Eve Sleep plc: Update on planned fundraising

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.

eve Sleep plc

("eve", the "Company" or the "Group")

Update on planned fundraising

Introduction

On 15 November 2018 Eve Sleep (AIM: EVE), a sleep brand focussed on the UK, Ireland and France, announced the results of its business review and a trading update, as well as stating its intention to raise approximately £15 million of new equity (the "Fundraise"). Since then, the Company has been in discussions with existing and potential new investors, and today announces the following:

• Subject to the Panel granting a Rule 9 Waiver* and the approval of Independent Shareholders (the "Whitewash") as set out below, existing shareholders, being certain investment funds acting through their agent and discretionary investment manager Woodford Investment Management Ltd ("Woodford") have indicated that they intend to subscribe for up to £8.0 million of new ordinary shares of 0.1p each in the capital of the Company ("Ordinary Shares") at a price of 10p per share (the "Proposed Issue Price");
• Paul Pindar, Chairman of the Company, has indicated that he intends to subscribe for approximately £1.0 million of new Ordinary Shares at the Proposed Issue Price;
• James Sturrock, Chief Executive Officer of the Company, has indicated that he intends to subscribe for approximately £20k of new Ordinary Shares at the Proposed Issue Price; and
• Another existing investor in the Company, Channel 4, that provides advertising services to the Company, has indicated that (subject to agreement of documentation and relevant internal approvals) it intends to subscribe for Ordinary Shares for a value at the Proposed Issue Price of £0.9 million.

The Company has also received other indications of potential interest at the Proposed Issue Price from existing and new investors, and remains in discussion with a number of other potential investors whose internal investment processes are longer than a typical public markets fundraising timetable. These conversations will remain ongoing whilst the Company undertakes the Whitewash process set out below.

Takeover Code Whitewash

Woodford is currently beneficially interested in 41,774,848 Ordinary Shares, representing approximately 29.91 per cent. of the voting rights of the Company.

Whilst the Company is in discussions with a number of investors that could result in Woodford's participation in the Fundraise being scaled back to its pro rata position, on the basis that approximately £15 million is raised by the Company at the Proposed Issue Price and Woodford subscribes for approximately £8 million, following completion of the Fundraise, Woodford's voting rights in the Company would be approximately 42.04 per cent.  In these circumstances, in order for Woodford to avoid a mandatory offer obligation pursuant to Rule 9 of the Takeover Code, a Rule 9 Waiver* will be sought in respect of the Fundraise.

The Rule 9 Waiver* would be subject to approval by a simple majority of the votes cast on a poll by Independent Shareholders**.

It is anticipated that a circular relating to the Whitewash (the "Whitewash Circular") will be prepared and that such circular will also include notice of the resolutions required to issue and allot the new Ordinary Shares pursuant to the Fundraise. The Company is aiming to send the Whitewash Circular to shareholders in the first quarter of 2019.

Related party transactions

It is likely that the participation of Woodford, Paul Pindar and James Sturrock in the Fundraise will be classified as related party transactions for the purpose of Rule 13 of the AIM Rules for Companies. 

Current Trading

Further to the trading update on 15 November 2018, trading has continued to be strong. In particular, the Company experienced a very good Black Friday period. Unaudited revenues for the 11 months to 30 November 2018 were approximately £33m, and therefore the Company continues to anticipate that it will deliver revenues above market expectations for the year end 31 December 2018. The Company had unaudited net cash resources of approximately £6.5 million at 30 November 2018.

A further update regarding the progress of the Fundraise will be announced in due course.

Commenting, James Sturrock, CEO of eve Sleep, said:

"Whilst the Fundraise is not yet completed and is subject to a short delay, the Board remains confident of delivering the investment from existing, new and potentially strategic investors which is required to deliver the business strategy. We look forward to putting the business on a stronger footing with a view to establishing eve as a leading sleep and well-being brand."

Enquiries:

The person arranging release of this announcement on behalf of the Company is Abid Ismail, Chief Financial Officer.

Definitions

*Rule 9 Waiver means the waiver, conditional on its approval by the Independent Shareholders** taken by a poll, by the Takeover Panel Executive (the "Panel") of the obligation that, following the issue of the shares pursuant to the Fundraise, would otherwise arise on Woodford to make a general offer to all shareholders of the Company pursuant to Rule 9 of the Takeover Code as a result of the allotment and issue of shares pursuant to the Fundraise to Woodford.

**Independent Shareholders means the shareholders of the Company, excluding (i) Woodford and any person acting in concert with them who holds Ordinary Shares and (ii) as anticipated, the shareholders of the Company who subscribe for shares in the Fundraise and any person acting in concert with them (including any members of their immediate families, related trusts or connected persons).