TIDMMMX
RNS Number : 4176Y
Minds + Machines Group Limited
14 January 2022
Minds + Machines Group Limited
("MMX", the "Company" or "Group")
Tender Offer, Proposed Cancellation of Admission of Ordinary Shares to Trading on AIM &
Notice of General Meeting
On 11 August 2021 the Board announced that Minds + Machines
Group Limited (AIM:MMX) had completed the sale of the majority of
the Company's assets, realising gross cash proceeds of US$120
million, $11.9 million of which is held in escrow to be released
(subject to set-off in accordance with the terms of the relevant
escrow agreement) on 31 March 2022. Following the Sale, the Company
has divested itself of the remainder of its non-cash assets and has
no operations except for final services under a transition services
agreement with the purchaser of the Company's assets.
Following completion of the fully subscribed October Tender
Offer in October 2021, which returned $80.0 million to
Shareholders, the Board has considered its options with regards to
how best to utilise the Company's remaining available capital and
its public market listing. The Board has concluded that the return
to Shareholders of the maximum amount of remaining available
capital as part of an orderly winding-up of the Company, and the
Cancellation of Admission of its Ordinary Shares to trading on AIM,
is in the best interests of the Company and its Shareholders.
The Company therefore announces its intention to seek
Shareholders' approval for the Cancellation. Prior to the proposed
Cancellation the Company intends to return a further proportion of
the Company's available cash to Shareholders by way of a Tender
Offer.
Highlights
-- Return of up to GBP19 million (approximately US$26 million)
to shareholders via a Tender Offer at 10.4 pence per Ordinary
Share
-- The Tender Offer Price represents a premium of approximately
26.1 per cent. to the price of an Ordinary Share at the close of
business on 13 January 2022 and a premium of approximately 24.8 per
cent. to the volume weighted average price of an Ordinary Share for
the period 14 December 2021 to 13 January 2022
-- Up to 182,692,308 Ordinary Shares will be redeemed,
representing approximately 67.3 per cent. of the Company's issued
share capital (if the Tender Offer is fully subscribed).
-- Cancellation of Admission of the Company's Ordinary Shares to
trading on AIM, details of which are set out in a circular (the
"Cancellation Circular") which is being posted to shareholders
later today.
Tender Offer Process
The Tender Offer is open to all Eligible Shareholders on the
Company's Register of Shareholders at 1.00 p.m. GMT on 28 January
2022 (the "Closing Time") who may participate by tendering all or a
proportion of their Ordinary Shares at 10.4 pence per Ordinary
Share.
If the Tender Offer is fully subscribed, all Eligible
Shareholders shall be entitled to sell their pro rata share of
182,692,308 Ordinary Shares, based on their holding of Ordinary
Shares on the Record Date (being 6.00 p.m. GMT on 28 January 2022).
Pursuant to the Tender Offer, Eligible Shareholders may seek to
tender more than their pro rata entitlement of Ordinary Shares to
the extent that other Shareholders tender less than their pro rata
entitlement. If any Shareholders have tendered less than their pro
rata entitlement under the Tender Offer, surplus tenders will be
accepted in proportion to the number of additional Ordinary Shares
tendered, so that the total number of Ordinary Shares purchased
pursuant to the Tender Offer does not exceed 182,692,308.
On the basis the Tender Offer is fully subscribed and all
Shareholders are Eligible Shareholders, each Shareholder shall be
entitled to tender 1 Ordinary Share for every 1.485 Ordinary Shares
held by them on the Record Date. Shareholders do not have to accept
the Tender Offer.
Under the BVI Business Companies Act 2004 and the AIM Rules, the
Tender Offer does not require the approval of the Shareholders at a
general meeting. A circular is being posted to shareholders later
today (the "Tender Offer Circular", together with the Cancellation
Circular, the "Circulars").
The Circulars will be available on the Company's website,
www.mmx.co , with further details of the Tender Offer and
Cancellation also set out below.
General Meeting
The Cancellation is conditional, inter alia upon the passing of
the Authorising Resolution by Shareholders at the General Meeting
to be held virtually at 3.00 p.m. GMT on 7 February 2022 and shall
be convened pursuant to the Notice of General Meeting to be set out
in the Cancellation Circular, to consider, and if thought fit,
approve the Authorising Resolution.
The Board is closely monitoring the evolving Coronavirus
(COVID-19) situation and public health concerns including the
related social distancing requirements, public health guidance and
legislation issued by the UK Government. At the time of publication
of this notice, indoor public gatherings remain subject to a number
of restrictions. The Board recognizes that the General Meeting
represents an opportunity to engage with Shareholders, and provides
a forum that enables Shareholders to ask questions of, and speak
directly with, the Board. However, in light of current
restrictions, the Board hopes that Shareholders will understand
that the General Meeting will be held via the 'Investor Meet
Company' digital platform. To register to access the General
Meeting, please use the following link:
https://www.investormeetcompany.com/minds-machines-group-limited/register-investor
Questions can be submitted pre-event via the 'Investor Meet
Company' dashboard, or at any time during the live presentation via
the "Ask a Question" function. The Company will make arrangements
such that the legal requirements to hold the meeting can be
satisfied through the physical attendance of a minimum number of
members.
Expected Timetable for the Tender Offer
2022
Publication of the Tender Offer Circular 14 January
Latest time and date for receipt of Forms 1.00 p.m. on 28 January
of Acceptance and TTE Instructions from
CREST Shareholders
Closing Time and Date 1.00 p.m. on 28 January
Record Date and Time 6.00 p.m. on 28 January
Outcome of Tender Offer announced by 8.00 a.m. on 31 January
Cancellation of Tender Shares by 5.00 p.m. on 7 February
Cheques dispatched for certificated Ordinary by 7 February
Shares purchased pursuant to the Tender
Offer and payment through CREST for uncertificated
Ordinary Shares purchased pursuant to the
Tender Offer
CREST accounts credited for revised holdings by 7 February
of Ordinary Shares
Dispatch of balance share certificates by 7 February
for unsold Ordinary Shares
Expected Timetable for Cancellation of Ordinary Shares Trading
on AIM
2022
Publication of the Cancellation Circular 14 January
Notice provided to the London Stock Exchange 14 January
to notify it of the proposed Cancellation
Latest time and date for receipt of Forms 3:00 p.m. on 2 February
of Instruction in respect of the General
Meeting
Latest time and date for receipt of Forms 3:00 p.m. on 3 February
of Proxy in respect of the General Meeting
General Meeting 3:00 p.m. on 7 February
Expected last day of dealings in Ordinary 21 February
Shares on AIM
Expected time and date of Cancellation 7:00 a.m. on 22 February
End of Escrow Period 31 March
All times refer to London time
Unless otherwise defined herein, capitalised terms used in this
announcement shall have the same meanings as those defined in the
Circulars.
