
Hot is the UK's fifth largest supplier of online recruitment services. The
acquisition of Parkside will complement its on-line presence and provide a major
step in building a traditional recruitment division. Established in 1989,
Parkside is a traditional recruitment company specialising in both temporary and
permanent employment. Parkside focuses its activities in the Greater London and
Thames Valley region through three offices in Bracknell, Uxbridge and Staines.
It primarily serves the local staffing needs of large UK and international
companies including GlaxoSmithKline, Amazon, Honda, Waitrose, Air Products and
ICI Paints.
This summary should be read in conjunction with the full text of this
announcement below. Copies of the prospectus are obtainable from today at the
offices of Denton Wilde Sapte, One Fleet Place, London, EC4M 7WS.
Enquiries:
Tony Reeves
Chairman & Chief Executive Officer
Hot Group Plc Tel: (0870) 202 0121
Simon Raggett
Managing Director
Strand Partners Limited Tel: (020) 7409 3494
Rory Murphy
Director
Strand Partners Limited Tel: (020) 7409 3494
Charles Crick
Managing Director
Numis Securities Limited Tel: (020) 7776 1500
Niall Devins
Director
Numis Securities Limited Tel: (020) 7776 1500
Hugo de Salis
St Brides Media & Finance Limited Tel: (020) 7242 4477
Strand Partners, which is regulated in the United Kingdom by the Financial
Services Authority, is acting as nominated adviser for Hot Group Plc and for no
one else in connection with the Proposals and will not be responsible to anyone
other than Hot Group Plc for providing the protections afforded to customers of
Strand Partners, or for providing advice in relation to the Proposals.
Numis, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Hot Group Plc and for no one else in connection with
the Proposals and will not be responsible to anyone other than Hot Group Plc for
providing the protections afforded to customers of Numis, or for providing
advice in relation to the Proposals.
Strand Partners has approved the contents of this announcement solely for the
purpose of section 21 of the Financial Services and Markets Act 2000. The
principal place of business of Strand Partners is 110 Park Street, London W1K
6NX.
The Directors of Hot Group accept responsibility for the information contained
in this announcement. Subject as aforesaid, to the best of the knowledge and
belief of the Directors of Hot Group (who have taken all reasonable care to
ensure that such is the case), such information is in accordance with the facts
and does not omit anything likely to affect the import of such information.
This announcement does not constitute, or form part of, an offer or an
invitation to purchase any securities.
28 July 2003
Hot Group Plc
Proposed acquisition of Parkside Recruitment Limited
Proposed Placing by Numis Securities Limited and Open Offer by Strand Partners
Limited of 85,000,000 New Ordinary Shares at 12 pence per share
Admission to trading on AIM
Introduction
The Board is pleased to announce that the Company has today conditionally agreed
to acquire the entire issued share capital of Parkside for an aggregate
consideration of #5.5 million subject to a net asset adjustment following
Completion in accordance with the terms of the Acquisition Agreement. The
principal activity of Parkside is the provision of permanent and temporary
staff.
The consideration payable in respect of the Acquisition is to be satisfied as to
#5.0 million in cash, which will be payable on Completion (and may be adjusted
following agreement of the net assets of Parkside on completion of the
Acquisition) and further consideration of #0.5 million to be satisfied by the
issue of the Guaranteed Loan Notes.
In order to finance the Acquisition, to repay an outstanding loan of #0.5
million, and to provide additional funding for the ongoing working capital
requirements of the Enlarged Group and potentially to exploit further
acquisition opportunities, the Company proposes to raise #10.2 million gross
(approximately #9.0 million net of expenses) by way of a Placing and Open Offer
of New Ordinary Shares at the Issue Price. Of the New Ordinary Shares,
67,935,594 have been placed firm and 17,064,406 have been conditionally placed
subject to clawback to satisfy valid applications under the Open Offer. The
Placing and the Open Offer have been underwritten by Numis and are conditional,
inter alia, on Admission.
Under the Placing, the Directors have agreed to subscribe for a total of
5,702,778 New Ordinary Shares.
