Avacta Group Regulatory News (AVCT)

12 Apr 2006 07:44

Readybuy PLC12 April 2006 READYBUY PLC Proposed capital reorganisation and subscription The Board of Readybuy plc (the "Company") is pleased to announce that itproposes to raise approximately £262,500, before expenses, by the issue ofadditional equity share capital to a group of new investors (the "Subscription")following a capital reorganisation of its existing issued share capital. The purpose of the Subscription is to provide additional capital in order tofacilitate the intended acquisition of a target to be identified so as toenhance the value of the Company's ordinary shares. Subject to the approval ofshareholders, the Company is also proposing to adopt a new investing strategy. The capital reorganisation In order to facilitate the Subscription, the Company proposes to sub-divide eachissued ordinary share of 0.5p into one new ordinary share of 0.1p each ("Ordinary Shares") and one deferred share of 0.4p each ("Deferred Share"). EachOrdinary Share will, effectively, have the same rights as each existing ordinaryshare. The rights of the Deferred Shares will render them effectively worthlessand, in due course, they will be cancelled. Each unissued existing ordinaryshare in the capital of the Company will be sub-divided into 5 unissued newOrdinary Shares. Further Ordinary Shares, each having a nominal value of 0.1pand having the same rights as the new Ordinary Shares, will be created. Inaddition, a resolution will be proposed at the EGM to convert the authorised butunissued 50,000 redeemable shares of £1.00 each in the capital of the Company(and which were redeemed by the Company on 26 August 2003) into 50,000,000 newOrdinary Shares. The Subscription The Company is proposing to issue 105,000,000 Ordinary Shares (the "SubscriptionShares") at 0.25p per share, 104,000,000 of which will be issued to a group ofinvestors comprising mainly high net worth individuals (the "Concert Party").In addition, the Company's nominated adviser and broker, WH Ireland Limited ("WHIreland") is to subscribe for 1,000,000 Ordinary Shares on the same basis as theConcert Party. Assuming the Subscription Shares are subscribed for in full, theConcert Party will own approximately 83.82% of the enlarged share capital of theCompany. In addition, it is proposed that each member of the Concert Party and WH Irelandwill be issued with warrants to subscribe for one additional Ordinary Share forevery two Subscription Shares subscribed for (the "Warrants"). The Warrants will be exercisable at a price of 0.25p per Ordinary Share at anytime from the date of admission of the Subscription Shares to trading on AIMuntil seven years from that date. Assuming the Warrants are exercised in full,an additional £131,250 of working capital will be raised for the Company. Application will be made for the Ordinary Shares (including the SubscriptionShares) to be admitted to trading on AIM. It is expected that trading willcommence on 8 May 2006. Concert Party The Concert Party is a group of mainly high net worth individuals, many of whomhave previously invested in private and public companies, which was broughttogether by Christopher Potts through his connections within the stockbrokingsector. Chris Potts Chris began his career in 1986 with stockbrokers Keith, Bayley, Rogers & Co.before moving to Winterflood Securities as a market maker in 1988. In 2002, hemoved to Evolution Group Plc to expand their trading operation and was appointedHead of Market Making, overseeing in excess of 700 smaller companies. Chris hasbeen involved with a number of private companies and was a founder shareholderof Z Group Plc and assisted their £21m float on AIM in June last year. Stephen James Stephen is an active investor in UK equities. His career started in Peru in 1979where he ran his own adventure travel company. Subsequently he has worked inZimbabwe (1986-89) and the UAE (1992- present). Daron Lee Daron commenced his career with stockbrokers Ashworth Sons & Barratt in 1987before pursuing other opportunities within the family business. He then cameback to stockbroking with WH Ireland until he established a company calledProquote Limited, a business engaged in the provision of on-line stock marketdata and company information. Proquote was sold in February 2003 to the LondonStock Exchange Plc and he remained with the company as its managing directoruntil the end of 2004. Since then Daron has pursued a number of personalbusiness interests. Robert Quested Robert Quested is currently working with an Abu Dhabi based privatepharmaceutical company. His career in the Middle East started in Saudi Arabiain the 1970s where he was involved in the provision of pharmacy services to themilitary and continued in a similar capacity in The Sultanate of Oman. He hasbeen an active investor in the UK stockmarket over the last 30 years. Robert isnot a director of any company at present. The remainder of the Concert Party is made up of a number of members each ofwhom, immediately following admission of the new Ordinary Shares to trading onAIM will hold less than 1% of the enlarged share capital of the Companyfollowing completion of the Subscription (assuming no further share issues). Investing Strategy Following the cessation of its trading activities in July 2005, the Company iscurrently deemed to be an investing company for the purposes of the AIM Rules.It is accordingly required to have an investing strategy. The