NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO
SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS
OF THAT JURISDICTION.
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY
CODE ON TAKEOVERS AND MERGERS (THE "CODE"). THIS DOES NOT
CONSTITUTE A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE
CODE. THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE
MADE.
THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION.
For immediate release
28 June
2024
Keywords Studios plc
("Keywords Studios", "Group", "Company")
Updated Possible Offer, and
current trading and outlook
Updated Possible Offer and
PUSU extension
On 27 June 2024, following
completion of diligence including the review of current trading and
outlook as set out below, the Board of Keywords Studios (the
"Board") received an
updated possible cash offer from a fund which is part of the EQT
Group ("EQT") of 2,450
pence per share to acquire the entire issued and to be issued share
capital of the Company (the "Updated Possible Offer").
The Updated Possible Offer follows a
revised possible cash offer of 2,430 pence per share from EQT on 26
June 2024.
The Board has carefully evaluated
the Updated Possible Offer with its financial advisers and
concluded that the Updated Possible Offer is at a value that the
Board would be minded to recommend to Keywords Studios
shareholders, should a firm intention to make an offer pursuant to
Rule 2.7 of the Code be announced on such financial terms, subject
to the agreement of all other terms and conditions of an
offer.
In an announcement on 14 June 2024,
the Board stated that in accordance with Rule 2.6(c) of the Code,
EQT was required, by no later than 5.00 pm on 28 June 2024
("PUSU Deadline"), either
to announce a firm intention to make an offer for Keywords Studios
in accordance with Rule 2.7 of the Code or to announce that it does
not intend to make an offer for Keywords Studios, in which case the
announcement will be treated as a statement to which Rule 2.8 of
the Code applies.
To finalise transaction
documentation, the Company has requested, and the Panel on
Takeovers and Mergers (the "Takeover Panel") has consented to, a
short extension of the PUSU Deadline. Consequently, in accordance
with Rule 2.6(c) of the Code, EQT is now required, by no later than
5.00 pm on 3 July 2024, either to announce a firm intention to make
an offer for Keywords Studios in accordance with Rule 2.7 of the
Code or to announce that it does not intend to make an offer for
Keywords Studios, in which case the announcement will be treated as
a statement to which Rule 2.8 of the Code applies.
Current trading and
outlook
As set out in the Group's full year
results, the Board is confident in delivering strong overall
revenue and profit growth in 2024, with performance expected to be
second half weighted as the sector emerges from the slower content
creation trends that are currently dampening industry spend and
therefore Group growth.
We have had a small number of larger
game development projects being deferred into H2 or cancelled,
creating capacity gaps in Create which were unable to be filled at
short notice. This, together with ongoing softer demand in
Globalize and the relatively slow ramp-up in content production in
Hollywood, has meant that first half organic growth is now expected
to be slightly negative during H1. Reported revenue is still
expected to grow by around 7% in the first half.
The Group is, however, increasingly
seeing positive signs across the industry with spend from larger
clients continuing to grow strongly, and anticipates a stronger
recovery from the US strikes, which reinforces its confidence in
the second half performance. As a result, H2 organic growth is
expected to be around 10%, in-line with our medium-term guidance.
The Board continues to be confident in the Group's ability to
outperform the market and deliver on its medium-term
guidance.
The Group continues to closely
manage costs, taking a broad range of cost actions, including the
restructuring of the go-to-market approach in Globalize set out at
the full year results, and expects full year margins to be around
15%. Due to the timing of the cost saving programmes and the
reduction of volumes, H1 adjusted operating margins are expected to
be lower, with H2 margins strong, as the impact of the cost savings
programmes and pick-up in volumes flow through.
The Group continues to actively
pursue M&A opportunities and has a strong pipeline. It has
signed a number of letters of intent with high-quality businesses,
and recently completed the acquisition of a small game development
studio in Australia as we continue to build out our offering there.
The Group is confident in its ability to deploy in excess of €100m
on value accretive M&A this year.
Presentational
currency
As also announced today, the Group
has decided to change its presentational currency from euro to US
Dollar with effect from 1 January 2024 to better reflect the
currencies in which we operate. The Board believes that the change
in presentational currency will provide investors and other
stakeholders with greater transparency of the Group's performance
and reduced foreign exchange volatility.
Final
dividend
The Board confirms the payment on 28
June 2024 of the 2023 final dividend of 1.76 pence, as recommended
on 13 March 2024.
Takeover Code Information
In accordance with Rule 2.6(c) of
the Code, the revised deadline may be extended further at the
request of the Board of Keywords Studios and with the consent of
the Takeover Panel.