In view of the size of Parkside relative to the Company, the Acquisition will
constitute a reverse takeover of Hot Group under the AIM Rules and therefore
requires the prior approval of Shareholders at an extraordinary general meeting.
Shareholders should note that the Proposals are interconditional. If the
Proposals are approved at the EGM, application will be made to the London Stock
Exchange for the re-admission of the Existing Ordinary Shares and the admission
of the New Ordinary Shares to trading on AIM. Admission is expected to become
effective in respect of the VCT/EIS Placing Shares on 26 August 2003 and
re-admission of the Existing Ordinary Shares and admission of the Public Shares
on 27 August 2003.
Background to and reasons for the Acquisition
As indicated in the Company's annual report for the 16 months ended 31 August
2002, Hot Group's strategy is to grow its business through selective
acquisitions of both online and traditional recruitment businesses with a view
to becoming a leading online and traditional recruitment company within the UK.
The Board believes that the proposed acquisition of Parkside, which is a well
established traditional recruitment business based in the UK, represents a key
first step towards the Company's expansion into the traditional recruitment
market and the Company achieving its longer term objectives.
The Board believes that the traditional recruitment services provided by
Parkside complement the Company's core online offering and will widen the
Group's product range.
The Directors believe that the Acquisition represents a good opportunity to
build on the stated strategy, which the Directors are confident will deliver
long term enhancement of Shareholder value through improved operating
performance of the Group as a whole. This should flow from the increased usage
of online resourcing in the traditional recruitment business, which the
Directors believe should reduce costs and improve internal efficiency and
customer service.
Information on Hot Group
Principal Activity
Hot Group's core business is the provision of online recruitment services
through a network of recruitment websites on the Internet across a range of
industry sectors. The Group's websites offer jobseekers a direct link to its
large and varied database of current job vacancies supplied by employment
agencies and directly by employers.
Hot Group operates under a number of different brand names, including
hotrecruit.com, PlanetRecruit, Jobsearch.co.uk, JobTrack.co.uk, JobTrack
Ireland, Jobmagic.net, Rex.co.uk, Absolute-comms.co.uk and
Absolute-engineers.co.uk.
These websites are united under the Group's umbrella brand, Hotonline, which
covers the entire network of sub-brands. A summary of the Group's key services
and brands is set out below.
Hot Group currently employs 44 people.
Hotonline
Hotonline represents an online recruitment "network" comprising both generalist
and niche jobsites. It is now recognised as the fifth largest online recruitment
business in the UK by turnover, attracting over 500,000 jobseekers in both May
and June 2003 and has a CV database of over 500,000 registered candidates.
Within its network, there are four "parent" brands:
* Hotrecruit.com ("Hotrecruit" )
Hotrecruit targets young jobseekers (with a 18 to 28 year old demographic) who
are typically students, working travellers, graduates and young professionals.
The site delivers approximately 5,000 jobseekers per day and has strategic
partnerships with organisations such as UCAS, Prospects and The Daily Telegraph.
Hotrecruit offers full-time, part-time and temporary positions that require
skilled or semi-skilled applicants and specialises in industries that have a
high staff turnover such as hospitality, retail, leisure, secretarial/
administration and sales.
* PlanetRecruit.com ("PlanetRecruit" )
PlanetRecruit is a large generalist site aimed at the professional jobseeker.
The site covers a broad range of job sectors with specialisation in the
technology, media and telecommunications sectors. It offers positions primarily
in the UK but also has positions overseas.
PlanetRecruit is a major provider of jobs to Yahoo! UK job classifieds and is
partnered with MSN/Hotmail. The site has been short-listed for "IT Recruitment
Service of the Year" at the Computing Awards for Excellence.
* JobTrack.co.uk ("JobTrack")
JobTrack has been providing web based resourcing solutions for over three years.
Historically a competitor of PlanetRecruit, JobTrack is also aimed at the
professional jobseeker with a focus on technology sectors. It primarily lists
vacancies from agencies. JobTrack and PlanetRecruit are now sister sites
intended to complement each other.
