TIDMBCT
RNS Number : 9599C
Business Control Solutions Grp PLC
24 November 2009
?
24 November 2009
PROPOSED CANCELLATION OF ADMISSION
TO TRADING ON AIM OF THE ORDINARY SHARES
AND
RE-REGISTRATION AS A PRIVATE LIMITED COMPANY
TENDER OFFER TO ACQUIRE UP TO 40,000,000 ORDINARY SHARES AT 1.25 PENCE PER
ORDINARY SHARE
The following announcement incorporates extracts from the Chairman's Letter
contained in a Circular which has been posted to the Company's Ordinary
Shareholders today, relating to Business Control Solutions Group's proposed
cancellation of its AIM listing:
1. Introduction
On 30 September 2009 the Company announced in its Interim Results that the Board
was considering the merits of maintaining the admission of the Ordinary Shares
to trading on AIM, as well as exploring how a de-listing might be best achieved.
The Company announces that it is proposing to seek Shareholder approval for the
cancellation of admission to trading on AIM of its Ordinary Shares and the
re-registration of the Company as a private limited company.
The Company also announces that the EBT is offering Qualifying Shareholders the
ability to sell at least a proportion of their shareholding through a Tender
Offer at 1.25 pence per Ordinary Share. This was also the closing price of an
Ordinary Share on 20 November 2009, being the latest practicable date prior to
the date of this announcement.
The Tender Offer will afford Qualifying Shareholders an opportunity to realise
some of their Ordinary Shares prior to the De-Listing becoming effective. A
Qualifying Shareholder will be able to tender up to a maximum of 14.7 per cent.
of his holding of Ordinary Shares but may be able to realise a larger proportion
of his shareholding depending on the extent to which other Qualifying
Shareholders decide not to participate in the Tender Offer.
The maximum number of Ordinary Shares which the EBT will acquire under the
Tender Offer is 40,000,000, which will result in a payment of up to GBP500,000
by the EBT to participating Qualifying Shareholders. Any Ordinary Shares
acquired by the EBT pursuant to the Tender Offer will be held by the EBT for the
purpose of granting share options to incentivise key employees of the Group.
The Company has received irrevocable undertakings to vote in favour of the
Resolutions from each of the Directors and certain Shareholders holding in
aggregate 175,838,214 Ordinary Shares, representing approximately 65 per cent.
of the Company's issued share capital.
The Company has also received irrevocable undertakings not to accept the Tender
Offer from each of the Directors in respect of their entire holdings of
152,747,360 Ordinary Shares in aggregate, representing approximately 56 per
cent. of the Company's issued share capital.
A circular is being sent later today to all Shareholders to convene a general
meeting of the Company and to explain the background to, and reasons for, the
Proposals and the reasons why the Directors unanimously consider the Proposals
to be in the best interests of the Company and its Shareholders as a whole.
2. De-Listing and Re-Registration
2.1 Reasons for the De-Listing
As announced on 30 September 2009, the Directors have been considering for some
time the merits or otherwise of the Company's Ordinary Shares continuing to be
admitted to trading on AIM and remaining a public limited company. The following
factors have been taken into account by the Directors in reaching the conclusion
that the De-Listing is in the best interests of the Company and its Shareholders
as a whole:
* the Group has made progress against its strategic goals and yet its market
capitalisation is significantly lower than when it raised additional funds to
pursue its strategic goals in November 2006;
* the Company, like most other small AIM quoted companies, suffers from a lack of
liquidity for its Ordinary Shares and, in practical terms, a small free float
and market capitalisation, which reduces demand. In addition, the width of the
bid/offer spread at which a market is made in the Ordinary Shares has
accentuated the lack of liquidity and, in the opinion of the Directors, this
spread is unlikely to improve given the Company's size and lack of appeal to
investors;
* the costs associated with maintaining the Company's admission to trading on AIM
are high (approximately GBP200,000 per annum) and given the economic climate are
becoming increasingly burdensome; and
* in the opinion of the Directors, the most likely exit route for Shareholders
will ultimately be via a trade sale and that the proceeds from a potential trade
sale will be maximised without reference to an underperforming share price.
