RNS Number : 4394F
Wren Homes Group PLC
09 October 2008
9 October 2008
Wren Homes Group Plc
("Wren" or "the Company") (WHG/L)
Proposed Investment to raise �4.0 million and
posting of circular to shareholders
Wren, the AIM listed provider of Extra Care retirement living, together with a range of care and domiciliary services for the
independent and active elderly, is pleased to announce that it has entered into agreements to raise a total of �4,000,000 before expenses
from Wainford Holdings Limited.
Highlights
* The net proceeds of the Proposed Investment will be used to fund development of the Company's Extra Care accommodation schemes and
for general working capital purposes.
* Second Extra Care planning permission recently approved for a 52 unit Extra Care scheme at Crowborough, East Sussex
* Wren has a number of Extra Care schemes, at different stages of planning, ownership and under option
* Dominic Wainford, of Wainford Holdings Limited, and James Butterfield, currently Group Company Secretary of Wren, to be appointed
to Company's Board
Paul Treadaway, Chief Executive of Wren Homes, commented:
"I am delighted to announce this very significant investment into Wren Homes and at a premium to the current share price. It represents
a strong endorsement of the Company and its ambition to roll out its Extra Care retirement living model, in which self contained apartments
are provided for the active elderly within a supportive environment, as well as a range of medical, nursing and domestic support services
and communal facilities also being available to residents."
He continued: "In spite of the current uncertain market, this investment should allow us to continue to develop our second Extra Care
scheme at Crowborough, which has recently received planning consent, and move the Company further towards fulfilling our vision of leading
the introduction of a new and innovative model in the retirement living sector. I am delighted to welcome both Dominic Wainford and James
Butterfield to the Board and believe that Wren is now in a strong position to capitalise on opportunities in our sector."
Enquiries:
Wren Homes Group plc
Paul Treadaway, Tel: 01372 742 244
Managing Director
www.wrenhomesplc.co.uk
Shore Capital
Pascal Keane Tel: 020 7408 4090
Adventis Financial PR
Tarquin Edwards Tel: 020 7034 4758/59 07879 458 364 / 07979 604 687
Chris Steele
9 October 2008
Wren Homes Group plc
("Wren" or the "Company")
Proposed Investment to raise �4 million and
posting of circular to Shareholders
The Company announces that it has entered into agreements to raise a total of �4,000,000 before expenses from Wainford Holdings Limited
("WHL") (the "Proposed Investment"). �1,000,000 is to be raised through the issue of 10,000,000 new ordinary shares of 10p each in the
capital of Wren ("Ordinary Shares") at a price of 10p per share ("Subscription Shares") and �3,000,000 by way of a five year unsecured loan,
bearing interest of 5 per cent. per annum, which may be converted into new Ordinary Shares of Wren at a price of 10p per share at any time
during the period of the loan at the option of WHL ("Convertible Loan"). The net proceeds of the Proposed Investment will be used to fund
development of the Company's Extra Care accommodation schemes and for general working capital purposes.
Under the terms of the Convertible Loan agreement, WHL may convert all or part of the Convertible Loan into new Ordinary Shares at a
price of 10p per share ("Conversion Shares") at any time prior to its repayment. Full conversion of the Convertible Loan would result in the
issue and allotment to WHL of 30,000,000 new Ordinary Shares. When aggregated with the Subscription Shares and WHL's existing holding of
102,500 Ordinary Shares, WHL would then hold 40,102,500 Ordinary Shares, representing approximately 49 per cent. of the Company's enlarged
issued share capital (assuming no other new Ordinary Shares are issued by the Company).
Both the Subscription Agreement and the Convertible Loan Agreement are conditional upon the passing of resolutions at an Extraordinary
General Meeting of the Company (the "General Meeting" and "Resolutions", as appropriate) to be held at 12 noon on 31 October 2008. A
circular has been sent to shareholders giving full details in relation to the Proposed Investment.
The potential percentage holding in Wren of WHL pursuant the Proposed Investment gives rise to certain considerations under the City
Code on Takeovers and Mergers (the "Takeover Code"). The purpose of the circular is to give Shareholders further information regarding the
Proposed Investment and its implications under the Takeover Code, the reasons why Wren Directors support the Proposed Investment and to seek
Shareholder approval for the Resolutions at the General Meeting.
Background to Extra Care Developments
During 2007 the Company moved to reposition its business towards the retirement homes and care sector, and formulated plans to undertake
Extra Care housing developments for the active elderly at which a number of health and care services would be available to residents.
