Arbuthnot Regulatory News (ARBB)

21 Mar 2006 07:02

Arbuthnot Banking Group PLC21 March 2006 Not for release, distribution or publication in whole or in part in or into theUnited States, Canada, Japan, Australia or South Africa Arbuthnot Banking Group PLC("Arbuthnot Banking Group", the "Group" or the "Company") Proposed placing and offer of new ordinary shares to raise approximately £4million (the "fundraising") 1. Introduction Arbuthnot Banking Group announces its intention shortly to raise approximately£4 million (after expenses) by the allotment and issue of 710,000 new ordinaryshares expected to be at 600 pence per share (the "Issue Price"), subject to theconditions referred to below, and on the terms to be set out in a circular to bedespatched to the Company's shareholders concerning the proposed Fundraising.It is currently envisaged that the Fundraising will be effected by offeringexisting Arbuthnot Banking Group shareholders the opportunity to subscribe fornew ordinary shares on the basis of 1 new ordinary share for every 20 existingordinary shares. The proposed Issue Price represents a 11.6 per cent premium to the closingmiddle market price of 537.5 pence per ordinary share on Monday, 20 March 2006,the last dealing day before this announcement. The 710,000 new ordinary sharesproposed to be issued would represent approximately 5.0 per cent of the currentissued share capital of the Company. 2. Background to and reasons for the proposed Fundraising The net proceeds of the proposed Fundraising will be used to fund thedevelopment of a high-quality, full-service, off-shore banking facility inSwitzerland. In recent years, the Group has focused on improving its portfolio of businesses.However, the Board recognises that the Group's lack of an off-shore bankingfacility significantly constrains the services that can be offered, the range ofclients it can attract and the Group's ability to recruit suitable employees.The Board believes the addition of such a facility would greatly improve theability to further develop the performance of the Group's banking operations. Research has been undertaken by the Group to determine the best way of providingan off-shore banking capability, including a review of different jurisdictionsand structures. Based on this research, the Board has concluded that theestablishment of a full-service banking operation in Switzerland is mostappropriate. In the light of this, the Group, working with advisers in Zurich,has developed a detailed plan for the establishment of a Swiss based bankingoperation. A significant investment will be required in applying for a Swiss bankinglicence and establishing the operation. 3. Further details of the proposed Fundraising The Company's Chairman, Mr Henry Angest, who owns beneficially approximately49.0 per cent of the current issued share capital of the Company, has indicatedhis intention to subscribe for his pro rata entitlement to new ordinary sharesto be issued pursuant to the proposed Fundraising. He also intends tounderwrite at the Issue Price the issue of all other shares proposed to beissued as part of the Fundraising. Unless all shareholders apply for their pro rata entitlements to new ordinaryshares proposed to be issued pursuant to the Fundraising, the percentageinterest of Mr Angest in the enlarged share capital of the Group would increase.Depending upon the extent to which shareholders (other than Mr Angest) decideto subscribe for new ordinary shares, Mr Angest's shareholding in the Companywould increase to between 49.0 per cent and 51.5 per cent in consequence of theFundraising. If, following the Fundraising, Mr Angest's holding exceeds 50 percent., he will be able to buy more shares in the Company without making ageneral offer. Mr Angest has confirmed that he has no intention of subsequentlytaking the Company private. Mr Angest's beneficial holding represents more than 30 per cent and less than 50per cent of the Group's issued share capital at the date of this document.Under Rule 9 of the City Code on Takeover and Mergers, unless a specific waiveris obtained from the Panel on Takeover and Mergers (the "Panel") and approved byindependent shareholders of the Company, Mr Angest would be obliged to make amandatory offer for the Company if his percentage interest in the Companyincreased. As this could occur as a consequence of the Fundraising, a specificwaiver from Mr Angest's obligation to make such an offer will be sought from thePanel in connection with the Fundraising. This waiver, if and when granted,will be subject to approval by independent shareholders at an extraordinarygeneral meeting of the Company. The proposed Fundraising will be conditional, inter alia, on receiving thewaiver from the Panel as referred to above, approval of the Fundraising byindependent shareholders and there being no material adverse change in the shareprice of the Company between the date of this announcement and Admission. 4. Timetable Following receipt of the waiver from the Panel a further announcement will bemade by the Company setting out details of the timetable for the Fundraising. 5. Despatch of circular to shareholders A circular setting out the terms of the proposed Fundraising and giving noticeof an extraordinary general meeting of the Company is expected to be despatchedto Arbuthnot Banking Group PLC shareholders once the details have beenfinalised. 21 March 2006 Enquiries:Arbuthnot Banking Group PLC Henry Angest 020 7012 2400 Stephen Lockley Andrew Salmon Hawkpoint Partners Limited Paul Baines 020 7665 4500 Lawrence Guthrie College Hill Tony Friend 020 7457 2020 Richard Pearson The Directors of Arbuthnot Banking Group accept responsibility for theinformation contained in this announcement. To the best of the knowledge andbelief of the Directors (who have taken all reasonable care to ensure that suchis the case) the information contained in this announcement is in accordancewith the facts and does not omit anything likely to affect the import of suchinformation. Hawkpoint Partners Limited, which is authorised and regulated in the UnitedKingdom by the Financial Services Authority, is acting exclusively for ArbuthnotBanking Group in connection with the Fundraising and no-one else. NeitherHawkpoint Partners Limited nor Arbuthnot Securities Limited, broker to ArbuthnotBanking Group, will be responsible to anyone other than Arbuthnot Banking Groupfor providing the protections afforded to customers of Hawkpoint PartnersLimited or Arbuthnot Securities Limited and will not be responsible forproviding advice to any such person in relation to the Open Offer or thecontents of this announcement or any other matter referred to herein. The proposed Fundraising described in this announcement is not being made toshareholders with a registered address in, or who are located in any excludedterritory. The New Ordinary Shares have not been, nor will they be, registeredunder the United States Securities Act of 1933 (as amended), or under thesecurities laws of any state of the United States or under the applicablesecurities laws of any other Excluded Territory. The New Ordinary Shares maynot be offered or sold, directly or indirectly, in or into the United States orany other Excluded Territory, or to or for the benefit of any national, residentor citizen of any other Excluded Territory. There will be no public offer ofsecurities in the United States or any other Excluded Territory. This announcement does not constitute an offer of, or the solicitation of anyoffer to subscribe for or buy, any of the new ordinary shares to any person inany jurisdiction to whom or in which such offer or solicitation is unlawful.The distribution of this announcement in certain jurisdictions may be restrictedby law and therefore persons into whose possession this announcement comesshould inform themselves about and observe any such restrictions. Any failureto comply with these restrictions may constitute a violation of the securitieslaws of such jurisdiction. This information is provided by RNS The company news service from the London Stock Exchange