* Jobsearch.co.uk ("Jobsearch")
This site was one of the UK's early online recruitment sites and has been
providing web based resourcing solutions for five years.
Jobsearch is being developed as the network's generic portal, with all positions
on the network being available from this site. Hence this site will become
generalist in nature, with a division serving agencies and a division serving
employers directly.
Hotonline has two divisions, both of which supply jobs to the network. The
first, the agency division, works exclusively with recruitment agencies and is
currently working with over 1,000 of the UK's 12,000 agencies. The number of
agencies working with Hot is currently growing by over 100 agencies per month.
The agency division provides a subscription based service whereby agencies are
able to subscribe for a one to three month licence to advertise on the relevant
website and access the Group's CV database. Hotonline is currently renewing 70
per cent. of its three monthly access licences.
The second division, the employer direct service, deals with the corporate and
SME markets. Like the agency division, it sells a subscription based advertising
product.
The Group seeks to place jobs from either division on the sites in order to give
such jobs the best exposure and hence quality of response. Access to each of the
Group's websites is free of charge to the jobseeker.
History
The business of The Hot Group Limited was originally established in August 1999,
with its first brand hotrecruit.co.uk launched in May 2000.The Directors believe
it has established itself as a leading UK recruitment site targeting young
jobseekers. The Hot Group Limited originally specialised in the temporary
recruitment sector and was aimed specifically at students, graduates, working
travellers and the young contingent workforce. The Hot Group Limited developed
to offer both part time and full time jobs across virtually all industries but
specialising in non management positions in sectors with high staff turnover,
such as retail, hospitality and leisure. The Hot Group Limited's customer base
comprised both large and small companies looking to employ young people to work
in full or part time positions in these sectors.
In June 2002, The Hot Group Limited was acquired by RexOnline plc by way of a
reverse takeover. RexOnline plc changed its name to Hot Group plc. RexOnline
plc, originally Recruitment Exchange plc, was one of the early online
recruitment companies in the UK. Its first brand, Rex.co.uk, was launched in
1996.
In January 2003, Hot Group acquired PlanetRecruit Limited, one of the top ten UK
online recruitment companies. This acquisition consolidated Hot Group's position
in this market and provided the Group with an enhanced product offering.
Information on Parkside
Principal Activity
Parkside is a traditional recruitment business which operates from three offices
in the UK serving the West London and Thames Valley region.
The principal activity of Parkside is the provision of permanent and temporary
staff.
Parkside is divided into two divisions, Parkside Recruitment and Parkside
Accountancy. Parkside Recruitment specialises in temporary and permanent
recruitment in the general office and secretarial markets. Parkside Accountancy
specialises in the supply of permanent and temporary finance staff, for short
and long term assignments, at all levels up to and including qualified
accountants.
Approximately 58 per cent. of placements relate to non specialist office staff
with the remaining 42 per cent. being accountancy professionals.
Parkside presently employs approximately 50 people. The Directors of Hot Group
have confirmed to the board of Parkside that the existing employment rights,
including pension rights, of the employees of Parkside will be properly
safeguarded.
The Customers
Parkside serves the local staffing needs primarily of large UK and international
companies. Its major customers include GlaxoSmithKline, Amazon, Honda, Waitrose,
Air Products and ICI Paints.
History
Parkside is a privately owned UK based recruitment company, which was
incorporated in July 1982 with the name K.P. Associates Limited and originally
operated as a purchasing agent for third party customers. It was acquired by the
Vendors in February 1989 and changed its name to Parkside.
Parkside's business has expanded through organic growth and it now operates out
of three offices located in Staines, Uxbridge and Bracknell. The Staines and
Uxbridge offices were opened in 1989 and the Bracknell office was opened in
1993.