On 28 April 2008, the Board announced that the Company had been granted detailed planning permission for its first Extra Care scheme.
This planning permission provides for a development comprising 54 one and two bedroom units and other communal facilities within an
estimated one and a half acre site in Warlingham, Surrey. Since that time, the Board has worked to secure sufficient funding for this
initial development and to facilitate a rollout of the Extra Care schemes. In the current market and given the continuing effects of the
'credit crunch', this has proved a difficult and time-consuming exercise. In that light, the Directors believe that the Proposed Investment
from WHL is a good outcome for Shareholders as a whole since, without such equity funding, Wren would be severely limited in its ability to
proceed with more than one Extra Care development scheme at any point in time.
The expected net proceeds of the Proposed Investment (amounting to approximately �3,900,000), together with bank facilities, which the
Company's primary lender has indicated should be available in principle (formal approval has not yet been received by Wren from the bank),
will be used to fund the development of the Warlingham site and are also expected to enable the Company to fund development of another
similar sized scheme in Crowborough, for which Wren has now received planning permission.
Wren has a number of Extra Care schemes, at different stages of planning, ownership and under option as set out below:
With planning consent, owned Planning applied for Under option, planning to be
or under option andunder option applied for
Warlingham (54 Units) Tattenham Corner, Kings Langley, Herts(59 Units)
Epsom (36 Units)
Crowborough (52 Units) Chipstead (69 Units) Burpham, Surrey (57 Units)
Beddington Gardens, Tring, Herts (63 Units)
Wallington(54 Units)
Structure of the Proposed Investment
The Proposed Investment has been structured as follows:
1. the issue and allotment of the Subscription Shares at 10p per share to WHL to raise �1,000,000 before expenses. The Subscription
Shares will represent approximately 19.3 per cent. of the Enlarged Issued Share Capital; and
2. the Convertible Loan, the principal terms of which are:
* a five year unsecured loan of �3,000,000;
* coupon of 5 per cent. per annum payable quarterly in arrears; and
* may be converted, at the option of WHL, into Conversion Shares in whole or in part at a price of 10p per share at any time prior
to repayment.
The Proposed Investment is subject to, and conditional upon, the passing of the Resolutions.
Upon issue, the Subscription Shares and Conversion Shares will rank pari passu with Ordinary Shares, including, in each case, the right
to receive dividends and other distributions declared, paid or made after their respective issue. Application will be made for the
Subscription Shares and the Conversion Shares, following their issue, to be admitted to trading on AIM.
Board changes
Pursuant to the Proposed Investment, the Company will, subject to passing of the Resolutions, appoint Dominic Wainford as part-time
Commercial Director of the Company. It is also intended that at the same time, James Butterfield, who is currently Group Company Secretary
and has been associated with Wren for a number of years should join the Board as Corporate Development Director. The Directors believe that
both Dominic and James will be very positive additions to the Board.
Dominic Wainford (40)
Dominic Wainford joined The Tilt Estate Company Limited in 1985. At the date of sale of that company to BPT Limited, a subsidiary of
Grainger plc, in 2007 he was both owner and managing director of the company. From 2001 to 2008 he was a director of Willowone Limited, a
building company employing a range of contractors to carry out building renovations, extensions and maintenance to properties within the
Tilt Estate portfolio. In 1997 he founded Wainford Holdings Limited which he continues to run as an investment company.
James Butterfield (63) BSC (Econ) MBA
James Butterfield joined 3i plc in 1969 and, over a ten-year period, became an area manager and subsequently a local director. Since
leaving 3i plc, he has, for over 25 years, specialised in advising small and medium sized companies on a range of matters including stock
market listings, mergers and acquisitions, fund raising and corporate recovery work. He is non-executive Chairman of Marinetrack Holdings
plc, an AIM quoted company which provides satellite based tracking solutions and services to the commercial and recreational maritime
markets, and a non-executive director of Essentially Group Limited, an AIM quoted sports management and marketing business, in which he was
actively involved in the early development of, what is now, one of the world's largest Rugby Union and Cricket player management businesses.
He has been involved with the Company as Company Secretary since September 2006.
The Takeover Code requirements
The Proposed Investment gives rise to certain considerations under the Takeover Code. The Takeover Code is issued and administered by
the Panel. The Takeover Code applies to all takeovers and merger transactions, however effected, where the offeree company is, inter alia, a
public company with its registered office in the UK and whose place of central management and control is in the UK. Wren is a company
subject to the Takeover Code and, as a result, Shareholders are entitled to the protections afforded by the Takeover Code.
