CIHL.L Regulatory News (CIHL)

6 Apr 2009 07:00



Cockleshell Limited

Merger with BB Holdings Limited

Belize City, Belize, 6 April 2009. Cockleshell Limited (London: CKL)  ("Cockleshell") today announces that final agreement has been reached on the terms of the proposed acquisition of the entire issued share capital of Cockleshell by BB Holdings Limited ("BBHL"). The acquisition will be implemented pursuant to the terms of the Merger. It is anticipated that the Merger will become effective on or around 7 May 2009 (the "Effective Date"). Completion of the Merger is conditional on the cancellation of admission to trading on AIM of the Cockleshell Shares prior to the Effective Date (the "Admission Cancellation"). The Admission Cancellation is conditional upon the consent of not less than 75 per cent. of votes cast by Cockleshell Shareholders at the General Meeting convened for 10.30 a.m. on Tuesday 28 April 2009. BBHL Shares will continue to be admitted to trading on AIM and the Bermuda Stock Exchange following completion of the Merger. 

At the time of the admission of Cockleshell to trading on AIM in December 2007, the Directors explained that they were actively seeking investment opportunities for Cockleshell. The Directors consider that the Merger with BBHL offers Cockleshell Shareholders the opportunity to increase value in respect of their holdings of Cockleshell Shares.

Cockleshell will be dispatching a circular to Cockleshell Shareholders today containing further details of the Merger and the Admission Cancellation, and containing notice of the General Meeting.

THE MERGER 

The acquisition of Cockleshell will be implemented pursuant to the terms of the Merger.

Following completion of the Merger, Cockleshell Shareholders will collectively hold up to 41,106,012 New BBHL Shares equivalent to approximately 69.9 per cent. of the existing issued share capital of BBHL and approximately 41.1 per cent. of the Enlarged BBHL Share Capital. The balance of 58,806,923 BBHL Shares, equivalent to approximately 58.9 per cent. of the Enlarged BBHL Share Capital, will be held collectively by the Existing BBHL Shareholders.

Lord Ashcroft, KCMG holds approximately 74.9 per cent. of the current issued share capital of Cockleshell and approximately 77.8 per cent. of the current issued share capital of BBHL and will hold approximately 76.6 per cent. of the Enlarged BBHL Share Capital following completion of the Merger.

By way of consideration for the Merger, Cockleshell Shareholders will be allotted and issued 0.916 New BBHL Shares for every Cockleshell Share registered in their name as at 5.00 p.m. (Belize time) on the Record Date.

Assuming completion of the Merger and using a pound sterling to US$ exchange rate of 1:1.42, the Merger values each Cockleshell Share at 122 pence and the existing issued share capital of Cockleshell at approximately £54,670,996 in aggregate. This represents a premium of approximately 132 per cent. to the Closing Price of 52.5 pence per Cockleshell Share on 3 April 2009 (being the last Business Day prior to the announcement of the potential transaction) and a premium of approximately 50 per cent. to the net asset value of each Cockleshell Share as at 31 March 2009.

New BBHL Shares will be issued credited as fully paid to Cockleshell Shareholders and will rank pari passu in all respects with the BBHL Shares in issue at the time that the New BBHL Shares are allotted and issued, including the right to receive and retain dividends and other distributions declared, made or paid after the Effective Date.

Under the provisions of Part VII of the IBCA, a holder of Cockleshell Shares, on dissenting from the terms of the Merger has the right to be paid the fair value of his Cockleshell Shares.

TERMS OF THE MERGER

The Merger will be effected under the IBCA and it is anticipated that the Merger will become effective on the Effective Date.

The Merger is conditional on the Admission Cancellation becoming effective prior to the Effective Date. If the Admission Cancellation does not become effective before the Effective Date, the parties' rights and obligations in relation to the Merger will automatically terminate.

The Merger was approved by written resolution of the majority shareholder of Cockleshell on 5 April 2009. The Merger was also approved by written resolution of the majority shareholder of BBHL on 5 April 2009.

Subject to completion of the Merger, it is expected that on or about 8 May 2009, the New BBHL Shares will be admitted to trading on AIM and that dealings will commence on that date.

As BBHL is not a UK company, the New BBHL Shares cannot be held or transferred directly in CREST. However, the articles of association of BBHL permit the holding of depositary interests representing BBHL Shares under the CREST system. Therefore, New BBHL Shares may be held electronically through CREST by way of depositary interests.

In respect of those Cockleshell Shareholders who hold Cockleshell Depositary Interests in CREST which represent their Cockleshell Shares, depositary interests representing their New BBHL Shares will be credited to their CREST stock accounts on the commencement of dealings. In respect of those Cockleshell Shareholders who hold their Cockleshell Shares in certificated form, definitive share certificates representing such New BBHL Shares will be distributed as soon thereafter as practicable and, in any event, within 14 days of the commencement of trading.

INFORMATION ON COCKLESHELL

Cockleshell is an international business company incorporated in Belize under the IBCA with registered number 65,954. Cockleshell is admitted to trading on AIM as an investing company. For the six months ended 30 September 2008 Cockleshell reported net profit of US$558,000 and earnings per share of US$1.24. At 30 September 2008, Cockleshell's sole asset comprised interest bearing cash deposits with banks amounting to approximately US$51.3 million. Since that date, Cockleshell has continued to hold the cash deposits earning interest at market rates.

At 31 March 2009, the value of Cockleshell's cash deposits amounted to US$51,755,210.

