NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE"). THERE CAN BE NO CERTAINTY THAT SUCH AN OFFER WILL BE MADE.
For immediate release
23 September 2019
Possible Cash Offer for Goals Soccer Centres plc
Sports Direct International plc ("Sports Direct") today announces that on 5 September 2019 it made a proposal to the board of Goals Soccer Centres plc ("Goals") regarding a possible cash offer of 5 pence per share for the entire issued and to be issued share capital of Goals, not already held by Sports Direct (or any person acting in concert with Sports Direct) (the "Possible Offer").
Background to the Possible Offer
Sports Direct is the largest shareholder in Goals, with an 18.93% shareholding. Goals has had some well-publicised difficulties and its shares are currently suspended from trading on AIM. Absent any extension of the suspension it is expected that Goals' trading facility on AIM will be cancelled on 30 September 2019, per Goals' announcement on 2 August 2019. Sports Direct believes an extension should be achievable if the board of Goals were committed to achieving it - which is something Sports Direct has asked the Goals board to confirm on a number of occasions.
On 29 August 2019, Goals announced that it had commenced a process to invite offers for the business and assets of Goals (the "AMA Process"). Goals also stated that there was no certainty as to the timetable or outcome of this process and there has been no further announcement.
Should Goals have its facility to trade its shares on AIM cancelled, its shareholders will lose the protection of the AIM Rules (including the right to approve in a general meeting any fundamental change of business). Accordingly, Goals' shareholders will have no ability to influence the AMA Process or, in particular, vote on whether they believe any transaction (such as a sale of the business and assets of Goals under the AMA Process) should go ahead. The shares will also lose their marketability.
Rationale for the Possible Offer
Sports Direct believes that due to Goals' well-publicised difficulties the board of Goals is not committed to maintaining Goals' trading facility. Instead, it seems only interested in pursuing the AMA Process whilst, at the same time through the loss of the trading facility, depriving Goals' shareholders of the ability to vote on it. Sports Direct is strongly of the view that the Goals shareholders deserve an opportunity to consider the Possible Offer.
Goals announced on 28 June 2019 that it was performing well and cash generative. On 2 August 2019, it further announced that in the year-to-date sales across the 45 sites in the UK on a gross like-for-like basis are up +11.5% and that US gross like-for-like sales are up +14.5%. Goals also announced on 2 August that it has had positive discussions with its debt providers (and that the existing debt facilities will remain in place past their initial review date). This raises the question of why the AMA Process is necessary and any urgency in following such a process. There has been no reason given as to why a sale of the business and assets of Goals (which would deprive the shareholders of the right to consider the Possible Offer) is the best course of action. In addition, there does not seem to be any solvency issue which needs to be urgently addressed.
The Possible Offer would, if progressed, provide shareholders with an exit and allow them to determine what is fair value and in their best interests. Sports Direct has requested the board of Goals provide customary due diligence materials. Despite the Possible Offer and request for information being communicated to the board of Goals on 5 September 2019, the board has so far failed to provide any such information to Sports Direct. Sports Direct urges the Goals board to engage with it in discussing the Possible Offer and providing the requested information.
This announcement does not amount to an announcement of a firm intention to make an offer under Rule 2.7 of the Code and there can be no certainty that an offer will be made. A further announcement will be made as and when appropriate.
For the purposes of Rule 2.5(a) of the Code, Sports Direct reserves the right to make an offer at a value below 5 pence per share in cash:
(a) with the agreement or recommendation of the board of Goals;
(b) if Goals announces, declares, pays or makes a dividend or any other distribution to its shareholders, in which case Sports Direct reserves the right to make an equivalent reduction in its offer terms; or
(c) following an announcement by Goals of a whitewash transaction pursuant to the Code.
Rule 2.6(a) of the Code requires that Sport Direct, by no later than 5.00 p.m. on 21 October 2019, being the 28th day following the date of this announcement, either announces a firm intention to make an offer for Goals in accordance with Rule 2.7 of the Code or announces that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Takeover Panel, in accordance with Rule 2.6(c) of the Code.
Tom Piper, Company Secretary
0344 245 9200
Numis (Financial Adviser to Sports Direct)
+44 (0) 207 260 1000
Numis Securities Limited ("Numis"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively for Sports Direct and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Sports Direct for providing the protections afforded to clients of Numis, nor for providing advice in relation to any matter referred to herein.
This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of any offer to buy, sell or subscribe for any securities or the solicitation of any vote in any jurisdiction.
The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at www.sportsdirectplc.com/investor-relations.aspx, by no later than 12 noon (London time) on 24 September 2019. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.