Further Information:
Minds + Machines Group Limited
Tony Farrow (CEO)
Bryan Disher (CFO)
finnCap Ltd Tel: +44 (0) 20 7220
0500
Corporate finance - Stuart Andrews /
Carl Holmes / Simon Hicks
Corporate broking - Tim Redfern / Richard
Chambers
For further information, please go to www.mmx.co
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR.
The following text has been extracted from the Tender Offer
Circular:
1 INTRODUCTION
1.1 On 11 August 2021 the Company completed the sale of the
majority of the Company's assets. It has subsequently sold or
otherwise disposed of the remainder of its assets. Following
completion of the fully subscribed October Tender Offer in October
2021 t he Board has resolved:
(a) to recommend to Shareholders the cancellation of the
Company's Ordinary Shares trading on AIM; and
(b) to return a further portion of the Company's net assets by
way of a Tender Offer through which Shareholders have the
opportunity to sell back some or (to the extent that other
Shareholders tender less than their pro rata entitlement) up to all
of their Ordinary Shares to the Company. In aggregate, the Company
shall redeem up to 182,692,308 Ordinary Shares representing 67.3
per cent. of the issued share capital at a price of 10.4 pence per
Ordinary Share for aggregate consideration of up to GBP19.0 million
(approximately US$26.0 million) (if the Tender Offer is fully
subscribed). As at the date of this Document the Company has a
total of
271,316,341 issued Ordinary Shares.
1.2 This letter sets out the background to and reasons for the
Tender Offer and why the Board has resolved that the Company make
the Tender Offer. The Cancellation Circular, being posted to
Shareholders today sets out the background to and reasons for the
proposed Cancellation Resolution but a summary of the proposal is
set out at paragraph 3 of Part I of this Document. Shareholders are
however recommended to read the Cancellation Circular in full prior
to making any decision regarding whether to Tender their Shares as
part of the Tender Offer.
1.3 Under the Act and the AIM Rules, the Tender Offer does not
require the approval at a general meeting of the Shareholders.
1.4 Although Shareholders should take their own tax advice on
the implications of the Tender Offer for them, the Directors
believe the Tender Offer (as opposed to a cash dividend) is a tax
efficient method of returning value to Shareholders.
1.5 Shareholders do not have to accept the Tender Offer. Those
Shareholders who do not accept the Tender Offer will have a
proportionately larger interest in the Issued Share capital of the
Company following completion of the Tender Offer (and a greater
interest in the residual net assets of the Company).
2 REASONS FOR THE TER OFFER
2.1 On 11 August 2021 the Company announced that the Company had
completed the sale of the majority of the Company's assets (the
"Sale"), realising gross cash proceeds of US$106.7 million with an
additional $13.3 million paid to escrow. Since Completion $1.4
million has been released from escrow. The balance of $11.9 million
is to be released (subject to set-off in accordance with the terms
of the relevant escrow agreement) on 31 March 2022.
2.2 Following the Sale, the Company has divested itself of the
remainder of its non-cash assets and has no operations except for
final services under a transition services agreement with the
purchaser of the Company's assets (the "Transition Services
Agreement").
2.3 Under the terms of the Transition Services Agreement the
Company provided a variety of services through 11 December 2022.
The Company is continuing to provide much more limited transition
services in the form of back-end registry services and billing
until 31 January 2022 (the "Transition Services Period"). From 31
January 2022 the Company will be classified as a Rule 15 cash shell
in accordance with the AIM Rules. As a Rule 15 cash shell the
Company will be required to make an acquisition or acquisitions
which constitute a reverse takeover under AIM Rule 14 (or seek
re-admission as an investing company (as defined under the AIM
Rules)), on or before the date falling six months from the end of
the Transition Services Period, failing which, the Company's
Ordinary Shares would be suspended from trading on AIM, pursuant to
AIM Rule 40.
2.4 In October 2021 the Company completed the fully subscribed
October Tender Offer, returning US$80.0 million (approximately
GBP58.0 million at the exchange rate at that time) to Shareholders.
Following further consultation with its significant Shareholders,
the Board has considered options with regards to how best to
utilise the remaining available capital, including an acquisition
constituting a reverse takeover or an additional return of capital
to Shareholders. The Board has concluded that the uncertainty,
costs and risks of an acquisition are not in the interest of the
majority of Shareholders and believes this Tender Offer is the
right way for the Company to return value to Shareholders.
3 REASONS FOR THE CANCELLATION
3.1 Following the Sale, the Company has divested itself of the
remainder of its non-cash assets and has no ongoing operations
except for the completion of the Transition Services Agreement. At
31 January 2022 the Company will be classified as a Rule 15 cash
shell in accordance with the AIM Rules. To maintain a listing of
the Company's Ordinary Shares on AIM in the medium-term would
require the Company to complete an acquisition or acquisitions
which constitute a reverse takeover under AIM Rule 14 (or seek
re-admission as an investing company (as defined under the AIM
Rules)), on or before 31 July 2022, failing which, the Company's
Ordinary Shares would be suspended from trading on AIM, pursuant to
AIM Rule 40 (such date being the "Suspension Date"). If the Company
does not then complete an acquisition constituting a reverse
takeover within six months of the Suspension Date, trading in the
Ordinary Shares on AIM will be cancelled.
3.2 The Directors have considered pursuing an acquisition or
acquisitions that would constitute a reverse takeover of the
Company but concluded that as the Company has a very limited staff
with neither the time nor the infrastructure to review potential
acquisition targets, the Company would need to engage external
specialists, at considerable cost, to carry out the reviews and
subsequent diligence of targets. The Directors do not believe it is
in the best interests of Shareholders to commit to this additional
outlay of cash with no certainty of any return. The Company has
also taken into account the considerable cost, management time and
the legal and regulatory burden associated with maintaining the
Company's admission to trading on AIM in general which, in the
Directors' opinion, are disproportionate to the benefits to the
Company.
