Announcement of Offer Price

RNS Number : 1642H

Card Factory PLC

15 May 2014

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA OR ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

This announcement is an advertisement for the purposes of the UK Prospectus Rules and not a prospectus and not an offer of securities for sale in any jurisdiction, including in or into the United States, Canada, Japan or Australia. Investors should not purchase or subscribe for any shares referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") expected to be published by Card Factory plc in due course in connection with the proposed admission of its ordinary shares to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the main market of the London Stock Exchange. A copy of the Prospectus will, following publication, be available for inspection from Card Factory plc's website at www.cardfactoryinvestors.com. This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States or in any other jurisdiction.

For immediate release

15 May 2014

Card Factory plc  

Announcement of Offer Price

Card Factory plc, the UK's leading specialist retailer of greeting cards, today announces the successful pricing of its initial public offering (the "IPO" or "Offer") of 131,834,049 Ordinary Shares at 225 pence per Ordinary Share (the "Offer Price").

•      Based on the Offer Price, the market capitalisation of the Company at the commencement of conditional dealings will be £766.6 million.

•      Following Admission (and following the issue and allotment of 4,375,000 Ordinary Shares to certain current and former members of the Group's management relating to management entitlements soon after Admission (the "Residual Management Equity")) the Company will have 340,696,235 Ordinary Shares in issue, with a free float of 38.6 per cent. assuming no exercise of the over-allotment option and 42.5 per cent. assuming exercise of the over-allotment option in full.

·      The Company will receive £90 million of gross proceeds from the Offer.

·      The selling shareholders comprise CCP IX LP No.1, CCP IX LP No.2, CCP IX Co-Investment LP (together, the "Charterhouse Funds") and certain individual shareholders comprising current and former members of the Group's Management (the "Selling Shareholders").

·      The Offer is expected to raise gross proceeds of £206.6 million for the Selling Shareholders, assuming no exercise of the over-allotment option, and £236.3 million assuming exercise of the over-allotment option in full.

·      The Offer represents 38.7 per cent. of the Ordinary Shares of the Company (following the issuance of the Residual Management Equity) assuming no exercise of the over-allotment option and 42.6 per cent. assuming exercise of the over-allotment option in full.⁽¹⁾

·      Following Admission (and following the issuance of the Residual Management Equity), the Directors and members of the Group's management will hold 19.2 per cent. of the Ordinary Shares and the Charterhouse Funds will hold 41.3 per cent. of the Ordinary Shares assuming no exercise of the over-allotment option and 37.4 per cent. assuming exercise of the over-allotment option in full.

·      Conditional dealings will commence on the London Stock Exchange at 8.00 a.m. today under the ticker "CARD" (ISIN: GB00BLY2F708).

·      Admission to the premium listing segment of the Main Market of the London Stock Exchange and the commencement of unconditional dealings in the Ordinary Shares are expected to take place at 8.00 a.m. on 20 May 2014.

·      As stabilising manager, Morgan Stanley Securities Limited has been granted an over-allotment option, exercisable no later than 30 calendar days from today, by the Principal Shareholders over up to 13,183,404 Ordinary Shares, representing 10 per cent. of the Offer.

(1) The difference between the Offer size and the free float reflects the subscription for Ordinary Shares immediately prior to Admission by the Chairman and independent non-executive Directors.

Richard Hayes, CEO of Card Factory, said:

"Since our first store was set up in Wakefield in 1997, Card Factory has firmly established itself as the leading specialist retailer in the large, resilient and growing UK greeting cards market, and now operates from over 700 stores nationwide. Ours is a well-invested and cash generative business with a strong business model, creating an excellent platform for further profitable growth. 

We welcome our new shareholders, and our priority now is to execute our clearly defined growth strategy on their behalf"

Further Information

·      The Company (180 days), the Charterhouse Funds (180 days), one current and certain former members of the Group's management (180 days) and the Directors and other current Management of the Company (365 days) have committed to lock-up arrangements following Admission, which are subject to certain customary exemptions including waiver by the Joint Bookrunners.

·      Following completion of the IPO, the Company is expecting to be eligible for inclusion in the FTSE UK Index Series at the quarterly review in September 2014.

·      In relation to the Offer, Morgan Stanley & Co. International plc and UBS Limited are acting as Joint Sponsors. Morgan Stanley Securities Limited and UBS Limited are acting as Joint Global Co-ordinators and, together with Nomura International plc, as Joint Bookrunners. Investec Bank plc is acting as Joint Lead Manager.

Full details of the Offer will be included in the Prospectus, which is expected to be published and available on the Company's website later today. Unless otherwise defined, terms used in this announcement shall have the same meaning as in the Prospectus.