The Directors strongly believe that for the reasons referred to above, the
Company should seek the cancellation of the admission of its Ordinary Shares to
trading on AIM and re-register as a private limited company.
2.2 Strategy
Following completion of the De-Listing, Re-Registration and the Tender Offer, it
is the intention of the Board to continue to operate the Group's business in the
same manner, and with the same objectives and strategy, as at present. The Group
will continue to operate with a level of corporate governance that the Board
considers to be appropriate for a company of its size and resources. I will
continue in my role as independent Chairman and to chair the remuneration
committee.
2.3 De-Listing
Rule 41 of the AIM Rules requires an AIM company wishing the London Stock
Exchange to cancel admission of its shares to trading on AIM to notify such
intended cancellation and separately inform the London Stock Exchange of its
preferred cancellation date at least twenty Business Days prior to such date.
The cancellation is conditional upon the consent of not less then 75 per cent.
of votes cast by Shareholders given in a general meeting.
The GM Notice contains a special resolution numbered 1 which proposes that the
Company's admission to trading on AIM is cancelled. Subject to the passing of
Resolution 1 at the GM, it is expected that the last day of dealings in Ordinary
Shares on AIM will be 23 December 2009 and that De-Listing will be effective
from 7.00 am on 24 December 2009.
2.4 Re-Registration
Following the De-Listing there will be no need for the Company to remain as a
public limited company. The Re-Registration will enable the Company to take
advantage of various provisions of the Act that will reduce the administrative
burden on the Company, such as the ability to pass written resolutions.
In order for the Company to effect the Re-Registration (and to make certain
consequential amendments to the Articles) Shareholders will be asked to pass the
special resolution numbered 2 set out in the GM Notice. Resolution 2 to approve
the Re-Registration will be conditional on Resolution 1 approving the De-Listing
being passed and the De-Listing taking effect.
If Resolution 2 in the GM Notice is duly passed by not less than 75 per cent. of
votes cast by Shareholders and the Re-Registration becomes effective, the
Articles will need to be updated to reflect the fact that the Company is no
longer a public limited company and to remove certain provisions which will no
longer be relevant. The main provisions which will be removed are those relating
to Ordinary Shares which are currently held in uncertificated form through
CREST. Certain consequential amendments will also need to be made to remove
definitions which will no longer be used and to update the numbering of the
Articles. Accordingly, the Resolution relating to the Re-Registration also seeks
Shareholders' approval to the amendments to the Articles. Copies of the amended
Articles showing the proposed changes can be viewed, together with the current
Articles, on the Company's website www.bcsplc.com and are also available for
inspection at the Company's registered office during usual business hours on any
Business Day until the time of the GM. The amended Articles will also be
available for inspection at the place of the GM for at least 15 minutes prior to
the GM and during the GM itself.
If Resolution 2 to approve the Re-Registration is passed, upon the De-Listing
taking effect, the Company will file the requisite documents with the Registrar
of Companies along with the relevant fee for re-registration. The
Re-Registration will become effective upon the Registrar of Companies issuing a
certificate of incorporation as a private limited company, which will be issued
once the Registrar is satisfied that no valid application can be made to cancel
the Resolution approving the Re-Registration.
If Resolution 2 to approve the Re-Registration is not passed, the Company will
still proceed with the De-Listing.
2.5 Following the De-Listing and Re-Registration
Shareholders should be aware that save as set out below following the De-Listing
and Re-Registration becoming effective there will be no market facility for
dealing in the Ordinary Shares and no price will be publicly quoted for the
Ordinary Shares. As such liquidity in, and marketability of, the Ordinary Shares
will be very limited and holdings of Ordinary Shares will be difficult to value
and to trade.
The Directors are aware that some Shareholders may still wish to acquire or
dispose of Ordinary Shares, but that De-Listing will make it more difficult for
them to do so. The Directors intend to make available following the De-Listing
becoming effective a new matched bargain service via J P Jenkins Limited.
