CAMH Consol.Asst.Mgt

 

TIDMCAMH 
 
RNS Number : 5383Z 
Consolidated Asset Mgmt (Hldgs) PLC 
23 September 2009 
 

CONSOLIDATED ASSET MANAGEMENT (HOLDINGS) PLC 
 
 
(the "Company") 
 
 
Proposed De-listing from AIM 
 
 
Introduction 
 
 
The Company today announces that it is seeking Shareholder approval to cancel 
the admission of its Ordinary Shares to trading on AIM. 
 
 
This announcement provides background to and the reasons for the proposed 
Delisting and why the Board believes the Delisting to be in the best interests 
of the Company and Shareholders as a whole. 
 
 
Current trading 
 
 
On 4 September 2009, the Company announced interim results for the six months 
ended 30 June 2009 in which the Chairman made the following statement: 
 
 
"The challenging environment in which your business is currently being conducted 
continued during the six months on which we are reporting. Our revenues are 
directly linked to the performance of the financial markets and investor 
confidence. Unfortunately this confidence, despite some recent encouraging 
survey data, remains at a low level. However, good progress has been made in 
repositioning the Group to be well placed to take advantage as and when the 
market improves." 
 
 
The Chairman then went on to make the following further comments: 
 
 
"We also continue to evaluate investment and acquisition opportunities as they 
arise, where it is possible to combine an appropriate valuation with the right 
fit for our strategic goals. In light of the Company's current share price, the 
Board is considering the appropriate structure in order to facilitate the 
implementation of their strategy. We are currently looking at a number of 
opportunities and hope that we will continue to make progress in restoring the 
Group to profitability." 
 
 
The Directors believe that the environment in which the business of the Company 
is being conducted continues to be challenging. Further, the ability of the 
Company to pursue certain strategic opportunities is, in the view of the Board, 
being restricted by the regulatory regime to which the Company is subject as a 
result of the Ordinary Shares being admitted to trading on AIM and the costs 
associated with complying with such regulation. Since the Chairman made the 
above statements, the Board has continued to consider the appropriate structure 
in which it is able to implement its existing strategy and the results of that 
review are set out below. 
 
 
Rationale for the proposed Delisting 
 
 
The Board has conducted a review of the benefits and disadvantages to the 
Company in continuing to be admitted to trading on AIM and has concluded that it 
would be in the best interests of the Company and Shareholders as a whole for 
the admission of the Company's Ordinary Shares to trading on AIM to be 
cancelled. 
 
 
The Board believes that the costs and regulatory requirements associated with 
maintaining the Company's admission to trading on AIM are a significant burden 
on the Company's financial resources and are likely to impede the Company's 
ability to pursue strategic opportunities. Costs associated with being admitted 
to trading on AIM include fees payable to the Company's nominated adviser, 
annual fees paid to the London Stock Exchange, costs relating to public 
announcements and fees and expenses of accountants and lawyers engaged to 
provide services and advice relating to the Company's compliance with the 
regulation to which the Company is subject as a result of Admission. 
 
 
The Board also believes that, given the relatively small size and profile of the 
Company, the Company is not enjoying certain of the benefits which might 
otherwise be expected to arise as a consequence of Admission, for example: 
 
 
  *  the Company has seen limited trading volume in its Ordinary Shares; 
  *  the Board believes that raising further equity capital, particularly from new 
  institutional investors, is likely to be difficult given the Company's current 
  size and share price; and 
  *  the Board also believes that the Company is unlikely to attract additional 
  analyst interest in the secondary market given its current size. 
 
 
 
Further, given that it is the stated strategy of the board of directors of the 
Company to consider investment and acquisition opportunities for the Company, 
the application of Rule 14 of the AIM Rules means that any acquisition or, in 
certain circumstances, a series of acquisitions carried out by the Company in a 
12 month period which exceeds certain financial criteria or satisfies certain 
other criteria would constitute a "reverse takeover" as defined in and for the 
purposes of the AIM Rules. The consequences of an acquisition being a reverse 
takeover for the purposes of the AIM Rules include the requirement for the 
Company to publish a new admission document and to make an application for the 
admission of its shares to trading on AIM as if it was a new applicant applying 
for admission for the first time. The view of the Board is that: (a) given the 
size of the Company, if the Company wishes to pursue an acquisition strategy 
over the following 12 months, there is a real prospect that such acquisition(s) 
would constitute a reverse takeover; and (b) if any acquisition or series of 
acquisitions which the Company pursues constitutes a reverse takeover for the 
purposes of the AIM Rules, compliance with the requirements of the AIM Rules 
would delay the Company's ability to pursue such acquisition(s) and result in 
the Company incurring significant additional costs. 
 
 
It is the view of the Board that the implementation of its stated strategy for 
the Company, that is, to identify acquisition opportunities for the Company, is 
key to the success of the Company and the Group and the ability of the Company 
and the Group to generate an appropriate level of profit and operating cash flow 
in the future. It is the Board's view that, should the Company's shares remain 
admitted to trading on AIM, the ability of the Company to pursue such 
acquisition opportunities for reasons of cost and the other reasons stated above 
will be restricted. If this is the case, it is the view of the Board that the 
prospects for the growth of the Group and the ability of the Company to generate 
profits will be restricted and that, as a result, the directors of the Company 
would need to consider alternative strategies including the disposal of the 
Company's remaining assets and the cessation of the Group's trade. 
 
