P R E S S R E L E A S E
VICTORIA HOUSE HIGH STREET SEVENOAKS KENT TN13 IJG
30th December, 2001
JUST GROUP SHAREHOLDERS
ACT TO SAVE COMPANY
In what may be an unprecedented situation, shareholders of Just Group PLC, the children entertainment rights business, are currently attempting to secure funding for Just Group which was suspended on the Alternative Investment Market last month.
The Company released a statement on the 1st November advising that several options to secure short term funding were being pursued,. However, it is understood that the Board have so far been unsuccessful in their attempts to raise funding.
A group of six shareholders, all businessmen (who for ease of recognition have named themselves GOS), met last week with Ian Miles, Chairman of Just, and David Newcombe, Finance Director, to try to ascertain the Group’s current position and to put forward a proposal for Just’s shareholders to provide the required funding, which would enable the Group’s Auditors, Andersen, to sign-off the annual accounts to April, 2001.
The GOS members are convinced that Just Group has an exceptional future, particularly with Butt Ugly Martians, the Group’s major intellectual property, recently launched to much acclaim in the USA on Nickelodeon Television. Christopher Jones, spokesman for GOS, commented, “We believe the worldwide potential for Butt Ugly Martians is excellent, with on-going royalties from licences generating substantial revenue. Nickelodeon is the prime children’s channel and reaches 80 Million homes in the USA alone and early indications are the launch is a resounding success. The Butt Ugly Martians could emulate the success of products like Power Rangers or,on a smaller scale, Pokemon. The latter has massed worldwide sales to date in excess of £10 Billion”.
It is understood that the agreement between Just and Universal, which includes a movie deal, will result in the entire cost of future productions of Butt Ugly Martians being met by Universal saving Just considerable sums in production costs. It is also believed Just have still retained a substantial percentage of future revenue after renegotiation of the contract with Universal, in the summer, when it came to light that Universal in fact
Continued…/2
PRESS RELEASE – FROM GOS & JAG PAGE 2 30th December 2001
already owned the rights to Butt Ugly Martians, as a result of their acquiring Polygram, which had apparently bought the rights five years earlier.
David Rose, a Chartered Accountant and member of GOS, stated, “Subject to clarification of the deal with Universal, which is obviously essential, together with critical financial information, we proposed to the board at our meeting last Thursday that we feel shareholders would support a rights issue”. Mr. Miles subsequently informed the GOS team that if good indicative support from shareholders could be obtained, he would personally underwrite a rights issue for the total funding requirement of £8 million and, furthermore, stated to GOS that he would invest £2 million himself taking up 25% of the offer. Mr Jones has telephoned Teather&Greenwood, the house brokers for Just, to try to arrange a meeting between all parties to ensure the proposal is a success.
Just Group also own other characters with global potential such as McDonalds Farm and Pinky and Perky, in addition to owning subsidiary companies such as Media Key, acquired by Just in December last year.
The GOS team are questioning whether Just Group’s current predicament is due to the auditors apparent failure to conduct due diligence on Media Key, as reported in the Financial Times on Monday, resulting in a ‘black hole’ running into millions of pounds; scores of Just shareholders have voiced their concern to GOS members about the conflict of interest, as Andersen was also the auditor for Media Key prior to the acquisition by Just. There is also serious concern amongst shareholders at the Directors’alleged failure to pursue what is believed may be a substantial claim against Andersen, possibly in excess of £5 million, and as much as £7M according to the FT report.
On the 18th December, the GOS team also met with Wilf Shorrocks, the ex-CEO of Just, who was dismissed from the Company at the end of August, together with his wife Paula, Commercial Director, who between them, still own 90 million shares in Just. Mr. Jones stated, “ The meeting was specifically to obtain the Shorrocks’ personal views on this year’s developments, the current situation and future potential of Just. They were both very positive that the Company has incredible potential and believed that the deal they renegotiated themselves with Universal in August would be very lucrative for Just.” Mr. Jones added, “Mr. Shorrocks informed me this weekend that both he and his wife would support shareholder action to save the Company, regardless of whether or not he has any future involvement in the Company. I have personally received the Shorrocks’ full support in writing as they are so impressed with the professional and thorough manner in which GOS are acting in all shareholders interests.
There are several other issues and concerns for the GOS team which have come to light, recently and a response from the non-executive Directors is anticipated shortly.
Continued…/3
PRESS RELEASE – FROM GOS AND JAG PAGE 3 30thDecember,2001
In the meantime, GOS believe that to resolve the short term funding issue, it is very realistic to project that 10% of the 28,000 Just shareholders would support a rights issue. Christopher Jones added, “Based on an average investment of £3,000 each by 2,800 shareholders, a total of £8.4 million would be raised. Many shareholders have indicated to us, so far, that they would invest over £10,000 and as much as £50,000, far in excess of the average we predicted. Mr. Jones continued, “We believe it is the duty of the Directors of every public company, on behalf of the shareholders whom, after all, own the Company, to explore all avenues for funding, particularly with so much potential in the case of Just Group and with such loyal shareholders. It is also the Directors duty to provide shareholders with proper, accurate information”
In addition to the proposal of a rights issue, Mr.Jones added, “GOS members are also in serious discussion with several of their own contacts who are potential substantial investors in Just, but we are still seeking further essential information from the Board as we feel very disappointed with the ‘Funding Document,’ sent to myself this week by Mr. Newcombe, which is wholly inadequate. We are hoping to meet on the 2nd January with the non-executive Directors of Just who have strongly indicated to me that they will fully support our attempts to save the Company and, to this end, agreed on Thursday that on provision of one of our backers details, we will receive figures and projections,which one would expect, in a professional manner. This is obviously a step in the right direction. Details have now been faxed to the Company from one potential investor”.
Another GOS member, Rene Morel, an IT expert based in the City, has established Just Action Group (JAG) for shareholders, of which he is Chairman. JAG has a professional
website which has attracted over 260 Just shareholder members through its first week
over Christmas, with 10,000 hits to the site. Mr.Morel stated, “It is essential that all shareholders register at the JAG site and take an active interest in securing the future of their Company. This will demonstrate to the Board of Just that shareholders will support the Group, providing they are given adequate information. Registering on the site is fast and simple and does not constitute a firm commitment; we are only trying to gain, at this stage, an indication that the rights issue would succeed”.
The GOS shareholders met unusually through an internet bulletin board on the UK’s leading financial website, ADVFN. If GOS succeeds in its aims, and helps secure funding for Just Group, it may be the first time that an internet board will have brought together a group of shareholders who will have been able to achieve such a significant influence on their Company's future and the future of fellow shareholders.
The JAG (Just Action Group) website address for shareholders is www.justgroup.biz
END of press release.
_____________________________________________________________________
CONTACT: Christopher Jones ***********************
Rene Morel JAG (Just Action Group): www.justgroup.biz |