Further details of this will be made available via the Company's website and
directly by letter or e-mail to Shareholders, where appropriate.
In addition, the EBT is proposing the Tender Offer (details of which are set out
below and in Part II of the Circular), so that Qualifying Shareholders have the
opportunity to realise at least some of their Ordinary Shares ahead of the
De-Listing becoming effective. Qualifying Shareholders may be able to realise a
greater proportion of their Ordinary Shares pursuant to the Tender Offer
depending on the extent to which other Qualifying Shareholders take up the
Tender Offer.
To the extent that Shareholders are unable or unwilling to hold Ordinary Shares
in the Company following the De-Listing becoming effective, or wish to realise
their investment in the Company beyond their participation in the Tender Offer,
such Shareholders should consider selling their Ordinary Shares on AIM prior to
the De-Listing becoming effective, which is expected to be at 7.00 am on 24
December 2009.
Shareholders should note that following the De-Listing, the Company will remain
subject to the provisions of the Code.
3. Tender Offer
In light of the proposed De-Listing and Re-Registration, the EBT is proposing a
Tender Offer to purchase up to 40,000,000 Ordinary Shares, representing 14.7 per
cent. of the Company's current issued share capital at 1.25 pence per Ordinary
Share. This represents the price of an Ordinary Share on 30 September 2009, the
date of the announcement of the Interim Results when the Company announced that
it was considering the merits of maintaining the admission of the Ordinary
Shares to trading on AIM, as well as exploring how a de-listing might be best
achieved.
The Tender Offer will be open to all Qualifying Shareholders (being those
Shareholders, other than Overseas Shareholders on the Company's Register of
Members on the Record Date). Qualifying Shareholders may participate in the
Tender Offer by tendering either all or a proportion of their registered
holdings of Ordinary Shares.
Each Qualifying Shareholder will be entitled to sell Ordinary Shares at a price
of 1.25 pence per Ordinary Share. Each Qualifying Shareholder may tender up to
14.7 per cent. of their holding of Ordinary Shares registered in their name on
the Record Date, rounded down to the nearest whole number of Ordinary
Shares. This was also the closing price of an Ordinary Share on 20 November
2009, being the latest practicable date prior to the date of this announcement.
The Tender Offer will also present tendering Qualifying Shareholders with an
opportunity to sell more than their pro rata entitlement of Ordinary Shares to
the extent that other Qualifying Shareholders tender less than their pro rata
entitlement or do not submit a tender. If the number of Ordinary Shares validly
tendered exceeds 40,000,000 and if and to the extent that any Qualifying
Shareholders have tendered less than their pro rata entitlement under the Tender
Offer, surplus tenders will be accepted pro rata to the number of additional
Ordinary Shares tendered so that the total number of Ordinary Shares purchased
pursuant to the Tender Offer does not exceed 40,000,000. Shareholders should be
aware that the Company has received irrevocable undertakings not to accept the
Tender Offer from each of the Directors in respect of their entire holdings of
152,520,906 Ordinary Shares in aggregate, representing approximately 56 per
cent. of the Company's issued share capital.
If tenders totalling less than 1 per cent. of the voting rights attaching to the
issued share capital of the Company are received, the Tender Offer will be void.
The EBT is a newly established employee benefit trust. The trustee of the EBT is
B2B Systems Trustees Limited, a wholly owned subsidiary of the Company, the
directors of which are Roger Shepherd, the Company's Finance Director and
Company Secretary, and Paul Brock, the Company's Chief Operating Officer.
Any Ordinary Shares purchased by the EBT pursuant to the Tender Offer will be
held by the EBT for the purpose of granting share options to incentivise key
employees of the Group. The Directors have determined that Nigel Walder, the
Company's Chief Executive, will not be granted options under the EBT. Any
Ordinary Shares purchased by the EBT under the Tender Offer will be funded by a
gift from Business Control Solutions public limited company, a wholly-owned
subsidiary of the Company, out of its current financial resources and therefore
the funding of the Tender Offer is not dependent on third party financing.
