CLP.L Regulatory News (CLP)

8 Mar 2006 16:57

Brainspark PLC08 March 2006 For immediate release 8 March 2006 BRAINSPARK PLC ("Brainspark" or the "Company") Update re Loan Stock On 2nd December, 2005 Brainspark announced that it had raised £850,000 by theissue of £850,000 of interest free loan stock (the "Loan Stock") convertibleinto ordinary shares of 0.01p each in Brainspark ("shares") at a price of 0.46pper share on or before 31st March, 2006. The shares to be issued rank pari passuin all respects with the existing shares in issue. Two of the subscribers for the Loan Stock were: +----------------------------------------+-----------------+--------------+| |Amount subscribed|No of shares || | | || |£ |on conversion |+----------------------------------------+-----------------+--------------+|Francesco Gardin, Chairman |378,850 |82,358,695 |+----------------------------------------+-----------------+--------------+|Luigi Fogliani (who is not a Director) |135,246 |29,401,304 |+----------------------------------------+-----------------+--------------+ On 3rd January, 2006 it was announced that Professor Gardin had converted partof his Loan Stock and that all other subscribers, including Mr. Fogliani, hadconverted all of their Loan Stock into shares and that the resultantshareholdings of Professor Gardin and Mr. Fogliani, together with shares heldpreviously by Professor Gardin, were as follows:- +--------------------------------------+-------------+-----------+-------------+| |Shares held |New Shares |% of enlarged|| | | | || |before 3rd |Following |Issued || | | | || |January, 2006|conversion |capital |+--------------------------------------+-------------+-----------+-------------+|Francesco Gardin, Chairman |31,903,278 |36,000,000 |20.53% |+--------------------------------------+-------------+-----------+-------------+|Luigi Fogliani (who is not a Director)| |29,401,304 |8.89% |+--------------------------------------+-------------+-----------+-------------+ Professor Gardin has indicated that he would like to convert further amounts ofhis outstanding £207,808.33 worth of Loan Stock into shares and raise hispersonal shareholding to 29.99%. However, the Panel on Takeovers & Mergers ("the Panel") has indicated that,because Mr. Fogliani is a relative of Professor Gardin by marriage, they shouldbe treated as acting in concert and therefore if either acquires shares so thatthey jointly hold in excess of 30%, they would be required to make a cash bidunder Rule 9 of the Takeover Code (a "Rule 9 Offer"). Rule 9 of the Takeover Code is designed to prevent the acquisition of control ofa company to which the Takeover Code applies without a general cash offer beingmade to all shareholders of that company. Under Rule 9, a person who acquires,whether by a series of transactions over a period of time or not, shares which(taken together with shares held or acquired or acquired by persons acting inconcert with him) carry 30 per cent. or more of the voting rights of a companyis normally required by the Panel to make a general offer to all theshareholders of that company to acquire the balance of the shares not held bysuch person, or group of persons acting in concert, at the highest price paid byhim or them or any person acting in concert. In the case of Professor Gardin and Mr. Fogliani, the highest price paid in thelast 12 months was effectively 0.46p per share (being the price determined bydividing the amount of Loan Stock subscribed for by the relevant party by thenumber of shares received or due to be received) .The market price at the closeof business on 7 March, 2006 was 0.875p, being, the latest practicable dealingdate prior to the release of this announcement. The Loan Stock is convertible at Professor Gardin's option at any time prior toits repayment and at any time prior to 31 March 2006 at the Company's option. The Company and Professor Gardin have agreed that neither will exercise itsright to demand conversion on or before 31 March 2006 (which could result in amandatory offer obligation arising under Rule 9 at substantially less than theprevailing market price), that the repayment date for the Loan Stock will bepostponed to 31 December 2007 and that the rights of either party to demandconversion will be extended to the same date. The Loan Stock will remaininterest free. The Directors (other than Professor Gardin who is a related party under the AIMRules), having consulted with the Company's Nominated Adviser, believe that theterms of the transaction described above are fair and reasonable insofar as theCompany's shareholders are concerned. Further information Dennis Bailey 01628 477785 This information is provided by RNS The company news service from the London Stock Exchange