PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP
787 Seventh Avenue, New York, NY 10019 25 Bishopsgate, London EC2N 3AR, United Kingdom
MEMORANDUM
Matter No.: 1017-00002
April 3, 2024
TO: The Board of Directors, Aurelius Global Media Group PLC
Attention: Dame Elspeth Greenvale, Independent Non-Executive Chair
Nadine Khalil, General Counsel & Corporate Secretary
FROM: Nathaniel Bower, Responsible Partner Audrey Zhou, Lead Associate Brendan Walsh, Working Associate
RE: UK Regulatory Considerations — FCA Disclosure Guidance and Transparency Rules (DTR 5) Overlay Applicable to AGMG as a Dual-Listed Issuer
This memorandum is a privileged and confidential attorney-client communication and constitutes attorney work product. It is intended solely for the use of the named recipients. It should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP. Disclosure to any third party may result in a waiver of the attorney-client privilege and work product protections.
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I. Executive Summary
The purpose of this memorandum is to analyze the application of the Financial Conduct Authority's ("FCA") Disclosure Guidance and Transparency Rules ("DTR"), and specifically DTR 5 (the Vote Holder and Issuer Notification Rules), as they apply to Aurelius Global Media Group PLC ("AGMG" or the "Company") in the context of the ongoing activist campaign by Corvus Peak Capital Partners LP ("Corvus Peak") and the contested CEO succession process currently underway. This memorandum is addressed to the Board of Directors and is intended to serve as a practical guide to the obligations imposed on the Company and its major shareholders under the UK disclosure regime, as well as a framework for evaluating compliance and potential enforcement considerations arising in the proxy contest.
AGMG occupies a distinctive regulatory posture. Although incorporated in the State of Delaware, the Company is registered as an overseas company in England and Wales. Its ordinary shares are listed on the New York Stock Exchange ("NYSE") under the ticker symbol AGMG and are simultaneously admitted to the premium segment of the Official List of the FCA and to trading on the London Stock Exchange ("LSE") Main Market under the ticker symbol AGMG.L. This dual-listed status subjects the Company and its shareholders to parallel—but distinct—disclosure frameworks in both the United States and the United Kingdom.
Our key conclusions are as follows:
First, AGMG and its major shareholders are subject to both the US and UK disclosure regimes. DTR 5 imposes notification obligations on vote holders that operate independently of, and in addition to, the US Schedule 13D/13G filing requirements under Sections 13(d) and 13(g) of the Securities Exchange Act of 1934 (the "Exchange Act"). Compliance with the US regime does not satisfy the requirements of DTR 5, and vice versa.
Second, AGMG itself has affirmative issuer-side disclosure obligations under DTR 5, including the obligation to publish TR-1 notifications received from vote holders and to disclose changes in total voting rights on a monthly basis.
Third, given Corvus Peak's rapid accumulation of an 8.7% stake in AGMG—crossing at least six DTR 5 notification thresholds—there is a significant risk that Corvus Peak may not have complied with its DTR 5 notification obligations. If Corvus Peak has relied exclusively on its US Schedule 13D filings, such filings would not satisfy the separate TR-1 notification requirement under DTR 5, and the two-trading-day notification window under DTR 5 is materially shorter than the analogous US filing deadlines.
Fourth, we recommend that the Board ensure that its advisors—including Ashworth Velmoran LLP as standing outside counsel and Citrine Advisory Group Inc. as proxy solicitor—coordinate with UK regulatory counsel to monitor DTR 5 compliance by Corvus Peak and other major shareholders, and that AGMG establishes internal protocols to fulfill its own issuer notification obligations under DTR 5 in a timely and comprehensive manner.
This memorandum should be read in conjunction with our prior work product in this matter, including the Memorandum on Board Fiduciary Duties in CEO Succession (dated March 25, 2024), the Memorandum on Advance Notice Bylaw Compliance Review (dated March 5, 2024), and the Memorandum on DGCL § 220 Books-and-Records Demand (dated March 26, 2024).
II. Background
A. AGMG's Corporate Structure and Listing Status
Aurelius Global Media Group PLC is a global media and entertainment conglomerate with operations spanning digital streaming, live entertainment, e-commerce, and advertising. The Company's full legal name is Aurelius Global Media Group PLC. It was originally incorporated in the State of Delaware on September 14, 2009, pursuant to its Certificate of Incorporation filed with the Delaware Secretary of State (Delaware File Number 4827193; Employer Identification Number 26-4831097). The Company's registered agent in Delaware is Pinnacle Corporate Services Inc., located at 1209 Orange Street, Wilmington, Delaware 19801.
Notwithstanding its Delaware incorporation, the Company is registered as an overseas company in England and Wales and maintains its principal headquarters at 14 Sceptre Row, London EC2V 7QN, United Kingdom. This dual domiciliation reflects the Company's historical evolution from its origins as a US-based digital media startup to its current status as a global media enterprise with a substantial UK and European operational footprint.
The Company's ordinary shares are listed on two major securities exchanges:
• New York Stock Exchange (NYSE): The Company's primary listing, under the ticker symbol AGMG.
• London Stock Exchange (LSE) Main Market: The Company's shares are admitted to the premium segment of the Official List of the FCA and to trading on the LSE Main Market, under the ticker symbol AGMG.L.
As of March 1, 2024, the Company's market capitalization was approximately £6.82 billion (approximately $8.65 billion at an exchange rate of $1.2683 per pound sterling). Total shares outstanding as of the same date were 412,600,000 ordinary shares. For the fiscal year ended December 31, 2023, the Company reported total revenue of $4.37 billion and EBITDA of $812 million, representing an EBITDA margin of 18.6%. The Company employs approximately 23,400 individuals worldwide.
