This announcement contains inside information for the purposes of Article 7 of the
("WH Ireland" or the "Company" and with its subsidiaries the "Group")
Conditional disposal of Wealth Management Business.
Proposed Cancellation of admission to AIM
Trading Update
Notice of General Meeting
WH Ireland announces that its subsidiary
Summary
· Sale of the Wealth Management Business
· Total Consideration of
· Proposed delisting of the Company's shares from trading on AIM and associated winddown
Background to the Transaction
The Transaction follows the disposal of the
Despite implementing further cost-saving measures, the Group's Wealth Management business continues to be loss-making and would require substantial investment to achieve sustainable profitability, but the Board believes that a further capital raise to fund such investment would be highly dilutive and difficult to execute in current circumstances. Against this backdrop, the Board believes that the Transaction with Oberon represents the best available outcome for stakeholders.
The Transaction constitutes a fundamental change of business under AIM Rule 15 and is therefore conditional upon shareholder approval at a general meeting of the Company. If approved, following the completion of the Transaction the Company will have divested all of its trading business and activities and will be regarded as an AIM Rule 15 cash shell. As such, technically the Company will be required to make an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission under the AIM Rules for Companies) within six months from the date of completion of the Transaction. However, given the Board's intention is to seek a delisting of the Company's shares from trading on AIM as part of this process, the Board is not considering making any such acquisition.
Completion of the Transaction is conditional upon (i) the passing of the resolution at the upcoming general meeting to approve the Transaction for the purposes of Rule 15 of the AIM Rules and (ii) WHIL's custodial services agreement with
In the event that any of the conditions to the APA have not been satisfied or waived on or before
In addition, and without prejudice to any other remedies or accrued rights which it may have, Oberon may terminate the APA at any time prior to Completion upon the occurrence of certain specified materially adverse events.
Escrow Arrangements
WHIL's current custodial services agreement with SEI in respect of custody and settlement services for clients will at Completion be novated to Oberon. Oberon will be liable to pay SEI's costs and charges for such time as SEI continues to provide its custodial services to Oberon under the novated custodial services agreement.
Unless Oberon decides to keep using SEI's custodial services platform that custodial services agreement will be terminated and, in these circumstances, WHIL will indemnify Oberon in respect of the termination costs of that custodial services agreement for the remainder of its fixed term, currently running to
Trading Update
Further to the announcement of
Early in the financial year, in
However, during FY2025, the Wealth Management business was impacted by market declines and the resignation of key financial planners from the Group's Henley office all of which resulted in total assets under management falling to
The pro-forma underlying loss before tax for FY2025 is expected to be c.
The Group continues to be loss-making on an underlying basis, with the Directors current expectations being for a further fall in annualised revenue to circa
With the divestment of the CM division and the planned sale of the Wealth Management business under the Transaction, the Group now intends to delist from the AIM market and commence a process of winding down its operations.
Net cash at year-end for FY2025 was
(* unaudited)
Proposed Cancellation
Following Completion, the Board intends to implement a wind-down of the Group by way of a liquidation and to return any remaining distributable reserves to shareholders once all liabilities, transaction costs and wind-down expenses have been settled. In that context, the Directors have conducted a review of the advantages and disadvantages of having the Company's ordinary shares trading on AIM, a market of the
Accordingly, the Company proposes the cancellation of admission of its ordinary shares to trading on AIM under AIM Rule 41 (the "Cancellation"), which will be put to shareholders at the same general meeting. More details of the Cancellation and the risks associated with it are set out at the end of this announcement.
As set out above, if approved, following the completion of the Transaction the Company will have divested all of its trading business and activities and will be regarded as an AIM Rule 15 cash shell. It should be noted that if the Transaction is approved by shareholders and completes but the Cancellation is not approved by shareholders and if the Company does not complete a reverse takeover under AIM Rule 14 within six months of becoming an AIM Rule 15 cash shell, the
Proposed Dividend
Following Completion, the Cancellation and the successful winddown of the Group, the Directors expect that any distributable reserves remaining in the Group will be returned to shareholders after settlement of all outstanding liabilities, transaction costs, and wind-down expenses. Whilst it is impossible to guarantee the timescale for this process or the quantum of this distribution due to the nature of a wind-down situation, the Board currently anticipates that this will be approximately 0.5p per Ordinary Share and distributed within twelve months of Completion.
Recommendation
The Directors unanimously consider the Transaction and the Cancellation to be in the best interests of the Company and its shareholders and all other stakeholders as a whole and intend to vote in favour of the resolutions in respect of their own beneficial holdings amounting in aggregate to 0.10 per cent. of the Company's issued ordinary share capital.
