Firm Placing, Open Offer and Conditional Placing

RNS Number : 6686I

Bonhill Group PLC

20 April 2022

 

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR FORWARDING, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

20 April 2022

Bonhill Group plc

("Bonhill", the "Company" or the "Group")

Firm Placing of 9,858,569 New Ordinary Shares

and

Open Offer of up to 10,844,426 New Ordinary Shares

and

Conditional Placing of up to 10,844,426 New Ordinary Shares,

in each case at 5.5 pence per New Ordinary Share

Bonhill Group Plc (AIM: BONH), a leading B2B media business specialising in three key areas: Business Information, Events and Data & Analytics, is pleased to announce that following its announcement on 7 April 2022, it has conditionally raised, in aggregate, approximately £1.1 million (before expenses) comprising: -

· approximately £0.54 million by means of a firm placing ("Firm Placing") with certain existing institutional shareholders of 9,858,569 new ordinary shares of £0.01 each in the Company ("Firm PlacingShares") at 5.5 pence per share ("Issue Price");

· approximately £0.6 million by means of an open offer to qualifying shareholders of up to 10,844,426 new ordinary shares ("Open Offer Shares") at the Issue Price ("Open Offer"); and

· up to approximately £0.6 million (subject to clawback under the Open Offer) by means of a conditional placing ("Conditional Placing" and together with the Firm Placing "Placings") with certain existing institutional shareholders of up to 10,844,426 new ordinary shares ("Conditional Placing Shares", the Open Offer Shares and Firm Placing Shares being "New Ordinary Shares") at the Issue Price.

A further announcement regarding the Open Offer will be made in due course and a circular setting out the full details and terms and conditions of the Open Offer will be made available and sent along with an application form to qualifying shareholders.

Shore Capital is acting as Nominated Adviser and Broker to the Company on the Placings and Open Offer (together the "Fundraising").

Key highlights

· Firm Placing of 9,858,569 New Ordinary Shares at the Issue Price

· Conditional Placing of up to 10,844,426 New Ordinary Shares at the Issue Price subject to clawback under the Open Offer

· The Issue Price is the same as the Company's closing share price on 19 April 2022, the last business day prior to the date of this announcement

· The net proceeds of the Fundraising will be used for working capital purposes

The Company and Shore Capital have entered into a placing agreement ("Placing Agreement"). The Firm Placing is conditional, inter alia, upon the Placing Agreement not having been terminated and becoming unconditional in respect of those shares. It should be noted that Conditional Placing Shares will only be issued pursuant to the Conditional Placing if and to the extent that the Open Offer is not subscribed in full by qualifying holders of existing ordinary shares of £0.01 each in the Company   ("Existing Ordinary Shares") and will result in a maximum of 10,844,426 New Ordinary Shares being issued pursuant to the Conditional Placing. Furthermore, the Open Offer is conditional on the Placing Agreement having not been terminated.

The Issue Price pence is the same as the Company's closing share price on 19 April 2022, being the last business day prior to the date of   this announcement.

Application has been made to the London Stock Exchange for the Firm Placing Shares, and will be made for the Open Offer Shares and (if any) the Conditional Placing Shares, to be admitted to trading on AIM. The New Ordinary Shares will rank pari passu in all respects with the Company's Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of the Ordinary Shares following admission of the New Ordinary Shares to trading on AIM.

The Fundraising is not being underwritten. The Firm Placing is conditional on, inter alia, admission to trading on AIM ("Admission") becoming effective by no later than 8.00 a.m. on 21 April 2022 (or such other time and/or date, being no later than 3 May 2022, as the Company and Shore Capital may agree). It is expected that the Firm Placing Shares will be admitted to trading on AIM on or around 8.00 a.m. on 21 April 2022. The Conditional Placing is conditional on, inter alia, Admission becoming effective by no later than 8.00 a.m. on 12 May 2022 (or such other time and/or date, being no later than 31 May 2022, as the Company and Shore Capital may agree). It is expected that the Open Offer Shares and (if any) the Conditional Placing Shares will be admitted to trading on AIM on or around 8.00 a.m. on 12 May 2022.

