Last checked at 2 Feb 2010 07:00
| Press Release | 2 February 2010 |
Volvere plc
("Volvere" or the "Company")
Approval of Waiver granted by the Panel on Takeovers and Mergers under Rule 9 of the City Code on Takeovers and Mergers in relation to the purchase of its own shares
Authority to make purchases of its own shares
Approval of Waiver granted by the Panel on Takeovers and Mergers under Rule 9 of the City Code on Takeovers and Mergers in relation to the Transferred Incentive Shares
Notice of General Meeting to be held on 22 February 2010
The Board of Volvere plc (AIM:VLE), the turnaround investment company, announces that a circular (the "Circular") has been posted to Shareholders today convening a General Meeting of the Company to be held at 11 a.m. on 22 February 2010 (the "GM"). The purpose of the Circular is:
| 1. | to seek Shareholder approval for the Company to purchase in the market up to 50 per cent. of the issued Ordinary Shares of the Company ("Share Purchase Authority"); |
| 2. | to seek the approval by independent Shareholders of a waiver, which has been granted by the Panel, subject to the approval at the GM by independent Shareholders on a poll, of any obligation on the part of a deemed concert party of Shareholders of the Company (comprising, Lord Kalms of Edgware, Jonathan Lander, Nicholas Lander, The Hon. Richard Kalms, Neil Ashley, Ashley Grandchildren's 2003 Settlement and Barry Pincus (the "Concert Party")) to make a general offer to Shareholders under Rule 9 of the Takeover Code which might otherwise arise upon any exercise by the Company of the Share Purchase Authority (the "Waiver"); and |
| 3. | to seek the approval by independent Shareholders of a further waiver which has been granted by the Panel, subject to the approval at the GM by independent Shareholders on a poll, of any obligation on the part of the Concert Party to make a general offer to Shareholders under Rule 9 of the Takeover Code which might otherwise arise upon a conversion of 5,165 A Shares and 5,165 B Shares (in aggregate) which were transferred on 19 February 2008 to certain members of the Concert Party from a person with whom the Concert Party previously acted in concert and the 10,525 A Shares and 10,525 B Shares (in aggregate) which were transferred on 9 February 2009 to certain members of the Concert Party from a person with whom the Concert Party previously acted in concert (all the A and B Shares referred to in this paragraph (3) being, the "Transferred Incentive Shares"). |
Additionally, the Circular sets out the background to and reasons for the above proposals (the "Proposals") including why the independent Director of the Company (being David Buchler) considers the Proposals to be in the best interests of the Company and its Shareholders as a whole and recommends that independent Shareholders (being shareholders of the Company other than the Concert Party (the "Independent Shareholders")) vote in favour of the Resolutions (as defined in the Circular) at the GM as he intends to do in respect of his own shareholding of 104,893 Ordinary Shares, representing approximately 1.8 per cent. of the Ordinary Shares in issue at the date of this announcement.
A copy of each of the 2008 Annual report and financial statements and the 2009 Interim report is being sent to Shareholders with the Circular.
Background to and reasons for the proposed Share Purchase Authority
On 12 May 2009 the Company announced its results for the year ended 31 December 2008. During 2008 Group net assets increased to £11.6m (2007: £10.8m) of which cash and government bonds represented £12.5m (2007: £11.7m). Group net assets and cash (including government bonds) amounted to £2.05 and £2.20 per share respectively (2007: £1.91 and £2.07). In 2008, Group revenue from continuing operations was up 92 per cent. to £7.3m (2007: £3.8m) and Group profit for the year from continuing operations was £0.5m (2007: loss £0.4m). Basic and diluted earnings per share from continuing operations were 5.69p (2007: loss 6.46p) and total basic and diluted earnings per share were 5.69p (2007: 57.74p, which included the gain on disposal of a discontinued business).
On 25 September 2009, the Company announced its results for the period ended 3 July 2009. During the first half of 2009, Group net assets increased to £19.4m (30 June 2008: £10.8m). Consolidated net assets and cash (including marketable securities) per share were £3.41 and £3.71 respectively (30 June 2008: £1.91 and £2.05 respectively). Group revenue from continuing businesses was £5.4m (30 June 2008: £0.25m) and Group profit for the period from continuing businesses was £0.5m 30 June 2008: loss £0.2m). Total basic earnings per share were 121.85p (30 June 2008: 0.18p); diluted earnings per share were 113.56p (30 June 2008: 0.18p).
The Independent Director believes that the current share price (closing mid market price of 262p as at 28 January 2010, being the latest practicable date prior to the date of this announcement) does not reflect the Group's favourable prospects and is lower than Group net assets per share. The intention therefore is to use distributable reserves of the Company to purchase Ordinary Shares in the market, and any Ordinary Shares bought back by the Company would either be cancelled or held in treasury as explained below.