 
Following the review referred to above and for the reasons stated above, the 
Board has concluded that the current structure of the Company is not conducive 
to implementing its future strategy for the Company. The Board believes that the 
annual cost to the Company of being admitted to trading on AIM is 
disproportionate to the size of the Company and is not commensurate with the 
benefits of Admission and that, accordingly, it would be in the best interests 
of the Company and Shareholders as a whole if the admission of the Company's 
Ordinary Shares to trading on AIM was cancelled. 
 
 
Strategy following the Delisting 
 
 
As previously stated, the strategy of the board of directors of the Company is 
to seek investment and acquisition opportunities to establish a broadly-based 
wealth management and financial services group. It is the Directors' intention 
to continue to pursue this strategy following the Delisting. 
 
 
It is also the current intention of the Directors that the Company will remain a 
public limited company and will continue to communicate certain key information 
about the Company (including annual accounts and other operational and financial 
information) to its Shareholders via the Company's website: 
www.consolidatedassetmanagement.co.uk. 
 
 
The Directors do not currently intend to propose that the Company be 
re-registered as a private company. As a consequence, immediately following the 
Delisting, the Company will remain a public limited company. 
 
 
  Process for Delisting 
 
 
In accordance with Rule 41 of the AIM Rules, the Company has notified the London 
Stock Exchange of the Delisting. Under the AIM Rules, it is a requirement that 
the Delisting is approved by the requisite majority of Shareholders voting at 
the General Meeting (being not less than 75 per cent. of the votes cast). 
Accordingly, the Resolution set out in the Notice of General Meeting seeks 
Shareholders' approval to the Delisting. Subject to the Resolution approving the 
Delisting being passed at the General Meeting, it is anticipated that trading in 
the Ordinary Shares on AIM will cease at close of business on 21 October 2009 
with the Delisting taking effect at 7:30am on 22 October 2009. 
 
 
Upon the Delisting becoming effective, Strand Partners will cease to be 
nominated adviser to the Company and the Company will no longer be required to 
comply with the rules and corporate governance requirements to which companies 
admitted to trading on AIM are subject, including the AIM Rules. 
 
 
Shareholders should note however that the Company will nevertheless remain 
subject to the provisions of the City Code on Takeovers and Mergers. 
 
 
If the Resolution is passed and the Delisting becomes effective, it is the 
intention of the Board to cancel the Company's CREST facility so that Ordinary 
Shares may only be held in certificated form. Those Shareholders who currently 
hold Ordinary Shares in uncertificated form in CREST will, following the 
Delisting becoming effective, be sent a share certificate for those Ordinary 
Shares which were previously held in uncertificated form and such share 
certificates will be despatched by 28 October 2009. 
 
 
Transactions in the Ordinary Shares following Delisting 
 
 
Immediately following the Delisting becoming effective, there will be no market 
facility for dealing in the Ordinary Shares and no price will be publicly 
quoted. The Board recognises that the Delisting will make it more difficult for 
Shareholders to buy and sell Ordinary Shares should they wish to do so. For this 
reason, the directors of the Company will consider, at an appropriate time 
following the Delisting, the facilitation of a dealing arrangement to enable 
Shareholders to trade their Ordinary Shares, although there can be no guarantee 
that such a facility will be established. Should any such facility be arranged, 
details will be made available to Shareholders via the Company's website. 
 
 
Non-executive Director 
Brian Aitchison was appointed as a non-executive director of the Company on 3 
September 2009 and brings to the Company his knowledge and experience of having 
operated and managed wealth management and financial advisory companies for over 
20 years. With the permission of the Board, Brian has been out of the UK during 
September and, as a consequence, has not been able to participate in the review 
conducted by the Directors, and referred to above, in respect of the advantages 
and disadvantages to the Company of continuing to be admitted to trading on AIM, 
or the decision of the Directors following this review to recommend the 
Delisting to Shareholders and that Shareholders vote in favour of the Resolution 
at the General Meeting. Given his recent appointment, the view of the Directors 
was that it was not necessary for Brian to participate in the review referred to 
above and, accordingly, Brian has not been required to take responsibility for 
the Board's actions. 
 
 
General Meeting 
 
 
The Company will hold a General Meeting at the Company's registered office at 58 
Queen Anne Street, London W1G 8HW at 5:00pm on 12 October 2009 at which the 
Resolution will be put to Shareholders. 
 
 
Recommendation to Shareholders 
 
 
For the reasons set out above the Directors consider that the Proposal is fair 
and reasonable and is in the best interests of the Company and its Shareholders 
as a whole. Accordingly, the Directors unanimously recommend that Shareholders 
vote in favour of the Resolution to be proposed at the General Meeting, as the 
Directors intend to do in respect of their own beneficial holdings of 954,701 
Ordinary Shares in aggregate, representing approximately 0.32 per cent of the 
Ordinary Shares in issue. 
 
 
Unless the context otherwise requires, defined terms in this announcement shall 
have the meanings given to them in the Circular sent to shareholders of the 
Company on 23 September 2009 and available on the Company's website, 
www.consolidatedassetmanagement.co.uk. 
 
 
For further information please contact: 
 
 
Consolidated Asset Management (Holdings) plc 
Simon Banks-Cooper, Chief Executive Officer 
Tel: 0845 838 4756 
 
 
Strand Partners Limited 
Simon Raggett 
Tel: 020 7409 3494 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 MSCPUURGBUPBGGW 
 

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