Notice of General Meeting
A circular containing further details of the Transaction and the Cancellation, together with the notice of general meeting, will be posted to shareholders on or around
Additional Disclosures
As at
It is intended that the proceeds from the forthcoming sale of the Wealth Management business will be applied to general working capital for the Group and any excess will be returned to shareholders as set out above.
"The sale of WH Ireland Wealth Management is, in the Board's view, the most appropriate outcome for the business and its stakeholders.
Following the disposal of its operating businesses, the Company proposes to delist from AIM and intends to implement a wind-down of the Group via a liquidation, with any resulting distributable reserves being returned to shareholders at its conclusion."
For further information please contact:
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+44 (0) 20 7220 1666 |
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+44 (0) 207 408 4090 |
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+44 (0) 161 831 1512 |
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MHP |
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+44 (0) 20 7831 406117 |
Additional Information
The following text comprises extracts from the Company's circular to shareholders. Capitalised terms used but not defined in these extracts have the meanings given to them in the circular.
Expected Timetable of Principal Events
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Announcement of the Transaction and Cancellation |
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Date of publication of this document |
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Latest time and date for receipt of completed Forms of Proxy |
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General Meeting |
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Announcement of the results of the General Meeting |
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Expected date for Completion |
On or around |
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Expected last day of dealings in Ordinary Shares on AIM |
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Expected time and date of Cancellation |
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Long Stop Date for Completion |
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Overview
On
Following the Transaction, the Company intends to undertake a wind down of the remaining operations of the Group and subsequently return residual cash to Shareholders. Therefore, the Directors do not believe it is prudent to continue to incur the additional costs of maintaining an AIM listing for the Company. Accordingly, the Directors are also seeking Shareholder approval for the cancellation of the admission of the Company's Ordinary Shares to trading on AIM. Pursuant to Rule 41 of the AIM Rules, such a cancellation requires the consent of not less than 75% of votes cast by Shareholders given in a general meeting.
A general meeting of the Company will be held at
Shareholders should note that, unless Resolution 1 is approved, the Transaction will not proceed.
Background to and reasons for the Transaction
On
As also detailed at the time, the Placing was accompanied by cost-reduction initiatives designed to avoid the alternative course of action available to the Company, namely a wind down of the Group.
Furthermore, shortly after the completion of the Placing, the Company announced changes to its Board on
As set out in the Company's interim results announcement for the six months ended
The Company announced on
In line with that ongoing focus, the Board has implemented a number of cost saving measures, including by further streamlining central functions and overheads, and accelerating the closure of the Group's Henley operations. However, given the regulated nature of the Wealth Management Business and the established market practices in respect of remuneration for revenue generating staff, the opportunities for further cost reductions have been limited leaving the business loss making.
Following detailed discussions with the senior management of the Wealth Management Business, the Board now believes that achieving meaningful revenue growth and scale would require the Group, following many years of underinvestment, departures of investment managers and outflows of funds under management, to modernise its IT infrastructure and invest heavily in its sales capability, either through inorganic acquisitions of investment managers and their teams from rival firms, or organically through significant investment in marketing and the recruitment and training of new revenue generating staff. However, the Company is not in a financial position to pursue this strategy and the Board believes that a further capital raise to fund such investment would be highly dilutive and difficult to execute in current circumstances.
The Board therefore believes that a strategic transaction is now in the best interests of Shareholders, staff, clients and the Company.
As previously announced, the Board has been exploring strategic opportunities whilst implementing operational changes on an ongoing basis following the changes to the Board in 2023. Over this period, the wealth management market has continued to consolidate, and the Company has had strategic conversations with a number of potential counterparties. In some cases, these discussions have been prolonged and extensive and have led to advanced negotiations that have not come to fruition.
Against this backdrop, the Board believes that the Transaction is preferable to any available alternative. Furthermore, two of the Group's senior investment managers with key client relationships (the "
In assessing the merits of the Transaction and strategy in general, the Board has concluded that it does not have the funds and resources to modernise the business, attract new teams and clients, or retain its existing major revenue generating staff, managers and directors, all of which are key components of returning the business to sustainable profitability.
If shareholders do not vote in favour of the Transaction, the Board believes the only viable alternative would be a wind-down of the Group, which may lead to less favourable outcomes for staff, clients and is expected to generate a reduced financial return for Shareholders when compared with the Transaction.
