TIDMPROP
RNS Number : 0580B
Property Recycling Group PLC
11 February 2011
NOT FOR RELEASE PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM ANY
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION.
11 February 2011
Proposed cancellation of trading on AIM, availability of
Facility and notice of General Meeting
1. Introduction
The Company announces today its intention to seek the
cancellation of the admission of the Shares to AIM and is today
posting a circular to Shareholders (the "Circular") convening a
General Meeting for the purpose of proposing such a
cancellation.
Except where the context otherwise requires, capitalised terms
have the meaning set out in the definitions contained in the
Circular. A copy of the Circular will shortly be available on the
Company's website: www.propertyrecycling.co.uk.
Under the AIM Rules, a proposal to cancel the admission of the
Shares to trading on AIM is conditional on the requisite notice
being given to London Stock Exchange and on the approval by
Shareholders holding not less than 75 per cent. of the votes cast
on a resolution proposed at a general meeting. As the Rackham
Family Interests (which hold approximately 80.83 per cent. of the
Shares in issue) have confirmed to the Board their intention to
vote in favour of the Resolution at the General Meeting, it is
anticipated that the trading of the Shares on AIM will be cancelled
with effect from 7.00 a.m. on 25 March 2011.
The Board recognises that the loss of the AIM trading facility
will have an impact on Shareholders and that some may wish to sell
their Shares in view of the consequent loss of liquidity and the
long term nature of the Company's business. Accordingly, an
arrangement has been put into place with Paul Rackham Limited in
order to enable those Shareholders who wish to sell some or all of
their Shares to do so cost effectively, at a fixed price, in the
period leading up to De-listing.
2. Background to, and reasons for, the De-listing
The Shares were admitted to trading on AIM in 2005. Part of the
Company's strategy was to use the quotation to expand the scale of
business by acquiring brownfield properties and property companies
using cash and shares. The Company was frustrated first by an
overheated property market and then by the effects of the financial
crisis. Since 2008 there has been a significant fall in development
activity which fuels the property market. The absence of bank
finance and the significant indebtedness of some other property
owners have resulted in much reduced activity. To address this
lower level of activity, the Company has reduced its cost base and
sought to supplement short term rental income with option fees from
potential long term purchasers. It has modest borrowings and has
been positioned to survive a prolonged downturn as the Directors
expect difficult conditions to prevail for some years.
On flotation the Rackham Family Interests held 51.4 per cent. of
the Shares. Following two purchases of Shares in late 2008, the
Rackham Family Interests acquired further Shares in 2009, mainly in
circumstances where the sellers had approached Paul Rackham. In
November 2010, the Rackham Family Interests acquired a further
5,308,799 Shares from an institutional investor taking their
holding to 80.83 per cent., where it stands at the date of this
document.
The Directors have been concerned for some time at the cost and
administrative burden of maintaining the trading of the Shares on
AIM. They have concluded that the Company should delist for the
following reasons:
-- there is no realistic prospect of the price of the Shares
trading at a level at which the quotation could provide capital or
currency for the Company's business development;
-- the Company is facing a prolonged workout of its portfolio
with future investment, if any, heavily dependent on disposal
proceeds;
-- a disproportionate amount of senior management time is spent
in meeting AIM Rules and related regulatory requirements, including
reporting, disclosure and corporate governance requirements;
and
-- at present the annual costs associated with the maintenance
of the trading of the Shares on AIM are approximately GBP50,000,
and the interests of the Company would best be served by removing
these costs and allowing the Company's business to develop outside
the regulatory constraints to which it is currently subject.
In view of the probable timescale of both market improvement and
effective realisation of value from our portfolio, it is no longer
appropriate for Paul Rackham, or his family interests, to maintain
a commitment to a new cycle of investment, enhancement and disposal
in a publicly quoted company.
3. Strategy of Peterborough following De-listing
The Directors intend to continue to seek to use short term
rental income and option fees to provide cash flow to cover
overheads and maximise value from the portfolio over medium to long
term.
As the portfolio is realised the Directors intend to seek to
provide opportunities for any remaining Shareholders to sell Shares
by way of tender offers for Shares made on an equitable basis
taking into account growth, if any, of net asset value and future
portfolio risk. It is not possible to predict the timing of such
realisations or tenders (if any), but completion of the process is
expected to take several years.
