TIDMARGO
RNS Number : 0979S
ARGO Group Limited
07 March 2019
7 March 2019
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, OR INTO OR FROM
AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, RUSSIA OR SOUTH AFRICA OR
ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.
Argo Group Limited ("AGL" or "the Company")
Tender Offer
The Company announces the proposed repurchase of the Company's
Ordinary Shares with a maximum value of GBP2.5 million by means of
a tender offer (the "Tender Offer"). A circular in connection with
the Tender Offer (the "Circular"), which contains the full terms
and Conditions of the Tender Offer and instructions to Eligible
Shareholders on how to tender their Ordinary Shares should they
choose to do so, is expected to be posted to Eligible Shareholders
today and will be available on the Company's website at
https://www.argogrouplimited.com. Definitions used in the Circular
bear the same meaning in this announcement.
Further to a programme of buybacks carried out by the Company
following approval by independent shareholders on 3 March 2016 and
19 September 2016, the Board is proposing that the Company
undertakes the purchase of further Ordinary Shares by way of the
Tender Offer, under which each Eligible Shareholder shall be
offered the opportunity to tender Ordinary Shares held at the
Record Date. The Company will undertake this purchase in accordance
with English law. The Board intends to use up to GBP2.5 million to
acquire Ordinary Shares.
Shareholders should note that the Company's 2018 full year
results have today been published and the annual report and
accounts for the year ended 31 December 2018 are available on the
Company's website at https://www.argogrouplimited.com.
Key elements of the Tender Offer are:
-- Ordinary Shares may be tendered within a price range of 18
pence to 26 pence per Ordinary Share (representing a premium of
18.0 per cent. to 70.5 per cent. to the closing price of 15.25
pence on 6 March 2019);
-- the Tender Offer is structured using a Strike Price
mechanism. All successfully tendered Ordinary Shares will be
acquired at the Strike Price; and
-- the closing time and date is 1.00 p.m. (UK time) on 25 March
2019, with proceeds expected to be despatched to Eligible
Shareholders by 8 April 2019.
Details of the Tender Offer
The Tender Offer will be implemented by Panmure Gordon (UK)
Limited ("Panmure Gordon") acquiring, as principal, the
successfully tendered Ordinary Shares at the Strike Price. The
Company will subsequently acquire the Ordinary Shares successfully
tendered from Panmure Gordon at the Strike Price.
Eligible Shareholders can decide whether they want to tender
all, some or none of their Ordinary Shares in the Tender Offer.
Further, Eligible Shareholders can decide the price, within the
price range, at which they wish to tender Ordinary Shares or they
can tender Ordinary Shares at the Strike Price.
The Company will spend a maximum of GBP2.5 million purchasing
Ordinary Shares under the Tender Offer. At the Minimum Price, this
represents a maximum number of 13,888,888 Ordinary Shares
representing approximately 29.5 per cent. of the Company's current
issued share capital. At the Maximum Price, this represents a
maximum number of 9,615,384 Ordinary Shares representing
approximately 20.4 per cent. of the Company's current issued share
capital.
Tenders may be made in the range of 18 pence to 26 pence per
Ordinary Share inclusive (the "Price Range").
Eligible Shareholders do not have to tender any Ordinary Shares
if they do not wish to do so.
Eligible Shareholders can tender their Ordinary Shares in the
following ways:
(a) at a single price in the Price Range;
(b) at different prices in the Price Range (including a Strike
Price Tender) in respect of different parcels of Ordinary Shares;
and/or
(c) at whatever is subsequently determined to be the Strike
Price (referred to as a "Strike Price Tender").
Shareholders may tender Ordinary Shares at differing points in
the Price Range and/or as a Strike Price Tender should they wish to
do so but cannot make tenders that in aggregate are in respect of
more Shares than they own.
Any tender, other than a Strike Price Tender, must be expressed
in whole pence per Ordinary Share and in increments of one penny at
within the Price Range (in the case of certificated Ordinary
Shares) or as explained in Circular.
Andreas and Kyriakos Rialas and Farkland Ventures have each
undertaken to the Company that they will not sell any Ordinary
Shares under the Tender Offer and will procure that the entities
holding their respective interests in Ordinary Shares will not
participate in the Tender Offer. Andreas and Kyriakos Rialas and
Farkland Ventures have an aggregate shareholding of 24,796,507
Ordinary Shares, representing 52.7 per cent. of the Company's
issued share capital, and together they therefore already have
statutory control of the Company. As a result of the Tender Offer,
their combined percentage interest in the Company will increase up
to a maximum of 74.8 per cent. of the Company's issued share
capital. Accordingly, they have recused themselves from decisions
in relation to the Tender Offer, which are being proposed by the
Independent Directors.
The Independent Directors believe it is in the best interests of
the Company to undertake the Tender Offer and that the repurchase
of the Ordinary Shares is a mechanism for creating liquidity.
It is important to note that the Board would only proceed if it
considered that the effect of the Tender Offer would be to increase
earnings and/or net assets per Ordinary Share and that such
exercise would benefit Shareholders generally. In addition, the
Board would only proceed where the Tender Offer is in accordance
with Isle of Man law.
