WSE.L Regulatory News (WSE)

10 Jun 2005 08:00

Western Selection P.L.C. ("Western" or "the Company") 10th June 2005 Proposed Share Consolidation and Sub-Division Proposed Waivers of the Requirements of Rule 9 of the City Code on Takeovers and Mergers ("the City Code") and Notice of Extraordinary General Meeting As referred to in the Company's interim report, dated 31st January 2005, theDirectors of the Company are convening an Extraordinary General Meeting ("theEGM") of the Company to approve proposals to consolidate the Company's sharecapital to remove small shareholdings, pay compensation for the fractionalholdings arising and then sub divide the Consolidated Shares into Shares of 40peach and to seek shareholders' approval for waivers for London Finance &Investment Group P.L.C. and Mr. J.M. Robotham (together "the Concert Party")from the requirements of Rule 9 of the City Code. A circular containing fulldetails of these proposals, together with the notice of EGM and form of proxy,has today been mailed to all shareholders.Consolidation and Sub-divisionThe Board proposes to consolidate the share capital of the Company on the basisof one Consolidated Share for every 1,000 Shares held at the Record Date. Thoseshareholders with a holding of 999 Shares or less at the Record Date will thenbe removed from the Company's share register and compensation paid to them,equivalent to 17p for each old Share. The directors believe this figure of 17pto be a fair and appropriate compensation for the shareholders removed from theregister in this way as it offers a 21.4 per cent. premium to the share priceof 14p per Share at the close of business on 7th June 2005, the latestpractical date before posting the circular.The holdings removed from the register as a result of the Consolidation will beaggregated and sold in the market for the benefit of the Company. After this,the Consolidated Shares will be sub-divided by 250 to create new Shares of 40peach. For all shareholders holding 1,000 Shares and over at the Record Date,the effect of the Consolidation and Sub-Division will be that of a 1 for 4consolidation. Fractions of a New Share arising from the Consolidation andSub-Division will not be allotted but will be sold in the market for thebenefit of the Company. No compensation will be paid for these fractions, asthe maximum amount arising of 42p would exceed the cost of paying such amountsto the Shareholders affected.WarrantsThe effect of the Consolidation and Sub-Division on the Company's Warrants toSubscribe will be that for every four Warrants held at the Record Date, Warrantholders will receive one New Warrant. Each New Warrant will entitle the holderto subscribe for one New Share of 40p each at a price of 64p. Fractions of NewWarrants arising from the Consolidation and Sub-Division will be cancelled.Proposed Waivers of the Requirements of Rule 9 of the City Code on Takeoversand MergersLondon Finance & Investment Group P.L.C. ("Lonfin") has been a substantialshareholder in Western for over 40 years and regards Western as a strategicinvestment. At present Lonfin owns 17,611,928 Shares, representing 40.48% ofthe issued share capital of the Company, and 3,238,072 warrants to subscribefor Shares in the Company, representing 54.71% of the Warrants currently inissue; at present Mr. J.M. Robotham owns 100,000 Shares representing 0.23% ofthe issued share capital of the Company; at present the Concert Party owns17,711,928 Shares representing 40.71% of the issued share capital of theCompany, and 3,238,072 Warrants to subscribe for Shares in the Company,representing 54.71% of the warrants in issue. These Warrants were issued to allsubscribers for the then new Shares issued by way of rights in 1996, pro ratato the number of Shares subscribed for.Under the City Code, Lonfin and Mr. J.M. Robotham (a director and shareholderof both Western and Lonfin) are deemed to be acting in concert.There are two ways that the Concert Party's percentage interest in the sharecapital of Western may increase: 1 Exercise of Warrants If Lonfin were the only Warrant holder to exercise its Warrants, its interest in the Company would increase from 40.48% to 44.60%; and, if the Concert Party were the only Warrant holder to exercise its Warrants, its interest in the Company would increase from 40.71% to 44.81%. If all outstanding Warrants were exercised, Lonfin's interest would increase to 42.18% and the Concert Party's interest would increase to 42.38%. Consequently, the Concert Party would be unable to exercise all its Warrants without triggering the requirement to make a bid for those Shares it did not own. At the time of the issue of the Warrants in 1996, given the Concert Party's then percentage shareholding in Western, no whitewash was required. However in light of the Concert Party's current shareholding a whitewash is now required. 