Financial Information
A financial summary of Parkside for the three years ended 31 March 2003 is set
out below:
Year ended Year ended Year ended
31 March 31 March 31 March
2003 2002 2001
#'000 #'000 #'000
(audited) (audited) (audited)
Turnover
Temporary placements 8,264 7,112 8,152
Permanent placements 1,225 1,465 2,132
Total Turnover 9,489 8,577 10,284
Operating profit 813 711 1,847
Profit before tax 821 719 1,868
Strategy for the Enlarged Group
Hot Group seeks to become a leading technology driven recruitment company in the
UK, through organic growth and the integration of both online and traditional
recruitment businesses.
In terms of the online strategy, the Company intends to develop further its two
distinct services for customers; its agency service and its employer direct
service. Both services utilise the Group's network of websites and the combined
candidate database. Job vacancies are listed on those sites which have the
appropriate demographic. The Directors believe that potential benefits to
employers from this strategy are a reduction in both time to hire and cost per
hire. The Directors believe that the potential benefits to agencies are a
reduction in the cost of obtaining candidates and access to a large CV database.
The Company is actively pursuing acquisitions in the online recruitment market
and is looking for businesses which will complement its existing offering or
which enable it to penetrate new markets. Businesses will be considered if they
have strong brands, serve attractive niches and have stable revenues and quality
candidate databases.
The Group's strategy is also to acquire businesses within the traditional
recruitment sector which are operating in high volume staffing sectors such as
general office, administration, accountancy, sales and marketing, healthcare,
hospitality and catering and which will therefore be synergistic with the
Group's existing online offering. The Acquisition is part of this strategy and
the Directors intend to use Parkside as the platform on which future
acquisitions of traditional recruitment businesses can be built. The Directors
intend, where appropriate and applicable, to secure financial improvements from
other such acquisitions, through a combination of:
(a) streamlining management;
(b) centralising back office infrastructure; and
(c) reducing the cost of obtaining candidates by utilising the Group's existing
online services combined with appropriate filtration software.
The Directors also anticipate that cost benefits may be secured through the
removal of shopfront real estate and labour intensive candidate processing and
by switching candidate advertising from traditional print to Internet
advertising through the appropriate Group websites.
The ultimate goal of the Directors over time is to develop a hybrid business,
combining the advantages of the online resourcing service (access to a large
pool of candidates and reducing the time to hire) and the benefits of its
bespoke candidate management software (through candidate filtration and
matching) whilst retaining personal interaction through professional recruiters
from the traditional business. In summary, the aim will be to provide clients
with a higher calibre short-list of candidates, quickly and more cost
effectively.
In order to finance further acquisition opportunities, it may be necessary for
the Company to seek further capital.
Cost Savings
Following the Acquisition, it is anticipated that there will be an immediate
cost saving of approximately #150,000 on an annualised basis in Parkside, which
will be achieved through the reduced remuneration to be paid to the Vendors.
Other cost savings are not expected to be significant since the Directors
believe that Parkside is already run on an efficient and cost-effective basis.
However, the Directors believe that Parkside's offering will be improved by
access to Hot Group's database and technology.
Board of Directors and Employees
Following completion of the Proposals, the directors of the Company will be as
follows:
Anthony Henry Reeves Chairman and Chief Executive Officer
Stephen Dennis Wright Finance Director
Harvey Ian Sinclair Managing Director (Online Division)
James Donald Hanson Non-Executive Director
John Frederick Waley Sanderson Non-Executive Director
The Board of Hot Group has agreed with the Vendors that upon completion of the
Proposals, the Vendors will enter into new service contracts with Parkside to
ensure that the transition of Parkside into the Enlarged Group is properly
managed. The service contracts will commence on completion of the Acquisition
and expire on 31 March 2004.
Furthermore, in order to properly incentivise the operational management team
for the benefit of all Shareholders, the Board intends to grant employee share
options to key operational management of Parkside.
Principal terms of the Acquisition
Pursuant to the Acquisition Agreement, the Company has agreed to acquire the
entire issued share capital of Parkside from the Vendors for an aggregate
consideration of #5.5 million, subject to adjustment. The aggregate
consideration will be satisfied as to #5.0 million in cash, payable on
completion of the Acquisition (which may be adjusted following agreement of the
net assets of Parkside at completion of the Acquisition) and as to the balance
of #0.5 million, to be satisfied by the issue of the Guaranteed Loan Notes.