AGMG's business is organized into four principal operating segments:
1. Streaming & Digital Content (approximately 42% of FY 2023 revenue), anchored by the Company's proprietary streaming platform, Luminos, which was launched in 2019 and has grown to become a significant competitor in the global streaming landscape;
2. Live Entertainment & Events (approximately 24% of FY 2023 revenue), encompassing the Company's portfolio of concert venues, theatrical productions, and live experience properties;
3. E-Commerce & Merchandising (approximately 19% of FY 2023 revenue), consisting of the Company's direct-to-consumer retail operations and licensed merchandise programs; and
4. Advertising & Brand Partnerships (approximately 15% of FY 2023 revenue), including the Company's advertising-supported streaming tier and branded content partnerships.
The Company's dual-listing status is of central importance to this memorandum, as it subjects AGMG and its shareholders to the regulatory jurisdiction of both the US Securities and Exchange Commission ("SEC") and the UK Financial Conduct Authority ("FCA"), and to the disclosure frameworks administered by each regulator.
B. The Activist Campaign and CEO Succession Context
The Board is well familiar with the circumstances giving rise to this memorandum, but we set forth the key events below for completeness and to provide context for the DTR 5 analysis that follows.
January 18, 2024: Corvus Peak Capital Partners LP, a Delaware limited partnership (general partner: Corvus Peak Management LLC; Founding Partner and Chief Investment Officer: Damien Solberg; Portfolio Manager for the AGMG campaign: Erin Nakamura; assets under management of approximately $7.2 billion), filed an initial Schedule 13D with the SEC disclosing a 6.1% beneficial ownership stake in AGMG. This filing represented the first public indication of Corvus Peak's activist interest in the Company.
February 12, 2024: Corvus Peak sent a demand letter to the Board requesting, among other things, the appointment of new independent directors, a comprehensive strategic review of the Company's operations and capital allocation, and the adoption of a formal CEO succession plan. The letter was addressed to Dame Elspeth Greenvale in her capacity as Independent Non-Executive Chair and was made publicly available through a press release issued contemporaneously.
February 26, 2024: Corvus Peak filed an amended Schedule 13D with the SEC disclosing an increase in its beneficial ownership stake to 8.7%, corresponding to 35,896,200 shares. The filing indicated an average cost basis of approximately $20.97 per share and a total investment of approximately $752.8 million. In connection with the amended filing, Corvus Peak announced its intention to nominate three director candidates for election at the forthcoming Annual General Meeting.
March 1, 2024: Corvus Peak submitted formal director nominations to the Company's Corporate Secretary in accordance with the advance notice provisions of the Company's Amended and Restated Bylaws (which establish a nomination window of February 10 through March 11, 2024 for the upcoming Annual General Meeting). The three nominated candidates are Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu.
March 8, 2024: Marcus Vane resigned as Chief Executive Officer of AGMG, effective immediately. The Board designated Priya Nair-Whitfield as Interim CEO pending the completion of a permanent CEO search process.
March 12, 2024: The Board engaged Calderwood & Harkness LLP as independent governance counsel to advise on matters arising from the activist campaign and CEO succession process.
April 1, 2024: Corvus Peak filed a preliminary proxy statement with the SEC in connection with its planned solicitation of proxies for the election of its three director nominees.
The following advisors and counsel are engaged in connection with the proxy contest and related matters:
• Corvus Peak's outside counsel: Blackthorn Howell & Crane LLP (lead partner: Dominic Sayer)
• Corvus Peak's proxy solicitor: Falconer Strauss LLC (lead contact: Derek Huang)
• AGMG's standing outside counsel: Ashworth Velmoran LLP (lead partner: Martin Cho)
• AGMG's proxy solicitor: Citrine Advisory Group Inc. (lead contact: Sandra Eriksson)
• AGMG's independent governance counsel: Calderwood & Harkness LLP (this firm)
The Company's Annual General Meeting is scheduled for June 7, 2024, at which the Corvus Peak director slate will be presented to shareholders alongside the Board's own nominees.
C. Key Shareholders Subject to Potential DTR 5 Obligations
Based on publicly available SEC filings and information provided by the Company's transfer agent, the following shareholders hold positions that are at or above the first DTR 5 notification threshold of 3%, or are otherwise relevant to the analysis in this memorandum:
Corvus Peak Capital Partners LP — 8.7% (35,896,200 shares). Principal office: 590 Lexington Avenue, 34th Floor, New York, NY 10022. As described above, Corvus Peak is the activist shareholder that initiated the proxy contest. Its stake has been acquired through a series of open market purchases over a period of several months, crossing multiple DTR 5 notification thresholds.
Thorne Capital Management LP — 6.3% (25,993,800 shares). Thorne Capital is a passive long-only investment fund headquartered in Boston, Massachusetts. Its portfolio manager is Oliver Thorne. Thorne Capital has not publicly expressed a position on the proxy contest or the CEO succession process.
Ridgeway Asset Management Ltd. — 5.1% (21,042,600 shares). Ridgeway is a London-based traditional asset manager organized as a private limited company under the laws of England and Wales. Its Head of Governance is Fiona Ashcroft. As a UK-domiciled institutional investor, Ridgeway is likely to have a higher degree of familiarity with the DTR regime than US-based shareholders.
Windermere Pension Trust — 4.4% (18,154,400 shares). Windermere is a US public pension fund based in California. Its Chief Investment Officer is Bernard Napier. Windermere has not publicly taken a position on the proxy contest.
Management & Board Insiders — 3.2% collectively (13,203,200 shares). The largest individual insider holding is that of Hugh Pemberton, co-founder of AGMG and current Non-Executive Director, who holds 2.1% (8,664,600 shares). The remaining insider holdings are distributed among other directors and officers of the Company.
