Nanoco Group plc (LON:NANO), a world leader in the development and manufacture of cadmium-free quantum dots and other specific nanomaterials emanating from its technology platform, has announced the results of the Tender Offer to return up to £30.0 million to Shareholders, as set out in the shareholder circular published by the Company on 11 March 2024, which closed on 9 April 2024.
Results of the Tender Offer
In total, 160,535,377 Ordinary Shares, being approximately 49.5 per cent. of the Issued Share Capital were validly tendered under the Tender Offer as at 6:00 p.m. on 9 April 2024 (the “Record Date”), meaning that the Tender Offer was oversubscribed. Tenders will therefore be accepted in full from Shareholders who validly tendered a number of Ordinary Shares equal to or less than their Basic Entitlement or those holders of 2,000 Ordinary Shares or less, irrespective of the proportion tendered. Following a scale back exercise, tenders in excess of the Basic Entitlement will be satisfied to the extent of the Basic Entitlement plus approximately 49.6 per cent. of the excess Shares tendered.
Cavendish will therefore purchase 125,000,000 shares on 12 April 2024 for a total cost of approximately £30.0 million. This represents approximately 38.5 per cent. of the Issued Share Capital as at the Record Date. Under the terms of the Option Agreement, Cavendish has a put option to be exercised on 12 April 2024 to require the Company to purchase, from Cavendish, the Ordinary Shares purchased by Cavendish pursuant to the Tender Offer at the Tender Price.
Following the purchase by the Company, the Company intends to cancel 111,250,000 Ordinary Shares. As set out in the Circular, 13,750,000 of the purchased Ordinary Shares will be held in treasury and subsequently transferred to the Nanoco Employee Benefit Trust (“EBT”) to meet potential future obligations arising under the Company’s 2015 Long Term Incentive Plan and the 2015 Deferred Bonus Plan. This transfer to the EBT represents approximately 10% of the shares to be acquired under the combined Tender Offer and Share Buyback Programme.
Settlement of the Tender Offer
As set out in the Circular, it is anticipated that the proceeds payable to Shareholders whose tendered shares are held through CREST accounts will be made by 25 April 2024 and that cheques for the certificated Ordinary Shares purchased under the Tender Offer will be despatched by 25 April 2024. Balance certificates will be despatched in respect of certificated Shares that were not accepted pursuant to the Tender Offer by 25 April 2024.
Total Voting Rights
Following the completion of the Tender Offer, the Company will have 213,180,950 Ordinary Shares in issue including 13,762,222 Ordinary Shares held in treasury. Therefore, the total number of voting rights in the Company will be 199,418,728 and this figure may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA’s Disclosure Guidance and Transparency Rules.
Share Buyback Programme
As set out in the Circular, the Company will pursue an ongoing on-market share buyback programme of up to a total value of £3.0 million to provide a continuing value-accretive return of capital to Shareholders. The Share Buyback Programme commences today and will end on the earlier of the date the aggregate consideration paid for Ordinary Shares under the share buyback programme reaches £3.0 million and the date of the Company’s next annual general meeting in 2024. The Share Buyback Programme is independent of the Tender Offer and will be undertaken using the AGM Buyback Authority.
Pursuant to the AGM Buyback Authority, the minimum price that may be paid for on-market share buybacks shall be 10 pence per Ordinary Share and the highest shall be the higher of (i) an amount equal to 105 per cent. of the average of the market value for an Ordinary Share as derived from the London Stock Exchange Daily Official List for the five Trading Days immediately preceding the day on which that Ordinary Share is purchased; and (ii) an amount equal to the higher of the price of the last independent trade of an Ordinary Share and the highest current independent bid for an Ordinary Share on the London Stock Exchange at the time the purchase is carried out.
Any Ordinary Shares purchased pursuant to the Share Buyback Programme will be cancelled. Any buyback of Ordinary Shares pursuant to the Share Buyback Programme will be effected in accordance with Chapter 12 of the Listing Rules, the EU Market Abuse Regulation 596/2014 and the Commission Delegated Regulation (EU) 2016/1052 (which are part of UK law by virtue of the European Union (Withdrawal) Act 2018).
Shareholders should also note that the AGM Buyback Authority was taken on the basis of 10 per cent. of the Issued Ordinary Share Capital before the Tender Offer. Following completion of the Tender Offer, the Issued Ordinary Share Capital will be reduced and there will be a corresponding reduction of the number of Ordinary Shares representing 10 per cent. of the Issued Ordinary Share Capital. In view of this, the Board intends to restrict its use of the AGM Buyback Authority to market purchases up to 21,318,095 Ordinary Shares representing a maximum of 10 per cent. of the Issued Ordinary Share Capital as it is immediately after completion of the Tender Offer. The Board would then expect to seek a new authority from Shareholders to make market purchases of Ordinary Shares at the AGM held later in 2024.
Nanoco has instructed Cavendish to conduct the Share Buyback Programme on its behalf on a broker-managed basis, with trading decisions taken independently of the Company. Due to the limited liquidity in the Ordinary Shares, a buyback of Ordinary Shares pursuant to the AGM Buyback Authority on any given trading day may represent a significant proportion of the daily trading volume in the Ordinary Shares on the London Stock Exchange and could exceed 25 per cent. of the average daily trading volume. Accordingly, the Company will not benefit from the exemption contained in Article 5(1) of Regulation (EU) No. 596/2014 as adopted into UK law by the European Union (Withdrawal) Act 2018.
Defined terms used in this announcement have the meanings given in the Circular unless the context otherwise requires.