2 Authority to make market purchases of Shares At each of the Annual General Meetings held in 2003 and 2004 the Company was authorised by shareholders to make one or more market purchases of its own shares in accordance with section 166 of the Act, subject to certain conditions. The Board plan to continue proposing such resolutions in future years as it is useful to have such power should a suitable opportunity to make such a purchase arise. If such a purchase was made and the Shares so purchased held in treasury or cancelled, the effect would be to increase the Concert Party's percentage interest in the Company and trigger the requirement for the Concert Party to make a bid for those Shares that it does not already own. If Lonfin were the only Warrant holder to exercise its Warrants and the Company exercised its power to purchase 4,350,000 shares in the market (the maximum number currently permitted) then Lonfin's interest in the Company would increase to 49.17% (assuming that no shares were purchased from Lonfin). If the Concert Party was the only Warrant holder to exercise its Warrants and the Company exercised its power to purchase 4,350,000 shares in the market (the maximum number currently permitted) then the Concert Party's interest in the Company would increase to 49.41% (assuming that no shares were purchased from the Concert Party). WaiversThe Panel on Takeovers and Mergers ("the Panel") has agreed, however, to waivethe obligations for the Concert Party to make a general offer that wouldotherwise arise: (a) if Western shares are issued to the Concert Party as aresult of it exercising it's Warrants; or (b) if Western exercising itsauthority to purchase Shares in the market caused an increase in the ConcertParty's percentage interest in Western's shares. These waivers are conditionalon being approved by the independent shareholders of the Company on a poll ingeneral meeting and such approvals will be sought at the EGM.Resolutions to be proposed at the EGM, will, if passed, approve: 1 a waiver for the Concert Party to make an offer for those Shares not already owned by the Concert Party if it exercises all or some of its Warrants. The waiver by the Panel is only in respect of any holding of Shares issued on the exercise of warrants currently held. Any acquisition of Western shares by other means will be subject to the normal provisions of Rule 9 of the Code. 2 a waiver for the Concert Party to make an offer for those Shares not already owned by it in the event that Western makes any market purchases of its own shares, and then either holds such Shares in treasury or cancels them, thereby increasing the aggregate percentage holding of voting rights of the Concert Party. Listing, Settlement and DealingsApplication has been made to AIM for the New Shares and New Warrants to beadmitted to trading on AIM. The last day of dealing in Shares of 10p each isexpected to be 27th June 2005. The last time for registration of transfers ofShares of 10p each is expected to be 5.00 p.m. on 27th June 2005. It isexpected that dealing in the New Shares and New Warrants will commence at 8.00a.m. on 28th June 2005.TIMETABLE 2005 Latest time and date for the receipt of the Form of 3.00 p.m. on 25th JuneProxy for the EGM EGM 3.00 p.m. on 27th June Record Date 5.00 p.m. on 27 th June Effective date of the Consolidation 2 8th June Effective date of the Sub-Division 28th June First day of dealings in New Shares of 40p each 2 8th June Despatch of cheques in respect of the Fractional By 5th JulyHoldings Despatch of certificates for New Shares and New By 5th JulyWarrants resulting from the Consolidation and Sub-Division A circular setting out full details of the proposals will be posted to shareand warrant holders today. Copies of the circular and of this notification areheld at the Company's office, 25 City Road, London, EC1Y 1BQ (tel. 020 74488950) and are available for a period of 14 days from the date of thisannouncement.ENDWESTERN SELECTION PLC