III. Overview of the UK Disclosure Regime — DTR 5
A. Statutory and Regulatory Framework
The UK's major shareholding notification regime is primarily established under the Financial Services and Markets Act 2000 ("FSMA"), as amended, and the FCA Handbook's Disclosure Guidance and Transparency Rules sourcebook ("DTR"). The DTR was originally promulgated to transpose the requirements of the European Union's Transparency Directive (Directive 2004/109/EC, as amended by Directive 2013/50/EU) into UK domestic law. Following the United Kingdom's withdrawal from the European Union, the DTR was retained and amended as part of the UK's body of retained EU law under the European Union (Withdrawal) Act 2018 (commonly referred to as the "Withdrawal Act"). The FCA has since made further amendments to the DTR to reflect the UK's post-Brexit regulatory posture, but the fundamental architecture of the major shareholding notification regime remains substantially similar to its EU predecessor.
DTR 5, titled "Vote Holder and Issuer Notification Rules," sets forth the rules governing the notification of major shareholdings in issuers whose shares are admitted to trading on a UK-regulated market. For purposes of DTR 5, the LSE Main Market is a UK-regulated market, and the admission of AGMG's shares to the premium segment of the Official List and to trading on the LSE Main Market brings the Company squarely within the scope of the DTR 5 regime.
It is important to emphasize that DTR 5 applies to AGMG notwithstanding its incorporation in Delaware. The relevant connecting factor for DTR 5 purposes is the admission of shares to trading on a UK-regulated market, not the place of incorporation of the issuer. Furthermore, because AGMG's shares are admitted to the Official List and the Company is registered as an overseas company in England and Wales, AGMG is treated as having the United Kingdom as its "home state" for purposes of DTR 5, which has implications for the applicable notification thresholds, as discussed below.
B. Scope of DTR 5 — Who Is Subject?
DTR 5 imposes notification obligations on two categories of persons:
Vote holders. Under DTR 5.1.1R, a person who holds, directly or indirectly, voting rights in shares admitted to trading on a UK-regulated market is subject to the notification obligations set forth in DTR 5. The term "person" encompasses natural persons, legal entities, partnerships, trusts, and any other form of legal arrangement. Importantly, DTR 5 applies regardless of where the vote holder is domiciled or organized. A US-based hedge fund, a Cayman Islands special purpose vehicle, a UK pension trust, and an individual retail investor are all equally subject to DTR 5 if they hold voting rights in shares admitted to trading on a UK-regulated market such as the LSE Main Market.
This extraterritorial reach is of particular significance in the present context, as three of the four major external shareholders of AGMG identified above—Corvus Peak, Thorne Capital, and Windermere—are domiciled and headquartered in the United States. Their obligations under DTR 5 arise solely by virtue of the fact that AGMG's shares are admitted to trading on the LSE Main Market, regardless of whether those particular shareholders acquired or hold their shares through the NYSE or the LSE.
The issuer. AGMG itself has affirmative obligations under DTR 5.6 and DTR 5.8, discussed in detail in Section VII below. These obligations include the disclosure of total voting rights on a monthly basis and the publication of TR-1 notifications received from vote holders.
C. Notification Thresholds Under DTR 5.1
The notification thresholds under DTR 5 are set forth in DTR 5.1.2R. For an issuer whose "home state" is the United Kingdom—which, as noted above, includes AGMG by virtue of its Official List admission and overseas company registration—the initial notification threshold is 3% of total voting rights. Subsequent notification obligations are triggered at each 1% increment thereafter: 4%, 5%, 6%, 7%, 8%, 9%, 10%, and continuing at each 1% threshold up to 100%.
A notification obligation arises whenever a person's percentage of voting rights reaches, exceeds, or falls below any of these thresholds. Thus, both acquisitions and dispositions of voting rights can trigger notification obligations, and a person who initially crosses the 3% threshold on the upside and subsequently falls back below 3% would have two separate notification obligations: one upon crossing 3% on the upside and another upon falling below 3% on the downside.
The 3% initial threshold is significantly lower than the 5% threshold applicable under the US Schedule 13D regime. This difference has practical importance for shareholders of dual-listed issuers like AGMG, as a person who accumulates a stake of, for example, 4.9% would not be required to file a Schedule 13D with the SEC but would already have triggered two separate notification obligations under DTR 5 (at 3% and 4%).
Each 1% increment constitutes a separate and independent notification obligation. A person who increases holdings from 2.9% to 6.1% in a single transaction (or series of transactions) would be required to submit separate notifications for the crossing of the 3%, 4%, 5%, and 6% thresholds. In practice, these may be submitted simultaneously or in a single TR-1 form that identifies all thresholds crossed, but the obligation to notify exists independently at each level.
D. What Constitutes "Voting Rights" for DTR 5 Purposes
The concept of "voting rights" under DTR 5 is broadly construed and encompasses several categories of holdings:
Direct holdings. The most straightforward category is the direct holding of shares carrying voting rights. A person who is the registered holder of ordinary shares of AGMG that carry the right to vote at general meetings of the Company holds voting rights for DTR 5 purposes.
Indirect holdings. Under DTR 5.2.1R, a person must also count voting rights held by controlled undertakings. A "controlled undertaking" is an entity in which the person holds a majority of voting rights, has the right to appoint or remove a majority of the board of directors, or exercises dominant influence. This is relevant to corporate structures where shares are held through subsidiary entities or investment vehicles.
Financial instruments. DTR 5.3.1R extends the notification regime to qualifying financial instruments—instruments that result in an entitlement to acquire, on the holder's own initiative alone, under a formal agreement, already-issued shares carrying voting rights. This category includes, but is not limited to, call options, contracts for difference ("CFDs"), equity swaps, convertible securities, and similar derivative instruments. The inclusion of financial instruments in the DTR 5 framework is designed to capture economic exposure to voting rights that might not be reflected in direct or indirect share ownership.
