21st Sep 2007 07:02
Gourmet Holdings PLC21 September 2007 21 September 2007 Gourmet Holdings Plc ("Gourmet" or the "Company") Proposed placing and notice of Extraordinary General Meeting Gourmet Holdings Plc announces it proposes to raise approximately £2.0m (beforeexpenses) by way of a conditional placing at a price of 26.0p to fund investmentin the growth of the Company, specifically to acquire/develop one or morecomplementary cafe/patisserie concepts in central London, bring aboutoperational improvements and provide funds for working capital requirements. Key Highlights • Fundraising of £2.0m (before expenses) by way of placing 7,692,308Ordinary Shares at a price of 26 pence per share. The Placing is conditionalupon approval at an EGM, to be held on 16 October 2007 • Shares conditionally placed by Arbuthnot Securities with existingshareholders and Salvatore Diliberto, Chief Executive • The Company intends to invest the proceeds in acquiring/developing oneor more complementary cafe/patisserie concepts in central London, bring aboutoperational improvements and provide funds for working capital requirements A circular is expected to be posted to shareholders later today, which willinclude a notice of Extraordinary General Meeting to be held at 10.00 a.m. on 16October 2007. Subject, inter alia, to the passing of resolutions to be proposedat the EGM, Admission and dealings in the Placing Shares are expected tocommence on 17 October 2007. Neil Blows, Chairman, commented: "The Board are actively focused on driving the business forward through theacquisition/development of one or more complimentary concepts in central Londonand by enhancing the already successful Richoux brand. The Directors believethat shareholder value will be maximized by combining this approach withoperational improvements across the business. I would like to take thisopportunity to thank our existing shareholders for their continued support." This summary should be read in conjunction with the full text of the followingannouncement. All terms and definitions contained in this announcement are asdefined in the circular referred to above unless otherwise shown. Enquiries: Gourmet Holdings 020 7491 3791Neil Blows Arbuthnot Securities 020 7012 2000Nick MarshPaul Vanstone College Hill 020 7457 2020Justine WarrenMatthew Smallwood 1. Introduction The Company announces that it proposes to raise £2.0 million (before expenses)by way of a placing of 7,692,308 Ordinary Shares at a price of 26 pence pershare. It is intended that the net proceeds will be used to fund investment inthe growth of the Company, specifically to acquire/develop one or morecomplementary cafe/patisserie concepts in central London, bring aboutoperational improvements and provide funds for working capital requirements. The Placing Shares have been conditionally placed with institutional and otherinvestors including the Company's Chief Executive, Salvatore Diliberto. Subject,inter alia, to the passing of the Resolutions at the EGM, Admission and dealingsin the Placing Shares are expected to commence on AIM at 8.00 a.m. on 17 October2007. The Placing is conditional, inter alia, upon the Shareholders at the EGMgranting authority to the Board to allot the Placing Shares and to disapplypre-emption rights which would otherwise apply to the allotment of the PlacingShares. Certain Shareholders have irrevocably undertaken to vote in favour ofthe Resolutions in respect of 7,303,845 Ordinary Shares, representing, inaggregate, approximately 21.3 per cent. of the Company's current issued sharecapital. 2. Background to and Reasons for the Placing Background On 13 August 2007 the Company announced a full change of its Board with theappointment of Neil Blows as Chairman, Salvatore Diliberto as Chief Executiveand James Rhodes as Non Executive Director. The previous Board had successfullyturned round the Company by focusing its operations on the profitable Richouxcafe concept and concluded that shareholder value would be maximised by bringingin a new management team to enhance the Richoux brand and acquire/develop othercomplementary patisserie/cafe concepts. This followed the sale of BDC HoldingsLimited, which held the four Bel and Dragon pub restaurants in June 2007 and thedisposal of two unbranded pub restaurants, The Five Bells at Stanbridge,Bedfordshire and the Talkhouse at Stanton St John, in December 2006. The Companyalso announced on 12 September 2007 the surrender of the lease of the Highwaymanpub. The Richoux restaurants generated a gross profit of approximately £705,000in the 52 weeks to 24 June 2007 (2006: approximately £559,000) with Groupcentral costs (net of other operating income) of approximately £654,000 in thesame period. Reasons for the Placing The Board strongly believe that Richoux is an inherently strong brand with acentury of history behind it and are confident of building on this success. TheDirectors all firmly believe that exemplary standards of food and service arethe cornerstone for any restaurant business and will focus rigorously on thedelivery of those standards at Richoux. In addition to the existing business, the Board see the opportunity to acquire/develop one or more complementary cafe/patisserie concepts in central London todrive the business forward and the Board are actively seeking out and evaluatingsuch opportunities. The Board is also proposing to establish a central kitchenin order to streamline certain elements of the Company's existing operations andthis is also expected to produce cost effective synergies with any new concept.The Company has also been required to temporarily relocate its head office tothe Richoux at Piccadilly, London from the existing office premises in Putneydue to the expiry of the lease. The new board members all have an operating background and wish to implementfurther improvements to Richoux both in terms of menu development, equipment andother aspects of the existing operation. It is intended that the Board will befurther strengthened by the appointment of a chief operating officer at theappropriate time. The Placing combined with the current cash resources will therefore provide uswith the necessary capital to acquire/develop one or more complementary cafe/patisserie concepts in central London, bring about operational improvements andprovide funds for working capital requirements. The Board firmly believes thatthis strategy will add shareholder value to the business. 