Jonathan Glasspool, the Company's Interim Executive Chairman, commented:

"We are pleased to have attracted the support of our largest shareholders in this fundraising, the proceeds of which will enable us to pursue opportunities in live events, ESG Clarity and content management solutions."

For further enquiries please contact:

Bonhill Group plc   [phone]

Jonathan Glasspool, Interim Executive Chairman

Shore Capital (Nominated Adviser and Broker)          [phone]

Tom Griffiths/David Coaten/John More

Houston (PR Adviser)     [phone]

Alexander Clelland

About Bonhill Group Plc

Bonhill Group Plc is a leading, AIM-quoted, B2B media company providing Business Information, Events and Data & Insight propositions to Financial Services, Diversity and Technology business communities in the US, UK, Pan Europe, Middle East and Asia. Bonhill operates multiple digital platforms, has market leading media brands, hosts over 100 events per annum, offers a portfolio of data & analytics propositions and provides a range of content marketing solutions.

Bonhill operates primarily in the financial services space where its brands and services are acknowledged as market leaders. It specialises in enhancing the relationship and flow of information between the global community of financial services providers and the advisers who recommend their products. Bonhill was early to recognise the growing importance of ESG in asset allocation and fund selection and now owns the leading global platform in this space, serving the adviser community. ESG Clarity.

Additionally, the business creates content, sales and marketing opportunities, networking events and lead generation opportunities for its audiences of entrepreneurs, business owners and managers, CTOs and technology leaders, asset and wealth managers, and professional women. Flagship brands include: InvestmentNews, ESG Clarity, Portfolio Adviser, Fund Selector Asia, What Investment, SmallBusiness.co.uk, GrowthBusiness.co.uk, Information Age, Women in… events series and DiversityQ.

For more information visit www.bonhillplc.com .

IMPORTANT INFORMATION

Shore Capital and Corporate Limited ("Shore Capital & Corporate"), which is authorised and regulated in the UK by the FCA, is acting as nominated adviser to the Company in connection with the matters described in this announcement and is not acting for any other persons in relation to the Fundraising and Admission. Shore Capital & Corporate is acting exclusively for the Company and for no one else in relation to the contents of this announcement and persons receiving this announcement should note that Shore Capital & Corporate will not be responsible to anyone other than the Company for providing the protections afforded to clients of Shore Capital & Corporate or for advising any other person on the arrangements described in this announcement. The responsibilities of Shore Capital & Corporate as the Company's nominated adviser under the AIM Rules for Companies ("AIM Rules") and the AIM Rules for Nominated Advisers are owed solely to the London Stock Exchange and are not owed to the Company or to any Director, Shareholder or other person in respect of his decision to acquire shares in the capital of the Company in reliance on any part of this announcement, or otherwise.

Shore Capital Stockbrokers Limited ("Shore Capital Stockbrokers" and together with Shore Capital & Corporate, "Shore Capital") which is authorised and regulated in the UK by the FCA, is acting as broker to the Company in connection with the matters described in this announcement and is not acting for any other persons in relation to the Fundraising and Admission. Shore Capital Stockbrokers is acting exclusively for the Company and for no one else in relation to the contents of this announcement and persons receiving this announcement should note that Shore Capital Stockbrokers will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for advising any other person on the arrangements described in this announcement. The responsibilities of Shore Capital Stockbrokers as the Company's broker under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company or to any Director, shareholder or other person in respect of their decision to acquire shares in the capital of the Company in reliance on any part of this announcement, or otherwise.

This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect the Directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by any such forward-looking statement. Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and neither Shore Capital nor, except as required by applicable law, the Company assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) the UK's implementation of EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) the UK's implementation of Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares have been subject to a product approval process, which has determined that the New Ordinary Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, Distributors should note that: the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Fundraising. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Shore Capital will only procure investors who meet the criteria of professional clients and eligible counterparties.  