Aggregation rules. Under DTR 5.1.3R, a person must aggregate all of the following when determining whether a notification threshold has been reached, exceeded, or fallen below: (i) direct holdings of voting rights; (ii) indirect holdings through controlled undertakings; and (iii) qualifying financial instruments. This aggregation requirement means that a person who holds 2.5% of voting rights directly and also holds call options that, if exercised, would result in an additional 1% of voting rights would have a total holding of 3.5% for DTR 5 purposes and would have crossed the 3% notification threshold.
E. Timing and Content of Notifications
Timing. Under DTR 5.8.3R, a person who is required to make a notification under DTR 5 must do so as soon as possible and in any event no later than two trading days after the date on which the person learns, or is deemed to have learned, of the acquisition, disposal, or other event that caused the relevant threshold to be reached, exceeded, or fallen below. For these purposes, a person is deemed to have learned of the event no later than two trading days after the transaction that gave rise to the threshold crossing. This means that, in the worst case, a person has a maximum of four trading days from the date of the transaction to submit the notification—two days to become aware of the threshold crossing, and two further days to submit the notification. In practice, however, institutional investors with sophisticated compliance and trade surveillance systems are expected to have actual knowledge of threshold crossings promptly, and reliance on the deemed knowledge provisions to extend the notification period may attract regulatory scrutiny.
The two-trading-day notification window under DTR 5 is significantly shorter than the ten-calendar-day initial filing deadline for a Schedule 13D under the US regime, and arguably shorter than the "promptly" standard for amendments to Schedule 13D (which the SEC has historically interpreted as approximately two business days but has not rigidly defined). This timing differential is a critical source of compliance risk for US-based shareholders of dual-listed issuers who may be accustomed to the more generous US filing deadlines.
Content. The prescribed content of a DTR 5 notification is set forth in DTR 5.8.1R and DTR 5.8.2R and includes:
• The identity of the notifying person (and, where applicable, the identity of the natural person or legal entity that is entitled to exercise voting rights on behalf of the notifying person);
• The date on which the threshold was reached, exceeded, or fallen below;
• The resulting percentage of voting rights held by the notifying person;
• The number of voting rights held directly and indirectly;
• The chain of controlled undertakings through which voting rights are effectively held (if applicable); and
• Such additional information as may be specified in the standard notification form.
Form. Notifications under DTR 5 are submitted using the TR-1 form, which is the standard notification form prescribed by the FCA for major shareholding notifications. The TR-1 form is a structured document that requires the notifying person to provide the information described above in a standardized format. A sample TR-1 form is attached as Appendix C to this memorandum for reference.
F. Issuer Obligations Under DTR 5.6 and DTR 5.8
As noted above, AGMG has its own set of obligations under DTR 5, which operate alongside the notification obligations of vote holders.
Monthly total voting rights disclosure (DTR 5.6.1R). At the end of each calendar month during which an increase or decrease in the total number of voting rights has occurred, AGMG must disclose to the public the total number of voting rights and the total capital of the Company. This disclosure enables shareholders to calculate whether their holdings have crossed a notification threshold as a result of changes in the denominator (i.e., changes in total voting rights rather than changes in the number of shares they hold). This obligation is discussed further in Section VII.A below.
Publication of vote holder notifications (DTR 5.8.12R). Upon receipt of a TR-1 notification from a vote holder, AGMG must make public all of the information contained in the notification by the end of the trading day following receipt. This is a tight timeline that requires the Company to have in place efficient internal processes for receiving, reviewing, and disseminating TR-1 notifications. The publication must be effected through a Regulatory Information Service ("RIS"), which is a service authorized by the FCA for the dissemination of regulatory announcements. The information must also be filed with the FCA's National Storage Mechanism ("NSM"), which is the central repository for regulatory filings in the United Kingdom.
These issuer-side obligations are discussed in greater detail in Section VII of this memorandum.
IV. Application of DTR 5 to Corvus Peak's Stake Accumulation
A. Analysis of Corvus Peak's Threshold Crossings
Corvus Peak's public SEC filings reveal a pattern of rapid stake accumulation in AGMG that would have triggered multiple independent DTR 5 notification obligations.
Initial Schedule 13D (January 18, 2024) — 6.1% stake. Corvus Peak's initial Schedule 13D disclosed a beneficial ownership stake of 6.1% of AGMG's total outstanding shares. Assuming that Corvus Peak accumulated this stake gradually through open market purchases (as is typical for activist campaigns), Corvus Peak would have crossed the following DTR 5 notification thresholds during the course of its accumulation:
• 3% threshold: triggered when Corvus Peak's aggregate holdings first reached or exceeded 3% of total voting rights (approximately 12,378,000 shares);
• 4% threshold: triggered when holdings first reached or exceeded 4% (approximately 16,504,000 shares);
• 5% threshold: triggered when holdings first reached or exceeded 5% (approximately 20,630,000 shares); and
• 6% threshold: triggered when holdings first reached or exceeded 6% (approximately 24,756,000 shares).
Each of these threshold crossings would have generated a separate notification obligation under DTR 5.1.2R, requiring Corvus Peak to submit a TR-1 notification to AGMG as soon as possible and in any event within two trading days of becoming aware (or being deemed to have become aware) of the crossing.
Amended Schedule 13D (February 26, 2024) — 8.7% stake. Corvus Peak's amended Schedule 13D disclosed an increase in its beneficial ownership stake to 8.7% (35,896,200 shares). The increase from 6.1% to 8.7% would have triggered the following additional DTR 5 notification thresholds:
• 7% threshold: triggered when holdings first reached or exceeded 7% (approximately 28,882,000 shares); and
• 8% threshold: triggered when holdings first reached or exceeded 8% (approximately 33,008,000 shares).
In total, Corvus Peak's accumulation of its current 8.7% stake would have triggered at least six separate DTR 5 notification obligations (at the 3%, 4%, 5%, 6%, 7%, and 8% thresholds). Each of these is an independent obligation that must be satisfied separately, and failure to comply with any individual notification obligation constitutes a separate regulatory breach.
