De-listing Proposals and Notice of General Meeting
06 October 2009 - 5:00PM
UK Regulatory
TIDMCMP
RNS Number : 2668A
Champion PLC
06 October 2009
Champion plc ("Champion" or the "Company")
Proposed Cancellation of Admission, Proposed Re-registration as a Private
Limited Company and General Meeting
Summary
The Company announces that, subject to Shareholder approval, the Board of
Champion has taken the decision to cancel Admission of the Ordinary Shares to
trading on AIM and to re-register the Company as a private limited company. It
is proposed that the Company will continue as an unquoted private limited
company in order to enable the Directors to continue to develop the business.
The Circular will be posted to Shareholders later today and will together with
this announcement contain the background to and reasons for the Proposals and
why your Directors believe that the Proposals are in the best interests of the
Company and the holders of Ordinary Shares as a whole and that they recommend
that you vote in favour of the Resolutions as they intend to do in respect of
their own beneficial holdings of Ordinary Shares.
Shareholder approval is required under the AIM Rules for the Cancellation and
under the Acts for the re-registration as a private limited company.
A General Meeting of the Company will be held at 9.00 am on Monday 2 November
2009 at Steam Packet House, 76 Cross Street, Manchester M2 4JU at which
resolutions will be proposed to approve, inter alia, the Proposals. A notice
convening the GM is set out in the Circular.
For further information please contact:
Ged Cosgrove, Champion plcTel: 0161 703 1500
Nick Cowles, Zeus Capital LimitedTel: 0161 831 1512
Information on and reasons for the Proposals
1. Cancellation and Re-registration
The current economic crisis has led to significant falls in the values of global
stock markets, which have been exaggerated in small cap, low liquidity stocks.
The Company has only seen 10,858 shares traded in the past six months for a
total consideration of GBP623 which only represents a fraction of the cost of
maintaining an AIM listing.
The Directors believe that they need to make decisions based on the assumption
that the testing economic environment currently being experienced could
potentially continue for several more years.
The Directors expect little improvement in our trading results in the short-term
and, depending upon the depth of the recession, the Company may struggle to
maintain its our current performance, although the Directors continue to believe
that the mid to long term future for the Company is positive and it will achieve
our main objective of increasing shareholder value.
Following careful consideration, the Directors have concluded that it is no
longer in the best interests of the Company or its shareholders to maintain the
Admission.
The Directors also believe that the Company's continued Admission:
* Results in a disproportionate amount of senior management time being spent in
complying with the related regulatory requirements of a listed company including
reporting, disclosure and corporate governance requirements;
* May no longer serve a useful function in terms of access to capital; and
* Results in significant direct costs to the Group, which management estimate to
be around GBP70,000 per annum.
With this in mind, the Board has decided to propose cancelling Admission to
trading on AIM of the Ordinary Shares ("Cancellation") to focus on continuing to
grow the inherent value of the Group.
The Board believes that broad benefits of delisting would include:
* Reduction of financial risk;
* Reduced costs; and
* Release of management time.
The principal effects of the Cancellation would be that:
(a) there would no longer be a formal market mechanism enabling shareholders
to trade their shares on AIM or any other market or tracking exchange and the
CREST trading facility will be cancelled;
(b) the Company would not be bound to announce material events,
administrative changes material transactions nor the requirement to announce
interim or final results;
(c) the Company would no longer be required to comply with any of the
corporate governance requirements for companies admitted to trading on AIM; and
(d) the Company will no longer be subject to the AIM Rules and Shareholders
will no longer be required to vote on certain matters as provided in the AIM
Rules.
The Board will, however, continue to:
* Hold general meetings in accordance with the applicable statutory requirements
and the
Company's articles of association; and
* Provide Shareholders with copies of the Company's audited accounts in accordance
with the applicable statutory requirements.
The provisions of the City Code on Takeovers and Mergers will continue to apply
to the Company following the Cancellation.
Under the AIM Rules, it is a requirement that the Cancellation must be approved
by not less than 75% of shareholders voting at a general meeting.
Accordingly, the notice of General Meeting contains a special resolution to
approve the application to the London Stock Exchange for the Cancellation.
If the resolution is approved, it is expected that the Cancellation will take
effect 5 clear business days following the date of the General Meeting.
At the same time it is proposed to re-register the Company as a private limited
company.
Subject to the Resolutions being passed the Remuneration Committee and Audit
Committee of the board will each be discontinued.
Whilst the Board believes that the Cancellation is in shareholders' interests,
it recognises that the Cancellation will make it more difficult for shareholders
to buy and sell Ordinary Shares should they so wish.
Following the Cancellation, the Board intends to set up a matched bargain
arrangement with JP Jenkins Limited to enable shareholders to trade the Ordinary
Shares. Under this facility, it is intended that shareholders or persons wishing
to acquire shares will be able to leave an indication with JP Jenkins Limited
that they are prepared to buy or sell at an agreed price. In the event that the
matched bargain settlement facility provider is able to match that order with an
opposite sell or buy instruction, JP Jenkins will contact both parties and then
effect the bargain. Shareholders who do not have their own broker may need to
register with JP Jenkins Limited as a new client. This can take some time to
process and therefore shareholders who consider they are likely to use this
facility are encouraged to commence it at the earliest opportunity. Once the
facility has been arranged, details will be made available to shareholders on
the
Company's website.