3.3 In addition, the Board consulted with the Company's largest
Shareholders and determined these Shareholders would prefer a full
return of the Company's net assets and for the quantum of that cash
distribution to be maximised by the Directors, with appropriate
steps taken to ensure costs are reduced to reflect the fact the
Company is no longer an operating business.
3.4 Accordingly, the Board is proposing the cancellation of the
Company's shares being admitted to trading on AIM (the
"Cancellation") to reduce the Company's operating costs prior to an
orderly winding-up of the Company and return of the remainder of
remaining net assets later in 2022. In particular, with the
completion of the Tender Offer and the October Tender the Company
returning more than 90 per Cent of the Company's estimated Net
Assets to the Shareholders, the Directors believe the regulatory
burden, management and staff time and considerable costs associated
with maintaining admission of the Ordinary Shares to trading on AIM
(including professional, legal, accounting, broker and nominated
adviser costs and fees of the London Stock Exchange) are now
disproportionate to the value provided by admission of the Ordinary
Shares to trading on AIM.
4 CURRENT OPERATIONS AND TRADING OF THE COMPANY
Cash available to the Company
4.1 As at 12 January 2022, two days prior to publication of this
Document, the Company holds approximately US$30.5 million of cash
(GBP22.3 million at the Exchange Rate) (the "Available Cash").
4.2 In addition to the Available Cash, US$11.9 million of the
cash consideration for the Sale is currently held in escrow
("Escrow Cash"), to be released on 31 March 2022 (subject to any
set-off in accordance with the terms of the Sale Agreement. The
Company has no reason to believe that all of the funds retained in
escrow will not be released to the Company at the end of the Escrow
Period.
4.3 Following completion of the Sale the Company has:
-- Provided transition services to the purchaser of the Company's assets;
-- Sold or otherwise disposed of assets and operations not
included as part of the Sale;
-- Terminated the majority of the Company's operating contracts;
-- Terminated the majority of the Company's employees, paying
retention amounts to those who worked through the completion of
their service commitment to the Transition Services Period, and
paid bonuses due to senior management;
-- Wound-up and dissolved a number of the Company's subsidiaries; and
-- Distributed US$80 million (GBP58 million at the exchange rate
at that time) to Shareholders through the October Tender Offer.
4.4 The Company has retained four employees, including its
senior management, to continue to provide back-end registry and
billing services under the Transition Services Agreement for the
duration of the Transition Services Period. The Company is also
working with its tax advisors to finalise relevant tax returns for
the Company's remaining subsidiaries and expects to have paid all
relevant tax by 31 March 2022. The Company continues to liquidate
its remaining subsidiaries. The Board intends to distribute the
remaining net assets of the Company in conjunction with the
winding-up of the Company.
4.5 In the interim the Company will retain a level of working
capital to cover expected costs during this period. At the time of
the October Tender Offer the Company confirmed that it would, in
addition to working capital, retain cash to either (i) underwrite a
potential acquisition, and/or (ii) cover the costs of winding-up
the Company and its legacy operations should no acquisition
constituting a reverse takeover be completed. As set out at
paragraph 3 above, the Board has now concluded that a reverse
takeover is not in the best interests of Shareholders and is
therefore not pursuing an acquisition. The Company is therefore
proposing the Cancellation (subject to Shareholders approving the
Cancellation Resolution) and is retaining sufficient cash, in
addition to the Escrow Cash, to effect the wind-up and dissolution
of the Company and its remaining subsidiaries.
4.6 At the time of the October Tender Offer the Board confirmed
that it would initially retain not less than US$24.0 million of
Available Cash until at least the expiry of the Transition Services
Period to cover expected tax liabilities, one-off employee related
costs, contract termination costs, professional fees, and working
capital requirements of the Company during this period, mitigate
tax liabilities (where delaying distribution from subsidiaries to
the Company would reduce taxes otherwise payable by the Company or
a subsidiary), as well as provide a minimum cash level to consider
acquisition opportunities and/or cover one-off costs of winding-up
the Company and its operations if no acquisition is completed. As
the Board has determined that it will not pursue acquisitions and,
in consultation with its advisors, set aside amounts sufficient to
cover estimated tax and other liabilities, the Board has now
resolved that this cash should now be returned to Shareholders by
way of the Tender Offer.
4.7 The Company estimates that total net assets of the Company,
i ncluding Available Cash and Escrow Cash, but net of current
liabilities and estimated tax liabilities and estimated
professional, operating, and other costs required to wind-up the
business and to be paid after the date of this Document ("Net
Assets") is US$38.7 million (GBP28.2 million at the Exchange Rate),
representing a net asset value of approximately 10.4 pence per
Ordinary Share.
4.8 As noted at paragraph 3 above, the Board is recommending the
Cancellation, and notes that the intention of the Board is to
wind-up the Company following the Cancellation but prior to the end
of 2022 and return all remaining Net Assets to Shareholders at such
time.
Suspension and De-Listing of the Company's Shares
4.9 Following the Sale, the Company has divested itself of the
remainder of its assets and has no ongoing operations. As at 31
January 2022 the Company will be classified as a Rule 15 cash shell
in accordance with the AIM Rules. As detailed at paragraph 3 above,
the Board has determined that it will wind-up the Company and
return net cash to the Shareholders.
4.10 As the Company is no longer trading and the Board intends
to wind-up the Company following the Tender Offer, the Board does
not believe continuing to incur the regulatory costs and
obligations of an AIM listed company benefit the Shareholders.
Consequently, the Board recommends that the Shareholders approve
the Cancellation of the Company's Ordinary Shares on AIM.
4.11 If trading of the Ordinary Shares on AIM is cancelled
Shareholders will retain their holding of shares (and interest in
the assets of the Company (and in particular, the Escrow Cash))
although there will be no trading platform for Shareholders to have
liquidity to dispose of their interest in the Company.
Future return of capital to Shareholders and winding-up of the
Company
4.12 As noted at paragraphs 4.3 and 4.4 above, the Company is
retaining approximately US$5.5 million of the Available Cash, plus
it has US$11.9 million of the Sale Consideration currently held in
escrow, subject to agreed escrow release terms, until 31 March
2022.
4.13 The Company needs to retain a portion of the Available Cash
to meet its working capital needs, pay taxes, and to ensure an
orderly winding-up of the Company and its subsidiaries. The balance
of retained cash and the Escrow Cash (net of any set off) will be
available to the Company to distribute to Shareholders later in
2022.