Timeline comparison. It is critical to note the divergence between the US and UK notification timelines. Corvus Peak's initial Schedule 13D was filed on January 18, 2024—which was within the ten-calendar-day deadline prescribed by the Exchange Act for the initial 13D filing upon crossing 5%. However, the DTR 5 notification obligations would have arisen significantly earlier, at the 3% threshold, and each subsequent threshold crossing would have required notification within two trading days. If Corvus Peak began accumulating its position in, for example, late 2023 or early January 2024, the 3% and 4% thresholds may have been crossed weeks before the January 18, 2024 Schedule 13D filing, and the DTR 5 notifications for those crossings would have been due far in advance of the 13D filing.
Moreover, the Schedule 13D filing itself does not constitute a DTR 5 notification. Even if the 13D were filed on the same day as a DTR 5 threshold crossing, the 13D is filed with the SEC through the EDGAR system and does not serve as a TR-1 notification to the issuer. DTR 5 requires a separate notification in the prescribed TR-1 form, delivered directly to the issuer.
B. Aggregation Considerations
The aggregation rules under DTR 5 require careful analysis of the entire Corvus Peak organizational structure to determine the full scope of voting rights and financial instruments that must be attributed to Corvus Peak for threshold calculation purposes.
Corvus Peak Management LLC is the general partner of Corvus Peak Capital Partners LP. Under DTR 5.2.1R, if Corvus Peak Management LLC exercises or controls the exercise of voting rights attached to the shares held by the fund, those voting rights must be attributed to Corvus Peak Management LLC in addition to (or instead of, depending on the structure) being attributed to the fund itself. As general partner, Corvus Peak Management LLC likely has investment discretion and voting authority over the fund's portfolio, and accordingly may have its own independent notification obligation.
Damien Solberg, as Founding Partner and Chief Investment Officer of Corvus Peak, may similarly be required to aggregate voting rights attributable to him through the chain of control: Solberg → Corvus Peak Management LLC → Corvus Peak Capital Partners LP → AGMG shares. Under DTR 5.2.1R, the voting rights held by controlled undertakings in a chain must be attributed up through each link in the chain to the ultimate controlling natural person or entity.
Erin Nakamura, as Portfolio Manager for the AGMG campaign, may or may not have independent voting authority or discretion over the AGMG position. If she does, this would need to be assessed for aggregation purposes, although in most fund structures the portfolio manager acts within the authority delegated by the general partner and does not independently hold or control voting rights.
Additionally, if Corvus Peak holds any qualifying financial instruments over AGMG shares—including contracts for difference, equity swaps, call options, or other derivative instruments—these must be separately identified and their delta (in the case of cash-settled instruments) or notional exposure (in the case of physically-settled instruments) must be aggregated with Corvus Peak's direct shareholdings when assessing threshold crossings. Corvus Peak's Schedule 13D may provide some information regarding derivative positions, but the US and UK disclosure frameworks categorize and treat financial instruments differently, and a position that does not trigger a beneficial ownership disclosure under the US regime may nonetheless constitute a qualifying financial instrument under DTR 5.3.1R.
We recommend that AGMG's advisors review the detailed beneficial ownership disclosures in Corvus Peak's Schedule 13D filings, including any disclosure of derivative positions, and assess whether additional financial instruments should be taken into account for DTR 5 aggregation purposes.
C. Corvus Peak's Potential Non-Compliance Risk
Corvus Peak Capital Partners LP is a Delaware limited partnership headquartered at 590 Lexington Avenue, 34th Floor, New York, NY 10022. As a US-based fund manager, Corvus Peak's compliance infrastructure is likely oriented toward the US regulatory framework—SEC filings, FINRA rules, and state securities laws—rather than the UK DTR regime. While Corvus Peak may have retained UK counsel in connection with its broader campaign (particularly given that AGMG is headquartered in London), there is a meaningful risk that Corvus Peak may not have been fully aware of, or may not have prioritized compliance with, its DTR 5 notification obligations.
This concern is not speculative. In our experience advising on dual-listing matters, US-based activist investors and institutional shareholders frequently overlook or underestimate their DTR 5 obligations when accumulating stakes in dual-listed issuers, particularly where the US listing is the primary listing and the majority of trading volume occurs on the US exchange. The fact that Corvus Peak's Schedule 13D filings do not reference DTR 5 compliance or UK regulatory obligations (based on our review of the publicly filed documents) is a further indication that DTR 5 compliance may not have been at the forefront of Corvus Peak's regulatory considerations.
We recommend the following steps to assess and address this risk:
1. Confirm receipt of TR-1 notifications. Nadine Khalil, as Corporate Secretary, should review AGMG's records to determine whether the Company has received TR-1 notifications from Corvus Peak corresponding to each of the six DTR 5 threshold crossings identified above (3%, 4%, 5%, 6%, 7%, and 8%). If such notifications have been received, they should be logged, published via RIS (if not already published), and filed with the NSM.
2. Raise non-compliance with opposing counsel. If TR-1 notifications have not been received, AGMG should consider raising the issue with Corvus Peak's counsel, Blackthorn Howell & Crane LLP (Dominic Sayer), through Calderwood & Harkness or Ashworth Velmoran. This could be done in a neutral and factual manner—noting that AGMG has not received the TR-1 notifications that it believes are required under DTR 5 and requesting that Corvus Peak submit the required notifications promptly.
3. Evaluate FCA referral. If material DTR 5 non-compliance by Corvus Peak is confirmed and Corvus Peak does not promptly cure the non-compliance, AGMG should consider whether it would be appropriate and strategically advisable to refer the matter to the FCA. The FCA has enforcement authority for DTR 5 violations, and penalties for non-compliance can include financial sanctions. However, the strategic implications of an FCA referral in the context of an active proxy contest must be carefully evaluated, as discussed further in Section IX.C below.
