Investment Division Disposal
2003年9月16日 - 4:01PM
RNSを含む英国規制内ニュース (英語)
RNS Number:7915P
Montpellier Group PLC
16 September 2003
MONTPELLIER GROUP PLC
("Montpellier" or the "Company")
Disposal of Investment Division
Montpellier is pleased to announce that it has today entered into an arrangement
with Browallia International BV ("BBV") and Browallia Discount Company Limited
("Browallia"), its principal shareholders, regarding the terms on which, subject
to the approval of its shareholders, the business and asset of the Investment
Division of Montpellier will be transferred to Browallia and BBV will offer to
sell 20 million ordinary shares in Montpellier back to Montpellier.
The consideration for the transaction consists of #4,081,000 of cash and Loan
Notes and #8,000,000 which will be set off against the consideration becoming
due from Montpellier to BBV for the sale and purchase of 20 million ordinary
shares in Montpellier at 40 pence per share. Following completion of the
purchase these shares will be cancelled.
Background to and reasons for the transaction
Montpellier has operated three distinct businesses, comprising its mainstream
Construction Division, carried out principally under the YJL name; its Property
Division, carried out principally under the Cheltenham Land name, and its
Investment Division conducted through Union Investment Management Limited
("UIM").
The principal reasons for the transaction are:
* while the Investment Division has been successfully established as a
profit centre, the Board considers the inherent risks and unpredictable nature
of the returns from its investments are incompatible with the Company's
objective to deliver consistent and sustainable growth in earnings and profits
to its shareholders;
* further, the Board believes that the diversity of Montpellier's
business activities has constrained its ability, as an AIM-listed company, to
develop a broader following within the investment community;
* the reduction in Browallia's shareholding from approximately 51 per
cent. to approximately 34 per cent. should, in the Board's view, assist in
broadening the Company's shareholder base.
It is therefore Montpellier's intention to retain and focus on its core
construction and property businesses, which should enable investors to make a
more accurate assessment of the Company's revenues and prospects.
Following Completion, Montpellier will continue to develop its construction
business operating throughout the UK, together with its property interests in
the UK and North America. It is the Board's intention to focus on growing the
construction business organically while carefully pursuing targeted acquisitions
of specialised construction opportunities. The Property business will continue
to generate cash for the business through realisation of its existing assets and
exploitation of other opportunities.
Principal terms of the proposed transaction
1. The asset to be transferred to Browallia at Completion will be the
entire issued share capital of The Union Discount Company of London Limited
("UDC"), a non-trading intermediate holding company incorporated in 2002. On
Completion UDC will hold all the issued shares of Union Investment Management
Limited ("UIM") which was acquired by Montpellier from Union Limited in March
2002 and which is the company through which Montpellier has conducted its
investment and corporate finance business.
On Completion UDC will hold the following assets:
* Investments
+ *Associated company investments
o *Jarvis Porter Group PLC
o *Walker Greenbank PLC
+ *Current asset investments
o *Cathay International International Holdings Limited
o *Lonrho Africa Plc
o *Yorkshire Group plc
o *Quadnetics Group plc
o *Interregnum plc
o *Cundhill International Company Limited
* all the issued shares of Tobull Limited, which in turn owns all the
issued shares of Bullough Limited (formerly Bullough plc) in consequence of a
recommended offer which was declared wholly unconditional on 18 June 2003.
* shares in companies and the benefit of loans which together comprise
Montpellier's interest in a property development in Belgium, acquired by
Montpellier when it acquired UIM in 2002.
2. On Completion Montpellier will
* transfer to Browallia the right to carry on corporate finance business
under the name "Union". The four employees of UIM and UDC and engaged in
corporate finance work will also transfer to Browallia.
* enter into a new lease of the fifth floor of 39 Cornhill for a period
of 10 years at a rent of #32.50 per square foot with an upwards only rent review
after five years and the right for either Montpellier or Browallia to terminate
the lease after 18months; and
* grant to Browallia an option to acquire the freehold of 39 Cornhill at
a price equivalent to Montpellier's book value at the date of exercise of the
option. The option will be for a period of 15 months from the date of
Completion.
3. The total consideration for the transaction is #12,081,000, equivalent
to Montpellier's aggregate book cost of the assets to be transferred and will be
satisfied as to #8,000,000 by set off against the consideration becoming payable
by Montpellier for the purchase of 20 million ordinary Montpellier shares
currently owned by BBV at a price of 40 pence per share; and as to the balance
of #4,081,000 by the payment of #2 million in cash and delivery to Montpellier
of Loan Notes totalling #2,081,000 ("the Loan Notes"), on Completion.
#1,746,000 of the Loan Notes is repayable by Browallia within six months of
Completion and will in the meantime carry interest at the annual rate of 6 per
cent; the balance of #335,000 is repayable within five years of Completion.
The effect of the cancellation of the 20 million ordinary shares should be to
significantly enhance value for shareholders, on an historic, proforma basis
through increasing net assets per share and earnings per share. The cash
proceeds will further strengthen Montpellier's balance sheet and the disposal of
the Investment Division will significantly reduce central overheads.
Following Completion, Browallia will retain 20 million ordinary shares in
Montpellier, amounting to approximately 34 per cent. of the reduced issued share
capital.
Current trading
In its interim results for the six months to 31 March 2003 announced on 30 May
2003, the Company reported steady progress in each of its three Divisions. The
profit before tax for the period was #3.4 million (2002: #2.6 million). Earnings
per share were 4.3p (2002: 3.9p) and net assets per share as at 31 March 2003
were 47.6p (2002: 42p). Trading in the second half of the year has continued to
be in line with management's expectations.
In keeping with the strategy referred to above, Montpellier has, since 13 August
2003, realised its entire shareholding in Cape Plc ("Cape") and no longer has
any interest in that company. Montpellier had previously owned approximately
29.9 per cent. of Cape and realised a substantial profit on sale over its costs
of acquiring the Cape shares, the proceeds of which will be used to provide
additional working capital for the Company's core construction and property
businesses.
The transaction is conditional on the approval of Montpellier's shareholders in
accordance with the requirements of Section 320 of the Companies Act. This is in
view of the interest of Peter Gyllenhammar, Montpellier's Deputy Chairman, in
the issued share capital of Forvaltnings AB Browallia, the holding company of
Browallia; and in accordance with section 164 of the Companies Act which
requires the off-market purchase by a company of its own shares to be approved
by its shareholders on a special resolution.
Recommendation
Montpellier's directors (other than Mr Gyllenhammar who, as an interested party,
has taken no part in the directors' considering of the proposed transaction)
have confirmed their opinion, after consultation with Montpellier's nominated
advisor, Rowan Dartington, that the proposed transaction is fair and reasonable
and in the best interests of shareholders as a whole. The directors (other than
Mr Gyllenhammar) recommend that shareholders vote in favour of the resolutions,
as they intend to do in respect of their own shareholdings.
16 September 2003
Enquiries:
Montpellier Group plc Tel: 020 7522 3200
Paul Sellars, Group Managing Director
Rowan Dartington & Co. Limited Tel: 0117 933 0020
John Wakefield, director
College Hill Tel: 020 7457 2020
Matthew Gregorowski
Mark Garraway
This information is provided by RNS
The company news service from the London Stock Exchange
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