AI assistant
Flutter Entertain — AGM Information 2021
Apr 29, 2021
Preview isn't available for this file type.
Download source fileauthor: Christina King
date: 2021-04-23 13:50:00+00:00
Special Business and special resolution of Flutter Entertainment plc (the “Company”) passed on 29 April 2021
The following resolutions were approved at the Company’s Annual General Meeting duly convened and held on 21 April 2021 at Arthur Cox, Ten Earlsfort Terrace, Dublin 2, D02 T380, Ireland at 11.00am. Each of the resolutions were voted on by way of a poll.
The following resolutions were duly passed:
Special resolution
Resolution 5: Convening of extraordinary general meetings on short notice
Resolution 5: Convening of extraordinary general meetings on short notice In Resolution 5, shareholders are being asked to maintain the existing authority in the Articles of Association which permits the Company to convene an extraordinary general meeting on not less than 14 clear days’ notice in writing where the purpose of the meeting is to consider an ordinary resolution. As a matter of policy, the 14 clear days’ notice will only be utilised where the Directors believe that it is merited by the business of the meeting and the circumstances surrounding such business. The Flutter Board availed of this authority during 2020 when convening an extraordinary general meeting of shareholders on 17 clear days’ notice for the purpose of seeking the approval of shareholders for the proposed acquisition of the 37.2% minority interest in FanDuel Parent Group LLC (“FanDuel”) from Fastball Holdings LLC (“Fastball”) as a related party transaction (the “December 2020 EGM”). The Board considered that it was in the best interests of the Company and its stakeholders to convene the December 2020 EGM at short notice in order to facilitate completion of the acquisition on or prior to 31 December 2020, which was a commercial imperative of Fastball. The December 2020 EGM was held on 29 December 2020 and, following approval of the acquisition by shareholders, the acquisition of the minority interest in FanDuel completed on 30 December 2020. The total number of votes cast (i.e. for, against and withheld) at the December 2020 EGM was 119,616,243, representing a turnout of approximately 73.24%, with approximately 99.99% of votes cast in favour of the resolution to approve the acquisition.
Special Business
Resolution 6: Authority to allot shares
Resolution 6 is divided into two parts. In paragraph (i), shareholders are being asked, in line with the principles of the guidance issued by the Investment Association, to renew the Directors’ authority to allot equity securities up to a maximum nominal amount of 33.33% of the issued share capital of the Company (excluding treasury shares) as at 23 March 2021 (being the latest practicable date before publication of this document) (the “Latest Practicable Date”), which would be equivalent to an aggregate nominal value of €5,255,413.83 (representing 58,393,487 ordinary shares).
In paragraph (ii) of Resolution 6, shareholders are being asked, again in line with the principles of the guidance issued by the Investment Association, to grant the Directors authority to allot up to 66.66% of the issued share capital of the Company (excluding treasury shares) as at the Latest Practicable Date, which would be equivalent to an aggregate nominal value of €10,510,827.66 (representing 116,786,974 ordinary shares), provided the allotment is made in connection with a rights issue or other pre-emptive issue in favour of holders of equity securities. The amount in paragraph (ii) would be reduced by the nominal amount of any ordinary shares already issued or assigned under the authority conferred by paragraph (i) of Resolution 6, so that the Company would not have the power to issue in total more than 66.66% of its issued share capital pursuant to the authority granted by this resolution. If Resolution 6 is passed, this authority will expire at the close of the AGM of the Company held in 2022 or the close of business on 28 July 2022 (whichever is earlier). Save for the allotment of shares in respect of the Group’s employee share schemes, as at the date of this document the Board has no current intention to exercise this authority and intends to comply with the guidance issued by the Investment Association.