V. Application of DTR 5 to Other Major Shareholders
While Corvus Peak's DTR 5 compliance is of particular concern given its role as the activist proponent, the other major shareholders of AGMG are also subject to DTR 5 obligations by virtue of the Company's LSE listing. We address each in turn.
A. Thorne Capital Management LP (6.3%)
Thorne Capital Management LP holds 6.3% of AGMG's total outstanding shares (25,993,800 shares), which means it has crossed the 3%, 4%, 5%, and 6% DTR 5 notification thresholds. Each of these threshold crossings required a separate TR-1 notification to AGMG within the prescribed two-trading-day window.
Thorne Capital is a US-based (Boston, Massachusetts) passive long-only investment fund. Like Corvus Peak, Thorne Capital's compliance infrastructure is likely oriented primarily toward the US regulatory framework, and there is a non-trivial risk that it may not have been aware of or complied with its DTR 5 obligations. The fact that Thorne Capital is described as a "passive" investor does not exempt it from DTR 5; the notification obligation applies regardless of the investor's investment strategy, intent, or purpose.
In addition, Oliver Thorne, as Portfolio Manager of Thorne Capital, may need to be assessed for aggregation purposes. If Mr. Thorne holds personal voting rights in AGMG shares—whether directly or through family trusts, retirement accounts, or other vehicles—those voting rights may need to be aggregated with Thorne Capital's holdings under DTR 5.2.1R, depending on the extent of his control over the fund's investment decisions and voting authority.
We recommend that Nadine Khalil review AGMG's records for TR-1 notifications from Thorne Capital and, if none have been received, consider whether to raise the issue with Thorne Capital directly or through its counsel.
B. Ridgeway Asset Management Ltd. (5.1%)
Ridgeway Asset Management Ltd. holds 5.1% of AGMG's total outstanding shares (21,042,600 shares), which means it has crossed the 3%, 4%, and 5% DTR 5 notification thresholds.
Ridgeway presents a different compliance profile from the US-based shareholders. As a private limited company organized under the laws of England and Wales, Ridgeway is a UK-based institutional investor. Its Head of Governance, Fiona Ashcroft, is described as a UK governance specialist who is likely familiar with the DTR regime. Accordingly, the risk of DTR 5 non-compliance by Ridgeway is lower than for the US-based shareholders, though it should not be assumed to be zero.
An additional consideration for Ridgeway relates to the aggregation of holdings across multiple funds. As a traditional asset manager, Ridgeway may manage multiple investment funds, segregated mandates, and pooled vehicles, some of which may hold AGMG shares. Under DTR 5.2.1R, if Ridgeway exercises or controls the exercise of voting rights across these vehicles, the voting rights held by all vehicles under Ridgeway's management may need to be aggregated for purposes of assessing DTR 5 threshold crossings. This could result in a higher aggregate holding than the 5.1% attributed to a single fund, potentially crossing additional thresholds (e.g., 6% or higher).
We recommend confirming that AGMG has received TR-1 notifications from Ridgeway for the 3%, 4%, and 5% threshold crossings and, if Ridgeway manages multiple vehicles holding AGMG shares, verifying that the aggregated holding has been properly assessed.
C. Windermere Pension Trust (4.4%)
Windermere Pension Trust holds 4.4% of AGMG's total outstanding shares (18,154,400 shares), which means it has crossed the 3% and 4% DTR 5 notification thresholds.
Windermere is a US public pension fund based in California. Its Chief Investment Officer is Bernard Napier. As with the other US-based shareholders, there is a risk that Windermere may not have been aware of its DTR 5 obligations. Public pension funds in the United States typically have sophisticated compliance and governance functions, but their focus is overwhelmingly on US securities law and fiduciary obligations, and they may not routinely monitor for UK regulatory obligations arising from investments in dual-listed companies.
We recommend that Nadine Khalil review AGMG's records for TR-1 notifications from Windermere and, if none have been received, consider outreach to Windermere's governance team.
D. Hugh Pemberton (2.1% / 8,664,600 Shares)
Hugh Pemberton, a co-founder of AGMG and current Non-Executive Director, holds 2.1% of AGMG's total outstanding shares (8,664,600 shares). At 2.1%, Mr. Pemberton's direct holding is below the 3% initial notification threshold under DTR 5.1.2R, and accordingly he does not presently have a DTR 5 notification obligation with respect to his direct holdings.
However, several caveats apply:
• If Mr. Pemberton holds additional voting rights indirectly—for example, through family trusts, spousal holdings, or other controlled entities—those indirect voting rights must be aggregated with his direct holdings under DTR 5.2.1R. If the aggregated total reaches or exceeds 3%, a notification obligation would arise.
• If Mr. Pemberton holds qualifying financial instruments (e.g., employee stock options that are currently exercisable and relate to already-issued shares), these may also need to be aggregated depending on their terms and DTR 5.3.1R classification.
• Any future increase in Mr. Pemberton's holdings—whether through market purchases, equity award vestings, or other events—could push his total above the 3% threshold and trigger a notification obligation.
We recommend that the Corporate Secretary's office inquire into the full scope of Mr. Pemberton's direct and indirect holdings to determine whether aggregation could bring his total to or above the 3% threshold.
E. Management & Board Insiders Collectively (3.2% / 13,203,200 Shares)
The collective holdings of AGMG's management and board insiders total approximately 3.2% of the Company's outstanding shares (13,203,200 shares). While this aggregate figure exceeds the 3% initial DTR 5 notification threshold, DTR 5 applies to individual holders, not to groups, unless those individuals are deemed to constitute a concert party or act in concert for DTR 5 purposes.
Accordingly, the relevant question is whether any individual insider has independently crossed a notification threshold. Based on the information available to us, Mr. Pemberton's 2.1% holding is the largest individual insider stake, and (as discussed above) it is below the 3% threshold. Unless another individual insider holds 3% or more—which does not appear to be the case based on the aggregate figures—no individual insider currently has a DTR 5 notification obligation.