Impact of Not Accepting the Tender Offer
4.14 If the Cancellation Resolution is approved, the Board will
seek to wind-up the Company in an orderly fashion following the
de-listing and distribute the remaining available cash to
Shareholders. At this stage it is not clear what the net asset
value of the Company's assets per Ordinary Share would be at such
future date, and the likely timing of such distribution cannot be
confirmed at this time, but it is expected (after payment of
winding-up costs and taxes due by the Group) the future
distribution would be at a price similar to the Tender Price. The
Company will seek to minimise costs associated with winding-up the
Company, and maximise any return of cash to Shareholders, and it is
possible a future distribution would be at a small premium to the
Tender Price. Similarly, if winding-up costs are greater than
expected, or it takes longer to complete the winding-up process, or
there is a claim against the Escrow Cash, the future distribution
may be at a discount to the Tender Price. It should also be noted
that the majority of the remaining cash, as it is in escrow, is
held in US dollars, therefore the amount of the final distribution
will be impacted, positively or negatively, by any exchange rate
movement between the dollar and the British pound. It is not
recommended Shareholders reject the Tender Offer on the basis they
believe a future distribution will be at a premium to the Tender
Price currently offered, as the Company can provide no guarantee at
this stage that would be the case and the amount of cash available
to be distributed at such time is subject to a number of factors
beyond the Company's control.
4.15 If the Cancellation Resolution is not approved by
Shareholders, the Company does not intend to pursue an acquisition
constituting a reverse takeover. The Board will instead continue to
wind-up the Company with a view to distributing the remaining cash,
including the Escrow Cash. The costs of maintaining the Company's
AIM listing, including audit, regulatory and insurance costs, are
such that the Board expects that should the Shareholders not
approve the Cancellation, the final distribution to Shareholders
will be less than would be realised if the Cancellation is
approved.
5 THE TER OFFER
5.1 The terms of the Tender Offer, that all Eligible
Shareholders tendering Ordinary Shares must accept and agree to,
are set out at Part Two of this Document.
5.2 The Tender Offer is being made available to all Eligible
Shareholders on the Register as at the Record Date (other than
certain Overseas Shareholders, as described in paragraph 9 of this
Part One (Overseas Shareholders) below).
5.3 Eligible Shareholders are invited to tender Ordinary Shares
for purchase by the Company on the terms and subject to the
conditions set out in Part Two of this Document and, in the case of
Eligible Shareholders holding certificated Ordinary Shares, in the
Form of Acceptance and, in the case of Eligible Shareholders
holding Depositary Interests, by sending a TTE Instruction.
5.4 The maximum number of Ordinary Shares that will be purchased
by the Company under the Tender Offer is 182,692,308.
5.5 To be valid, Forms of Acceptance must be received by the
Receiving Agent, and in the case of a TTE Instruction must settle,
no later than by 1.00 p.m. on 28 January 2022 (that is, the Record
Date).
5.6 Eligible Shareholders may either tender: (a) some; (b) all;
or (c) none of their Ordinary Shares.
5.7 Pursuant to the Tender Offer Eligible Shareholders may sell
more than their pro rata entitlement of Ordinary Shares to the
extent that other Shareholders tender less than their pro rata
entitlement. If any Shareholders have tendered less than their pro
rata entitlement under the Tender Offer, surplus tenders will be
accepted in proportion to the number of additional Ordinary Shares
tendered so that the total number of Ordinary Shares purchased
pursuant to the Tender Offer does not exceed 182,692,308.
5.8 Once redeemed, all Tendered Shares will be cancelled by the
Company. The overall number of issued Ordinary Shares will
therefore be reduced by the number of Tender Shares cancelled. The
practical effect of this is that, subject to the Tender Offer being
fully subscribed, each remaining Ordinary Share will (immediately
following such cancellation) represent a greater percentage of the
Company's issued share capital than it does at present.
5.9 The Company will satisfy payment for Tendered Shares entirely from its own resources.
5.10 Action required by Eligible Shareholders who do wish to
participate in the Tender Offer is set out at paragraph 11 of this
Part One of the Document.
5.11 Eligible Shareholders do not have to tender any Ordinary
Shares if they do not wish to, but, once submitted, a Form of
Acceptance and/or a TTE Instruction is irrevocable and cannot be
withdrawn. Eligible Shareholders should note that, once tendered,
Ordinary Shares may not be sold, transferred, charged or otherwise
disposed of.
5.12 All or part of a registered holding of Ordinary Shares may
be tendered, but only one tender may be made in respect of any
single Ordinary Share. The total number of Ordinary Shares tendered
by any Eligible Shareholder should not exceed the total number of
Ordinary Shares registered in such Eligible Shareholder's name.
5.13 All Ordinary Shares which are successfully tendered and
accepted by the Company (at its sole discretion) will be purchased
at the Purchase Price. No Ordinary Shares tendered or purported to
be tendered at any price other than the Purchase Price will be
purchased by the Company.
5.14 Shareholders should note that the Company is entitled not
to, and will not, proceed with the Tender Offer if the Directors
determine, prior to 1 1.00 a.m. on the Record Date that:
(a) the Board cannot be satisfied on reasonable grounds that the
Company will, immediately after completion of the Tender Offer,
satisfy the solvency test prescribed by the Act; or
(b) the Board in its absolute discretion concludes that the
Tender Offer would no longer be likely to promote the success of
the Company for the benefit of Shareholders as a whole; or
(c) there shall occur any material adverse change in national or
international, financial, economic, political or market
conditions,
which, in respect of (b) and (c) above, in the reasonable
opinion of the Directors of the Company, renders the Tender Offer
temporarily or permanently impractical or inadvisable (taking into
account the background to and reasons for the Tender Offer); the
Company shall in such a case terminate the Tender Offer and shall,
as soon as reasonably practicable thereafter, notify the Eligible
Shareholders affected in writing (and return tendered Ordinary
Shares as soon as reasonably practicable).
5.15 Unless the Tender period is extended (at the sole
discretion of the Board) the Tender Offer will remain open from the
date of this Document until 1.00 p.m. on the Record Date (in the
event of an extension of the Tender Period the Company will notify
all Shareholders by way of regulatory news announcement on the day
any extension is approved).
5.16 In the event that the Tender Offer is cancelled or
withdrawn by the Company (at its sole discretion), neither the
Company nor any Director shall have any liability to any
Shareholder for any loss, damage or costs caused to such
Shareholder as a direct or indirect result of the Tender Offer
and/or its withdrawal or cancellation.