No Ordinary Shares will be purchased in relation to the Tender Offer unless
Resolution 1 to approve the De-Listing is passed at the General Meeting.
The EBT reserves the right at any time prior to the announcement of the results
of the Tender Offer to decline to proceed with the Tender Offer if it concludes
that the implementation of the Tender Offer is no longer in its best interests.
The Tender Offer is conditional upon the passing at the General Meeting of
Resolution 1 to approve the De-Listing, but is not conditional on the passing of
Resolution 2 to approve the Re-Registration.
Ordinary Shares will be purchased from Qualifying Shareholders free of any
commissions, stamp duty, stamp duty reserve tax and dealing charges.
Further information relating to the Tender Offer is set out in Part II of the
Circular.
4. Directors' Intentions regarding the Tender Offer
The Directors have irrevocably undertaken that they will not participate in the
Tender Offer in respect of any Ordinary Shares which they legally and/or
beneficially own.
5. Shareholders Agreement
The Company is aware that on 18 November 2009, Nigel Walder, the Company's Chief
Executive and holder of 70,922,379 Ordinary Shares, representing approximately
26.1 per cent. of the Company's issued share capital, and Alexander (Sandy)
Anderson, a Non-Executive Director of the Company and holder of 81,055,193
Ordinary Shares, representing approximately 29.9 per cent. of the Company's
issued share capital, entered into an agreement to record their intentions in
relation to the management of the Company following the De-Listing taking
effect. The Shareholders Agreement is conditional upon the De-Listing taking
effect and will come into force immediately thereon.
Shareholders should note that the Company is not a party to the Shareholders
Agreement, but the Directors are of the opinion that Shareholders should be made
aware of the following provisions contained in the Shareholders Agreement:
1. The parties have agreed to exercise their voting rights and other powers of
control to ensure
that, so far as they are able, the board remains
committed to maintaining high standards of
corporate governance,
in particular that:
1.1 the Company remains headed by an effective board, that includes a balance of
executive and non-executive directors so that no individual or small group of
individuals can dominate the Boards decision making;
1.2 the Chairman remains an independent director;
1.3 levels of remuneration remain sufficient to attract, retain and motivate
suitable directors;
1.4 the Companys remuneration committee remains in place and has delegated
responsibility for setting the remuneration for all executive directors;
1.5 the terms of reference of the remuneration committee include recommending
the size of the discretionary annual bonus pool for senior management, with the
allocation of the pool determined by the executive directors;
1.6 the board continues to determine the remuneration of the non-executive
directors;
1.7 the Company maintains a sound system of internal controls to safeguard
Shareholders' investment and the Groups assets; and
1.8 the board continues to use annual general meetings as an opportunity to
communicate with Shareholders.
2. For as long as the parties (together with their connected persons) hold not
less than 10 per cent. of the Companys issued share capital, each of the
Parties shall exercise their voting rights to ensure that they (or a
representative) shall sit on the board at all times.
3. The parties acknowledge the board's intention to establish one or more
executive director and senior management incentive schemes to ensure that such
persons remain motivated to contribute to the success of the Group.
4. The parties have agreed not to dispose of any of their Ordinary Shares
without first giving the Company a reasonable opportunity to purchase such
Ordinary Shares.
5. The parties have agreed to support a dividend policy that maximises the
distribution of the Companys distributable reserves if the Board considers a
distribution to be in the best interests of the Company, having regard to its
financial requirements.
A copy of the Shareholders Agreement will be available for inspection at the
Companys registered office during normal business hours from the date of this
announcement until the time of the GM and for at least 15 minutes prior to the
GM and during the GM.
6. The Code
The Panel has determined that Nigel Walder and Sandy Anderson are deemed to be
acting in concert for the purposes of the Code.