The City Code and Transfers
Following the Cancellation and Re-registration the City Code will continue to
apply to the Company as it has issued a prospectus within the last 10 years.
Ordinary Shares will remain freely transferable but will cease to be
transferable through CREST after the Cancellation. Instead, Shareholders who
currently hold shares in uncertificated form will receive share certificates in
due course following the Cancellation taking effect. Share transfers may still
be effected after the date of Cancellation by depositing a duly executed and
stamped stock transfer form together with an appropriate share certificate with
the company secretary at the registered office of the Company.
New Articles of Association
It is proposed to adopt new Articles of Association with effect from the
conclusion of the GM (the "New Articles"). These are intended to replace the
Company's current Articles of Association (the "Current Articles"). The main
reasons for adopting the New Articles are to recognise the re-registration of
the Company from a public limited company to a private limited company and to
take account of the changes in UK company law brought about by the Companies Act
2006 (the "2006 Act"). The 2006 Act, which is replacing the Companies Act 1985
(the "1985 Act"), has been implemented in stages and is fully in force with
effect from 1 October 2009. The New Articles will come into effect from the
passing of the resolution.
The principal changes being proposed in the New Articles are summarised below.
Other changes, which are of a minor, technical or clarifying nature, and also
some more minor changes which merely reflect changes made by the 2006 Act, have
not been noted. A clean copy of the New Articles and a copy marked up to show
changes from the Current Articles are available for inspection at the Company's
registered office.
Variation of class rights
The Current Articles contain provisions regarding the variation of class rights.
The proceedings and specific quorum requirements for a meeting convened to vary
class rights are contained in the 2006 Act and a reference to the 2006 Act has,
therefore, been included in the New Articles.
Transfer of shares
Under the 2006 Act, a company must either register a transfer of shares or give
the transferee notice of, and reasons for, its refusal to register a transfer.
Any registration of transfer or notice must be made or given as soon as
practicable and in any event at the earlier of either the time required by the
rules of any relevant recognised investment exchange or within two months from
the date that the transfer is lodged with the Company. The New Articles reflect
these requirements.
Timing of annual general meeting
The 2006 Act requires a company to hold its annual general meeting within nine
months from the day following the company's accounting reference date in each
year. The New Articles reflect the requirements of the 2006 Act.
Types of meetings
The Current Articles refer to annual general meetings and extraordinary general
meetings. The concept of the extraordinary general meeting has not been retained
by the 2006 Act. Pursuant to the 2006 Act any general meeting other than an
annual general meeting shall be referred to as a general meeting. The New
Articles reflect this amendment.
Form of resolution
The Current Articles provide for both special and extraordinary resolutions.
References to extraordinary resolutions are not included in the New Articles as
the concept of extraordinary resolutions has not been retained under the 2006
Act.
Notice of general meetings
The provisions in the New Articles dealing with the convening of general
meetings and the length of notice required to convene general meetings have been
amended to reflect the requirements of the 2006 Act. In particular, a general
meeting (other than an annual general meeting) to consider a special resolution
can be convened on 14 days' notice whereas previously 21 days' notice was
required.
Receipt and termination of proxies
The time limits in the New Articles for the appointment of a proxy have been
clarified and brought in line with the provisions of the 2006 Act. The New
Articles also provide that a member may terminate the appointment of a proxy
within a certain specified period of time.
Votes of members and proxies
Pursuant to the 2006 Act, proxies are entitled to vote on a show of hands as
well as on a poll, and members may appoint a proxy to exercise all or any of
their rights to attend, speak and vote at meetings. Multiple proxies may be
appointed provided that each proxy is appointed to exercise the rights attached
to a different share or shares. The New Articles reflect these new proxy rights.
Conflicts of interest
Pursuant to the 2006 Act a director must avoid a situation where he has, or can
have, a direct or indirect interest that conflicts, or possibly may conflict
with the Company's interests. The requirement is very broad and could apply, for
example, if a director becomes a director of another company or a trustee of
another organisation where such appointment conflicts or possibly may conflict
with the Company's interests. The New Articles give the directors authority to
approve such situations.
There are safeguards which will apply when directors decide whether to authorise
a conflict or potential conflict. First, only directors who do not have an
interest in the matter being considered will be able to take the relevant
decision, and secondly, in taking the decision the directors must act in good
faith and in a way in which they consider will be most likely to promote the
Company's success. The directors will be able to impose limits or conditions
when giving such authorisation if they think this is appropriate.
The New Articles also contain provisions relating to the disclosure of
confidential information, attendance at board meetings and availability of board
papers, each of which is intended to protect a director from being in breach of
his duties to the Company if a conflict of interest or potential conflict of
interest arises. These provisions will only apply where the position giving rise
to the potential conflict has previously been authorised by the directors.