5.17 Ordinary Shares purchased pursuant to the Tender Offer will
be acquired free of all liens, charges, restrictions, claims,
equitable interests and encumbrances and together with all rights
attaching thereto.
5.18 The Purchase Price is net of all direct costs and expenses
incurred by the Company in connection with the Tender Offer and
therefore the Purchase Price is the actual amount which will be
received from the Company per Ordinary Share successfully sold by
an Eligible Shareholder under the Tender Offer.
Allocation policy
5.19 Each Eligible Shareholder is be entitled to sell its pro
rata share of the maximum 182,692,308 Ordinary Shares the subject
of the Tender Offer registered in his/her/its name on the Record
Date, rounded down to the nearest whole number of Ordinary Shares.
Eligible Shareholders may sell more than their pro rata entitlement
of Ordinary Shares to the extent that other Shareholders tender
less than their pro rata entitlement of Ordinary Shares. To the
extent that any Shareholders have tendered less than their pro rata
entitlement under the Tender Offer, surplus tenders will be
accepted in proportion to the number of additional Ordinary Shares
tendered so that the total number of Ordinary Shares purchased
pursuant to the Tender Offer does not exceed 182,692,308.
Takeover Offer Obligations under Articles of Association
Waived
5.20 Under Regulation 23 of the Company's Articles of
Association the Board has the right to require any Shareholder (or
any "concert party") interested in greater than 30 per cent. of the
issued share capital of the Company from time-to-time, to make an
offer for the balance of the Ordinary Shares not in its or their
control. For the avoidance of doubt, the Board has irrevocably
resolved that no Shareholder breaching the 30 per cent. threshold
as a result of completion of the Tender Offer shall be required to
make a mandatory bid under the Articles of Association.
6 DIRECTORS' INTENTIONS
6.1 Details of Directors' shareholdings and those of their
respective connected persons, and the intentions of the Directors
in relation to the Tender Offer (subject to there being no legal
restrictions on such party dealing at such time), are set out
below:
Director Date of Interest Tender Undertaking to participate
Undertaking in Ordinary Entitlement in the Tender Offer
Shares
as at the
date of
this
Document
Tender Excess
Entitlement Shares
----------------------- -----------------------
Guy 13 January
Elliott 2022 6,782,888 4,567,294 4,567,294 2,215,594
------------------------ ----------------------- ----------------------- ----------------------- -----------------------
Tony 13 January
Farrow 2022 213,299 143,626 143,626 69,673
------------------------ ----------------------- ----------------------- ----------------------- -----------------------
Bryan n/a - - - -
Disher
------------------------ ----------------------- ----------------------- ----------------------- -----------------------
Henry 13 January
Turcan(1) 2022 37,8818,105 25,507,444 25,507,444 -
------------------------ ----------------------- ----------------------- ----------------------- -----------------------
(1) Mr Turcan is a representative of Lombard Odier Asset
Management Europe Limited ("LOAME"), which in its capacity as
discretionary investment manager for certain funds and accounts
holding in aggregate 37,888,105 Ordinary Shares has committed
(subject to there being no legal restrictions on such party dealing
at such time) to tender not less than its pro rata Tender
Entitlement as set out above.
7 TAXATION
7.1 No advice is provided regarding taxation. Any Shareholder
who is in any doubt as to their tax position should consult an
appropriate professional adviser.
8 CLOSING TIME AND RECORD DATE
8.1 Only Eligible Shareholders who hold Ordinary Shares at the
Closing Time on the Record Date are eligible to participate in the
Tender Offer in respect of those Ordinary Shares so held. Any
Shareholder holding shares in certificated form who returns a Form
of Acceptance is required to return also the relevant share
certificate or a completed letter of indemnity in lieu thereof by
the Record Date.
9 OVERSEAS SHAREHOLDERS
9.1 U.S. Shareholders should refer to the Notice to U.S.
Shareholders attached to this Document for instructions on how they
can participate in the Tender Offer.
9.2 The Tender Offer is not available to Shareholders whose
address, as stated on either of the Registers, is in a Restricted
Jurisdiction, or who are resident in a Restricted Jurisdiction. The
Board shall use its discretion in deciding whether the Tender Offer
is made available to Shareholders whose address or place of
residence is not in a Restricted Jurisdiction but is outside of the
UK. A Restricted Jurisdiction includes Australia, New Zealand, the
Republic of Ireland, South Africa, Canada or Japan or any other
jurisdiction where the mailing of this Document, or the making of
the Tender Offer into such jurisdiction would constitute a
violation of the laws of such jurisdiction.
9.3 The making of the Tender Offer in, or to persons resident
in, jurisdictions outside the United Kingdom or custodians,
nominees or trustees for persons who are citizens, residents or
nationals of jurisdictions outside the United Kingdom may be
prohibited or affected by the laws of the relevant overseas
jurisdiction. Shareholders who are Overseas Shareholders should
inform themselves about and observe any applicable legal or
regulatory requirements. It is the responsibility of any such
Shareholder wishing to tender Ordinary Shares to satisfy himself as
to the full observance of the laws of the relevant jurisdiction in
connection therewith, including the obtaining of any governmental,
exchange control or other consents which may be required, the
compliance with other necessary formalities and the payment of any
issue, transfer or other taxes due in such jurisdiction. If you are
in any doubt about your position, you should consult your
professional adviser in the relevant jurisdiction.
9.4 Shareholder will be responsible for any such issue, transfer
or other taxes payable and the Company and any person acting on
their behalf shall be fully indemnified and held harmless by such
Shareholder for any such issue, transfer or other taxes such person
may be required to pay. No steps have been taken to register or
qualify the Tender Offer or to authorise the extending of the
Tender Offer or the distribution of this Document, the Form of
Acceptance and any related documents in any territory outside the
United Kingdom.
