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Thu 13th Jun 2019 - Exclusive: Pod founders urge shareholders to reject £2.7m Azzurri Group sale as it is ‘not in their best interests’
Exclusive: Pod founders urge shareholders to reject £2.7m Azzurri Group sale as it is ‘not in their best interests’: The founders of Pod, the 22-strong, London-based healthy eating operator, have urged shareholders to reject its sale to Azzurri Group for £2.7m. As exclusively reported by Propel, Pod’s board has accepted the offer, which would see shareholders receive 5p per share while advisors would receive a total of £321,000. Three-quarters (75%) of shareholders are required to approve the deal by 5pm on Monday (17 June) for it to go through – otherwise the company warned it was likely it would go into administration. However, Tim Hall and Kate Skerritt, who founded Pod in 2005, have urged shareholders to reject the offer because it is “not in their best interests”. Hall, who has since launched sourdough pizza concept Three Joes, told Propel: “The 5p per share price is unguaranteed and not paid until June 2020 – and only if the company is still trading then. It works out at £150,000 return if someone invested £8m, yet more than twice that sum – £321,000 – will go to ‘advisors’ immediately. It’s astonishing and the final insult to all shareholders. I resigned from Pod and sold my shares five years ago as soon as Andrew Taylor, of Limerston Capital, became chairman. Nevertheless, it has been an agonising experience watching the slow demise of something you created from the sidelines. All three founding partners of Limerston Capital have occupied board seats at Pod – two of them (James Paget and Martim Avillez Caldeira) for more than five years – and the company has, in my opinion, continued to deteriorate.” Hall added: “Pod was a market-leading brand five years ago, striking partnership deals with Starbucks, SSP and The Restaurant Group for a European roll-out and in record trading growth with millions of cash in the bank. It’s a tragedy for our sector.” Pod put itself up for sale in May after revealing it needed “significant development capital to get the business back on track as it continues to see a drop in sales”. It appointed RSM to run the sales process, with three “credible” offers received. The Pod board has accepted the £2.7m offer from Azzurri Group, which operates ASK Italian, Zizzi and Coco di Mama. Of this, £1,250,000 is to repay the company’s trade creditors and for working capital purposes; £379,780.52 to procure repayment by the company of its secured bank debt facilities with National Westminster Bank in full; £595,687.53 to procure the repayment of about 60% of the loan notes and shareholder loans and other non-trading loans outstanding from the company or its wholly owned subsidiary, Pod Food Group; and £321,000 in respect of the company’s professional fees relating to the proposed transaction, payable to RSM and the company’s solicitor Charles Russell Speechlys. The balance of the buyer’s investment of £153,531.95 will be applied as consideration for the acquisition of the 3,020,839 ordinary shares, which amounts to 5p per share. Propel insights editor Mark Wingett will look further at the potential deal in his latest column, which will be sent to Premium subscribers tomorrow (Friday, 14 June) at 5pm

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