Process of Cancellation
Under the AIM Rules, it is a requirement that the Cancellation must be
conditional upon the consent of not less than 75 per cent of votes cast by
shareholders at a general meeting. Accordingly, the Notice contains a special
resolution to approve the Cancellation of Admission of the Ordinary Shares to
trading on AIM. The Company has notified the London Stock Exchange of its
intention to seek Shareholder approval of the Cancellation of the Admission of
the Ordinary Shares to trading on AIM and if the resolution is approved at the
GM on 2 November 2009, it is expected that cancellation of trading will take
effect on Tuesday 10 November 2009.
General Meeting
As explained above, the Proposals are subject to the approval of Shareholders at
the GM. Accordingly, set out at the end of the Circular is a notice convening
the General Meeting to be held at Steam Packet House, 76 Cross Street,
Manchester M2 4JU at 9.00 a.m. on Monday 2 November 2009.
At this meeting special resolutions will be proposed to:
(1) approve the Cancellation in accordance with the AIM
Rules; and
(2) re-register the Company as a private limited company and make certain
alterations to the Company's Memorandum and adopt new Articles of Association.
2. Action to be taken
A Form of Proxy will accompany the Circular for use by Shareholders in
connection with the General Meeting. Whether or not Shareholders intend to be
present at the meeting, they are asked to complete and return the Form of Proxy
in accordance with the instructions printed thereon and return it to the Company
secretary,1 Worsley Court, High Street, Worsley, Manchester M28 3NJ, as soon as
possible and, in any event, so that it is received by no later than 9.00 a.m. on
31 October 2009.
The return of a completed Form of Proxy will not prevent Shareholders from
attending the General Meeting and voting in person if they so wish.
Recommendation
The Directors consider that the Proposals are 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 Resolutions as they intend to
do in respect of their own beneficial holdings amounting to 10,951,443 Ordinary
Shares, representing 35.06 per cent. of the Company's Ordinary Shares.
Irrevocable undertakings to vote in favour of the Resolutions have been obtained
from Shareholders (including the Directors) holding 19,006,311 Ordinary Shares
comprising 60.84% of the entire issued share capital of the Company.
DEFINITIONS
+--------------------------------+----------------------------------------------+
| The following definitions apply throughout this announcement unless the |
| context requires otherwise: |
| |
+-------------------------------------------------------------------------------+
| "Acts" | Companies Acts 1985 and 2006 |
+--------------------------------+----------------------------------------------+
| "Admission" | the admission of the Company's Ordinary |
| | Shares to trading on AIM |
+--------------------------------+----------------------------------------------+
| "AIM" | a market operated by the London Stock |
| | Exchange plc |
+--------------------------------+----------------------------------------------+
| "AIM Rules" | the AIM Rules for Companies, published by |
| | the London Stock Exchange plc from time to |
| | time |
+--------------------------------+----------------------------------------------+
| "Cancellation" | the proposed cancellation of Admission |
+--------------------------------+----------------------------------------------+
| "City Code" | the City Code on Takeovers and Mergers |
+--------------------------------+----------------------------------------------+
| "Circular" | the circular posted to Shareholder on 6 |
| | October 2009 |
+--------------------------------+----------------------------------------------+
| "Company" or "Champion" | Champion plc |
+--------------------------------+----------------------------------------------+
| "CREST" | the relevant system (as defined in the |
| | Uncertificated Securities Regulations 2001) |
| | in respect of which CRESTCo Limited is the |
| | Operator (as defined in such regulations) |
+--------------------------------+----------------------------------------------+
| "Directors" or "Board" | the board of directors of the Company |
+--------------------------------+----------------------------------------------+
| "GM" or "General Meeting" | the general meeting of the Company to be |
| | held at Steam Packet House, 76 Cross Street, |
| | Manchester M2 4JU at 9.00 a.m. on Monday 2 |
| | November 2009, notice of which is set out at |
| | the end of the Circular |
+--------------------------------+----------------------------------------------+
| "Form of Proxy" | the form of proxy enclosed with the Circular |
| | for use at the GM |
+--------------------------------+----------------------------------------------+
| "Notice" | the notice of GM set out at the end of the |
| | Circular |
+--------------------------------+----------------------------------------------+
| "Ordinary Shares" | ordinary shares of 0.5p each in the issued |
| | capital of the Company |
+--------------------------------+----------------------------------------------+
| "Proposals" | the proposed Cancellation and |
| | Re-registration |
+--------------------------------+----------------------------------------------+
| "Re-registration" | the proposed re-registration of the Company |
| | as a private limited company |
+--------------------------------+----------------------------------------------+
| "Resolutions" | the special resolutions to be proposed at |
| | the GM which are set out in the Notice |
+--------------------------------+----------------------------------------------+
| "Shareholders" | the holders of Ordinary Shares |
+--------------------------------+----------------------------------------------+
| "Zeus Capital Limited" | Zeus Capital Limited, the Company's |
| | nominated adviser |
+--------------------------------+----------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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