The Directors do not anticipate there will be any change in the
terms and conditions of employment of Peterborough's employees or
management going forward. In addition, Paul Rackham has agreed with
the Board that there will continue to be an independent director on
the board.
4. Details about the Facility
The Directors recognise that cancelling the trading of the
Company's Shares on AIM will make it significantly more difficult
for Minority Shareholders to sell (or to buy) Shares should they so
wish. Accordingly in consultation with the Panel and with the
support of the Independent Director advised by Marshall Securities
Limited ("Marshall"), Paul Rackham Limited (a company indirectly
controlled by Paul Rackham's family) has made arrangements to
purchase Shares from Minority Shareholders who wish to sell. The
price at which Paul Rackham Limited is prepared to buy such Shares
is the same for all the Minority Shareholders and is 14.5p per
Share in cash, which is equivalent to the price paid to a major
institutional shareholder by the Rackham Family Interests on 4
November 2010 and is also the highest price paid for a Share by the
Rackham Family Interests in the twelve months preceding the date of
the Circular.
Shareholders will be able to sell their Shares without incurring
dealing costs by following the instructions set out in the
Circular. Minority Shareholders should further note that: (i) this
is the only price at which Paul Rackham Limited is prepared to
acquire Shares; (ii) the same price is being made available to all
Minority Shareholders; and (iii) this price will not be subject to
any amendment during the Sale Period.
The Facility will be available until 24 March 2011 in order to
provide Shareholders with sufficient opportunity to sell their
holding to Paul Rackham Limited prior to De-listing should they so
wish. Therefore, Minority Shareholders have from the date of the
Circular until close of business on 24 March 2011, being the last
anticipated day of dealings in Shares on AIM, to sell all or part
of their shareholding to Paul Rackham Limited.
The Facility will not be available to any Shareholders in or
from any jurisdictions (including the U.S.A., Japan, Australia or
Canada) where the sale or purchase of Shares from that Shareholder,
by Paul Rackham Limited, would or might infringe the laws of any
jurisdiction or might require Paul Rackham Limited and/or the
Company to obtain or observe any consent or formality.
The procedure for those Shareholders wishing to sell Shares
under the Facility is set out in the Circular and summarised in
paragraph 7 below.
5. Principal effects of De-listing
The principal effects of De-listing include, inter alia:
-- there will be no public stock market on which Shareholders
can trade their Shares. Following De-listing there can be no
guarantee that a Shareholder will be able to sell or purchase
Shares;
-- no price will be publicly quoted for the Shares;
-- Shares will remain transferable but will cease to be
transferable through CREST. Shareholders who hold Shares in
uncertificated form prior to De-listing will receive share
certificates; and
-- the Company will not be subject to the AIM Rules.
6. The City Code and transfers
Following the De-listing (and for at least ten years
thereafter), the City Code will continue to apply to the Company.
In addition, whilst the Shares will remain freely transferable,
there will be no public market for any Shares not purchased by Paul
Rackham Limited and they will cease to be transferable through
CREST. Shareholders who currently hold shares in uncertificated
form (that is, in CREST) and who do not sell their Shares to Paul
Rackham Limited will receive share certificates in due course
following the De-listing taking effect. Share transfers may still
be effected after the date of De-listing by depositing a duly
executed and stamped stock transfer form together with an
appropriate share certificate with the Company Secretary at the
registered office.
In accordance with Rules 35.1 and 35.3 of the City Code, the
Rackham Family Interests (and any person(s) acting in concert with
them) will not, except with the consent of the Panel:
(a) seek to acquire Shares in the 12 months after De-listing or,
if earlier, the closure of the Facility; and
(b) acquire Shares at a higher price than 14.5p per Share in the
six months after De-Listing.
7. Procedure for selling Shares
Paul Rackham Limited is willing to purchase Shares from Minority
Shareholders at a fixed price of 14.5p per Share at any time
between the date of the Circular and close of business on 24 March
2011. Marshall has received written confirmation from Paul Rackham
Limited that it has instructed its bank to deposit funds with
Marshall's settlement agent sufficient to purchase all of the
6,938,500 Shares held by Minority Shareholders and that it has
irrevocably instructed Marshall to purchase on Paul Rackham
Limited's behalf, up to 6,938,500 Shares at a price of 14.5p per
Share until close of business on 24 March 2011. Further details of
the procedure for selling shares are set out in the Circular.