Resolution 7: Disapplication of statutory pre-emption rights
Resolution 7A is a special resolution which asks shareholders to renew the Directors’ authority to allot shares for cash without first being required to offer them to existing shareholders of the Company. It gives the Directors authority to allot shares up to 5% of the issued share capital of the Company (excluding treasury shares) as at the Latest Practicable Date, which would be equivalent to an aggregate nominal value of €788,312.07 (representing 8,759,023 ordinary shares). If renewed, this authority will expire at the close of the AGM of the Company held in 2022 or the close of business on 28 July 2022 (whichever is earlier). Resolution 7B is a special resolution which asks shareholders to grant the Directors an additional authority to dis-apply statutory pre-emption rights in relation to allotments of new shares for cash in connection with an acquisition or specified capital investment. It gives the Directors further authority to allot shares up to 5% of the issued share capital of the Company (excluding treasury shares) as at the Latest Practicable Date, which would be equivalent to an aggregate nominal value of €788,312.07 (representing 8,759,023 ordinary shares). The additional authority is being sought in line with the Pre-Emption Group’s Statement of Principles. The authority to allot the additional 5% in Resolution 7B would be used only in connection with an acquisition or specified capital investment which is announced contemporaneously with the issue, or which has taken place in the preceding six-month period and is disclosed in the announcement of the issue. If granted, this authority will expire at the close of the AGM of the Company held in 2022 or the close of business on 28 July 2022 (whichever is earlier). Flutter carried out a number of non-pre-emptive issues of ordinary shares during 2020, details of which are contained on pages 130 and 131 of the Annual Report 2020. As described in further detail in the Annual Report 2020, the Board considers that each of these share issues was in the best interests of the Company and all stakeholders.
As at the date of this document the Board has no current intention to exercise the authority under Resolutions 7A or 7B. Nevertheless, the Board considers that it is important that shareholders renew these authorities in order to preserve the flexibility of the Company to respond to market challenges and opportunities in line with its peers.
Resolution 8: Authority to purchase own shares
In Resolution 8, shareholders are being asked to renew the authority of the Company, or any subsidiary, to make market purchases of the Company’s shares of up to 10% of the issued share capital of the Company (excluding treasury shares) as at the Latest Practicable Date (or, if less, up to 10% of the issued share capital (excluding treasury shares) on the date on which Resolution 8 is passed). The price range at which ordinary shares may be acquired cannot be less than the nominal value of the Company’s shares and cannot be greater than the higher of (i) an amount equal to 105% of the average of the middle market quotations of an ordinary share of the Company for the five business days immediately preceding the day on which the ordinary share is contracted to be 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 market where the purchase is carried out. Shares purchased by the Company may be cancelled or held in treasury pending cancellation or re-issue. As at the Latest Practicable Date, the total number of options to subscribe for shares in the Company is 1,999,328 which represents 1.14% of the total voting rights of the Company on that date. This percentage would increase to 1.27% if the full authority to buy back shares were used. If renewed, this authority will expire at the close of the AGM of the Company held in 2022 or the close of business on 28 July 2022 (whichever is earlier). The Board will only exercise the power to purchase shares in the future at price levels at which it considers purchases to be in the best interests of the shareholders generally after taking account of the Group’s overall financial position. The Board has no current intention to exercise this authority.
Resolution 9: Re-issue price of treasury shares
In Resolution 9, shareholders are being asked to pass a resolution authorising the Company to re-issue shares purchased by it and not cancelled and which are held as treasury shares off market within a price range, which is not less than 95% nor more than 120% of the average price of the Company’s shares over the five dealing days prior to the date of re-issue by the Company. If renewed, this authority will expire at the earlier of the close of the AGM of the Company held in 2022 or the close of business on 28 July 2022. The total number of treasury shares held by the Group on the Latest Practicable Date was 1,965,600, which represents 1.12% of the total issued share capital of the Company (excluding treasury shares) as at the Latest Practicable Date.