The Panel has also determined that the EBT will be deemed to be acting in
concert with Nigel Walder and Sandy Anderson in respect of the Tender Offer. As
a consequence, as the concert party holds more than 50 per cent. of the voting
rights of the Company and for so long as they continue to be treated as acting
in concert, the concert party will be able to acquire Ordinary Shares without
incurring an obligation to make a general offer to all Shareholders in
accordance with Rule 9 of the Code. In the event that the shareholding of any
individual member of the concert party amounts to 30 per cent. or more of the
entire issued share capital of the Company, that person will be required to make
a general offer under Rule 9 of the Code. Accordingly Sandy Anderson (who
currently holds 29.9 per cent. of the issued share capital of the Company) is
unable to acquire any further Ordinary Shares without giving rise to this
requirement.
7. General Meeting
The Circular contains a notice of the GM which is to be held on 16 December 2009
at 11.30 a.m. at the offices of Arbuthnot Securities, Arbuthnot House, 20
Ropemaker Street, London, EC2Y 9AR at which the Resolutions will be proposed to
approve the De-Listing and the Re-Registration.
To be effective, each of the Resolutions approving the De-Listing and the
Re-Registration must be passed on a show of hands or on a poll by not less than
75 per cent. of those Shareholders present in person or (being a corporation)
present by a duly authorised person or by proxy and voting at the General
Meeting.
8. Irrevocable Undertakings
The Company has received irrevocable undertakings to vote in favour of the
Resolutions from each of the Directors and certain Shareholders holding in
aggregate 175,838,214 Ordinary Shares, representing approximately 65 per cent.
of the Companys issued share capital.
The Company has also received irrevocable undertakings not to accept the Tender
Offer from each of the Directors in respect of their entire holdings of
152,747,360 Ordinary Shares in aggregate, representing approximately 56 per
cent. of the Companys issued share capital.
Arbuthnot Securities Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting as nominated adviser and
broker to the Company in relation to the proposals outlined in the document and
will not be responsible to any person other than the Company for providing the
protections afforded to its customers or for advising any other person on the
contents of this document or any matter, transaction or arrangement referred to
herein. The responsibilities of Arbuthnot Securities Limited as the Companys
nominated adviser and broker under the AIM Rules are owed solely to the London
Stock Exchange plc and are not owed to the Company or to any Director,
Shareholder or any other person. Arbuthnot Securities Limited is not making any
representation or warranty, express or implied, as to the contents of this
document.
For further information, please contact:
+--------------------------------------+----------+------------------------+
| Business Control Solutions Group plc | | 0207 648 2050 |
+--------------------------------------+----------+------------------------+
| Nigel Walder, CEO | | |
+--------------------------------------+----------+------------------------+
| Roger Shepherd, Finance Director | | |
+--------------------------------------+----------+------------------------+
| | | |
+--------------------------------------+----------+------------------------+
| Financial Dynamics Limited | | 0207 831 3113 |
+--------------------------------------+----------+------------------------+
| James Melville-Ross | | |
+--------------------------------------+----------+------------------------+
| Haya Herbert-Burns | | |
+--------------------------------------+----------+------------------------+
| | | |
+--------------------------------------+----------+------------------------+
| Arbuthnot Securities Limited | | 020 7012 2000 |
+--------------------------------------+----------+------------------------+
| Tom Griffiths | | |
+--------------------------------------+----------+------------------------+
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
+----------------------------------------------------+-------------------------+
| | 2009 |
| | |
+----------------------------------------------------+-------------------------+
| Latest time and date for receipt of Tender Forms | 1.00 pm on 15 December |
| and TTE instructions | |
+----------------------------------------------------+-------------------------+
| Closing Date for the Tender Offer | 1.00 pm on 15 December |
+----------------------------------------------------+-------------------------+
| Record Date for the Tender Offer | 5.00 pm on 15 December |
