Two Shields Investments plc (LON: TSI), the AIM quoted investment company with a strategy to build a high quality portfolio of investments in fast growing and scalable digital and technology enabled businesses, has today announced that it has today signed a Share Purchase Agreement pursuant to which certain shareholders of WeShop Limited have conditionally agreed to swap their shares in WeShop for the issue and allotment of new Ordinary Shares in TSI. The Share Swap is conditional upon inter alia the shareholders of TSI granting the requisite authorities to issue the Consideration Shares to complete the Share Swap. TSI shareholders will be asked to consider these resolutions at a General Meeting in the near future.
WeShop is an innovative, digital social network platform focused on the rapidly growing and highly valuable social e-commerce sector forecast to become a US$350 billion market over the mid-term. WeShop’s digital platform enhances online shopping experiences by combining social media’s assets of reviews, likes, and shares with an engaging retail e-commerce offering, specifically tailored to the individual user. Users benefit from gaining access to thousands of brands and millions of products on one platform plus a two-way sharing of ideas with friends to participate in a rewards system whilst brands and retailers benefit from increased sales and awareness. Retail partnerships with major brands and retailers including ASOS, Harrods, Nike, Tesco and Boots have already been established, and as a result WeShop has a firm foundation for future growth.
Subject to GM approval, the Transaction will be completed with settlement made effective through the issuance by TSI of 1,000,000,000 Consideration Shares, conditional upon Admission. On completion of the Transaction, TSI will increase its holding in WeShop from 1.71% to 6.7% of the issued share capital of WeShop. TSI will acquire 226,667 shares currently in issue from certain WeShop shareholders, taking TSI’s holding to 301,918 shares. WeShop has conducted fundraising activities over the last 12 months at £5.98 per WeShop share, including most recently in April 2019, in which TSI acquired 16,722 shares for consideration of £100,000. On this basis, the current Transaction represents an implied issue price of circa 0.136p per Consideration Share.
As the Company announced on 15 March 2019, TSI notes that WeShop has made considerable progress since TSI first invested at £5.98 per WeShop share in July 2018. This progress includes:
· Increase WeShop retailer count from 3,000 to 9,000+
· Increase UK product count from circa 5m to 150m+
· Provide access to a global product feed of circa 1.6bn products in 12 countries
· Provide access to a global retailer count of over 20,000 merchants
· Strengthened management team
In addition, successful completion of the Transaction would result in TSI acquiring new shareholders, some of whom have considerable track records in investing in successful technology businesses. They include Matthew Hammond, the current CFO of Mail.ru, the largest internet business in Russia, and a current Director of WeShop. The new shareholders will be subject to lock-in agreements for 6 months and standard orderly market restrictions for a further 6 months thereafter, as from the date of Admission of the Consideration Shares.
Application will be made for the admission of the new 1,000,000,000 Ordinary Shares to trading on AIM, with Admission expected to take place following the GM.
In the year ended 30 June 2018, WeShop reported an unaudited loss of £6,520,229. The net asset value of WeShop at 30 June 2018 was £89,000.
Following Admission, the Company’s issued share capital will comprise 3,361,596,558 Ordinary Shares, each with voting rights. The above figure of 3,361,596,558 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the Disclosure Guidance and Transparency Rules.
James Sowerby, CEO of WeShop, commented:
“I am personally delighted that TSI is increasing its position as a strategic investor in WeShop. They have demonstrated since their first investment that they are a real partner to the business, working closely with us on our plans. It also represents a strong vote of confidence in us as a business and team, and we look forward to working closely with TSI on the exciting journey ahead.
“The market opportunity for social commerce continues to strengthen, and the overwhelmingly positive feedback we’ve had from our users validates our product and approach. We are gearing ourselves up for launch in Q3 this year, when we will start to realise the potential that social commerce represents. TSI’s ongoing support will enable us to further invest in user acquisition, growth and the product to ensure we are delivering the best possible end to end user experience.”
Chairman of Two Shields Investments plc, Andrew Lawley, said:
“The Board of TSI is delighted to have the opportunity to increase our holding in WeShop as it continues its development into a truly global social commerce company. Successful completion of this Transaction will follow WeShop’s recent announcement in which it highlighted its product and proposition enhancements, its strengthened team, new branding and the agreements of key commercial deals.
The Transaction is a further example of the Board acting on its stated strategy of leveraging the technology based and highly scalable investments in the portfolio as it continues to seek opportunities to reduce exposure to legacy natural resources exploration assets. The Board is continuing to seek opportunities to realise value in these natural resources assets whilst shielding the Company from any ongoing liability in terms of further capital requirements.
“We look forward to updating the market on progress with the Transaction following the GM and are to hopefully welcoming new shareholders to TSI that believe in our revised strategy and returning value to all shareholders.”