Resolution 10: Capitalisation of amounts standing to the credit of the Company’s merger reserve account
At the Extraordinary General Meeting of the Company held on 21 April 2020 (the “April 2020 EGM”) in connection with the proposed combination with The Stars Group Inc. (“TSG”), shareholders approved the capitalisation of the amounts standing to the credit of the merger reserve account of Flutter resulting from the issuance of new Flutter ordinary shares to former TSG shareholders on completion of the combination with TSG. The capitalisation was intended to facilitate a subsequent capital reduction of some or all of the share premium arising from the capitalisation in order to create distributable reserves within Flutter. As disclosed in the Consolidated Statement of Changes in Equity on page 145 of the Annual Report 2020, the amount of the merger reserve arising on completion of the combination with TSG was approximately £6,189.5m. Due to a number of factors, including in particular the disruption caused by the COVID-19 pandemic following the April 2020 EGM, the Company did not implement the capitalisation approved at the April 2020 EGM or any reduction of capital during 2020. In addition, as disclosed in the Consolidated Statement of Changes in Equity on page 145 of the Annual Report 2020, a further amount of approximately £1,793.4m was credited to the Company’s merger reserve account in connection with the issue of approximately 11,747,500 new ordinary shares as partial consideration for the acquisition of an additional 37.2% of the outstanding units of FanDuel in December 2020. As a result, as at 31 December 2020, an aggregate amount of approximately £7,982.9m was credited to the Company’s merger reserve account. The Board continues to believe that a capitalisation of the amounts standing to the credit of the Company’s merger reserve account and a subsequent capital reduction of the resulting undenominated capital to create distributable reserves would be in the best interests of shareholders and subject to confirmation by the Irish High Court. As a result, in Resolution 10 shareholders are being asked to approve the capitalisation of up to all amounts standing to the credit of the Company’s merger reserve account as at 31 December 2020 (being approximately £7,982.9m), in order to create undenominated capital that can be converted to distributable reserves by way of a subsequent capital reduction to be implemented in accordance with the authority sought in Resolution 11. If Resolution 10 is not approved at the AGM then Flutter will be unable, without further shareholder approval at a subsequent general meeting, to capitalise the amounts standing to the credit of Flutter’s merger reserve account following completion of the combination with TSG or the acquisition of an additional 37.2% of the outstanding units of FanDuel; these amounts will not form part of any reduction of capital implemented in accordance with Resolution 11 (if approved by shareholders and confirmed by the Irish High Court) and will not form part of Flutter’s distributable reserves.
Resolution 11: Approval of reduction in the company capital of the Company
At the April 2020 EGM, shareholders also approved the implementation of a capital reduction of some or all of the undenominated capital arising from the capitalisation approved at that meeting in order to create distributable reserves within Flutter, subject to the approval of the Irish High Court. Under Irish company law, any dividends, share redemptions or repurchases made by Flutter must be funded from distributable reserves or, for share repurchases or redemptions, from the proceeds of a fresh issue of shares for that purpose. Section 84 of the Companies Act 2014 enables a company, subject to shareholder approval and the confirmation of the Irish High Court, to create distributable reserves through a reduction of company capital. Flutter’s existing distributable reserves will be reduced over time by any dividends, share repurchases or redemptions which it may declare or implement and accordingly Flutter wishes to ensure that it is not constrained from paying dividends, or redeeming or repurchasing shares by a lack of distributable reserves in circumstances where it is otherwise in a position to pay dividends and/or redeem or repurchase shares. As outlined above, due to a number of factors, including in particular the disruption caused by the COVID-19 pandemic following the April 2020 EGM, the Company did not implement the capitalisation or any reduction of capital during 2020. In addition, following the April 2020 EGM, additional undenominated capital of approximately £811.9 million and £1,119.9 million was credited to the Company’s share premium account as a result of the implementation of the share placings in May 2020 and December 2020 respectively. The Board continues to believe that a capital reduction of the undenominated capital standing to the credit of Flutter’s share premium account as at 31 December 2020, together with any undenominated capital arising as a result of the implementation of the capitalisation referred to in Resolution 10, to create distributable reserves would be in the best interests of shareholders. As a result, in Resolution 11 shareholders are being asked to approve, subject to confirmation of the Irish High Court: (i) the reduction of Flutter’s company capital by the cancellation of up to the entire amount of any undenominated capital credited to Flutter’s share premium account as at 31 December 2020, together with any undenominated capital arising as a result of the implementation of the capitalisation referred to in Resolution 10; (ii) the reserve resulting from such cancellation being treated as profits available for distribution; and (iii) the Directors being authorised to determine the amount of such reduction and whether to seek (or not seek) the approval of the Irish High Court. If Resolution 11 is not approved at the AGM, then the undenominated capital standing to the credit of Flutter’s share premium account, including any amounts arising as a result of the capitalisation referred to in Resolution 10, will not be available to fund distributions, including dividends and share repurchases, which may be declared by the Board in future. Even if Resolution 11 is approved by shareholders at the AGM, any proposed capital reduction would be subject to the confirmation of the Irish High Court. Although the Directors are not aware of any reason why the Irish High Court would not approve the creation of distributable reserves in this manner, the issuance of the required Irish High Court order is a matter entirely at the discretion of the Irish High Court and there is no guarantee that such approval will be forthcoming.