REG - Brave Bison Grp PLC Mission Group PLC - Possible All Share Offer for The Mission Group plc
13/05/2024 07:00
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RNS Number : 0695O Brave Bison Group PLC 13 May 2024
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 OR REGULATIONS OF SUCH JURISDICTION.
THIS IS AN ANNOUNCEMENT OF A POSSIBLE OFFER FALLING UNDER RULE 2.4 OF THE CITY
CODE ON TAKEOVERS AND MERGERS (THE "CODE"). IT DOES NOT CONSTITUTE AN
ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE.
ACCORDINGLY, THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
13 May 2024
Brave Bison Group plc
("Brave Bison" or the "Company", together with its subsidiaries "the Group")
Possible Offer
for
The Mission Group plc
Possible all-share takeover to create one of the largest independent /
UK-focused
digital media, marketing and technology services companies listed on AIM
Brave Bison, the digital advertising and technology services company,
announces that it has made a formal approach to the Board of The Mission Group
plc ("Mission") regarding a possible offer to acquire the entire issued and to
be issued share capital of Mission by way of an all-share offer (the "Possible
Offer").
The combination of Brave Bison and Mission would create a scaled media,
marketing and technology services company with pro-forma FY23 revenues of
approximately £120 million and pro-forma FY23 adjusted EBITDA of
approximately £14 million. Potential synergies derived from duplicate costs
and efficiencies have not been included in the pro-forma.
The Board of Brave Bison believes that a company of this size, scale and
profitability would present a more attractive investment opportunity to
institutional shareholders than either standalone company leading to the
possibility of the enlarged Brave Bison trading at a higher multiple of
earnings. The terms of the Possible Offer would allow Mission shareholders to
participate in future value growth as shareholders of the enlarged Brave
Bison. A broader investor universe may also increase liquidity for new and
existing investors.
As at 31 December 2023, Mission reported outstanding bank loans, acquisition
obligations and certain overdue creditors totalling approximately £30
million, the majority of which are repayable within two years((1)). A
combination with Brave Bison, which reported net cash of £7 million as at the
same date, would result in a strengthened balance sheet and improved debt and
covenant ratios.
Brave Bison is currently engaging in conversations with Mission's Board and
major institutional shareholders to solicit support for the Possible Offer.
Mission's Board has yet to provide due diligence access to Brave Bison, which
is one of a number of factors preventing Brave Bison from announcing a firm
offer. Mission shareholders who would be interested in seeing Brave Bison
announce a firm offer for Mission are encouraged to contact the Board of
Mission to express their support for the Possible Offer.
The Possible Offer is non-binding and the making of a Possible Offer would be
subject to the satisfaction or waiver of certain customary conditions,
including completion of due diligence to the satisfaction of Brave Bison.
Mission has been offered reciprocal due diligence on Brave Bison. Brave Bison
reserves the right to waive in whole or in part any pre-conditions.
Under the terms of the Possible Offer, the enlarged business would be led by
Oliver Green and Theo Green.
Oliver Green, Executive Chairman, commented:
"The combination of Brave Bison and Mission has the potential to deliver
compelling value for both company's shareholders, clients and employees. We
look forward to engaging with the Board of Mission to discuss the merits of
our proposal further."
About Brave Bison
Brave Bison is a digital advertising and technology services company,
headquartered in London with a globally distributed workforce in over nine
countries. We provide services to global brand advertisers through four
business units.
Brave Bison Performance is a paid and organic media practice. We plan and buy
digital media on platforms like Google, Meta, TikTok, Amazon and YouTube, as
well as providing search engine optimisation and digital PR services.
Customers include New Balance, Curry's and Asus.
SocialChain is a social media advertising practice. We create content for
brands and run campaigns across social media platforms like Instagram and
TikTok. We use influencers to create and distribute this content, leading to
high levels of engagement and brand awareness. Customers include Holland &
Barrett, The Army and General Mills.
Brave Bison Commerce is a digital commerce practice. We build complex
ecommerce platforms to support digital commerce operations. We are specialist
consultants in composable system architecture, the most advanced technology
available for enterprise customers. Customers include Furniture Village,
Fiskars and Winparts.
Brave Bison Media Network is a portfolio of sports and entertainment channels
across YouTube, Facebook, Snapchat, TikTok and Instagram. These channels
generate over 1 billion monthly views, and the advertising inventory from each
channel is sold through online advertising exchanges. Popular channels in our
network include The Hook, PGA Tour, US Open and Link Up TV.