Enquiries:

Card Factory Richard Hayes (CEO) Darren Bryant (CFO)
Joint Global Co-ordinators, Joint Sponsors and Joint Bookrunners
Morgan Stanley Ian Hart Ben Grindley Rosie Bailey	[phone]
UBS Limited Craig Calvert Nick Bishop Christopher Smith	[phone]
Joint Bookrunners
Nomura Adrian Fisk Ken Brown Ed Matthews Ed Boyce	[phone]
Joint Lead Manager
Investec David Flin Joe Thompson	[phone]
Financial Adviser to the Company
STJ Advisors Marcus Le Grice Jonathan Miller	[phone]
Financial Public Relations
MHP Communications John Olsen Katie Hunt Simon Hockridge	[phone]

Expected Timetable:

	Time and Date (1) (2)
Commencement of conditional dealings in Ordinary Shares on the London Stock Exchange	8.00 a.m. on 15 May 2014
Admission and commencement of unconditional dealings in Ordinary Shares on the London Stock Exchange	8.00 a.m. on 20 May 2014
Ordinary Shares credited to CREST accounts (where applicable) (3)	8.00 a.m. on 20 May 2014
Notes:
1.        Times and dates set out in the timetable above and mentioned throughout this announcement that fall after the date of publication of this announcement are indicative only and may be subject to change without further notice. 2.        All references to time in this timetable are to UK time. 3.        Or as soon as practicable thereafter. No temporary documents of title will be issued.

DISCLAIMERS

The contents of this announcement, which has been prepared by and is the sole responsibility of the Company, have been approved by Morgan Stanley & Co. International plc solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000, as amended.

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

Neither this announcement, the publication in which it is contained nor any copy of it may be made or transmitted into the United States of America (including its territories or possessions, any state of the United States of America and the District of Columbia) (the "United States"). The securities referred to herein have not been and will not be registered under the applicable securities laws of the United States and, subject to certain exceptions, may not be offered or sold within the United States. There will be no public offering of such securities in the United States.

This announcement is not for publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction, including the United States, Australia, Canada or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

This announcement is only addressed to and directed at persons in member states of the European Economic Area ("EEA") who are qualified investors within the meaning of Article 2(l)(e) of the Prospectus Directive (Directive 2003/71 /EC and amendments thereto, including Directive 2010/73/EU, to the extent implemented in the Relevant Member State of the EEA) and any implementing measure in each Relevant Member State of the EEA (the "Prospectus Directive") ("Qualified Investors").

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Group's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. 

Each of Card Factory plc and Morgan Stanley & Co. International plc, Morgan Stanley Securities Limited, UBS Limited, Nomura International plc and Investec Bank plc and their respective affiliates (together, the "Banks")  expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

Any purchase of Shares in the proposed IPO should be made solely on the basis of the information contained in the final Prospectus. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change.

The IPO timetable, including the date of Admission, may be influenced by a range of circumstances such as market conditions. There is no guarantee that Admission will occur and you should not base your financial decisions on the Company's intentions in relation to Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all or part of the amount invested. Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the IPO. The value of Shares can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the IPO for the person concerned. Past performance cannot be relied upon as a guide to future performance.

The Banks, each of which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, are acting exclusively for the Company and no-one else in connection with the IPO. They will not regard any other person as their respective clients in relation to the IPO and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the IPO, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the IPO, each of the Banks and any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Shares and other securities of the Company or related investments in connection with the IPO or otherwise. Accordingly, references in the Prospectus, once published, to the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by any of the Banks and any of their affiliates acting as investors for their own accounts. In addition, certain of the Banks or their affiliates may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of Shares. None of the Banks intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

None of the Banks or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the IPO, Morgan Stanley Securities Limited as Stabilising Manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other transactions with a view to supporting the market price of the Shares at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilisation, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares above the price at which each Share is to be issued or sold under the IPO (the "Offer Price"). Except as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the IPO.

In connection with the IPO, the Stabilising Manager may, for stabilisation purposes, over-allot Shares up to a maximum of 10% of the total number of Shares comprised in the IPO. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotments and/or from sales of Shares effected by it during the stabilising period, the Principal Shareholders of the Company, being funds managed by Charterhouse General Partners (IX) Limited, will grant to it the Over-allotment Option, pursuant to which the Stabilising Manager may purchase or procure purchasers for additional Shares up to a maximum of 10% of the total number of Shares comprised in the IPO (the "Over-allotment Shares") at the Offer Price. The Over-allotment Option will be exercisable in whole or in part, upon notice by the Stabilising Manager, at any time on or before the 30th calendar day after the commencement of conditional dealings of the Shares on the London Stock Exchange. Any Over-allotment Shares made available pursuant to the Over-allotment Option will rank pari passu in all respects with the Shares, including for all dividends and other distributions declared, made or paid on the Shares, will be purchased on the same terms and conditions as the Shares being issued or sold in the IPO and will form a single class for all purposes with the other Shares.

Certain figures contained in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.

Market Data

Unless otherwise stated, all market, industry, market share and competitive position data are provided by OC&C Strategy Consultants ("OC&C"). Unless otherwise indicated, such market, industry, market share and competitive position data are estimates (and accordingly, approximate) and should be treated with caution. Such information has not been audited or independently verified, nor has the Company ascertained the underlying economic assumptions relied upon therein.

 

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