Under the Acquisition Agreement, the Vendors have given the Company certain
warranties and indemnities (subject to certain limitations) relating to the
business and assets of Parkside.
Completion of the Acquisition Agreement is conditional, inter alia, on the
passing of the Resolutions at the EGM, the Placing and Open Offer Agreement
having become unconditional in accordance with its terms and Second Admission.
Details of the Placing and the Open Offer
In order to finance the Acquisition, to repay an outstanding loan of #0.5
million, to provide additional funding for the ongoing working capital
requirements of the Enlarged Group and potentially to exploit further
acquisition opportunities, the Company is proposing to raise #10.2 million gross
(approximately #9.0 million net of expenses) by the issue of 85,000,000 New
Ordinary Shares pursuant to the Placing and the Open Offer. The Placing and the
Open Offer has been underwritten by Numis.
Qualifying Shareholders who wish to subscribe for Open Offer Shares are invited
to apply at the Issue Price, free of expenses, pro rata to their existing
shareholdings on the basis of:
3 Open Offer Shares for every 8 Existing Ordinary Shares
held at the close of business on the Record Date (and so in proportion for any
number of Existing Ordinary Shares then held). Entitlements of Qualifying
Shareholders to Open Offer Shares will be scaled down to the nearest whole
number. Fractional entitlements to the Open Offer Shares will be aggregated and
allotted to placees pursuant to the Placing and Open Offer Agreement for the
benefit of the Company. The Open Offer Shares are to be paid for in full on
application.
Numis has conditionally placed the New Ordinary Shares with institutional and
other investors at the Issue Price. Of the 85,000,000 New Ordinary Shares,
67,935,594 have been placed firm with the Directors and certain institutions
(including some existing Shareholders) and the balance are subject to recall to
the extent required to satisfy valid applications under the Open Offer.
The Placing and the Open Offer are conditional, inter alia, upon the passing of
the Resolutions to be proposed at the EGM and upon Admission. It is expected
that dealings in the New Ordinary Shares will commence on AIM at 8.00 a.m. on 27
August 2003 (or such later time and date as shall be determined by Strand
Partners, Numis and the Company, being not later than 3 September 2003). If
Admission has not so occurred by 3 September 2003, application monies will be
returned to applicants without interest and at the applicants' risk as soon
thereafter as is practicable.
Qualifying Shareholders will shortly receive a Prospectus setting out further
details of the Proposals, together with an Application Form containing details
of their entitlement to subscribe for Open Offer Shares. To be valid,
Application Forms must be received by Northern Registrars by post or (during
normal business hours only) by hand at Northern House, Woodsome Park, Fenay
Bridge, Huddersfield HD8 0LA not later than 3.00 p.m. on 20 August 2003.
Qualifying Shareholders should be aware that the Open Offer is not a rights
issue. Qualifying Shareholders' entitlements under the Open Offer are not
transferable unless to satisfy bona fide market claims and the Application Form
is not a document of title and cannot be traded. Qualifying Shareholders should
be aware that in an open offer, unlike in a rights issue, the Open Offer Shares
not applied for under the Open Offer will not be sold in the market or placed
for the benefit of Qualifying Shareholders who do not apply for them under the
Open Offer, but will be allotted at the Issue Price to Numis as underwriter or
such other person(s) as Numis may procure pursuant to the Placing and Open Offer
Agreement.
Subject to the fulfilment of the conditions of the Placing and Open Offer
Agreement, Placing Shares will be registered in the names of the relevant
placees and Open Offer Shares will be registered in the names of the Qualifying
Shareholders validly applying for them and it is expected that certificates in
respect of the New Ordinary Shares will be dispatched to relevant shareholders
by first class post at their own risk by 3 September 2003 or, if appropriate,
delivery will be made to their CREST accounts by 27 August 2003. No temporary
documents of title will be issued.