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to New Ordinary Shares. 

Each distributor is responsible for undertaking its own target market assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.

Bonhill Group plc

("Bonhill", the "Company" or the "Group")

Firm Placing of 9,858,569 New Ordinary Shares

and

Open Offer of up to 10,844,426 New Ordinary Shares

and

Conditional Placing of up to 10,844,426 New Ordinary Shares,

in each case at 5.5 pence per New Ordinary Share

Introduction

Further to its announcement released on 7 April 2022, the Company announces that it has conditionally raised, in aggregate, approximately £1.1 million (before expenses) comprising: -

· approximately £0.54 million by means of a firm placing ("Firm Placing") with certain existing institutional shareholders of 9,858,569 new ordinary shares of £0.01 each in the Company ("Firm Placing Shares") at 5.5 pence per share ("Issue Price");

· up to approximately £0.6 million by means of an open offer to qualifying shareholders of up to 10,844,426 new ordinary shares ("Open Offer Shares") at the Issue Price ("Open Offer"); and

· up to approximately £0.6 million (subject to clawback under the Open Offer) by means of a conditional placing ("Conditional Placing" and together with the Firm Placing "Placings") with certain existing institutional shareholders of up to 10,844,426 new ordinary shares ("Conditional Placing Shares", the Open Offer Shares and Firm Placing Shares being "New Ordinary Shares" at the Issue Price.

The Company and Shore Capital have entered into a placing agreement ("Placing Agreement"). The Firm Placing is conditional, inter alia, upon the Placing Agreement not having been terminated and becoming unconditional in respect of those shares. It should be noted that Conditional Placing Shares will only be issued pursuant to the Conditional Placing if and to the extent that the Open Offer is not subscribed in full by qualifying holders of existing ordinary shares of £0.01 each in the Company ("Existing Ordinary Shares") and will result in a maximum of 10,844,426 New Ordinary Shares being issued pursuant to the Conditional Placing. The Open Offer is conditional on the Placing Agreement having not been terminated.

The Issue Price pence is the same as to the Company's closing share price on 19 April 2022, being the last business day prior to the date of this announcement.

The Fundraising is not being underwritten. The Firm Placing is conditional on, inter alia, admission to trading on AIM ("Admission") becoming effective by no later than 8.00 a.m. on 21 April 2022 (or such other time and/or date, being no later than 3 May 2022, as the Company and Shore Capital may agree). It is expected that the Firm Placing Shares will be admitted to trading on AIM on or around 8.00 a.m. on 21 April 2022. The Conditional Placing is conditional on, inter alia, Admission becoming effective by no later than 8.00 a.m. on 12 May 2022 (or such other time and/or date, being no later than 31 May 2022, as the Company and Shore Capital may agree). It is expected that the the Open Offer Shares and (if any) the Conditional Placing Shares will be admitted to trading on AIM on or around 8.00 a.m. on 12 May 2022.

The net proceeds of the Fundraising will be used for working capital purposes. Further details of the use of proceeds are set out below.

Background to and reasons for the Fundraising

In its unaudited interim results for the six months ended 30 June 2021, which were released on 14 September 2021, the Company highlighted weaker US digital sales in 2021 compared with 2020. On 26 November 2021, the Company announced that despite some new initiatives being implemented, Investment News, its US business, had not seen a significant improvement in the key fourth quarter ("Q4 2021") in order to meet the Company's full year revenue expectations. 

By way of background, Investment News had planned to launch Investment Strategy in Q4 2021, which would be delayed until Q1 2022 because of Covid, and the global ESG Clarity, although live, would not generate meaningful revenues until 2022. This, combined with some event cancellation, re-formatting of events from live to digital and the postponement of a research project, would result in a reduction in US revenue against the Board's previous expectations.

The Company's announcement stated that at Group level, both Financial Services and Business Solutions in UK/EMEA were continuing to perform in line with the Board's expectations. However, the Board anticipated Group revenue for the year ending 31 December 2021 ("FY 2021") of approximately £16.5 million with Group EBITDA of approximately £0.8 million and a year-end cash position of approximately £1.0 million, being materially below market expectations.