The Strike Price
All Ordinary Shares will be purchased by Panmure Gordon at the
Strike Price.
The Strike Price will be the lowest price per Ordinary Share in
the Price Range that will allow Panmure Gordon to purchase the
maximum number of Ordinary Shares for a total cost nearest to but
(after applying the scaling-back arrangements described below) not
exceeding the Maximum Monetary Amount or, if the aggregate value of
all Ordinary Shares validly tendered by Eligible Shareholders is
less than the Maximum Monetary Amount, such lesser number of
Ordinary Shares as are validly tendered pursuant to the Tender
Offer.
All Eligible Shareholders who tender Ordinary Shares at a price
below or at the Strike Price or as Strike Price Tenders will
receive the Strike Price for all successful tenders accepted,
subject, where applicable, to the scaling-back arrangements
described below.
Number of Ordinary Shares to be purchased
Provided the Conditions in this circular are met, if the
aggregate value at the Strike Price of all validly tendered
Ordinary Shares is less than the Maximum Monetary Value, then all
Ordinary Shares validly tendered will be purchased at the Strike
Price.
If the aggregate value at the Strike Price of all validly
tendered Ordinary Shares exceeds the Maximum Monetary Value, not
all of the Ordinary Shares validly tendered will be accepted and
purchased. In these circumstances, the number of Ordinary Shares
which will be accepted and purchased will be as follows:
(a) all valid tenders of Ordinary Shares at a price below the
Strike Price by Eligible Shareholders will be accepted in full (and
will be purchased at the Strike Price);
(b) all valid tenders of Ordinary Shares at the Strike Price or
as Strike Price Tenders by Eligible Shareholders will be scaled
down by the same factor such that the aggregate amount purchased by
Panmure Gordon does not exceed the Maximum Monetary Amount; and
(c) all tenders of Ordinary Shares at a price above the Strike
Price will be rejected and will not be purchased by Panmure
Gordon.
Once lodged (in the case of a Tender Form) or settled (in the
case of a TTE Instruction) such tender shall be irrevocable. The
Tender Offer will close at 1.00pm on 25 March 2019 and tenders
received after that time will not be accepted (unless the Tender
Offer is extended). The Company reserves the right at any time
prior to the announcement of the results of the Tender Offer to
extend the period during which the Tender Offer is open, based on
market conditions and/or other factors.
Successfully tendered Ordinary Shares will be purchased free of
commission and dealing charges.
Any Ordinary Shares repurchased by the Company will be
cancelled. Any rights of Ordinary Shareholders who do not tender
their Ordinary Shares will be unaffected.
The Tender Offer is conditional, inter alia, on the Company
satisfying the solvency test requirements under Isle of Man law in
relation to the distribution to shareholders at the time of the
Tender Offer.
Full details of the Tender Offer, including the terms and
Conditions on which it is made, are set out in the Circular.
Rule 9 of the City Code
In relation to the Tender Offer, the Panel has confirmed that it
will treat Andreas Rialas and Kyriakos Rialas as a single person.
Because Andreas and Kyriakos Rialas have an aggregate shareholding
of 24,796,507 Ordinary Shares, representing 52.7 per cent. of the
Company's issued share capital, together they already have
statutory control of the Company and the independent shareholders
of the Company approved a whitewash resolution in September 2016
which allowed them to further increase their aggregate interests
without incurring an obligation under Rule 9 to make a general
offer. Implementation of the Tender Offer will not therefore
require a vote of independent shareholders as provided in Rule 9 of
the City Code.
Timetable
The expected timetable is as follows:
Record Date* Close of business on
6 March 2019
Announcement of Tender Offer 7.00am on 7 March 2019
Latest time and date for receipt of Tender 1.00pm on 25 March 2019
Forms and TTE instructions
Announcement of result of Tender Offer 26 March 2019
Purchase of Shares under the Tender Offer 26 March 2019
Creation of assured payment obligations by 8 April 2019
for Tender Offer proceeds for uncertificated
Ordinary Shares
Despatch of cheques for Tender Offer by 8 April 2019
proceeds and balance share certificates
for certificated holdings
Notes:
(1) Future dates are indicative only and may be subject to
change by the Company, in which event details of the new times and
dates will be notified via a Regulatory Information Service.
(2) References to times in this timetable are to London time.
Recommendation
The Board is making no recommendation to Shareholders in
relation to participation in the Tender Offer. Whether or not
Shareholders decide to tender their Ordinary Shares will depend,
amongst other things, on their own individual circumstances,
including their own tax position. Shareholders are recommended to
consult an appropriately authorised independent adviser in
determining whether or not to participate in the Tender Offer and
to the extent of such participation
This announcement contains inside information for the purposes
of the Market Abuse Regulation No. 596/2014.
Enquiries:
Argo Group Limited
Andreas Rialas
020 7016 7660
Panmure Gordon
Dominic Morley
020 7886 2500
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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