Further information on Cockleshell, including audited financial statements for the period from 17 October 2007 (the date of incorporation of Cockleshell) to 31 March 2008 and unaudited financial statements for the six months ended on 30 September 2008, can be found on Cockleshell's website at www.cockleshelllimited.com.

INFORMATION ON BBHL

BBHL is a public investment company incorporated in Belize under the IBCA with registered number 1. The BBHL Shares are admitted to trading on AIM and on the Bermuda Stock Exchange.

BBHL operates financial services businesses through The Belize Bank Limited and Belize Bank International Limited, both located in Belize, and British Caribbean Bank Limited (formerly known as The Belize Bank (Turks and Caicos) Limited), located in the Turks and Caicos Islands. In addition, through its approximately 24 per cent. ownership in the Numar Group, BBHL has an interest in an edible oil processing and distribution operation in Costa Rica. 

Further information on BBHL, including audited financial statements for the 10 years ended on 31 March 2008 and unaudited financial results for the nine months ended 31 December 2008, can be found on BBHL's website at www.bbholdingslimited.com.

REASONS FOR THE MERGER

The Directors believe that holders of Cockleshell Shares will benefit from the Merger for the following reasons:

• as referred to above, the Merger represents a premium of approximately 132 per cent. to the Closing Price of 52.5 pence per Cockleshell Share on 3 April 2009 (being the last Business Day prior to the announcement of the potential transaction); 

• the Directors consider BBHL is an established business with a good management team, solid growth prospects and the potential for capital value appreciation over the medium term;

• the Merger will give BBHL the opportunity to further strengthen its Financial Services Division by utilising the cash assets of Cockleshell (being approximately US$51.8 million in aggregate) to fund expansion in line with BBHL's previously stated objectives of diversifying from its traditional dependence on Belize and the Belize dollar into other areas of the Caribbean and into the United States dollar. This process will be further accelerated by expanding both the range of services offered and by the entry into additional markets in the region through further lending and by way of acquisitions, with benefits for all shareholders; and

• BBHL will provide Cockleshell Shareholders with increased liquidity in their shareholding of New BBHL Shares than is currently the case for Cockleshell Shares.

FRACTIONAL ENTITLEMENTS TO BBHL SHARES AND DEPOSITARY INTERESTS

Cockleshell Shareholders may be left with a fractional entitlement to New BBHL Shares under the Merger. All fractional entitlements to New BBHL Shares will be rounded down and discounted for the purposes of calculating each Cockleshell Shareholder's entitlement to New BBHL Shares. 

In respect of Cockleshell Shareholders who hold Cockleshell Depositary Interests, Capita IRG Trustees (Nominees) Limited holds the legal title to the underlying Cockleshell Shares. As the holder of such Cockleshell Shares, Capita IRG Trustees (Nominees) Limited will be credited with New BBHL Shares pursuant to the Merger. The Depositary will issue depositary interests in respect of such New BBHL Shares on a pro-rata basis to the Cockleshell Shareholders who hold Cockleshell Depositary Interests. Fractional entitlements will not be issued to Cockleshell Shareholders who hold Cockleshell Depositary Interests. All such fractional entitlements will be aggregated and donated to charity in accordance with the terms of the trust deed poll dated 29 November 2007 by the Depositary in favour of Cockleshell.

ADMISSION CANCELLATION AND GENERAL MEETING

As noted above, the Merger is conditional on the Admission Cancellation becoming effective prior to the Effective Date. Accordingly, in accordance with Rule 41 of the AIM Rules for Companies, Cockleshell has today notified the London Stock Exchange of its intention to seek the proposed cancellation of admission to trading on AIM of the Cockleshell Shares, which is conditional upon the consent of not less than 75 per cent. of votes cast by Cockleshell Shareholders in a general meeting.

Consequently, Cockleshell is convening the General Meeting for 10.30 a.m. on Tuesday 28 April 2009. If the Resolution is passed at the General Meeting, the last day of trading of the Cockleshell Shares is expected to be 6 May 2009 with the Admission Cancellation being effective from 7.00 a.m. on 7 May 2009. The notice of the General Meeting is set out in the circular being dispatched to Cockleshell Shareholders today.

RECOMMENDATIONS

The Directors consider the Admission Cancellation to be in the best interests of Cockleshell and the Cockleshell Shareholders as a whole and accordingly unanimously recommend Cockleshell Shareholders to vote in favour of the Resolution to be proposed at the General Meeting.

Lord Ashcroft, KCMG, the majority shareholder in Cockleshell, has irrevocably undertaken to vote in favour of the Resolution in respect of his aggregate holding of 33,604,680 Cockleshell Shares representing approximately 74.9 per cent. of the shares eligible to vote at the General Meeting.

Irrevocable undertakings to vote in favour of the Resolution have also been obtained from Directors holding in aggregate an additional 537,040 Cockleshell Shares representing an additional approximately 1.2 per cent. of the shares eligible to vote at the General Meeting. 

The remaining Director who holds Cockleshell Shares has confirmed his intention to vote in favour, or to use reasonable endeavours to procure that the legal holders of his Cockleshell Shares vote in favour, of the Resolution in respect of his holding of 254,380 Cockleshell Shares representing approximately 0.6 per cent. of the shares eligible to vote at the General Meeting.

Consequently, the outcome of the General Meeting and the approval of the Resolution by the requisite majority has already been determined.

Cockleshell Limited 

Belize +501 223 5989 

UK +44 (0)20 7248 6700

Cenkos Securities plc

Ken Fleming / John Fitzpatrick +44 (0)131 220 6939

Note: This and other press releases are available at Cockleshell's web site: 

http://www.cockleshelllimited.com.

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