TIDMMWE
RNS Number : 6165H
MTI Wireless Edge Limited
14 March 2018
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR)
14 March 2018
MTI Wireless Edge Ltd
("MTI" or the "Company")
Merger discussions with majority shareholder
MTI Wireless Edge Ltd (AIM: MWE), a market leader in the
manufacture of flat panel antennas for fixed wireless broadband and
a wireless irrigation solutions provider, announces that it is in
preliminary discussions with its majority shareholder, MTI
Computers & Software Services (1982) Ltd ("MTIC"), regarding a
potential merger between the two companies (the "Proposed
Transaction"). MTIC, whose shares are listed on the Tel Aviv Stock
Exchange, currently holds 52.2% of the Company's issued ordinary
shares.
The Proposed Transaction is still being discussed and would be
subject to various regulatory and corporate approvals, but if
successful would see MTIC (including its business and assets)
merged into the Company, following which MTIC would cease to exist.
The Company would remain as the surviving entity and its ordinary
shares would continue to be traded on AIM, a market operated by the
London Stock Exchange plc ("AIM"). As consideration for the merger,
the current shareholders of MTIC would receive new ordinary shares
in the Company (the "Consideration Shares"). The number of
Consideration Shares to be issued to the shareholders of MTIC would
be calculated based on independent third-party valuations of the
Company and MTIC, which have yet to be carried out(1) .
The key benefits the Proposed Transaction are expected to
include:
1. Creating a larger company - the merged company will have
revenues which are approximately 30% above the Company's current
revenues.
2. Broadened business base - the merged company would still be
focused on Radio Frequency and Microwave solutions but would add
two divisions that would diversify the business (being
Representation Radio Frequency and Microwave solutions in Israel
and Russia and System Engineering).
3. Alignment of shareholder interests and the elimination of potential conflicts of interest.
4. Costs savings and efficiency - the merged company would have
its shares traded on one stock exchange and this would save
significant costs and allow management to spend more time on
developing the combined business.
5. Increased liquidity - at the end of the merger process it is
expected that non-controlling shareholders would hold an increased
proportion of the Company's ordinary shares with more diversified
holdings, thus assisting liquidity.
The Proposed Transaction would be subject to various regulatory
and corporate approvals, including:
-- MTIC and the Company will need to receive a "pre-ruling" from
the Israel Securities Authority (the "ISA") according to which the
Company, as the surviving entity, would continue to be traded only
on AIM, and subject only to the AIM Rules for Companies and will
not have to publish a prospectus in Israel regarding the Proposed
Transaction and will not be subject to Israeli Securities law, 1968
(the "Securities law") and regulations as a result and after the
Proposed Transaction;
-- It should be noted that MTIC and the Company submitted a
request for a pre-ruling to the ISA and the response of ISA to the
pre-ruling request will be attached to the documents submitted to
the Israeli court in connection with the scheme of arrangement (see
bullet point below), as the ISA's position to the court in
connection with the Proposed Transaction and as required under the
Securities Law;
-- the approval of the Israeli court will be required as the
Proposed Transaction will be carried out via a scheme of
arrangement in accordance with Sections 350-351 of the Israeli
Companies Law;
-- the approval of the shareholders of both the Company and MTIC
will be required and these approvals will need to satisfy the
special voting requirements set out under Sections 275 and 350 of
the Companies Law due to it being: i) a transaction with a
controlling shareholder of the Company; ii) a transaction with
possible benefits for controlling shareholders of MTI; and iii) a
merger under a court order in accordance with Sections 350-351 of
the Companies Law; and
-- MTIC and the Company will require a "pre-ruling" from the
Israeli Tax Authority with respect to the tax treatment of both
companies and their shareholders in connection with and as a result
of the Proposed Transaction.
The board of the Company believes that the Proposed Transaction,
as outlined herein, would also constitute both a substantial
transaction and a related party transaction under Rules 12 and 13
of the AIM Rules for Companies.
It should be noted that the Proposed Transaction is still being
discussed and there is no certainty that it will proceeded, be
approved or be consummated. If the Company and/or MTIC do not
approve the Proposed Transaction, or if any of the approvals or
"pre-rulings" listed above are not received, then the Proposed
Transaction (according to the suggested framework) will not
proceed.
The Company will provide a further notification in due course
regarding the progress of the discussions and in the event the
Proposed Transaction moves ahead will issue a circular to
shareholders setting out details of the Proposed Transaction, which
will include notice of the shareholders meeting required to approve
the Proposed Transaction in accordance with Israeli law.
(1) It should be mentioned that the audit committees of MTIC and
the Company appointed external independent valuator in order to
prepare appropriate valuations.
For further information please contact:
MTI Wireless Edge Ltd http://www.mtiwe.com/
Dov Feiner, CEO +972 3 900 8900
Moni Borovitz, Financial Director
Nomad and Joint Broker
Allenby Capital Limited
Nick Naylor
Alex Brearley +44 20 3328 5656
Joint Broker
Peterhouse Corporate Finance Limited
Lucy Williams
Eran Zucker +44 20 7469 0930
About MTI Wireless Edge
MTI is engaged in the development, production and marketing of
high quality, low cost, flat panel antennas for commercial and for
military applications. Commercial applications include: WiMAX;
wireless networking; RFID readers; and broadband wireless access.
With over 40 years' experience MTI supplies 100KHz to 90GHz
antennas (including directional antennas and omni directional) for
outdoor and indoor deployments, including smart antennas for WiMAX,
Wi-Fi, public safety, RFID and base stations and terminals for the
utility market. Military applications includes a wide range of
broadband, tactical and specialized communications antennas,
antenna systems and DF arrays installed on numerous airborne,
ground and naval, including submarine, platforms worldwide.
Via its subsidiary, Mottech Water Solutions Ltd ("Mottech"), MTI
is also a leading provider of remote control solutions for water
and irrigation applications based on Motorola IRRInet state of the
art control, monitoring and communication technologies. Mottech,
headquartered in Israel, is the global prime distributor of
Motorola for the IRRInet remote control solutions serving its
customers worldwide through its subsidiaries and a global network
of local distributers and representatives. It utilizes over 25
years of experience in providing its customers with remote control
and management systems which ensure constant, reliable and accurate
water usage, while reducing operational costs and maintenance
costly expenses. Mottech activities are focused in the market
segments of agriculture, water distribution, municipal and
commercial landscape and wastewater and storm water reuse.
About MTIC
In addition to its 52.2% interest in MTI, MTIC also owns and
operates a number of business that offer: (i) aerostat solutions;
and (ii) radio frequency and microwave solutions. MTIC's audited
results for the year ended 31 December 2017 recorded revenues of
US$34.65 million and a profit before income tax of US$2.45 million.
The audited total assets of MTIC as at 31 December 2017 were
US$29.5 million. The financial statements of MTI are consolidated
within the MTIC financial information stated above.
Further information on MTIC can be found via the following
website address: http://www.mti-group.co.il/
This information is provided by RNS
The company news service from the London Stock Exchange
END
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