Pending the receipt of definitive share certificates in respect of the New
Ordinary Shares (other than in respect of those shares settled through CREST),
transfers will be certified against the register.
The New Ordinary Shares will, when issued and fully paid, rank pari passu in all
respects with the Existing Ordinary Shares, including the right to receive all
dividends and other distributions thereafter declared, made or paid.
Use of Proceeds
On becoming unconditional, the Placing and the Open Offer are expected to raise
#10.2 million gross (approximately #9.0 million net of expenses). The net
proceeds will be utilised by the Company to finance the Acquisition, to repay an
outstanding loan of #0.5 million, to provide additional funding for the ongoing
working capital requirements of the Enlarged Group and potentially to exploit
further acquisition opportunities.
Alternative Funding
If the Placing and Open Offer do not proceed, the Group would have to seek
alternative methods of financing such as the re-negotiation of the Group's
overdraft facility and/or the securing of additional bank facilities or other
sources of finance. Shareholders should note that if the Placing and the Open
Offer do not proceed and the Company is unable to procure alternative sources of
funds, the Company might not be able to continue to trade.
Current trading and prospects
The Group released its interim results for the six month period ended 28
February 2003 on 21 May 2003.
Hotonline, the Group's online division operated through its subsidiaries,
Hotonline Limited and PlanetRecruit Limited, currently has approximately 1,000
employment agencies and 200 companies as customers.
Since changing the agency product from a 12 month access licence to its new
three month product in March 2003, Hotonline is increasing its agency customer
base at the rate of approximately 100 agencies per month. The pricing of the new
three month access licence on a pro rata basis is approximately double that of
the 12 month licence. With the same resources, monthly sales productivity within
the agency division (which accounts for two-thirds of Hotonline's revenues) has
more than doubled since February 2003.
Early indications are that the new access licence is being well received within
the agency market as evidenced by the renewal rate of its contracts, which is
currently running at over 70 per cent. since its launch.
Revenues have shown quarter on quarter growth for Hotonline during the financial
year which commenced on 1 September 2002, and the Directors believe the renewal
rate of the new access licence should support the expected continuation of this
trend.
Incremental costs to support additional revenues are expected to be limited and
consequently sales and renewals of the new access licence are anticipated to
enhance the Group's performance.
The Directors believe that the employer direct service is important to the long
term implementation of the Company's strategy. This area of business is being
taken forward primarily through the relationships being developed directly with
companies with ongoing resource requirements. In the short term this division is
not expected to contribute significantly to growth in the Group's revenue.
Admission to AIM and dealings
Application will be made for the Existing Ordinary Shares to be re-admitted and
for the New Ordinary Shares to be admitted to trading on AIM. It is expected
that First Admission will become effective on 26 August 2003. It is expected
that Second Admission will become effective and that dealings on AIM of the New
Ordinary Shares will commence on 27 August 2003.
Extraordinary General Meeting
In order to give effect to the Acquisition and to approve the other elements of
the Proposals, an extraordinary general meeting of the Company is being convened
for 11.00 a.m. on Friday 22 August 2003.
Prospectus
The Prospectus, accompanied by an Application Form for use in connection with
the Open Offer, setting out details of the Proposals and including a notice of
the EGM, will be posted to shareholders today. The Placing and the Open Offer
are not being made in or into the United States, Canada, Australia, Japan or the
Republic of Ireland or any other jurisdiction in which such Placing and Open
Offer or solicitation is unlawful. The attention of shareholders who have
registered addresses outside of the United Kingdom, or who are citizens or
residents of countries other than the United Kingdom, is drawn to the further
information in this regard to be set out in the Prospectus.
A copy of the prospectus is available from today at the offices of Denton Wilde
Sapte, One Fleet Place, London, EC4M 7WS.
