The Board of GYG plc (LON:GYG) has noted the announcement made at 4.36pm on 9 April 2021 by Harwood Capital, one of the Company’s major shareholders, that it is in the preliminary stages of evaluating a possible offer for the entire issued and to be issued share capital of the Company of 92.5p in cash per ordinary share in the capital of GYG, such Possible Offer currently expected to include an unlisted securities alternative. The Possible Offer price represents, as stated in the Announcement, a premium of approximately 10.78 per cent. to the closing middle market price of 83.5p per Ordinary Share on 8 April 2021. The Board further notes that the Possible Offer price also represents a premium of approximately 6.32 per cent. to the closing middle market price of 87p per Ordinary Share on 9 April 2021.
The Board confirms that, on 7 April 2021, Harwood Capital verbally expressed its interest in making a possible offer for the entire issued and to be issued share capital of the Company. The Board also confirms that it received a preliminary, conditional written proposal from Harwood Capital regarding the Possible Offer (“Possible Offer Letter”) simultaneously with the Announcement.
The Directors note the following in relation to the Possible Offer:
1. The Possible Offer is subject to material pre-conditions including satisfactory completion of commercial, accounting/tax and legal due diligence by Harwood Capital and its appointed professional advisers on GYG, via full access to the Company’s senior management and relevant information, with this process expected to take six weeks;
2. The letter of intent from Lombard Odier Asset Management (Europe) Limited (“Lombard Odier”) referenced within the Announcement of the Possible Offer is not legally binding and represents only an expression of Lombard Odier’s present intention. In particular, Lombard Odier has reserved its rights either to change its intention or to dispose of the shares which are the subject of the letter of intent at its absolute discretion; and
3. Due to the expected inclusion of an unlisted securities alternative within the structure of the Possible Offer, Harwood Capital has acknowledged within the Possible Offer Letter that, subject to counsel’s formal opinion, any firm offer made under Rule 2.7 of the Code will need to be structured by way of a Scheme of Arrangement to avoid the requirement for the publication of a prospectus under the Prospectus Regulation Rules of the Financial Conduct Authority. Implementation of the Scheme of Arrangement would require, inter alia, the approval at a duly convened court meeting by (i) greater than 50 per cent. by number of those GYG shareholders choosing to vote; and (ii) 75 per cent. or more of the Ordinary Shares voted by value. The clients of Harwood Capital which currently hold Ordinary Shares would not be entitled to vote at the Court Meeting.
Accordingly, the Board emphasises that the announcement of the Possible Offer does not constitute a firm intention to make an offer under Rule 2.7 of the Code and GYG shareholders are strongly urged to take no further action at this time.
GYG plc will announce its annual results for the financial year ended 31 December 2020 on 14 April 2021 as previously advised. The Directors welcome the opportunity to engage with independent shareholders to appraise them fully of the current trading and prospects for GYG. Armed with feedback from this consultation process, the Board will meet with its advisers to consider the unsolicited Possible Offer and will issue a further response statement thereafter.
There can be no certainty that a firm offer will be made by Harwood Capital, nor as to the terms on which any such offer might be made.