SOLO.L Regulatory News (SOLO)

7 Mar 2007 15:45

St James's Energy PLC07 March 2007 7 March 2007 St James's Energy plc ("St James's") Offer to acquire Immersion Technology International plc ("Immersion") Audio speaker technology business to list on AIM via a reverse takeover The Board of St James's Energy is pleased to announce that it intends to make anoffer to acquire the entire issued share capital of Immersion, to be satisfiedby the allotment of new St James's shares at completion. Background on Immersion • Immersion has developed and patented a series of technologies for application in audio speakers (herein referred to as "Immersion Technology"). • The Immersion Technology has been researched and developed for over 10 years, with the objective of providing the highest possible audio reproduction characteristics. The results of which have been a considerable improvement in the operation of both high performance electrostatic loudspeakers and conventional cone loudspeakers. • The Immersion Technology reduces audio distortion to extremely low levels, whilst maintaining clarity and volume. • In addition, Immersion has the ability to manufacture the audio speakers in thin, small aesthetically pleasing designs. Their scalability means they can be used in a wide variety of applications. • The Immersion Technology has already achieved industry recognition and awards, for example, at the 2006 and 2007 Consumer Electronics Show in Las Vegas and the Sound and Image Awards in 2004 in Sydney. • On 22 December 2006, Immersion signed a 3 year manufacture and supply agreement for the supply of audio speaker products with a premier audio-visual and multimedia equipment provider Nakamichi Corporation Ltd. The contract specifies a delivery schedule for one particular product range whereby Nakamichi indicates that it may order US$12.1 million during the first two years, with a minimum order quantity of US$5.5 million during the same period. It is also expected that Nakamichi will commission further products from Immersion. • Immersion's management team has extensive experience in the electronics and audio entertainment industry. Immersion's Chief Executive Craig Evans has a wealth of experience in manufacturing, including that obtained through his time spent at Tyco International. Details of the Acquisition • St James's, an AIM quoted company with cash of approximately £3.5 million, will acquire Immersion through the issue of up to 175,903,671 new St James's shares (such new shares will exist upon completion, following shareholder approval by St James's of a share capital consolidation of every seven ordinary shares of 0.1p each into one new ordinary share of 0.7p each) ("Acquisition"). • St James's cash resources will be used for the implementation of Immersion's expansion plans which will include; a sales and marketing campaign to capitalise on the Nakamichi contract and leads developed at the CES conference of January 2007, establishing a manufacturing assembly facility in China, further development and protection of the Company's intellectual property and future product development. In addition, the cash reserves will provide general working capital. • The Acquisition is subject, inter alia, to the approval of St James's shareholders, which will be sought at an Extraordinary General Meeting ("EGM"), and also subject to the offer for Immersion becoming or being declared unconditional in all respects. • At the EGM, a resolution will be proposed to change the name of the Company from St. James's Energy plc to Immersion Technologies International plc. • The transaction will be a reverse takeover within the meaning of the AIM Rules and an Admission Document containing full details of the Acquisition, information on Immersion and a notice of the EGM is expected to be sent to shareholders shortly. St James's has requested that its shares be suspended with immediate effect so that it can obtain disclosures required for a whitewash under Rule 9 of The Takeover Code from the members of the concert party, who will be in control of the Company following the Acquisition. Commenting on the proposed Acquisition, Craig Evans, Chief Executive ofImmersion said: "This is a major step in the development of Immersion. We have made significantprogress in the development of our patented technologies and are just beginningto realise their potential application in the market, especially with thesigning of a major deal with Nakamichi. We look forward to joining AIM andentering into the next stage of our development." Brian Ling, Senior Manager of Nakamichi, said: "I think that Immersion's technology could revolutionise the design of nextgeneration audio entertainment. The quality of the sound's reproduction as wellas the flexibility of the panel design allows the creation of speaker designsolutions that are superior. It is my opinion that Immersion has the best flatspeaker technology available in the market today." Christopher Lambert, Chairman of St James's, said: "Immersion is a dynamic young company and one which we feel offers significantfuture value to shareholders. We feel that the management's strategy will enableImmersion to develop and enhance its product portfolio and offer its customersquality, value and choice in this dynamic sector." Enquiries: St James's Energy plcKiran Morzaia + 44 (0) 20 7016 5100 Nabarro WellsHugh Oram/Anthony Rowland +44 (0) 20 7710 7400 Immersion Technology International plcCraig Evans/Blair Snowball +44 (0) 20 7016 5017 Pelham Public RelationsArchie Berens/Hugh Barker +44 (0) 20 7743 6670 Further information on Immersion Commercialisation strategy • The world market for audio reproduction devices is of a considerable size. Sales of hi-fi loudspeakers were expected to exceed US$3.6 billion (at manufacturers pricing level) by the end of 2006. Furthermore in view of the increased uptake of new consumer electronics products such as plasma and LCD television screens, which incorporate speaker technology, the Immersion Directors believe that the prospects for growth of the Immersion business are strong, especially in view of the Immersion Technology being scalable, making it ideal for incorporating within flat television screens. • Immersion's key strategy is to commercialise the Immersion Technology by developing and manufacturing speakers for sale to the consumer electronics manufacturers - as demonstrated through the Nakamichi (www.nackamichi.com) contract detailed above. • Immersion has also signed licence agreements for the use of the Immersion Technology with Alpine Electronics of UK Limited, a leading supplier of mobile media systems, and with BSS Audio Limited, a Harman International group company. Harman is a worldwide leader in the manufacture of high quality, high fidelity audio and electronic products for automotive consumer and professional use. Manufacturing • Immersion has developed technology to enable the manufacture of audio speakers in thin, small aesthetically pleasing designs. • The speakers will be manufactured at a plant already identified by Immersion in the Nanjing Jiangming Economic and Technological Development Zone. Nanjing is near Shanghai in China. Immersion intends to initially invest US$250,000 to provide for manufacturing assembly and quality control testing facility. Immersion will also outsource much of its sub-assembly manufacturing in China which the Immersion Directors believe will enable it to increase production and obtain faster lead times for key components which will in turn allow it to increase production. • Immersion's management have considerable experience of operating manufacturing facilities in China. Immersion's Chief Executive, Craig Evans spent almost five years as a General Manager within the Tyco International Group and has a strong operational background in manufacturing, plant rationalisation, development and expansion both in China and the Asia Pacific region. - Ends - This information is provided by RNS The company news service from the London Stock Exchange