In addition, the Company announced that Christine Shaw, the CEO of Investment News, had recently left the Group and had been replaced in the short term by the Chairman of Bonhill Group Inc, John French, an experienced leader of US B2B media businesses.

Despite the disappointing performance in the US in the key fourth quarter, the Group stated that it had seen a strong performance from the remaining territories, including Asia. Furthermore, after the uncertainty of the return to live events in the autumn, the Company had seen a positive return to its larger event formats and a marked increase in RFP activity across the business as confidence returns in 2022.

On 14 January 2022, the Company announced that following its year-end, the Board expected that FY 2021's revenue would be £16.4 million, EBITDA would be £0.2 million and the year-end cash position would be £1.4 million. The Company stated that since its announcement of 26 November 2021, it had seen further impact of COVID in the form of Omicron which had resulted in unexpected, last-minute reductions in margin for its final events in November and December in both the UK and US.  It also saw reduced bookings in the final part of the year compared to the prior year. EBITDA was further reduced by unexpected reductions in customer spending as their budgets moved to 2022 and order cancellations, particularly in the USA. The overall EBITDA movement could be broadly categorised as being £0.3 million from events, £0.1 million from digital and £0.2 million other. 

Throughout FY21, there was much focus on reducing the Group's underlying operational cost base, as shown by a reduction in total annual costs of approximately £3.9 million year on year.

The Company stated that since being appointed, the new management team in the US had started to make progress in changing the US digital model and this transition was expected to continue for the first six months of 2022. The Company's aim in 2022 is to further develop its position as a global partner for asset managers and financial advisors. A focus on a global offering, resolving its US digital issues and benefitting from improved operations and business efficiencies should lead to a better performance in 2022 and it has already seen a strong start to its revenues which are ahead of the prior year by 10% in Q1.

Subsequently, on 22 March 2022, the Company announced that its audited final results for the year ended 31 December 2021 would be released on or before 21 April 2022 following completion of the audit, rather than as scheduled on 24 March 2022.

On 7 April 2022, the Company announced that Simon Stilwell had resigned as Chief Executive Officer with immediate effect to pursue other business opportunities and Patrick Ponsford, the Company's UK Managing Director, had been appointed Interim Chief Executive Officer with immediate effect. He would be supported by Jonathan Glasspool, the Company's Non-Executive Chairman, who had been appointed as Interim Executive Chairman, until a permanent CEO appointment is made.

In addition, the Company provided an update on trading, details of which are set below. The Company also announced that, at the same time as it announced its audited final results for FY 2021, which have been announced separately today, it proposed to raise approximately £1.1 million for working capital purposes through the issue of New Ordinary Shares at the Issue Price, using its existing share authorities, by way of the Placing and the Open Offer to qualifying shareholders.

The Company announced that it had received written commitments from two of its largest institutional shareholders and a letter of intent from a third to subscribe for New Ordinary Shares in the Placing and effectively to underwrite the Open Offer for, in aggregate, the requisite £1.1 million. The commitments of the institutional shareholders were conditional on certain events, including the circular in connection with the Open Offer being published by not later than 30 April 2022. In addition, the commitment of one of the institutional shareholders was conditional on no adverse trading update being released by the Company prior to the close of the Open Offer.

Current trading and prospects

In its announcement released on 7 April 2022, the Company announced that while the audit of its final results for the year ended 31 December 2021 had not been completed, the Board expected that the Group's revenue would be £16.4 million, EBITDA would be break even and the year-end cash position would be £1.4 million. The Group's cash position as at 31 March 2022 was £1.0 million with net cash after debt of £0.9 million.

The Company announced that the reduction in EBITDA from its trading update released on 14 January 2022 related to: (i) a £0.1 million charge relating to an accounting policy change (IAS38); and (ii) an additional provision of £0.1 million relating to bad debts and expected credit losses.