On 22 April 2024, Brave Bison released its audited annual results for the year
ended 31 December 2023. These results showed revenue of £35.7 million (+13
per cent. year-on-year), net revenue of £20.9 million (+23 per cent.
year-on-year) and adjusted EBITDA of £4.3 million (+42 per cent.
year-on-year). Net cash at year end was £6.8 million (+10 per cent.
year-on-year).
Brave Bison Management Track Record
Oliver Green, Theo Green and Philippa Norridge joined Brave Bison as
executives in 2020, having made a strategic investment in the company in 2019.
Since joining the business, the team has grown Brave Bison organically and
through selective acquisitions, generating value for shareholders and creating
a dynamic and exciting workplace for its employees.
Brave Bison prioritises the integration of teams and culture to drive
performance for the business. The company operates a dynamic digital culture
and invests in best-in-class technology to enable its employees to achieve
more for clients. Brave Bison operates strategically through the marketing
funnel, offering enterprise-level clients an alternative to traditional agency
networks or siloed specialists, by joining the dots from trend to spend.
Since 2020, Brave Bison has made the following acquisitions, all of which have
been integrated into the Brave Bison operating platform:
a) SocialChain, a social media advertising and influencer marketing
company
b) Best Response Media, a digital commerce company specialised in Adobe
Commerce
c) Greenlight Digital, a digital advertising company
d) Greenlight Commerce, a digital commerce company
e) The Hook, a social publisher and social media marketing company
Shown below is the four-year financial track record of Brave Bison since the
current management team joined the business:
FY20 FY21 FY22 FY23
Net Revenue £4.0m £7.8m £16.9m £20.9m
Year-on-Year Growth n/a +95% +117% +23%
Adjusted EBITDA £0.1m £1.8m £3.0m £4.3m
Year-on-Year Growth n/a +1,700% +67% +42%
Adjusted Profit Before Tax (£0.5 m) £1.4m £2.6m £3.6m
Year-on-Year Growth n/a n/a +86% +38%
Adjusted Basic Earnings per Share (0.08p) 0.18p 0.24p 0.29p
Year-on-Year Growth n/a n/a +32% +18%
Net Cash £2.7m £4.7m £6.2m £6.8m
Year-on-Year Growth n/a +74% +32% +10%
Strategic Rationale for the Possible Offer
1. Value for Shareholders
In combination with Mission, the enlarged Brave Bison would generate pro-forma
FY23 revenues of approximately £120 million and pro-forma FY23 adjusted
EBITDA of approximately £14 million (in each case based on reported FY23
financials). Potential synergies derived from duplicate costs and efficiencies
have not been included in the pro-forma.
The Board of Brave Bison believes that a combined company of this size, scale
and profitability would present a more attractive investment opportunity to
institutional shareholders than either standalone company leading to the
possibility of the enlarged Brave Bison trading at a higher multiple of
earnings. A broader investor universe may also increase liquidity for new and
existing investors.
Under the terms of the Possible Offer, shareholders in Mission will become
shareholders in the enlarged Brave Bison, and therefore will benefit in future
value growth generated as a result of the combination.
2. Mission Capital Structure
As at 31 December 2023, Mission reported outstanding bank loans of £20.0m,
repayable on revised terms by 5 April 2026. Additionally, Mission reported
acquisition obligations totalling £5.5m, with 80 per cent. payable within two
years, and a £4.3m HMRC Time to Pay agreement. In aggregate, Mission's
outstanding debts and certain liabilities totalled approximately £30m at that
date((1)). Mission's bank facility provides for maximum interest margin of 4.9
per cent., which inclusive of SONIA, currently results in a total cost of over
10 per cent. per annum.
The Board of Brave Bison believes these debt levels are unsustainable based on
the historical free cashflow generated by Mission in the past three years.
Even with substantial improvements to operating cashflows, the Board of Brave
Bison believes Mission will struggle to repay outstanding liabilities without
a combination of asset sales, which would reduce the scale and may reduce
attractiveness of an investment in Mission, or an equity fundraising, which
would be dilutive to non-participating shareholders. The prospect of both
asset sales and an equity fundraising were mentioned in Mission's final
results announcement on 28 March 2024.
By contrast, the Board of Brave Bison believes that a combination with Brave
Bison would improve debt covenants and serviceability, increase scale, not
reduce it, and provide Mission shareholders with potential future value
growth.
3. Broader Service Offering
Brave Bison has a high-quality client list, exceptional staff and strong brand
recognition in the UK digital media, social media and digital commerce
markets. Large advertisers include New Balance, Curry's and Holland &
Barrett. Mission has an equally strong proposition with advanced specialisms
in integrated media, advertising, B2B, brand communications and sports
marketing.