Information on the Wealth Management Business and the Buyer
The Group's Wealth Management Business provides independent financial planning advice and discretionary investment management solutions for individuals, families and charities, from its offices in
The Buyer Guarantor is quoted on the Apex segment of the
Oberon is authorised and regulated by the Financial Conduct Authority with firm reference number 124885 and is a member of the
This Transaction would involve Oberon taking on approximately
The profile of WHIL's Wealth Management Business is very similar to Oberon's existing business and does not materially alter the nature or complexity of Oberon's operations, which remain focused on
Summary of the key terms of the Transaction
Asset Purchase Agreement
Pursuant to the Asset Purchase Agreement WHIL has conditionally agreed to sell, and Oberon has conditionally agreed to purchase the Wealth Management Business, including WHIL's offices in
The Disposal is a fundamental change of business for the purpose of Rule 15 of the AIM Rules and, accordingly, it is conditional on the consent of Shareholders by way of an ordinary resolution. If approved, following the completion of the Transaction the Company will be regarded as an AIM Rule 15 cash shell. As such, technically the Company will be required to make an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission under the AIM Rules for Companies) within six months from the date of completion of the Transaction. However, given the Board's intentions the Board is not considering making any such acquisition. However, it should be noted that if the Transaction is approved by Shareholders and completes but the Cancellation is not approved by Shareholders and if the Company does not then complete a reverse takeover under AIM Rule 14 within six months of becoming an AIM Rule 15 cash shell, the
The consideration for the acquisition of the Wealth Management Business is
Completion of the APA is conditional upon (i) the passing of the Resolution to approve the Transaction for the purposes of Rule 15 of the AIM Rules and (ii) WHIL's custodial services agreement with
Unless Oberon decides to keep using SEI's custodial services platform that custodial services agreement will be terminated and, in these circumstances, WHIL will indemnify Oberon in respect of the termination costs of that custodial services agreement for the remainder of its fixed term, currently running to
The APA contains customary business conduct obligations which apply to WHIL during the period between exchange of the APA and Completion, subject to the Buyer's consent. The APA also contains customary warranties given by each of the parties in respect of (amongst other things) its power and authority to enter into and perform the APA and by WHIL to Oberon including in respect of title to assets, certain financial matters, contracts, employees, real estate and compliance with laws and regulations, in each case as they relate to the Wealth Management Business.
The aggregate liability of WHIL in respect of the warranties is limited to an amount equal to 100% of the consideration actually received by WHIL, and any claims for breach of the warranties given by WHIL are subject to customary financial and time limitations.
The parties expect that the relevant employees assigned to the Wealth Management Business will transfer to Oberon in accordance with applicable
In the event that any of the conditions to the APA have not been satisfied or waived on or before
In addition, and without prejudice to any other remedies or accrued rights which it may have, Oberon may terminate the Asset Purchase Agreement at any time prior to Completion upon the occurrence of certain specified materially adverse events.
Furthermore, WHIL has undertaken to Oberon that, without the written consent of Oberon, it shall not, and shall procure that no other member of the Group shall, for a period of twenty-four (24) months from Completion:
(a) carry on any business in
(b) solicit, employ or offer employment to any employee of the Wealth Management Business,
subject to certain specified exceptions.
The Buyer Guarantor has guaranteed the obligations of Oberon pursuant to the APA and the Transitional Services Agreement and has given certain customary warranties for the benefit of WHIL. The Seller Guarantor has guaranteed the obligations of WHIL pursuant to the APA and the Transitional Services Agreement has given certain customary warranties for the benefit of Duke.
Arrangements with
The two
Arrangements with SEI
WHIL's current custodial services agreement with SEI in respect of custody and settlement services for clients will at Completion be novated to Oberon. Oberon will be liable to pay SEI's costs and charges for such time as SEI continues to provide its custodial services to Oberon under the novated custodial services agreement.
Transitional Services Agreement
WHIL and Oberon will also enter into a mutual transitional services agreement at Completion which sets out certain services to primarily be provided to Oberon to assist Oberon with the integration of the business for a transitional period of up to six months post Completion.
Future intentions for the Group
Following Completion, the Group intends to wind down any remaining operations of the Group. It will also seek to relinquish its FCA permissions, as it will no longer be undertaking regulated activities.
Accordingly, subject to Completion of the Transaction occurring, the Company intends to commence an orderly wind down of the Group, utilising the standard Members' Voluntary Liquidation process as defined in the Insolvency Act 1986 which will include seeking the approval of Shareholders for such process.
