28th Oct 2009 15:17
For immediate release: 28 October 2009
Universe Group PLC
("Universe", "the Company" or "the Group")
PROPOSED RENEWAL and EXTENSION OF CONTRACT WITH LARGE UK SUPERMARKET CHAIN
Universe, the AIM (UNG.L) listed retail and loyalty systems group, is delighted to announce that it has reached agreement on the terms of the renewal and extension of a contract to supply a range of petrol forecourt services (the "New Contract") to a large UK supermarket chain (the "Customer").
The New Contract, which is proposed to be signed upon Universe receiving shareholders' approval, will include the provision of both existing and supplemental services for a period of up to 5 years. It will increase recurring revenues materially from this existing customer and provide opportunities for further equipment roll-outs for the Group for the duration of the agreement. Following entry into the New Contract, the Customer will continue to represent the showcase account for the Company's Petrol Forecourt Services division.
The City Code
As previously announced, the Company has received a preliminary approach from Brulines Group PLC ("Brulines") regarding a possible offer for the issued and to be issued share capital of the Company. The directors of Universe (the "Directors") reiterate that they remain committed to pursuing a strategy which enhances shareholder value and continue to believe that the Company's current share price does not properly reflect its prospects. Following this approach, the Company remains in an offer period for the purposes of the City Code on Takeovers and Mergers (the "City Code"). Shareholders should note that, under Rule 11 of the City Code, if Brulines announces a firm intention to make an offer for the Company, it has an obligation to make that offer in cash or accompanied by a cash alternative at not less than the highest price paid by it or any person acting in concert with it during the offer period and within 12 months prior to its commencement.
Rule 21.1 of the City Code requires, inter alia, that where the board of a company has reason to believe that an offer might be imminent, the board of that company must not, without the consent of shareholders voting in general meeting, enter into any contracts otherwise than in the ordinary course of business, since doing so may have the effect of frustrating a potential offer.
The Customer has included in the New Contract a change of control clause such that if Brulines or any of its group companies acquires control of Universe (within the meaning of the Income and Corporation Taxes Act 1988), the Customer will have the right to invoke immediate termination of the New Contract. Entry into such a contract has been deemed to amount to frustrating action pursuant to Rule 21.1 of the City Code, requiring consent from Brulines or Universe's shareholders to be received.
Universe has attempted unsuccessfully to have the Customer agree to remove this clause. In light of this, Universe has sought the consent of Brulines to enter into the New Contract to enable signing of the contract to be concluded. However, unconditional consent has not been given by Brulines and consequently shareholder approval is to be sought.
Circular to shareholders
The Company will despatch a circular to its shareholders as soon as reasonably practicable setting out the reasons why the Directors consider that entering into the New Contract is in the best interests of the Company and its shareholders as a whole and to convene a general meeting of the Company in order to approve entry into the New Contract.
A further announcement will be made in due course.
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Enquiries: |
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Universe Group PLC John Scholes, Chairman Paul Cooper, Chief Executive Officer Bob Smeeton, Finance Director |
Tel: 023 8068 9510 |
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Arbuthnot Securities Limited Tom Griffiths |
Tel: 020 7012 2000 |
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Tavistock Communications Jeremy Carey/John West/Andrew Dunn |
Tel: 020 7920 3150 |
Related Shares:
UNG.L