By combining these practices as a single media, marketing and technology
services company, clients would be able to procure a scaled and integrated
solution across multiple channels and markets. This would allow the enlarged
Brave Bison to compete for a larger share of wallet, from larger clients.
Furthermore, a combination would provide Mission clients access to Brave
Bison's sports & entertainment network, a portfolio of approximately 600
social media channels across YouTube, Facebook, Snap, TikTok and Instagram.
These owned social media properties generate in excess of 1 billion average
monthly views, and are followed by engaged communities across high-value
demographics.
There can be no certainty any offer will be made, even if the pre-conditions
are satisfied or waived, nor as to the terms of any offer.
Pursuant to Rule 2.5 of the Code, Brave Bison reserves the right to vary the
form and/or mix of the consideration described in this announcement and vary
the transaction structure.
In accordance with Rule 2.6(a) of the Code, Brave Bison is required, by no
later than 5.00pm on 9 June 2024, to announce either a firm intention to make
an offer for Mission in accordance with Rule 2.7 of the Code or 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 can be
extended with the consent of the Panel on Takeovers and Mergers ("Takeover
Panel") in accordance with Rule 2.6(c) of the Code.
-----------
Notes:
(1) As at 31 December 2023, Mission reported outstanding bank
loans of £20.0m, repayable on revised terms by 5 April 2026. Additionally,
Mission reported acquisition obligations totalling £5.5m, with 80 per cent.
payable within two years, and a £4.3m HMRC Time to Pay agreement.
For further information please contact:
Brave Bison Group
plc
via Hannam & Partners
Oliver Green, Executive
Chairman
Theo Green, Chief Growth Officer
Philippa Norridge, Chief Financial Officer
Hannam & Partners
Tel: +44 (0) 20 7907 8500
Financial Adviser to Brave Bison
Andrew Chubb
Ernest Bell
Lucia Sviatkova
Cavendish Capital Markets
Tel: +44 (0) 20 7220 0500
Nominated Adviser & Broker
Ben Jeynes
Dan Hodkinson
Powerscourt
Tel: +44 (0) 20 7250 1446
Financial PR
Elly Williamson
Pete Lambie
Ollie Simmonds
Bravebison@powerscourt-group.com (mailto:Bravebison@powerscourt-group.com)
Rule 2.4 information
In accordance with Rule 2.4(c)(iii) of the Code, Brave Bison confirms that it
is not aware of any dealings in Mission shares that would require it to offer
a minimum level, or a particular form, of consideration under Rule 6 or Rule
11 of the Code. However, it has not been practicable for Brave Bison to make
enquiries of all persons acting in concert with it prior to the date of this
announcement in order to confirm whether any details are required to be
disclosed under Rule 2.4(c)(iii) of the Code. To the extent that any such
details are identified following such enquiries, Brave Bison shall make an
announcement disclosing such details as soon as practicable, and in any event
by no later than the time it is required to make its Opening Position
Disclosure under Rule 8.1 of the Code.
Rule 2.9
In accordance with Rule 2.9 of the Takeover Code, as at the date of this
announcement, Brave Bison's issued share capital consisted of 1,288,147,280
ordinary shares of 1 pence each and admitted to trading on the AIM of the
London Stock Exchange. There are no shares held in treasury. The International
Securities Identification Number for the ordinary shares is GB00BF8HJ774.
Important information
This announcement does not constitute a prospectus or prospectus equivalent
document. This announcement is not intended to, and does not, constitute or
form part of any offer, invitation or the solicitation of an offer to
purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any
securities, or the solicitation of any vote or approval in any jurisdiction,
pursuant to this announcement or otherwise. Neither Brave Bison nor Mission
shareholders should make any investment decision in relation to the Possible
Offer except on the basis of certain offer documentation published by Brave
Bison and/or Mission in due course. Any offer, if made, will be made solely by
certain offer documentation which will contain the full terms and conditions
of any offer, including details of how it may be accepted.
The distribution of this announcement in jurisdictions other than the United
Kingdom and the availability of any offer to shareholders of Brave Bison who
are not resident in the United Kingdom may be affected by the laws of relevant
jurisdictions. Therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom or shareholders of Brave Bison who
are not resident in the United Kingdom will need to inform themselves about,
and observe, any applicable requirements.
Disclaimer
H&P Advisory Ltd ("Hannam & Partners"), which is regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively for
Brave Bison and no-one else in connection with the possible offer and will not
be responsible to anyone other than Brave Bison for providing the protections
afforded to clients of Hannam & Partners nor for providing advice in
relation to the acquisition or any other matters referred to in this
announcement.