Rule 9 of the Takeover Code stipulates, inter alia, that if (a) a person acquires, whether by a series of transactions over a period of
time or not, an interest in shares which (taken together with shares in which persons acting in concert with him are interested) carry 30
per cent. or more of the voting rights of a company which is subject to the Takeover Code; or (b) a person, together with persons acting in
concert with him, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of such a company but
does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with him,
acquires an interest in any other shares which increases the percentage of the voting rights in which he is interested; such person will
normally be required by the Panel to make a general offer to shareholders of that company to acquire the balance of the equity share capital
of that company not held by such person or group of persons acting in concert with him. An offer under Rule 9 must be in cash and at the highest price paid by the person required to make the
offer or any person acting in concert with him for any interest in shares in the company during the twelve months prior to the announcement
of the offer.
The Takeover Code states that persons are acting in concert if, inter alia, they co-operate, pursuant to an agreement or understanding
(whether formal or informal) to obtain or consolidate control of a company. A person and each of its affiliated persons will be deemed to be
acting in concert all with each other. WHL and Dominic Wainford, together comprising the members of the concert party, are deemed to be
acting in concert (the "Concert Party"), as WHL is wholly owned by Dominic Wainford. The directors of WHL are Dominic Wainford and Rebecca
Wainford.
Full details of the members of the Concert Party are set out in the circular which has been sent to Shareholders.
Current and potential shareholding of the Concert Party
The aggregate shareholding interests of the Concert Party in the Company as at 7 October 2008, being the last practicable date prior to
the issue of this announcement, comprised 102,500 Ordinary Shares, representing 0.24 per cent. of the issued share capital of the Company.
Shareholding
Following the issue of the Subscription Shares, the Concert Party will hold 10,102,500 Ordinary Shares, representing 19.46 per cent. of
the Enlarged Issued Share Capital. Full conversion of the Convertible Loan would result in the issue and allotment to WHL of 30,000,000 new
Ordinary Shares giving the Concert Party a total holding of 40,102,500 Ordinary Shares representing approximately 49 per cent. of the
Company's enlarged issued share capital (assuming no other new Ordinary Shares are issued by the Company).
Such an increase in the holding of the Concert Party would prima facie have the effect of triggering Rule 9 and result in the Concert
Party being under an obligation to make a general offer to all Shareholders.
Dispensation from Rule 9 of the Takeover Code in relation to the Proposed Investment
The issue of the Conversion Shares to WHL would normally give rise to an obligation on the Concert Party to make a general offer to all
Shareholders pursuant to Rule 9 if it were to result in the Concert Party's combined shareholding increasing through 30 per cent. or more of
the issued share capital of the Company. Following full conversion of the Convertible Loan, the Concert Party could be interested in shares
which carry more than 30 per cent. but will not hold more than 50 per cent. of the Company's voting share capital and, in such
circumstances, any further increase in the number of Ordinary Shares in which the members of the Concert Party are interested will be
subject to the provisions of Rule 9.
Following an application by the Directors, the Panel has agreed, subject to the approval of the Waiver Resolution on a poll by
Independent Shareholders at the General Meeting, to grant the Waiver. The effect of the Waiver, if approved by Independent Shareholders,
would be that the Concert Party would not be subject to a requirement to make a general offer under Rule 9 that might otherwise arise due to
the increase in the aggregate holding of Ordinary Shares by the Concert Party resulting from the issue of Conversion Shares on conversion of
the Convertible Loan.
The Waiver Resolution is subject to the approval of the Independent Shareholders on a poll and each Independent Shareholder will be
entitled to one vote for each Ordinary Share held. The Independent Shareholders are the Shareholders other than members of the Concert
Party. In order to comply with the requirements of the Waiver, the members of the Concert Party will be precluded from voting on the Waiver
Resolution.
General Meeting
The General Meeting has been convened to consider the Resolutions and will be held at the offices of Bircham Dyson Bell LLP at 50
Broadway, Westminster, London SW1H 0BL at 12 noon on 31 October 2008.
Document availability
An electronic copy of the shareholder circular can be accessed at the Company's website: www.wrenhomesplc.co.uk
Ends.
Enquiries:
Wren Homes Group plc
Paul Treadaway, Managing Director Tel: 01372 742 244
Shore Capital
Pascal Keane Tel: 020 7408 4090
Adventis Financial PR
Tarquin Edwards Tel: 020 7034 4758 / 07879 458 364
Chris Steele Tel: 020 7034 4759 / 07979 604 687
This information is provided by RNS
The company news service from the London Stock Exchange
END
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