Expected timetable of principal events
Record Date for the Open Offer close of business on 25 July 2003
Latest time and date for splitting
of Application Forms 3.00 p.m. on 18 August 2003
(to satisfy bona fide market claims only)
Latest time and date for receipt
of Forms of Proxy 11 a.m. on 20 August 2003
Latest time and date for receipt of
completed Application Forms and payment
in full under the Open Offer 3.00 p.m. on 20 August 2003
Extraordinary General Meeting 11 a.m. on 22 August 2003
Admission of VCT/EIS Placing Shares 26 August 2003
CREST member accounts expected to be
credited in respect of the VCT/EIS Placing Shares 26 August 2003
Admission of the Public Shares and dealings
expected to commence on AIM 27 August 2003
CREST member accounts expected to be credited
in respect of the Public Shares 27 August 2003
Completion of the Acquisition 29 August 2003
Despatch of definitive share certificates in respect of the
in respectof the New Ordinary Shares 3 September 2003
Enquiries:
Tony Reeves
Chairman & Chief Executive Officer
Hot Group Plc Tel: (0870) 202 0121
Simon Raggett
Managing Director
Strand Partners Limited Tel: (020) 7409 3494
Rory Murphy
Director
Strand Partners Limited Tel: (020) 7409 3494
Charles Crick
Managing Director
Numis Securities Limited Tel: (020) 7776 1500
Niall Devins
Director
Numis Securities Limited Tel: (020) 7776 1500
Hugo de Salis
St Brides Media & Finance Limited Tel: (020) 7242 4477
The Placing and the Open Offer are not being made, directly or indirectly, in or
into the United States, Canada, Australia, Japan or the Republic of Ireland or
any other jurisdiction in which such Placing and Open Offer or solicitation is
unlawful. Accordingly, this announcement is not being and should not be released
or otherwise distributred or sent in, into or from the United States, Canada,
Australia, Japan, the Republic of Ireland or any other jurisdiction where to do
so would be in breach of any applicable law and/or regulation. The New Ordinary
Shares to be allotted pursuant to the Placing and the Open Offer have not been
and will not be registered under the Securities Act or under the relevant
securities laws of any state or other jurisdiction of the United States, Canada,
Australia, Japan or the Republic of Ireland. Accordingly, the New Ordinary
Shares to be allotted pursuant to the Placing and the Open Offer may not (unless
an exemption under the Securities Act or other relevant securities laws is
available) be offered, sold, re-sold, or delivered, directly or indirectly, in,
into or from the United States, Canada, Australia, Japan, the Republic of
Ireland or any other jurisdiction where this would constitute a violation of the
relavant laws of, or require registration thereof in, such a jurisdiction or to,
or for the account or benefit of, any US persons or a person in, or resident of
Canada, Australia, Japan or the Republic of Ireland.
Strand Partners, which is regulated in the United Kingdom by the Financial
Services Authority, is acting as nominated adviser for Hot Group Plc and for no
one else in connection with the Proposals and will not be responsible to anyone
other than Hot Group Plc for providing the protections afforded to customers of
Strand Partners, or for providing advice in relation to the Proposals.
Numis, which is regulated in the United Kingdom by the Financial Services
Authority, is acting for Hot Group Plc and for no one else in connection with
the Proposals and will not be responsible to anyone other than Hot Group Plc for
providing the protections afforded to customers of Numis, or for providing
advice in relation to the Proposals.
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise:
"Acquisition" the proposed acquisition by Hot Group of Parkside pursuant to
the Acquisition Agreement
"Acquisition the conditional agreement dated 28 July 2003 between (1) the
Agreement" Vendors and (2) Hot Group relating to the Acquisition
"Act" the Companies Act 1985, as amended
"Admission" unless the context otherwise requires, in relation to the VCT/
EIS Placing Shares, First Admission, and in relation to the
Public Shares, Second Admission
"AIM" the Alternative Investment Market of the London Stock
Exchange
"AIM Rules" the rules relating to the admission of securities to trading on
AIM, as published by the London Stock Exchange from time to
time
"Application the application form on which Qualifying Shareholders may apply
Form" for Open Offer Shares under the Open Offer and which forms part
of the terms and conditions of the Open Offer
"Completion" completion of the Proposals
"CREST" the relevant system (as defined in the CREST Regulations) in
respect of which CRESTCo is the operator (as defined in the
CREST Regulations)
"CRESTCo" CRESTCo Limited
"CREST the Uncertificated Securities Regulations 2001 (SI 2001 No.