+----------------------------------------------------+-------------------------+
| General Meeting | 11.30 am on 16 December |
+----------------------------------------------------+-------------------------+
| Last day of dealings in Ordinary Shares on AIM | 23 December |
+----------------------------------------------------+-------------------------+
| Cancellation of admission to trading on AIM of the | with effect from 7.00 |
| Ordinary Shares | am on 24 December |
+----------------------------------------------------+-------------------------+
| Payment issued for Ordinary Shares purchased | 29 December |
| pursuant to the Tender Offer | |
+----------------------------------------------------+-------------------------+
| Balance share certificates despatched and TFE | by 29 December |
| instructions issued where relevant by | |
+----------------------------------------------------+-------------------------+
DEFINITIONS
The following definitions apply throughout this announcement unless the context
otherwise requires:
"Act" the Companies Act 2006;
"AIM" the AIM Market operated by the
London Stock Exchange;
"AIM Rules" the AIM Rules for Companies published
by the London Stock Exchange governing admission to and the operation of AIM;
"Arbuthnot Securities" Arbuthnot Securities Limited of Arbuthnot
House, 20 Ropemaker Street, London, EC2Y 9AR;
"Articles" the Companys articles of
association;
"Board" or "Directors" the board of directors of the Company;
"Business Day" a day (other than a Saturday, Sunday or
public holiday) when banks in the City of London are open for business;
"Circular" the document to be sent to
Shareholders later today which amongst other things convenes the General
Meeting;
"Code" the City Code on Takeovers and
Mergers in force from time to time;
"Company" Business Control Solutions Group plc;
"CREST" a relevant system (as defined in the
Regulations) in respect of which Euroclear is the operator (as defined in the
Regulations);
"De-Listing" the proposed cancellation of
admission to trading on AIM of the Ordinary Shares;
"EBT" the Business Control Solutions
Group Employee Benefit Trust, the trustee of which is B2B Systems Trustees
Limited (company number 04728516) (a wholly owned subsidiary of the Company)
whose registered office is at Churchgate, New Road, Peterborough,
Cambridgeshire, PE1 1TT;
"Euroclear" Euroclear UK & Ireland Limited
(company number 02878738) whose registered office is at 33 Cannon Street,
London, EC4M 5SB;
"GM" or "General the general meeting of the Company to be
held at 11.30 am
Meeting" on 16 December 2009 or any
adjournment thereof;
"GM Notice" the notice convening the GM which is
set out in the Circular;
"Group" the Company and its subsidiary
undertakings;
"Interim Results" the unaudited interim results for the
Group for the six months ended 30 June 2009;
"London Stock Exchange" London Stock Exchange plc;
"Ordinary Share(s)" fully paid ordinary shares of GBP0.01
nominal value each in the capital of the Company;
"Overseas Shareholder" a Shareholder resident in, or a citizen of,
a jurisdiction outside the UK;
"Panel" the Panel on Takeovers and Mergers;
"Proposals" together the De-Listing, the
Re-Registration and the Tender Offer;
"Qualifying Shareholder" a Shareholder who is entitled to
participate in the Tender Offer, being a Shareholder on the Register of Members
at the Record Date who is not an Overseas Shareholder;
"Record Date" the record date for the Tender Offer,
being 5.00 pm on 15 December 2009;
"Regulations" the Uncertificated Securities
Regulations 2001, as amended from time to time;
"Re-Registration" the proposed re-registration of the
Company as a private limited company;
"Resolutions" the resolutions as set out in the GM
Notice;
"Shareholder(s)" holder(s) of Ordinary Shares;
"Shareholders Agreement" the agreement entered into on 18 November 2009
between Nigel Walder and Alexander Anderson, details of which are set out above;
"Tender Form" the tender form to be issued with the
Circular for use by Qualifying Shareholders in respect of Ordinary Shares held
in certificated form in connection with the Tender Offer;
"Tender Offer" the invitation by the EBT to Qualifying
Shareholders to tender Ordinary Shares on the terms and subject to the
conditions set out in this document and the Tender Form;
"TFE instruction" a transfer from escrow instruction (as
defined by the CREST manual issued by Euroclear);
"TTE instruction" a transfer to escrow instruction (as
defined by the CREST manual issued by Euroclear); and
"UK" or "United Kingdom" United Kingdom of Great Britain and Northern
Ireland.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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