In accordance with Rule 2.5(a) of
the Code, EQT reserves the right to make an offer for Keywords
Studios at a lower value or on less favourable terms than the
Updated Possible Offer: (i) with the agreement or recommendation of
the Board of Keywords Studios; (ii) if a third party announces a
firm intention to make an offer for Keywords Studios which, at that
date, is of a value less than the value of the Updated Possible
Offer; or (iii) following the announcement by Keywords Studios of a
Rule 9 waiver transaction pursuant to Appendix 1 of the Code or a
reverse takeover (as defined in the Code). If Keywords Studios
declares, makes or pays any dividend or distribution or other
return of value or payment to its shareholders, EQT reserves the
right to make an equivalent reduction to the Updated Possible
Offer. In connection with the possibility of EQT making a cash
offer for Keywords Studios (if it were so inclined), EQT reserves
the right to vary the form and / or mix of the consideration it
would offer.
This announcement is being made with
the consent of EQT.
The person responsible for arranging
the release of this announcement on behalf of Keywords Studios is
Andrew Kennedy, General Counsel.
Enquiries:
Keywords Studios plc
|
via Deutsche Numis / Robey
Warshaw
|
Giles Blackham, Director of Investor
Relations
|
|
|
|
Deutsche Numis
|
+44 (0) 20 7260 1000
|
Joint financial adviser, NOMAD and Joint corporate
broker
|
|
Stuart Skinner
|
|
Alec Pratt
|
|
William Baunton
Alexander Kladov
|
|
|
|
Robey Warshaw
|
+44 (0) 20 7317 3900
|
Joint financial adviser
|
|
Simon Robey
|
|
Daniel Zumbuehl
|
|
|
|
MHP
Group
|
+44 (0) 20 3128 8100
|
Financial Communications
|
+44 (0) 7884 494 112
|
Katie Hunt
|
|
Further
information
Numis Securities Limited ("Deutsche
Numis"), which is authorised and regulated in the United Kingdom by
the Financial Conduct Authority, is acting exclusively for Keywords
Studios and no one else in connection with the matters set out in
this announcement and will not regard any other person as its
client in relation to the matters in this announcement and will not
be responsible to anyone other than Keywords Studios for providing
the protections afforded to clients of Deutsche Numis, nor for
providing advice in relation to any matter referred to herein.
Neither Deutsche Numis nor any of its affiliates (nor any of their
respective directors, officers, employees or agents), owes or
accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Deutsche Numis in
connection with this announcement, any statement contained herein
or otherwise.
Robey Warshaw LLP ("Robey Warshaw"),
which is authorised and regulated in the United Kingdom by the FCA,
is acting as financial adviser exclusively for Keywords Studios and
no one else in connection with the matters referred to in this
announcement and will not regard any other person as its client in
relation to the matters referred to in this announcement and will
not be responsible to anyone other than Keywords Studios for
providing the protections afforded to clients of Robey Warshaw, nor
for providing advice in relation to the matters referred to in this
announcement.
This announcement is not intended to
and does not constitute an offer to sell or the solicitation of an
offer to subscribe for or buy or an invitation to purchase or
subscribe for any securities or the solicitation of any vote in any
jurisdiction. The release, publication or distribution of this
announcement in jurisdictions outside the United Kingdom may be
restricted by law and therefore persons into whose possession this
announcement comes should inform themselves about, and observe such
restrictions. Any failure to comply with such restrictions may
constitute a violation of the securities law of any such
jurisdiction.
Disclosure requirements of
the Code
Under Rule 8.3(a) of the Code, any
person who is interested in 1% or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the offer period and, if later, following the
announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any
person who is, or becomes, interested in 1% or more of any class of
relevant securities of the offeree company or of any securities
exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain
details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s), save to the extent that these
details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by
no later than 3.30 pm (London time) on the business day following
the date of the relevant dealing.
If two or more persons act together
pursuant to an agreement or understanding, whether formal or
informal, to acquire or control an interest in relevant securities
of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule
8.3.
Opening Position Disclosures must
also be made by the offeree company and by any offeror and Dealing
Disclosures must also be made by the offeree company, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror
companies in respect of whose relevant securities Opening Position
Disclosures and Dealing Disclosures must be made can be found in
the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and
when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.
Publication on
Website
In accordance with Rule 26.1 of the
Code, a copy of this announcement will be available at
https://www.keywordsstudios.com/en/investors/investors-home/potential-offer
promptly and in any event by no later than 12 noon on the business
day following this announcement. The content of this website is not
incorporated into and does not form part of this
announcement.