9.5 A Shareholder will be deemed not to have tendered Ordinary
Shares pursuant to the Tender Offer if:
(a) such Shareholder is unable to make the representations and
warranties set out in paragraph 5 of Part Two of the Document (in
the case of Shareholders holding their interest in certificated
form) and paragraph 6 of Part Two of this Document (in the case of
Shareholders holdings Depositary Interests); or
(b) such Shareholder completes Box 1 of a Form of Acceptance
with an address in any Restricted Jurisdiction or has a registered
address in any Restricted Jurisdiction and in either case such
Shareholder does not insert in Box 1 of a Form of Acceptance the
name and address of the person or agent outside of any Restricted
Jurisdiction to whom he wishes the consideration to which he is
entitled under the Tender Offer to be sent, subject to the
provisions of this paragraph and applicable law; or
(c) such Shareholder inserts in Box 5 of a Form of Acceptance
the name and address of a person or agent in any Restricted
Jurisdiction to whom he wishes the consideration to which such
Shareholder is entitled under the Tender Offer to be sent; or
(d) the Form of Acceptance received from him is in an envelope
postmarked in, or which otherwise appears to the Company or its
agents to have been sent from any Restricted Jurisdiction.
9.6 The Company reserves the right, in its absolute discretion,
to investigate in relation to any acceptance, whether the
representations and warranties in paragraphs 5 and 6 (as
applicable) of Part Two of this Document are correct and, if such
investigation is undertaken and as a result the Company determines
(for any reason) that such representation and warranty is not
correct, such acceptance shall not be valid.
9.7 The provisions in this paragraph 9 and/or any other terms of
the Tender Offer relating to Overseas Shareholders, may be waived,
varied or modified as regards a specific Shareholder or on a
general basis by the Company in its absolute discretion but only if
the Company is satisfied that such waiver, variation or
modification will not constitute or give rise to breach of
applicable securities or other laws. References to a "Shareholder"
shall include references to the persons executing Forms of
Acceptance and and/or submitting a TTE Instruction, and in the
event of more than one person executing Forms of Acceptance, the
provisions in paragraph 9.5 above shall apply to them jointly and
severally.
10 ADDITIONAL INFORMATION
10.1 If you are in any doubt about the completion of the Form of
Acceptance or submission of a TTE Instruction please contact The
Receiving Agent, Computershare Investor Services PLC, at The
Pavilions, Bridgwater Road, Bristol BS99 6AH on 0370 702 0000 if
calling from within the United Kingdom or +44 370 702 0000 if
calling from outside of the United Kingdom Monday to Friday during
the hours of 8.30 a.m. to 5.30 p.m. (London time). For legal
reasons the Receiving Agent will not be able to give advice on the
merits of the Tender Offer or to provide legal, financial or
taxation advice, and accordingly Shareholders should consult with
their stockbroker, solicitor, accountant, bank manager or other
independent professional adviser for such advice.
11 ACTION TO BE TAKEN
11.1 Shares held in certificated form
Eligible Shareholders who hold Ordinary Shares in certificated
form and who wish to participate in the Tender Offer should follow
the instructions on the accompanying Form of Acceptance and return
it to the Receiving Agent at Computershare Investor Services Plc,
Corporate Actions Projects, Bristol BS99 6AH to arrive by no later
than 1.00 p.m. on 28 January 2022 (the Record Date). Eligible
Shareholders who hold their Ordinary Shares in certificated form
should also send their share certificate(s) or other documents of
title in respect of the Ordinary Shares tendered with their Form of
Acceptance to the Receiving Agent at Computershare Investor
Services Plc, Corporate Actions Project, Bristol BS99 6AH, to be
received not later than 1.00 p.m. on the Record Date. Further
details of the procedure for tendering and settlement are set out
in Part Two of this Document and on the accompanying Form of
Acceptance.
COMPLETED FORMS OF ACCEPTANCE MUST BE RECEIVED NOT LATER THAN
1.00 P.M. LONDON TIME ON 28 JANUARY 2022.
The execution of the Form of Acceptance will constitute the
irrevocable appointment of any director or officer of the Company,
or other person(s) nominated by the Company, as a Shareholder's
attorney and/or agent ("Attorney") and an irrevocable instruction
and authorisation for the Attorney to complete and execute all or
any instruments of transfer and/or other documents at the
Attorney's absolute discretion in relation to the Ordinary Shares
being tendered by that Shareholder. Further details of the
procedures for tendering and settlement are set out in Part Two of
this Document and, in the case of Shareholders tendering Ordinary
Shares held in certificated form, in the Form of Acceptance.
Further copies of the Form of Acceptance may be obtained on
request from the Receiving Agent by calling between 8.30 a.m. and
5.30 p.m. (London time) Monday to Friday on 0370 702 0000 if
calling from within the United Kingdom or +44 370 702 0000 if
calling from outside the United Kingdom.
11.2 Interest in Ordinary Shares in uncertificated form held as
Depositary Interests in CREST
Eligible Shareholders who hold their interest in Ordinary Shares
in uncertificated form as Depositary Interests in CREST and who
wish to tender all or any of their Ordinary Shares under the Tender
Offer should tender electronically through CREST so that the TTE
Instruction settles no later than 1.00 p.m. on 28 January 2022.
Further details of the procedures for tendering and settlement are
set out in Part Two of this Document.
11.3 U.S. Shareholders
U.S. Shareholders should refer to the Notice to U.S.
Shareholders attached to this Document for instructions on how they
can participate in the Tender Offer.
11.4 Shareholders who do not want to participate in the Tender Offer
Shareholders who do not want to participate in the Tender Offer
should not complete the Form of Acceptance and will not be required
to make a TTE Instruction.
12 NO RECOMMATION
12.1 The Directors make no recommendation to Shareholders in
relation to whether or not tendering for sale any of their Ordinary
Shares pursuant to the Tender Offer is in their best interests.
Whether or not Eligible Shareholders decide to tender any of their
Ordinary Shares will depend, among other things, on their
individual circumstances, including their tax position.
12.2 In the event the Cancellation Resolution is approved it is
expected that the Board will seek to wind-up the Company and, after
payment of relevant costs, distribute available cash to
Shareholders. At this stage it is not clear what the net asset
value of the Company's assets per Ordinary Share would be at such
future date, and the likely timing of such distribution cannot be
confirmed at this time, but it is expected (after payment of
relevant costs and taxes due by the Group following the Sale) the
future distribution would be at a price similar to the Tender
Price. The Company will seek to minimise costs associated with
winding-up the Company, and maximise any return of cash to
Shareholders, and it is possible a future distribution would be at
a small premium to the Tender Price. Similarly, if costs are
greater than expected, or it takes longer to complete the
winding-up process, the future distribution may be at a discount to
the Tender Price.
12.3 Whilst the Board makes no recommendation to Shareholders as
to whether they accept the Tender Offer in respect of their
Ordinary Shares, it is not recommended Shareholders reject the
Tender Offer on the basis they believe a future distribution will
be at a premium to the Tender Price currently offered, as the
Company can provide no guarantee at this stage that would be the
case and the amount of cash available to be distributed at such
time is subject to a number of factors beyond the Company's
control.