Cavendish Capital Markets Limited ("Cavendish"), which is authorised and
regulated in the United Kingdom by the FCA, is acting exclusively for Brave
Bison and no one else and will not be responsible to anyone other than Brave
Bison for providing the protections offered to clients of Cavendish or for
providing advice in connection with any matter referred to in this
Announcement. Neither Cavendish nor any of its affiliates (nor their
respective directors, officers, employees or agents) owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Cavendish in connection with this Announcement, any statement
contained herein, the Acquisition or otherwise. No representation or warranty,
express or implied, is made by Cavendish as to the contents of this
Announcement.
Forward-looking statements
This announcement and certain oral statements made regarding the Possible
Offer and other information published by Brave Bison containing statements
about Brave Bison, Mission and/or the combined group are or may be deemed to
be forward-looking statements. All statements other than statements of
historical facts included in this announcement, may be forward-looking
statements. Without limitation, any statements preceded or followed by or that
include the words "targets", "plans", "believes", "expects", "aims",
"intends", "hopes", "continues", "would", "could", "should", "will", "may",
"anticipates", "estimates", "projects" or words or terms of similar substance
or the negative thereof, are forward-looking statements. Forward-looking
statements include statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic performance,
indebtedness, financial condition, dividend policy, losses and future
prospects; and (ii) business and management strategies and the expansion and
growth of Brave Bison, Mission or the combined group's operations and
potential cost and operating synergies resulting from the Possible Offer.
These forward-looking statements are not based on historical fact and are not
guarantees of future performance. By their nature, such forward-looking
statements involve known and unknown risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions. Many factors could cause actual results to differ materially from
those projected or implied in any forward-looking statements. Many of these
risks and uncertainties relate to factors that are beyond the entities'
ability to control or estimate precisely. These factors include, but are not
limited to, changes in political and economic conditions, changes in levels of
capital investment, success of business and operating initiatives, the impact
of any acquisitions or similar transactions, changes in tenants' strategies
and stability, changes in the regulatory environment and fluctuations of
rates, and changes in tax rates. Except as expressly provided in this
announcement, they have not been reviewed by the auditors of Brave Bison or
Mission. Neither Brave Bison, nor any of its respective members, associates or
directors, officers, employees or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed or implied
in any forward-looking statements in this announcement will actually occur.
Neither Brave Bison, nor any of its respective members, associates or
directors, officers, employees or advisers assumes any obligation to update or
correct the information contained in this announcement except as required by
applicable law. Due to such uncertainties and risks, readers are cautioned not
to place undue reliance on such forward-looking statements, which speak only
as of the date of this announcement. Brave Bison disclaims any obligation to
correct or update any forward-looking or other statements contained in this
announcement, except as required by applicable law or by the rules of any
competent regulatory authority, whether as a result of new information, future
events or otherwise.
Disclosure requirements of the Code
Rule 8.3
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 10(th) business day following the commencement of the
offer period and, if appropriate, by no later than 3.30 pm (London time) on
the 10(th) 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, 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 Takeover Panel's website at
www.thetakeoverpanel.org.uk (http://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.
Publication of this announcement
A copy of this announcement will be available, subject to certain restrictions
relating to persons resident in restricted jurisdictions, at
https://bravebison.com (https://bravebison.com) , by no later than 12 noon
(London time) on 13 May 2024. The content of the website referred to in this
announcement is not incorporated into and does not form part of this
announcement.
No profit forecasts or estimates
Except as otherwise set out herein, nothing in this announcement (including
any statement of estimated synergies) is intended as a profit forecast or
estimate for any period and no statement in this announcement should be
interpreted to mean that earnings or earnings per share or dividend per share
for Brave Bison or Mission, as appropriate, for the current or future
financial years would necessarily match or exceed the historical published
earnings or earnings per share or dividend per share for Brave Bison or
Mission, as appropriate.
Sources & bases of information
In this announcement:
1. Unless otherwise stated, historical financial information relating to
the Company has been extracted or derived (without any adjustment) from the
Company's final results for the year ended 31 December 2023.
2. Unless otherwise stated, historical financial information relating to
Mission has been extracted or derived (without any adjustment) from Mission's
final results for the year ended 31 December 2023.
3. Year-on-year movements where presented in this announcement are based
on the reported final results for each fiscal year.
4. Certain figures included in this announcement have been subject to
rounding adjustments.
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