A separate question is whether the management and board insiders could be considered a "concert party" for DTR 5 purposes. Under DTR 5.2.1R and the related guidance, persons "acting in concert" must aggregate their holdings. However, the concept of acting in concert under DTR 5 requires a positive agreement or arrangement to exercise voting rights collectively to adopt a common policy vis-à-vis the issuer. Mere board membership, or the existence of a fiduciary relationship among directors and officers of the same company, does not in itself constitute a concert party arrangement. There must be a specific agreement or understanding to coordinate the acquisition, holding, or exercise of voting rights.
We do not believe that the current facts support a concert party finding with respect to AGMG's insiders. However, if the proxy contest dynamics evolve—for example, if insiders enter into a voting agreement or undertaking to support the Board's slate—the concert party analysis should be revisited.
VI. Interaction Between US Proxy Rules and UK DTR 5 Disclosure Regime
A. Parallel but Independent Obligations
AGMG's dual listing subjects it and its shareholders to two parallel but independent disclosure regimes: the US regime administered by the SEC and the UK regime administered by the FCA. These regimes overlap in certain respects but differ materially in others, and compliance with one does not satisfy the requirements of the other.
The US disclosure framework relevant to the current proxy contest includes the following principal components:
• Sections 13(d) and 13(g) of the Exchange Act and the rules thereunder, which require beneficial ownership reporting on Schedule 13D (for persons acquiring more than 5% of a class of equity securities with an activist purpose) or Schedule 13G (for passive investors and certain institutional investors);
• Section 14(a) of the Exchange Act and Regulation 14A thereunder, which govern the solicitation of proxies and require the filing of proxy statements and related materials with the SEC; and
• Section 16 of the Exchange Act and the rules thereunder, which impose short-swing profit disgorgement and reporting obligations on insiders (directors, officers, and 10% shareholders).
The UK disclosure framework relevant to the present analysis includes the following:
• DTR 5 (Vote Holder and Issuer Notification Rules), which requires notification of major shareholdings as described in detail in Section III above;
• DTR 6 (Continuing Obligations and Access to Information), which imposes ongoing disclosure obligations on issuers whose securities are admitted to trading on a UK-regulated market; and
• The UK Market Abuse Regulation ("UK MAR"), as retained and amended post-Brexit, which governs inside information, insider dealing, market manipulation, and related matters.
The key differences between the US Schedule 13D regime and the UK DTR 5 regime are summarized in the table at Appendix B and can be characterized as follows:
Threshold. The US Schedule 13D regime is triggered at 5% beneficial ownership. The UK DTR 5 regime is triggered at 3% for UK issuers (which, as discussed above, includes AGMG). This means that DTR 5 captures shareholdings at a lower level and imposes notification obligations on a broader range of shareholders than the US regime.
Timing. The initial Schedule 13D filing must be made within ten calendar days of crossing the 5% threshold. Amendments to the Schedule 13D must be made "promptly" upon the occurrence of a material change, which the SEC has generally interpreted to mean within approximately two business days but has not defined with precision. By contrast, DTR 5 notifications must be made as soon as possible and in any event within two trading days of the person becoming aware (or being deemed to have become aware) of the threshold crossing. The DTR 5 timeline is therefore significantly more compressed, particularly for the initial notification at the 3% threshold.
Content. Schedule 13D requires extensive disclosure of the filing person's identity, source of funds, purpose of the acquisition, plans and proposals (including any plans for extraordinary transactions, changes to the board of directors, or material changes to the business or corporate structure), and other matters specified in the Schedule 13D form. DTR 5 is more limited in scope—it requires disclosure of the identity of the notifying person, the date of the threshold crossing, the resulting percentage, and the number and chain of voting rights, but does not require disclosure of purpose, plans, or intent. However, DTR 5 requires specific notification of qualifying financial instruments, which the US regime addresses through the broader beneficial ownership analysis.
Financial instruments. DTR 5 explicitly requires notification of qualifying financial instruments—including contracts for difference, equity swaps, and call options—as a separate category. Under the US regime, these instruments are captured through the beneficial ownership analysis (i.e., a person who has voting or investment power over shares through a derivative instrument is a beneficial owner), but the mechanics and disclosure format differ.
B. Implications for the Proxy Contest
The parallel US and UK disclosure regimes have several practical implications for the ongoing proxy contest between AGMG and Corvus Peak.
Corvus Peak filed its preliminary proxy statement with the SEC on April 1, 2024, and AGMG is expected to file its own preliminary proxy statement in the coming days. The proxy solicitation itself is governed primarily by the US regime—specifically, Regulation 14A under the Exchange Act—and by Delaware law, which governs the conduct of shareholder meetings and the solicitation of proxies under AGMG's Amended and Restated Bylaws (effective March 22, 2022). The UK proxy solicitation regime does not directly apply to AGMG's shareholder meetings in the same manner, because the Company's corporate governance is fundamentally governed by the Delaware General Corporation Law ("DGCL") and the Company's charter documents, not by the UK Companies Act 2006.
However, DTR 5 notifications are relevant to the proxy contest because they provide transparency to the UK market regarding the ownership dynamics during the contest period. UK-based shareholders—including Ridgeway Asset Management and the substantial retail and institutional investor base that trades on the LSE—are entitled to rely on the DTR 5 notification framework for information about major shareholding changes. If Corvus Peak or other major shareholders have not complied with their DTR 5 obligations, the UK market may lack material information about the ownership dynamics driving the proxy contest.
AGMG itself must ensure that it disseminates TR-1 notifications it receives to the market via RIS within the timeline prescribed by DTR 5.8.12R. This includes any notifications received from Corvus Peak relating to its increased stake. Failure by AGMG to timely publish received TR-1 notifications would constitute a breach of the Company's own issuer-side obligations under DTR 5.