Company is looking to make an acquisition and is currently concentrating onthose involved in enabling technologies particularly in the defence andbio-chemistry sectors. It is likely that such company will be UK based,although, in time, the Company may look overseas. The Company believes that it should fulfil initial goals by completing a reversetransaction into the Company within 12 months and if it was unable to completesuch a transaction within the next 18 months it would call a general meeting ofits shareholders to vote on a return of any remaining funds to shareholders. The Company understands that the Concert Party has long-term access to financefor acquisitions. The Concert Party is currently in discussions with a potential target, but atthis stage has not entered into any binding agreement. The Concert Party proposal includes the raising of £262,500 through theSubscription in order to strengthen the Company's balance sheet. The City Code Under Rule 9 of the City Code on Takeovers and Mergers (the "City Code"), when aperson or a group of persons acting in concert acquires shares in a companywhich is subject to the City Code (as is the case with the Company), and suchshares would result in such person or persons holding shares carrying 30%, ormore of the voting rights of that company, such person or group is normallyobliged by the Panel on Takeovers and Mergers (the "Panel") to make a generaloffer to all shareholders for the remaining shares in the capital of thatcompany. The members of the Concert Party are deemed to be acting in concert for thepurpose of the City Code. Immediately following the Subscription, assuming allSubscription Shares are subscribed for by the Concert Party, the Concert Partywould hold approximately 83.82% of the then enlarged issued share capital of theCompany. If the Concert Party exercised all the Warrants in full, this wouldincrease their holding to approximately 88.29% of the then further enlargedissued share capital of the Company (assuming no further share issues have takenplace). A table showing (i) the respective individual shareholdings of the keymembers of the Concert Party in the then enlarged issued share capital of theCompany upon completion of the Subscription (assuming all Subscription Sharesare issued and allotted to such members of the Concert Party) and (ii) followingexercise of all the Warrants in full in the then further enlarged issued sharecapital of the Company (assuming no other share issues have taken place) is setout below:- Member Current Holding (i) Post Subscription (ii) Post Warrant Stephen James Nil 16.1% 17.0% Daron Lee Nil 12.1% 12.7% Christopher Potts 74,990 17% 17.9% Robert Quested Nil 29.8% 31.4% The remainder of the Concert Party is made up of a number of individuals, eachof whom, immediately following admission of the Ordinary Shares to trading onAIM, will hold at that time, less than 1% of the then enlarged share capital ofthe Company. In the present circumstances, the Panel has agreed to waive any requirement forthe Concert Party to make a general offer to Shareholders under Rule 9 of theCity Code as a result of the Subscription and the issue of any shares pursuantto the exercise by any member of the Concert Party of any of the Warrants,subject to approval by the Company's existing independent shareholders (i.e.holders of existing ordinary shares save for Christopher Potts) at theextraordinary general meeting of the Company to be held on 5 May 2006 (the "EGM").. Following completion of the Subscription, the members of the Concert Party willhold more than 50% of the Company's voting share capital and (for so long asthey continue to be treated as acting in concert) may accordingly be able toincrease their aggregate shareholding without incurring any further obligationunder Rule 9 to make a general offer, although individual members of the ConcertParty will not be able to increase their percentage shareholding through a Rule9 threshold without Panel consent. For the avoidance of doubt, subject toResolution 1 being passed, Mr Quested will be able to exercise Warrants suchthat he holds 31.4% of the Company's voting share capital, as detailed in thetable above, without any Rule 9 consequences. Accordingly, a poll will be held on Resolution 1 (set out in the notice of EGM)to be proposed to the holders of existing ordinary shares as an ordinaryresolution at the EGM, for the purpose of waiving any requirement that theConcert Party should make a general offer to Shareholders. To be passed, asimple majority of the votes cast by independent shareholders (i.e. holders ofexisting ordinary shares excluding Mr Christopher Potts) must be cast in favourof the Resolution. EGM The capital reorganisation, Subscription and issue of Warrants are conditionalupon the passing of the necessary resolutions at the extraordinary generalmeeting of the Company to be held on 5 May 2006. Circular to Shareholders A circular setting out details of the proposals referred to above has beenposted to all existing shareholders. Commenting on the proposals, Colin Davies, a director of Readybuy said "We arepleased that the Concert Party has agreed to inject new funds into Readybuywhich should, hopefully, deliver some future value for shareholders" Enquiries Colin Davies (Readybuy plc) Tel: 01904 520840 David Youngman (W H Ireland Limited) Tel: 0161 832 2174 This information is provided by RNS The company news service from the London Stock Exchange