12.4 Shareholders in any doubt as to the action they should take
should consult an appropriately qualified independent financial
adviser authorised under the Financial Services and Market Act
2000.
The following text has been extracted from the Cancellation
Circular:
1 INTRODUCTION
I am writing to you with details of a General Meeting of the
Company to be held at 3.00 p.m. GMT on 7 February 2022. The formal
Notice of the General Meeting is set out at Part II of this
Document.
The Company announced today that it intends to seek shareholder
approval for the cancellation of the admission of its Ordinary
Shares to trading on AIM with effect from 7:00 a.m. on 22 February
2022. The Directors believe that it is in the best interests of the
Company and its Shareholders for the proposed cancellation of
admission of the Ordinary Shares to trading on AIM (the
"Cancellation") to be approved and will seek Shareholders' approval
for the Authorising Resolution at the General Meeting.
This Document provides Shareholders with the background to and
the reasons for the proposed Cancellation, explains the
consequences of the Cancellation, and sets out why the Directors
unanimously consider the Cancellation to be in the best interest of
the Company and its Shareholders as a whole.
2 BACKGROUND TO THE PROPOSED CANCELLATION
On 11 August 2021 the Company announced that the Company had
completed the sale of the majority of the Company's assets (the
"Sale"), realising gross cash proceeds of US$106.7 million with an
additional $13.3 million paid to escrow. Since then, $80.0 million
has been returned to Shareholders by way of a tender offer (the
"October Tender Offer"). In addition, $1.4 million has been
released from escrow. The balance of $11.9 million is to be
released (subject to set-off in accordance with the terms of the
relevant escrow agreement) on 31 March 2022.
Following the Sale, the Company has divested itself of the
remainder of its non-cash assets and has no operations except for
final services under a transition services agreement with the
purchaser (the "Transition Services Agreement").
Under the terms of the Transition Services Agreement the Company
provided a variety of services in the period from completion of the
Sale to 11 December 2022. The Company is continuing to provide much
reduced transition services in the form of back-end registry
services and billing until 31 January 2022 (the "Transition
Services Period"). From 31 January 2022 the Company will be
classified as a Rule 15 cash shell in accordance with the AIM
Rules. As a Rule 15 cash shell the Company will be required to make
an acquisition or acquisitions which constitute a reverse takeover
under AIM Rule 14 (or seek re-admission as an investing company (as
defined under the AIM Rules)), on or before 31 July 2022, failing
which, the Company's Ordinary Shares would be suspended from
trading on AIM, pursuant to AIM Rule 40.
As mentioned above, in October 2021 the Company completed the
fully subscribed October Tender Offer, returning US$80.0 million
(approximately GBP58.0 million at the exchange rate at that time)
to Shareholders. The Board carefully considered options with
regards to how best to utilise the remaining available capital,
including an acquisition constituting a reverse takeover or a
return of additional available capital to Shareholders. For the
reasons set out at paragraph 3 below, and following further
consultation with its significant Shareholders, the Board has
concluded that the uncertainty, costs and risks of a future
potential acquisition are not in the interest of the majority of
Shareholders, and the Company should endeavour to return to
Shareholders the maximum amount of available cash as part of an
orderly winding-up of the Company in 2022, and accordingly has:
(a) approved the Tender Offer, details of which are set out at
paragraph 4 below and the process of which has been set out in a
separate shareholder circular being posted to Shareholders today;
and
(b) recommended to Shareholders that they approve the Cancellation.
3 REASONS FOR THE PROPOSED CANCELLATION
Following the Sale, the Company has divested itself of the
remainder of its assets and has no ongoing operations except for
the completion of the Transition Services Agreement. At 31 January
2022 the Company will be classified as a Rule 15 cash shell in
accordance with the AIM Rules. To maintain a listing of the
Company's Ordinary Shares on AIM in the medium-term would require
the Company to complete an acquisition or acquisitions which
constitute a reverse takeover under AIM Rule 14 (or seek
re-admission as an investing company (as defined under the AIM
Rules)), on or before 31 July 2022, failing which, the Company's
Ordinary Shares would be suspended from trading on AIM, pursuant to
AIM Rule 40 (such date being the "Suspension Date"). If the Company
does not then complete an acquisition constituting a reverse
takeover within six months of the Suspension Date, trading in the
Ordinary Shares on AIM will be cancelled.
The Directors have considered pursuing an acquisition or
acquisitions that would constitute a reverse takeover of the
Company but concluded that as the Company has very limited staff
with neither the time nor the infrastructure to review potential
acquisition targets internally, the Company would need to engage
external specialists, at considerable cost, to carry out the
reviews and subsequent diligence of targets. The Directors do not
believe it is in the best interests of Shareholders to commit to
this additional outlay of cash with no certainty of any return. The
Company has also taken into account the considerable cost,
management time and the legal and regulatory burden associated with
maintaining the Company's admission to trading on AIM in general
which, in the Directors' opinion, are disproportionate to the
benefits to the Company.
In addition, the Board consulted with the Company's largest
Shareholders and determined these Shareholders would prefer a full
return of the Company's cash, and for the quantum of that cash
distribution to be maximised by the Directors, with appropriate
steps taken to ensure costs are reduced to reflect the fact the
Company is no longer an operating business.
For these reasons the Board has determined that it will not
pursue acquisitions. The Company estimates that total net assets of
the Company, i ncluding Available Cash and Escrow Cash, but net of
current liabilities, tax liabilities, and estimated professional,
operating, and other costs required to wind-up the business and to
be paid after the date of this Document ("Net Assets") is US$38.7
million (approximately GBP28.2 at the Exchange Rate), representing
a net asset value of approximately 10.4 pence per Ordinary Share.
The Directors have resolved that the Net Assets should be returned
to Shareholders: US$26.0 by way of the Tender Offer and the balance
later in 2022 in conjunction with the winding-up of the
Company.
Accordingly, the Cancellation is proposed to enable the Company
to reduce its operating costs prior to an orderly winding-up of the
Company to maximise the Net Assets returned to Shareholders. In
particular, the Board believes the regulatory burden, management
and staff time and considerable costs associated with maintaining
admission of the Ordinary Shares to trading on AIM (including
professional, legal, accounting, broker and nominated adviser costs
and fees of the London Stock Exchange), with more than 90 per cent.
of the Company's estimated net asset value distributed to
Shareholders through the Tender Offer and October Tender, are now
disproportionate to the value provided by admission of the Ordinary
Shares to trading on AIM.
