27 October 2023
RECOMMENDED CASH OFFER FOR FIREANGEL SAFETY TECHNOLOGY GROUP PLC BY INTELLIGENT SAFETY ELECTRONICS PTE. LTD
Summary
The Boards of Intelligent Safety Electronics Pte. Ltd (“ISE“) and FireAngel Safety Technology Group plc (“FireAngel“) are pleased to announce that they have reached agreement on the terms and conditions of a recommended cash offer to acquire the issued and to be issued share capital of FireAngel not already owned or controlled by ISE (the “Offer“). ISE is a company incorporated in Singapore and wholly-owned by Siterwell Electronics Co., Ltd (“Siterwell“), a leading manufacturer of intelligent security protection for life and property which utilises an advanced smart security ecosystem technology. ISE currently holds approximately 17.46 per cent. of the issued ordinary shares of FireAngel Safety Technology Group plc.
Under the terms of the Offer, the shareholders of FireAngel (“FireAngel Shareholders“) will be entitled to receive:
7.40 pence per share in cash for each FireAngel Share
· The Offer of 7.40 pence per share in cash for each FireAngel Share (the “Offer Price“) values the total issued and to be issued share capital of FireAngel at approximately £27.68 million.
· The Offer Price represents a premium of:
o approximately 252.38 per cent. to the Closing Price of 2.10 pence per FireAngel Share on 26 October 2023 (being the last Business Day prior to the date of this announcement (the “Announcement“));
o 46.53 per cent. to the price per FireAngel Share of 5.05 pence, being the price at which FireAngel undertook its £6.1 million (before expenses) equity fundraising in June 2023; and
o 198.20 per cent. to the volume-weighted average price per FireAngel Share of 2.48 pence for the last three months to 26 October 2023 (being the last Business Day prior to the date of this Announcement).
· The Offer is conditional upon, among other things, valid acceptances of the Offer being received which, together with FireAngel Shares already held by ISE, will result in ISE holding FireAngel Shares carrying, in aggregate, not less than 90 per cent. of the voting rights of FireAngel.
· The Offer is to be extended to all issued FireAngel Shares not held by ISE and any further FireAngel Shares which are unconditionally allotted or issued and fully paid before the Offer closes.
· If any dividend, distribution or other return of value is authorised, declared, made or paid in respect of FireAngel Shares on or after the date of this Announcement, the cash consideration payable for each FireAngel Share shall be reduced by the amount of any such dividend, distribution or other return of value. In such circumstances, FireAngel Shareholders will be entitled to retain any such dividend, distribution, or other return of value declared, made or paid.
· Information on the terms and conditions to which the Offer will be subject is set out in Appendix I and will be set out in an offer document, which ISE will despatch to FireAngel Shareholders in due course (“Offer Document“).
· ISE currently holds 52,777,257 FireAngel Shares, representing approximately 17.46 per cent. of FireAngel’s issued ordinary share capital, as well as 26,388,628 FireAngel Warrants which were issued to it in connection with the participation of ISE in FireAngel’s June 2023 equity fundraising.
· The consideration payable under the Offer will be funded out of ISE’s existing cash resources which have been made available to it by Siterwell as a capital contribution.
· It is intended that the Offer be effected by means of a takeover offer within the meaning of Part 28 of the Companies Act 2006 (“CA 2006“).
· In ISE’s opinion, the highly competitive market environment in which FireAngel operates and the heightened global macroeconomic challenges has generated headwinds for both FireAngel and its share price. The board of ISE believes that the Offer provides a certain path to recover lost value for FireAngel Shareholders and an immediate and compelling proposition for all stakeholders.
· On 6 June 2023, FireAngel announced that it had committed to undertake a strategic review to explore options to realise value for FireAngel Shareholders as soon as reasonably practicable. As part of this review, the FireAngel Board considered a number of alternative strategic options, including a sale of all or part of the FireAngel Group and further fundraising options. Extensive work was done in conjunction with external consultants to ensure all potential avenues to recover and build shareholder and wider stakeholder value were explored.