Furthermore, the Company announced that, while not finalised, the Board intended to agree an impairment charge of £6.1 million relating to the Group's US operations due to the previously announced drop off in performance in Q4 2021 and resulting management changes.

In addition, the Company also announced that 2022 had started positively with forward bookings up 5 per cent. (£0.4 million) year on year, which was mainly due to the strong return of live events, including the annual Women in IT Awards UK and the successful launch of a new Thematics Congress for fund selectors in London. While the Company was seeing some weakness in media, due mainly to the current geopolitical uncertainty and inflationary concerns, Group revenues of approximately £3.3 million in Q1 2022 were in line with the Board's expectations and up 10 per cent. on the same period in 2021.

In addition, the Company announced that the Group had forward bookings equivalent to 45 per cent. of its 2022 revenue target.

Use of proceeds

The Directors intend that the net proceeds of the Fundraising, totalling approximately £0.95 million, will be used to invest in:

• live events;

• ESG Clarity's US operations; and

• content marketing solutions

and for working capital purposes.

Related party transactions

Harwood Capital LLP ("Harwood") has agreed to subscribe, in aggregate, for 9,391,731 New Ordinary Shares. As at the date of this announce ment, so far as the Company is aware, Harwood holds 14,364,186 Existing Ordinary Shares representing approximately 14.6 per cent. of the Existing Ordinary Shares. As such, Harwood is a substantial shareholder of the Company and its participation in the Fundraising is a related party transaction pursuant to AIM Rule 13 of the AIM Rules. The independent Directors, being all of the Directors, other than Richard Staveley ("Independent Directors"), consider, having consulted with the Company's nominated adviser, Shore Capital & Corporate, that the terms of Harwood's participation in the Fundraising are fair and reasonable insofar as the Company's shareholders are concerned.

Client funds of Downing LLP (together, "Downing LLP") have agreed to subscribe, in aggregate, for 7,299,035 New Ordinary Shares. As at the date of this announce ment, so far as the Company is aware, Downing LLP holds 11,163,514 Existing Ordinary Shares representing approximately 11.3 per cent. of the Existing Ordinary Shares. As such, Downing LLP is a substantial shareholder of the Company and its participation in the Fundraising is a related party transaction pursuant to AIM Rule 13 of the AIM Rules. The Independent Directors  consider, having consulted with the Company's nominated adviser, Shore Capital & Corporate, that the terms of Downing LLP's participation in the Fundraising are fair and reasonable insofar as the Shareholders are concerned.

Principal Terms of the Firm Placing

The Company is proposing to issue 9,858,569   Firm Placing Shares pursuant to the Placing Agreement. In accordance with the terms of the Placing Agreement, Shore Capital Stockbrokers have, as agent for the Company, placed with certain existing institutional investors the Firm Placing Shares at the Issue Price. The Firm Placing Shares are not subject to clawback and are not part of the Open Offer or the Conditional Placing.

Principal Terms of the Conditional Placing

The Company is proposing to issue up to 10,844,426   Conditional Placing Shares pursuant to the Placing Agreement. In accordance with the terms of the Placing Agreement, Shore Capital Stockbrokers have, as agent for the Company, placed with certain existing institutional investors the Conditional Placing Shares at the Issue Price which are subject to clawback under the terms of the Open Offer

Settlement and dealings

Application has been made to the London Stock Exchange for the Firm Placing Shares, and will be made for the Open Offer Shares and (if any) the Conditional Placing Shares, to be admitted to trading on AIM. It is expected that admission of the Firm Placing Shares to trading on AIM will become effective and that dealings in the Firm Placing Shares will commence at 8.00 a.m. on 21 April 2022. It is expected that admission of the Open Offer Shares and (if any) the Conditional Placing Shares to trading on AIM will become effective and that dealings in the Conditional Placing Shares will commence at 8.00 a.m. on 12 May 2022.

The New Ordinary Shares will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of the Ordinary Shares following admission of the New Ordinary Shares.

 

END

 

 

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