3. Details of the Placing The Company proposes to raise £2.0 million (before expenses) through the issueof the Placing Shares at the Placing Price. The Placing Price represents adiscount of 3.7% per cent. to the closing mid-market price of 27 pence perOrdinary Share on 20 September 2007, being the last dealing day prior to theannouncement of the Placing. The Placing Shares will represent approximately18.35 per cent. of the Company's Enlarged Share Capital. Pursuant to the terms of the Placing Agreement, Arbuthnot has agreedconditionally to use reasonable endeavours, as agent for the Company, to procuresubscribers for the Placing Shares at the Placing Price. The Placing Agreementis conditional upon, inter alia, the Resolutions being duly passed at the EGMand Admission becoming effective on or before 8.00 a.m. on 17 October 2007 (orsuch later time and/or date as the Company and Arbuthnot may agree, but in anyevent no later than 11.00 a.m. on 30 October 2007). The Placing Agreementcontains provisions entitling Arbuthnot to terminate the Placing Agreement atany time prior to Admission in certain circumstances. If this right isexercised, the Placing will not proceed. The Placing has not been underwrittenby Arbuthnot. Application has been made to the London Stock Exchange for the Placing Shares tobe admitted to trading on AIM. It is expected that Admission will becomeeffective and that dealings in the Placing Shares on AIM will commence at 8.00a.m. on 17 October 2007. The Placing Shares will rank pari passu in all respects with the OrdinaryShares, including the right to receive all dividends and other distributionsdeclared following Admission. It is expected that CREST accounts will becredited on the day of Admission and that share certificates (where applicable)will be despatched by 24 October 2007. As part of the Placing, the Chief Executive, Salvatore Diliberto, has agreed tosubscribe for 3,846,154 Placing Shares in aggregate at the Placing Price. Thisrepresents 50.0 per cent. of the Placing Shares. On completion of the Placing,Salvatore Diliberto will hold 4,123,932 Ordinary Shares, representingapproximately 9.84 per cent. of the Enlarged Share Capital. James Rhodes', NonExecutive Director, existing holding of 57,664 Ordinary Shares will represent0.1 per cent. of the Enlarged Share Capital. The Directors regard SalvatoreDiliberto's subscription to the Placing as being important to the alignment ofhis interests with those of the Company. The proposed Placing Shares with Salvatore Diliberto constitutes a related partytransaction for the purposes of the AIM Rules. The Directors, other thanSalvatore Diliberto, having consulted with Arbuthnot, the Company's nominatedadviser, believe that the terms of the placing of 3,846,154 Placing Shares byArbuthnot with Salvatore Diliberto are fair and reasonable insofar as theShareholders are concerned. 4. EMI Share Option Scheme The Board believes that the ability to offer equity incentives through the grantof share options to employees and Directors is an important part of the Group'sremuneration policy. The Directors have adopted a new EMI employee share option scheme pursuant towhich options to acquire Ordinary Shares may be granted to directors andemployees of the Group. It is expected that the total number of Ordinary Shares under option under theexisting option scheme of the Company which is due to expire on 28 April 2008and the new EMI scheme will not exceed 10 per cent. of the Company's issuedordinary share capital from time to time. The following options were granted to Salvatore Diliberto and Neil Blows on 17September 2007:Name Scheme Number of options Exercise PriceSalvatore Diliberto EMI 363,636 27.5pSalvatore Diliberto Existing Unapproved 386,364 27.5p In addition an option was granted to Neil Blows over 250,000 ordinary shareswith an exercise price of 27.5p. The exercise price was calculated being theclosing mid market price per Ordinary Share on 14 September 2007, being the lastdealing day prior to the date of grant of the options. 5. Extraordinary General Meeting The EGM will be held on 16 October 2007 at the offices of Dechert LLP, 160 QueenVictoria Street, London, EC4V 4QQ at 10.00 a.m. at which the Resolutions will beproposed to permit the issue of the Placing Shares. The Resolutions to be proposed at that meeting are, inter alia, to empower theDirectors to allot equity securities for cash and to do so otherwise than inaccordance with the pre-emption provisions under the Act, in connection with thePlacing and otherwise. Resolution 1, which is an ordinary resolution, proposes to grant the Directorsthe authority, required by section 80 of the Act, to allot new Ordinary Sharesin an aggregate nominal amount of £1,001,312. This authority will expireimmediately following the next annual general meeting of the Company and willreplace the authority obtained at the annual general meeting held in December2006. Resolution 2, which is a special resolution, proposes to grant the Directorsauthority under section 95 of the Act to allot, for cash, new Ordinary Shares inan aggregate nominal amount of up to £407,336 (being approximately 30 per cent.of the existing Ordinary Shares and 24 per cent. of the Enlarged Share Capital),without being required first to offer such securities to shareholders inaccordance with statutory pre-emption rights. This authority will expireimmediately following the next annual general meeting of the Company and willreplace the authority obtained at the annual general meeting held in December2006. While the Directors have no present intention to allot any relevant securitiespursuant to the authorities prepared to be granted to them pursuant to theResolutions, save for the allotment of the Placing Shares and pursuant to anyexercise of options, the rights described above would provide flexibility forraising additional funds or making acquisitions should suitable opportunitiesarise. Resolution 3, which is an ordinary resolution, will, if passed, authorise theDirectors to take all necessary steps to implement the EMI Share Option Schemein relation to options that may be granted after the passing of the resolution. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Richoux Group