C. Section 793 Companies Act 2006 — Investigatory Powers
Section 793 of the UK Companies Act 2006 provides a powerful investigatory tool that may be available to AGMG in connection with the proxy contest. Under Section 793, a public company may, by notice in writing, require any person whom the company knows or has reasonable cause to believe to be interested in the company's shares to confirm whether they hold such an interest and, if so, to provide detailed information about the nature and extent of that interest.
Although AGMG is a Delaware corporation, its registration as an overseas company in England and Wales and its listing on the LSE Main Market may bring it within the scope of Section 793. The applicability of Section 793 to overseas companies is not entirely free from doubt, and the precise scope of its extraterritorial reach is subject to ongoing legal development. However, there are reasonable arguments that AGMG, as a company whose shares are admitted to the Official List, may avail itself of Section 793 powers—or, alternatively, that the FCA may exercise analogous powers on its own initiative.
If Section 793 is available to AGMG, it could serve as an additional tool for identifying undisclosed shareholdings or concert party arrangements in connection with the Corvus Peak campaign. For example, a Section 793 notice could be used to determine:
• Whether Corvus Peak or its affiliates hold any undisclosed interests in AGMG shares, including through financial instruments not reflected in the Schedule 13D filings;
• Whether any other investors are acting in concert with Corvus Peak, either through formal agreements or informal understandings; and
• Whether any of Corvus Peak's director nominees (Malcolm Trask, Vanessa Loring, or Dr. Raymond Chu) hold interests in AGMG shares that have not been publicly disclosed.
We recommend further analysis of the applicability of Section 793 to AGMG as a Delaware-incorporated overseas company and the strategic value of issuing such a notice in the current context. This analysis should be conducted in coordination with UK regulatory counsel.
D. FCA Market Abuse Regulation (MAR) Considerations
While this memorandum is primarily focused on DTR 5, the Board should be aware that AGMG's dual listing also implicates the UK Market Abuse Regulation ("UK MAR"), as retained and amended post-Brexit under the European Union (Withdrawal) Act 2018.
UK MAR applies to financial instruments admitted to trading on UK-regulated markets, including AGMG's shares as admitted to the LSE Main Market. Under UK MAR, AGMG has several ongoing obligations, including:
Insider lists (UK MAR Article 18). AGMG must draw up and maintain a list of all persons who have access to inside information and who are working for the Company under a contract of employment, or otherwise performing tasks through which they have access to inside information. Given the current circumstances, the insider list must include all persons with access to inside information relating to:
• The CEO succession process, including information about candidate interviews, compensation negotiations, and the Board's deliberations regarding the selection of a permanent CEO;
• The strategic alternatives review being conducted with Stonebridge Crane & Co. (engaged April 22, 2024), including any information about potential divestitures, acquisitions, or restructuring options under consideration;
• The proxy contest, including the Board's strategy for responding to Corvus Peak's campaign, any potential settlement discussions with Corvus Peak, and the Board's assessment of the likelihood of various outcomes at the June 7, 2024 AGM; and
• Any other material non-public information that, if disclosed, would be likely to have a significant effect on the price of AGMG's shares.
Disclosure of inside information (UK MAR Article 17). AGMG must announce inside information as soon as possible, subject to the ability to delay disclosure under limited circumstances (e.g., where immediate disclosure would prejudice the Company's legitimate interests, the delay is not likely to mislead the public, and the Company can ensure the confidentiality of the information).
We recommend that Nadine Khalil ensure that AGMG's insider list is current and comprehensive, reflecting all individuals with access to the categories of information described above. The insider list should include not only AGMG employees and directors but also external advisors, including personnel from Calderwood & Harkness, Ashworth Velmoran, Citrine Advisory Group, Stonebridge Crane & Co., and any other firms providing advice in connection with the CEO succession, strategic review, or proxy contest.
VII. AGMG's Issuer-Side Compliance Obligations
A. Total Voting Rights Disclosure (DTR 5.6.1R)
Under DTR 5.6.1R, AGMG must disclose to the public the total number of voting rights and the total capital of the Company at the end of each calendar month during which an increase or decrease in total voting rights has occurred. This disclosure is made via a Regulatory Information Service ("RIS") and filed with the FCA's National Storage Mechanism.
AGMG's current total outstanding shares are 412,600,000. If this number changes during any calendar month—whether as a result of share buybacks, the vesting of equity awards, new share issuances, cancellations, or any other event—AGMG must publish the updated total at month-end. This disclosure is critical because it enables shareholders to recalculate their percentage holdings against the updated denominator and assess whether they have crossed a DTR 5 notification threshold.
A specific event that may trigger this obligation in the near term is the departure of Marcus Vane as CEO. According to the information provided to us, Mr. Vane's severance arrangement included $5.2 million in accelerated equity vesting. If this accelerated vesting resulted in the issuance of new shares (rather than the vesting of previously issued restricted shares), it would have changed the total number of voting rights and triggered a month-end disclosure obligation under DTR 5.6.1R. AGMG's equity compensation team should confirm the nature of the equity awards that vested in connection with Mr. Vane's departure and whether any new share issuance occurred.
Similarly, any equity awards granted to Priya Nair-Whitfield in connection with her appointment as Interim CEO, or any equity awards granted to the eventual permanent CEO, could change total voting rights if they involve new share issuances. The Company's equity plan administrators should be instructed to flag any events that would change total voting rights so that the DTR 5.6.1R disclosure can be prepared and published in a timely manner.
B. Receipt and Publication of TR-1 Notifications
Under DTR 5.8.12R, AGMG must make public all information contained in a TR-1 notification received from a vote holder by the end of the trading day following receipt of the notification. This is a tight timeline that requires efficient internal processes. The publication must be made via RIS announcement and filed with the NSM.