· As part of the strategic review the FireAngel Board had discussions with a small number of parties, including ISE, in relation to a possible acquisition of all or part of the Group, which has culminated in the Offer being made at the Offer Price, representing a significant premium to FireAngel’s current prevailing share price. The Offer follows a number of previous proposals made by ISE, each of which included a lower offer price per FireAngel Share than the Offer Price.
· The FireAngel Directors, who have been so advised by PwC as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing financial advice to the FireAngel Directors, PwC has taken into account the commercial assessments of the FireAngel Directors.
· Accordingly, the FireAngel Directors unanimously intend to recommend that the FireAngel Shareholders accept the Offer (or in the event that the Offer is implemented by way of a Scheme, to vote or procure voting in favour of such Scheme at the court meeting and the resolutions relating to the Offer at any general meeting of FireAngel), as they have irrevocably undertaken so to do (or procure to be done) in respect of their own beneficial shareholdings (or the shareholdings they control), such holdings amounting to 13,754,611 FireAngel Shares, representing approximately 4.55 per cent. of FireAngel’s issued share capital. PwC is providing independent financial advice to the FireAngel Directors for the purposes of Rule 3 of the Takeover Code. These irrevocable undertakings cease to be binding, inter alia, on the earlier of the Long-stop Date and the time and date on which the Offer is withdrawn, lapses or otherwise terminates in accordance with its terms, or ISE announces, with the consent of the Panel, that it does not intend to proceed with the Offer.
· This summary should be read in conjunction with the full text of this Announcement. The Offer will be subject to the conditions and further terms set out in Appendix I to this Announcement and to the full terms and Conditions to be set out in the Offer Document to be despatched to FireAngel Shareholders containing the full terms and conditions of the Offer. Appendix II to this Announcement contains further details of the sources of information and bases of calculations set out in this Announcement. Appendix III sets out further information in respect of Irrevocable Undertakings received by ISE in respect of the Offer and Appendix IV contains definitions of certain expressions used in this summary and in this Announcement.
Commenting on the Offer, Andrew Blazye (Chairman of FireAngel) said:
“As part of its strategic review of FireAngel, the Board has considered a number of options for the Group in order to ensure all potential avenues to build stakeholder value have been fully explored.
The Board is very mindful of the continued trading challenges the Group faces in the medium term and believes this offer by ISE represents an opportunity for shareholders to realise a return, in cash, at a significant premium to FireAngel’s current prevailing share price. FireAngel has a longstanding relationship with ISE through Siterwell, initially as a valued manufacturing partner and more recently as a major shareholder, and the Board is confident that it can provide a supportive environment for FireAngel’s long term success.”
Commenting on the Offer, Wang Jiejun (a director of ISE) said:
“We think this is a great deal for FireAngel Shareholders and are delighted that the Board has recommended our offer. We believe it represents an excellent premium to the share price and encourage shareholders to accept the offer.”
Copies of this Announcement will be made available on ISE’s website at www.intelligentse.com/?investor.
Further information and enquiries
FireAngel
Neil Radley, Chief Executive Officer / Zoe Fox, Chief Finance Officer
+44 24 7771 7700
PwC (Financial Adviser to FireAngel)
Iain Reilly / Jon Raggett / Marcela Salgado Escalante
+44 20 7583 5000
Shore Capital (Nominated adviser and broker to FireAngel)
Tom Griffiths/ David Coaten/ Tom Knibbs
+44 20 7408 4050
Houston (Financial PR to FireAngel)
Kate Hoare / Kay Larsen / Ben Robinson
+44 20 4529 0549
ISE
Enquiries to be made via SPARK as set out below.
SPARK Advisory Partners Limited (Financial adviser to ISE)
Matt Davis / James Keeshan
Tel: +44 20 3368 3550