8. General Meeting
A resolution to cancel the admission to trading of the Shares on
AIM will be proposed at the General Meeting. The De-listing is
conditional upon the approval of Shareholders holding not less than
75 per cent. of the votes cast (whether in person or by proxy) at
the General Meeting. The meeting will be held at 11.00 a.m. on 9
March 2011 at the offices of Mayer Brown International LLP, 201
Bishopsgate, London EC2M 3AF. The Rackham Family Interests, which
hold approximately 80.83 per cent. of the Shares, have confirmed to
the Board their intention to vote in favour of the Resolution at
the General Meeting.
9. Recommendations
The Directors consider that the De-listing is in the best
interests of the Company and its Shareholders as a whole and
unanimously recommend that Shareholders vote in favour of the
Resolution. As noted above the Rackham Family Interests intend to
vote in favour of the Resolution in respect of Shares owned or
controlled by them representing in aggregate 29,261,500 Shares
(approximately 80.83 per cent. the Shares in issue). These
interests include Paul Rackham's shareholdings and those of his
son, Paul Rackham Jnr. In addition, the remaining directors intend
to vote in favour of the Resolution in respect of Shares
beneficially owned or controlled by them, representing in aggregate
177,099 Shares (approximately 0.5 per cent. of the Shares in
issue).
David Weir, the Independent Director, who has been so advised by
Marshall, considers that the provision of the Facility is in the
best interests of the Company and its Shareholders as a whole and
that the price of 14.5p per Share at which Paul Rackham Limited is
willing to buy Shares from Minority Shareholders to be fair and
reasonable for the purposes of the Facility. In providing advice to
the Independent Director, Marshall has taken into account the
Independent Director's commercial assessments. The Independent
Director recommends that Minority Shareholders consider carefully
their own personal circumstances, particularly in respect of loss
of market based liquidity and the uncertain value and timescale of
future tenders by the Company, when deciding whether to sell their
Shares to Paul Rackham Limited at this time.
David Weir does not intend to participate in the Facility in
respect of his holding of 62,000 Shares representing approximately
0.2 per cent. of the Shares in issue. In addition, Stephen Stuteley
and George Atterbury do not intend to participate in the Facility
in respect of their holdings amounting to an aggregate of 115,099
Shares representing approximately 0.3 per cent. of the Shares in
issue.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Circular and Form of Proxy posted to 11 February
Shareholders 2011
Latest time and date for receipt of 11.00 a.m. 7 March 2011
Form of Proxy on
General Meeting 11.00 a.m. 9 March 2011
on
Last day for dealings in Shares on 24 March 2011
AIM
Cancellation of trading of Shares on 7.00 a.m. 25 March 2011
AIM on
If any of the details contained in the timetable above should
change, the revised times and dates will be notified to
Shareholders by means of an announcement through a Regulatory
Information Service (as defined in the AIM Rules). All events
listed in the above timetable following the General Meeting are
conditional on the passing of the Resolution at the General Meeting
and assume that the General Meeting is not adjourned.
All of the times referred to in this announcement refer to
London time.
For further information please contact:
Paul Rackham, Chairman,
Property Recycling Group plc 01953 717176
John Webb/Robert Luetchford
Marshall Securities Limited (Financial
adviser) 020 7490 3788
Geoff Nash
FinnCap (Nominated adviser) 020 7600 1658
This announcement has been issued by and is the sole
responsibility of the Company.
The distribution of this announcement into jurisdictions other
than the UK may be restricted by law. Persons into whose possession
this announcement comes should inform themselves of and observe any
such restrictions.
This announcement is for information purposes only and is not
intended to and does not constitute or form any part of any offer
or invitation to subscribe for, purchase or otherwise acquire any
securities.
Neither the content of the Company's website (or any other
website) nor the content of any website accessible from hyperlinks
on the Company's website (or any other website) is incorporated
into, or forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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