Regulations" 3755)
"Directors" or the existing directors of the Company
"Board"
"EIS" Enterprise Investment Scheme
"Enlarged the Group as enlarged by the Acquisition
Group"
"Existing the 45,505,084 Ordinary Shares in issue on the Record Date
Ordinary
Shares"
"Extraordinary the extraordinary general meeting of the Company convened for
General Meeting" 11.00 a.m. on 26 August 2003
or "EGM"
"FSMA" Financial Services and Markets Act 2000
"First re-admission of the Existing Ordinary Shares and admission of
Admission" the VCT/EIS Placing Shares becoming effective in accordance
with the AIM Rules
"Group" Hot Group and its subsidiary undertakings
"Guaranteed Loan #0.5 million redeemable 5 per cent. loan notes (guaranteed by a
Notes" UK clearing bank) to be redeemed on the second anniversary of
Completion subject to the terms of the Acquisition Agreement
"Hot Group" or Hot Group Plc
the "Company"
"Issue Price" 12 pence per New Ordinary Share
"London Stock London Stock Exchange plc
Exchange"
"New Ordinary the 85,000,000 Ordinary Shares to be issued by the Company
Shares" pursuant to the Placing and the Open Offer
"Northern Northern Registrars Limited
Registrars"
"Numis" Numis Securities Limited
"Open Offer" the conditional offer by Strand Partners, on behalf of the
Company, to Qualifying Shareholders to subscribe for the Open
Offer Shares at the Issue Price
"Open Offer the 17,064,406 New Ordinary Shares which are the subject of the
Shares" Open Offer
"Ordinary ordinary shares of ten pence each in the share capital of the
Shares" Company
"Parkside" Parkside Recruitment Limited
"Placing" the placing by Numis of the Placing Shares subject to the terms
of the Placing and Open Offer Agreement
"Placing and the conditional agreement dated 28 July 2003 between (1) the
Open Offer Company, (2) Strand Partners and (3) Numis relating to the
Agreement" Placing and the Open Offer, details of which are to be set out
in the Prospectus
"Placing the 85,000,000 New Ordinary Shares which have been
Shares" conditionally placed pursuant to the Placing, 4,833,333 of
which have been placed firm to placees subscribing for VCT/EIS
Placing Shares, 63,102,261 of which have been placed firm with
other placees and 17,064,406 of which have been conditionally
placed with other placees subject to clawback to satisfy
applications under the Open Offer
"Proposals" the Acquisition, the Placing, the Open Offer, the First
Admission and the Second Admission
"Public the New Ordinary Shares other than the VCT/EIS Placing Shares
Shares"
"Prospectus" the document to be posted to shareholders setting out details
of the Proposals and including a notice of the EGM
"Qualifying holders of Existing Ordinary Shares on the register of members
Shareholders" of the Company at the Record Date and others with bona fide
market claims, other than certain overseas Shareholders
"Record Date" the close of business on 25 July 2003
"Resolutions" the resolutions to be proposed at the EGM
"Second respectively re-admission of the Existing Ordinary Shares in
Admission" issue and admission of the Public Shares to trading on AIM and
such re-admission and admission becoming effective in
accordance with the AIM Rules
"Shareholders" holders of Existing Ordinary Shares
"Strand Strand Partners Limited
Partners"
"subsidiary" or have the meanings given to them by the Act
"subsidiary
undertaking"
"United Kingdom" the United Kingdom of Great Britain and Northern Ireland
or "UK"
"United States" the United States of America, its territories and possessions,
or "US" any state of the United States of America and the district of
Columbia and all other areas subject to its jurisdiction
"VCT/EIS Placing the 4,833,333 New Ordinary Shares which have been placed firm
Shares" with certain venture capital trusts and individual investors
"Vendors" Malcolm Costello and Paul Keady
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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