At the Annual General Meeting of the Company held on 2 July 2009, a resolution was passed authorising the Company to purchase in the market up to 4,000,000 Ordinary Shares, representing approximately 70 per cent. of the Company's issued ordinary share capital (the "Existing Authority"). The Existing Authority will expire on the earlier of the conclusion of the next Annual General Meeting of the Company and 2 October 2010.
The Company will be seeking an authority from Shareholders at the GM (in replacement of the Existing Authority) to purchase the Company's own Ordinary Shares in the market. The authority will be limited to a maximum of 2,854,360 Ordinary Shares, representing 50 per cent. of the current issued ordinary share capital of the Company.
If the Company were to exercise the Existing Authority to purchase its own shares now, by purchasing Ordinary Shares from Shareholders other than the Concert Party members, then the resulting reduction in the Company's share capital would increase the Concert Party's percentage holding of Ordinary Shares and absent a waiver of Rule 9 of the Takeover Code, the Concert Party would be required to make a general offer to Shareholders under the Takeover Code. As described below, the Company has sought the Waiver in order to avoid the need for such an offer to be made. The Panel normally grants waivers in respect of Rule 9 on the basis that the waiver expires at the same time as the relevant shareholders' authority to buy back shares expires. Accordingly, in order to allow the Board the maximum flexibility to effect buybacks at the most appropriate time for the Company, your Board is seeking the Share Purchase Authority at the GM in replacement of the Existing Authority granted at the Annual General Meeting of the Company held on 2 July 2009, with the intent that the Share Purchase Authority will be the relevant shareholders' authority in respect of which the Waiver shall apply. The Share Purchase Authority now being sought will expire on the fifth anniversary of the date that the relevant Resolution is passed.
The Takeover Code requirements
Rule 9 of the Takeover Code ("Rule 9") stipulates, inter alia, that if (a) any person acquires, whether by a series of transactions over a period of time or not, an interest (as defined in the Takeover Code) in shares which (taken together with shares in which persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company; or (b) any person, together with persons acting in concert with him, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with him, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which he is interested; such person or persons acting in concert with him will normally be required to make a general offer to shareholders of that company to acquire the balance of the equity share capital of that company not held by such person or persons acting in concert with him. An offer under Rule 9 must be made in cash (or be accompanied by a full cash alternative) and at not less than the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares of the company during the 12 months prior to the announcement of the offer.
Under Rule 37 of the Takeover Code, when a company redeems or purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purpose of Rule 9 (although a shareholder who is neither a director nor deemed to be acting in concert with a director will not normally incur an obligation to make an offer under Rule 9).
Under the Takeover Code, a concert party arises where persons acting together pursuant to an agreement or understanding (whether formal or informal) co-operate to obtain or consolidate control of a company or to frustrate the successful outcome of an offer for a company. A person has control of a company if he is interested in shares carrying 30 per cent. or more of the voting rights of the company. The Panel considers that for these purposes, Lord Kalms of Edgware, Jonathan Lander, Nicholas Lander, The Hon. Richard Kalms, Neil Ashley, Ashley Grandchildren's 2003 Settlement and Barry Pincus are acting in concert.
Current and potential shareholding of the Concert Party
The aggregate of the shareholding interests of the Concert Party in the Company as at 28 January 2010, being the last practicable date prior to this announcement, was 2,313,547 Ordinary Shares, representing 40.53 per cent. of the issued ordinary share capital of the Company. In addition, all members of the Concert Party hold Incentive Shares which are convertible into new Ordinary Shares, and which if converted, would increase the aggregate shareholding of the Concert Party. Details of the Incentive Shares are set out below.
Incentive Shares
Prior to admission to trading on AIM in 2002 ("Admission"), the founding directors of the Company and certain other persons subscribed for and were issued with Incentive Shares. If the Incentive Shares are all converted into Ordinary Shares (prior to the buyback of any Ordinary Shares), the Concert Party would (based on their existing holdings of Ordinary Shares and a market price of £3.05 per Ordinary Share, being the highest closing mid-market price in the 12 month period ending at the latest practicable date prior to the this announcement) hold, in aggregate, Ordinary Shares carrying a maximum of 45.30 per cent. of the voting rights of the Company.
Share Purchase Authority
If the Company were to repurchase the maximum number of Ordinary Shares authorised pursuant to the Share Purchase Authority from Independent Shareholders, the Concert Party's interest in the issued ordinary share capital of the Company would (assuming no other allotments of Ordinary Shares) be 2,313,547 Ordinary Shares equivalent to 81.05 per cent. of the issued ordinary share capital of the Company (assuming no prior conversion of any of the Incentive Shares into new Ordinary Shares). If the Concert Party fully converted all of the Incentive Shares (at the assumed market price of £3.05 per Ordinary Share), and the Company repurchased the maximum number of Ordinary Shares authorised pursuant to the Share Purchase Authority from Independent Shareholders, the Concert Party's interest in the issued ordinary share capital of the Company would (assuming no other allotments of Ordinary Shares) increase to 83.87 per cent. of the issued ordinary share capital of the Company. If the Company repurchased the maximum number of Ordinary Shares authorised pursuant to the Share Purchase Authority from Independent Shareholders and then the Concert Party fully converted all of the Incentive Shares (at the assumed market price of £3.05 per Ordinary Share) the Concert Party's interest in the issued ordinary share capital of the Company would (assuming no other allotments of Ordinary Shares) increase to 82.57 per cent. of the issued ordinary share capital of the Company. Accordingly, an increase in the percentage of Ordinary Shares carrying voting rights in which the Concert Party is interested, as a result of the implementation of the Share Purchase Authority, would prima facie have the effect of triggering Rule 9 of the Takeover Code and result in the Concert Party being under an obligation to make a general offer to all Shareholders.