The Directors expect that, following Completion and the Cancellation, any distributable reserves remaining in the Group will be returned to Shareholders after settlement of all outstanding liabilities, transaction costs, and wind-down expenses.
Whilst it is impossible to guarantee the timescale for this process or the quantum of this distribution due to the nature of a wind-down situation, the Board currently anticipates that this will be approximately 0.5p per Ordinary Share and distributed within twelve months of completion.
Proposed Cancellation
The Directors have conducted a review of the advantages and disadvantages of the Company's AIM Admission and have unanimously concluded that as a result of the Transaction and, in any event, given the significant costs involved, there is insufficient benefit in maintaining the Admission. In reaching this conclusion the Directors have had particular regard to the following factors:
· the regulatory burden, together with the resulting demands on management time and considerable costs, are disproportionate to the limited value which Admission now offers to the Company and its Shareholders;
· funds currently expended on regulatory compliance including regulatory, legal, accounting, broker and nominated adviser fees, could be better utilised for the benefit of the Group and its Shareholders;
· the Directors have considered the alternative of maintaining Admission in order to operate as an AIM Rule 15 cash shell following the Disposal, but concluded that the associated costs and current uncertainties associated with pursuing a suitable reverse takeover candidate would not be in the best interests of the Company or its Shareholders; and
· on Completion, the Group will have disposed of its sole remaining business division and, as explained in paragraph 6 (Future Intentions for the Group) above, intends to commence a wind down of the Group. As a result, there will no longer be any trading business within the Group.
Accordingly, Shareholders' approval is being sought for the Cancellation pursuant to Resolution 2 set out in the Notice of General Meeting. As required by the AIM Rules, Resolution 2 will be proposed as a special resolution and requires a majority in favour of at least 75% of those Shareholders attending and voting in person or by proxy at the General Meeting in order to be passed.
Timetable for Cancellation
Under the AIM Rules, subject to the requisite Shareholders' approval, the Cancellation can only be effected by the Company at the expiry of a period of 20 clear Business Days from the date on which notice of the Cancellation is given to the
The Company has notified the
The Directors are mindful that certain Shareholders may be unable or unwilling to hold Ordinary Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their interests in the market prior to the Cancellation becoming effective as, given the intention to wind down the Group, no matched bargain facility is intended to be established by the Company in respect of the Ordinary Shares.
Implications of Cancellation
Set out below is an overview of the principal effects of the Cancellation; however, this list is not exhaustive. Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.
Following the Cancellation:
· there will be no market mechanism enabling the Shareholders to trade Ordinary Shares;
· the Ordinary Shares are likely to be more difficult to sell compared to shares of companies traded on AIM (or any other recognised market or trading exchange);
· while the Ordinary Shares will remain freely transferable (subject to the provisions in the Company's articles of association) the liquidity and marketability of the Ordinary Shares will, in the future, be more constrained than at present and the secondary market value of such shares may be adversely affected as a consequence;
· in the absence of a formal market quotation, it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;
· the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply;
· Shareholders will no longer be afforded the protections afforded by the AIM Rules, such as the requirement to be notified of certain events and the requirement that the Company seek shareholder approval for certain corporate actions, where applicable, including reverse takeovers and fundamental changes in the Company's business, including certain acquisitions and disposals;
· the Company will no longer be obliged to produce and publish half-yearly reports and financial statements;
· the Company will no longer be subject to the Market Abuse Regulation (EU No 596/2014) as applied in the
· the Company will no longer be required to publicly disclose any change in major shareholdings in the Company under the Disclosure Guidance and Transparency Rules;
· it is expected that Shareholders will cease to be afforded the protection of the Takeover Code from re-registration as a private limited company or the second anniversary of the date upon which the Cancellation takes effect (or the dissolution of the Company, whichever occurs first);
· the Company will cease to have an independent nominated adviser and broker;
· whilst the Company's CREST facility will remain in place immediately following the Cancellation, the Company's CREST facility may be cancelled in the future and, although the Ordinary Shares will remain transferable, they would then cease to be transferable through CREST. In this instance, Shareholders who hold Ordinary Shares in CREST will receive share certificates;
· stamp duty will be due on transfers of shares and agreements to transfer shares unless a
relevant exemption or relief applies to a particular transfer; and
· the Cancellation may have taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.
The above considerations are not exhaustive, and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.
The Takeover Code
Overview
The Takeover Code is issued and administered by the Panel. The Takeover Code currently applies to the Company and, accordingly, Shareholders are entitled to the protections afforded by the Takeover Code.
The Takeover Code and the Panel operate principally to ensure that shareholders in an offeree company are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders in the offeree company of the same class are afforded equivalent treatment by an offeror.