Dispensation from Rule 9 of the Takeover Code in relation to the repurchase by the Company of its own shares
The Company has applied to the Panel for a waiver of Rule 9 of the Takeover Code in order to permit the proposed Share Purchase Authority to be exercised by the Board without triggering an obligation on the part of the Concert Party to make a general offer to Shareholders. The Panel has agreed, subject to Independent Shareholders' approval on a poll, to waive any obligation for the Concert Party to make a general offer to all Shareholders where such an obligation would arise as a result of purchases by the Company of up to 2,854,360 Ordinary Shares pursuant to the Share Purchase Authority. The waiver granted by the Panel relates only to any increase in the percentage of Ordinary Shares held by the Concert Party as a result of purchases by the Company of Ordinary Shares pursuant to the Share Purchase Authority and is conditional on the passing of a Resolution by the Independent Shareholders of the Company on a poll. As the members of the Concert Party are interested in the outcome of this Resolution, they will be precluded from voting.
Dispensation from Rule 9 of the Takeover Code in relation to the Transferred Incentive Shares
As stated above, prior to Admission, the founding directors of the Company and certain other persons subscribed for and were issued with Incentive Shares. At that time, the Panel agreed to waive any obligation under Rule 9 of the Takeover Code that might otherwise be incurred by the Concert Party (or any member thereof) together with certain other persons with whom the Concert Party previously acted in concert (the "Former Concert Party") in relation to the conversion of certain Incentive Shares, on the basis that the potential levels of shareholding in the Company of the Former Concert Party were disclosed at that time. On 19 February 2008, 5,165 A Shares and 5,165 B Shares (in aggregate) were transferred to Nicholas Lander and Richard Kalms (both separate members of the Concert Party) from a member of the Former Concert Party who is not a member of the Concert Party. On 9 February 2009, 10,525 A Shares and 10,525 B Shares (in aggregate) were transferred to Lord Kalms of Edgware, Jonathan Lander, Nicholas Lander, Richard Kalms, and Neil Ashley (all separate members of the Concert Party) from a member of the Former Concert Party who is not a member of the Concert Party.
The Company has applied to the Panel for a waiver of Rule 9 of the Takeover Code in order to permit the future conversion of the Transferred Incentive Shares without triggering an obligation on the part of the Concert Party (or any member thereof) to make a general offer to Shareholders. The Panel has agreed, subject to Independent Shareholders' approval on a poll, to waive any obligation for the Concert Party to make a general offer to all Shareholders where such an obligation would arise as a result of the conversion of the Transferred Incentive Shares. The waiver granted by the Panel relates only to any increase in the percentage of Ordinary Shares held by the Concert Party as a result of the conversion of the Transferred Incentive Shares and is conditional on the passing of a Resolution by the Independent Shareholders of the Company on a poll. As the Concert Party are interested in the outcome of this Resolution, they will be precluded from voting.
General Meeting
The GM will take place at the Company's offices, York House, 74-82 Queen Victoria Street, London EC4N 4SJ, at 11 a.m. on 22 February 2010.
Document availability
An electronic copy of the Circular can be accessed at the Company's website: www.volvere.co.uk
Expected timetable of principal events
| Circular and Forms of Proxy posted to Shareholders
| 2 February 2010
|
| Latest time for receipt of completed Forms of Proxy for GM | 20 February 2010
|
| General Meeting of the Company | 22 February 2010
|
- Ends -
For further information:
| Volvere plc |
|
| Jonathan Lander, CEO | Tel: +44 (0) 20 7979 7596 |
|
| www.volvere.co.uk |
| Shore Capital and Corporate Limited |
|
| Pascal Keane | Tel: +44 (0) 20 7408 4090 |
| Arbuthnot Securities Limited |
|
| Edward Gay, Corporate Finance | Tel: +44 (0) 20 7012 2000 |
| edwardgay@arbuthnot.co.uk | www.arbuthnot.co.uk |
Media enquiries:
| Abchurch |
|
| Henry Harrison-Topham / Mark Dixon | Tel: +44 (0) 20 7398 7702 |
| mark.dixon@abchurch-group.com | www.abchurch-group.com |