The Takeover Code also provides an orderly framework within which takeovers are conducted. In addition, it is designed to promote, in conjunction with other regulatory regimes, the integrity of the financial markets. The Takeover Code is based upon a number of General Principles, which are essentially statements of standards of commercial behaviour. The General Principles apply to takeovers and other matters to which the Takeover Code applies. They are applied by the Panel in accordance with their spirit in order to achieve their underlying purpose.
In addition to the General Principles, the Takeover Code contains a series of rules. Like the General Principles, the rules are to be interpreted to achieve their underlying purpose. Therefore, their spirit must be observed as well as their letter. The Panel may derogate or grant a waiver to a person from the application of a rule in certain circumstances.
Application
The Takeover Code applies to any company which has its registered office in the
The Takeover Code therefore applies to the Company as its securities are admitted to trading on AIM, which is a
While the Takeover Code continues to apply to the Company, a mandatory cash offer will be required to be made if either: (a) any person acquires an interest in shares which (taken together with the shares in which the person or any person acting in concert with that person is interested) carry 30% or more of the voting rights of the company; or (b) any person, together with persons acting in concert with that person, is interested in shares which in the aggregate carry not less than 30% of the voting rights of a company but does not hold shares carrying more than 50% of such voting rights and such person, or any person acting in concert with that person, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which that person is interested. Brief details of the Panel, and of the protections afforded by the Takeover Code, are set out below. Before voting on the Cancellation, you may want to take independent professional advice from an appropriate independent financial adviser.
Loss of protections afforded by the Takeover Code
The following is a summary of key provisions of the Takeover Code which apply to transactions to which the Takeover Code applies.
Equality of treatment
Information to shareholders
The opinion of the offeree board and independent advice
The board of the offeree company is required by Rule 3.1 to obtain competent independent advice as to whether the financial terms of any offer are fair and reasonable and the substance of such advice must be made known to its shareholders. Rule 25.2 requires the board of the offeree company to send to shareholders and persons with information rights its opinion on the offer and its reasons for forming that opinion. That opinion must include the board's views on: (i) the effects of implementation of the offer on all the company's interests, including, specifically, employment; and (ii) the offeror's strategic plans for the offeree company and their likely repercussions on employment and the locations of the offeree company's places of business.
The document sent to shareholders must also deal with other matters such as interests and recent dealings in the securities of the offeror and the offeree company by relevant parties and whether the directors of the offeree company intend to accept or reject the offer in respect of their own beneficial shareholdings.
Rule 20.1 states that, except in certain circumstances, information and opinions relating to an offer or a party to an offer must be made equally available to all offeree company shareholders and persons with information rights as nearly as possible at the same time and in the same manner.
Option holders and holders of convertible securities or subscription rights
Rule 15 provides that when an offer is made and the offeree company has convertible securities, options or subscription rights outstanding, the offeror must make an appropriate offer or proposal to the holders of those securities to ensure their interests are safeguarded.
General Meeting
Shareholders' approval is being sought to proceed with the Disposal pursuant to Rule 15 of the AIM Rules and to approve the delisting of the Company from trading on AIM. The General Meeting to consider the Resolutions is being convened for
Action to be taken in relation to the General Meeting
Shareholders are strongly encouraged to ensure that their votes are counted at the General Meeting by appointing the Chairman of the General Meeting.
You will find enclosed a Form of Proxy for use at the General Meeting. Whether or not you intend to be present at the General Meeting, you are requested to complete the Form of Proxy in accordance with the instructions printed on it and to return it as soon as possible and in any case so as to be received by the Company's registrars,
Recommendation
For the reasons set out above, the Directors consider that the Resolutions are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions as the Directors intend to do in respect of their entire beneficial holdings, amounting in aggregate to 254,600 Ordinary Shares, representing approximately 0.10 per cent. of the Company's existing issued ordinary share capital.
If shareholders do not vote in favour of the Transaction, the Board currently believes the alternative would be a wind-down of the Group's business, leading to worse outcomes for its clients through the need to migrate them to a new service provider and/or terminate its contract to provide services (in line with its terms and conditions of business) and would result in a reduced financial return for Shareholders compared with the Transaction.
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Notes to Editors:
About
WH Ireland provides independent financial planning advice and discretionary investment management. Our goal is to build long term, mutually beneficial, working relationships with our clients so that they can make informed & effective choices about their money and how it can support their lifestyle ambitions. We help clients to build a long term financial plan and investment strategy for them and their families.
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