4 DETAILS OF THE TER OFFER
Following completion of the fully subscribed October Tender
Offer in October 2021 the Board has resolved to return a further
portion of the Company's net assets by way of the Tender Offer
through which Shareholders have the opportunity to sell back some
or (to the extent that other Shareholders tender less than their
pro rata entitlement) up to all of their Ordinary Shares to the
Company. In aggregate, the Company shall redeem up to 182,692,308
Ordinary Shares representing 67.3 per cent. of the issued share
capital at a price of 10.4 pence per Ordinary Share for aggregate
consideration of up to GBP19.0 million (approximately US$26.0
million) (if the Tender Offer is fully subscribed). As at the date
of this Document the Company has a total of 271,316,341 issued
Ordinary Shares. Further details regarding the Tender Offer are set
out in the Tender Circular which is also being posted to
Shareholders today. The Timetable for the Tender Offer is set out
below:
2022
Publication of the Tender Circular 14 January
Latest time and date for receipt of Forms 1.00 p.m. on 28 January
of Acceptance and TTE Instructions from
CREST Shareholders
Closing Time and Date for Tender Offer 1.00 p.m. on 28 January
Record Date and Time for Tender Offer 6.00 p.m. on 28 January
Outcome of Tender Offer announced by 8.00 a.m. on 31 January
Cancellation of Tender Shares by 5.00 p.m. on 7 February
Cheques dispatched for certificated Ordinary by 7 February
Shares purchased pursuant to the Tender
Offer and payment through CREST for uncertificated
Ordinary Shares purchased pursuant to the
Tender Offer
CREST accounts credited for revised holdings by 7 February
of Ordinary Shares
Dispatch of balance share certificates by 7 February
for unsold Ordinary Shares
5 WINDING-UP OF THE COMPANY
As detailed above, the Company will have limited operations
during 2022, but will need to complete the Transition Services
Agreement, terminate remaining staff and all other remaining
contracts, finalise and pay certain tax liabilities and wind-up and
dissolve the Company's various subsidiaries. Following release of
the Escrow Cash (which is subject to set-off rights in the event of
a warranty or indemnity claim under the Sale Agreement (which is
not expected and the Directors have no knowledge that such a claim
is threatened of pending)), the Directors have resolved to taking
such steps as required to solvently wind-up the Company, and return
the remainder of the Company's Net Assets to Shareholders. The
Directors do not know the exact timing for the proposed winding-up
but expect it to be completed, and the remaining Net Assets
returned to Shareholders, by 31 December 2022.
Current Operations and Financial Position of the Company
As at 12 January 2022, two days prior to publication of this
Document, the Company holds approximately US$30.5 million of cash
(GBP22.3 million at the Exchange Rate) (the "Available Cash"),
US$26.0 million (GBP19.0 million at the Exchange Rate) of which it
intends to return to Shareholders in February 2022 through the
Tender Offer.
In addition to the Available Cash, US$11.9 million of the cash
consideration for the Sale is currently held in escrow ("Escrow
Cash"), to be released on 31 March 2022 (subject to any set-off in
accordance with the terms of the Sale Agreement). The Company has
no reason to believe that all of the funds retained in escrow will
not be released to the Company at the end of the Escrow Period.
Following completion of the Sale the Company has:
(a) provided transition services to the purchaser;
(b) sold or otherwise disposed of its assets and operations not
included as part of the Sale;
(c) terminated the majority of the Company's operating contracts;
(d) terminated the majority of the Company's employees, paying
retention amounts to those who worked through the completion of
their service commitment to the Transition Services Period, and
paid bonuses due to senior management;
(e) liquidated a number of the Company's subsidiaries; and
(f) distributed US$80.0 million (approximately GBP58.0 million
at the Exchange Rate) to Shareholders through the October Tender
Offer.
The Company has retained four employees, including its senior
management, to continue to provide back-end registry and billing
services under the Transition Services Agreement for the duration
of the Transition Services Period. The Company is also working with
its tax advisors to finalise relevant tax returns for the Company
and its subsidiaries and expects to have paid all relevant tax by
31 March 2022 and continues to liquidate its remaining
subsidiaries. The Company intends to distribute the remaining cash
in conjunction with the winding-up of the Company.
In the interim the Company will retain a level of working
capital to cover expected costs during this period.
Net of current and expected liabilities required to wind up the
business, but including cash in escrow and/or retained by the
Company for the purposes tax liabilities, professional and
operating expenses, and dissolution costs to be paid after the date
of this Document, as at the date of this Document the Company
estimates it has cash available or due to it of approximately US$
38.7 million (GBP28.2 million at the Exchange Rate), representing
approximately 10.4 pence per Ordinary Share on a net asset
basis.
The Board will review the level of retained cash following
release of the Escrow Cash (net of any set-off) and expects to make
a further announcement about any future further return of capital
to Shareholders as appropriate. As noted at paragraph 3 above, the
Board is recommending the Cancellation, and notes that subject to
relevant taxes being paid, and delivery of the transition services
for the Transition Services Period, the intention of the Board is
to solvently wind-up the Company following the Cancellation prior
to the end of 2022 and return all available cash to Shareholders at
such time (net of the costs of the winding-up process).
6 PROCEDURE FOR CANCELLATION
Shareholder Approval Required
The Cancellation is conditional, pursuant to Rule 41 of the AIM
Rules, upon the approval of not less than 75 per cent. of the votes
cast by Shareholders (whether present in person or by proxy) at the
General Meeting. The Company is therefore seeking Shareholders'
approval of the Cancellation at the General Meeting.
Timetable for Cancellation
In accordance with Rule 41 of the AIM Rules, the Company has
notified London Stock Exchange plc of its proposed Cancellation
from trading on AIM and has provided not less than 20 clear
Business Days' notice of Cancellation.
Cancellation will not take effect until at least five clear
Business Days have passed following the passing of the Authorising
Resolution. If the Authorising Resolution is passed at the General
Meeting, it is proposed that the last day of trading in Ordinary
Shares on AIM will occur on 21 February 2022 and that the
Cancellation will take effect at 7:00 a.m. on 22 February 2022 (the
"Cancellation Date").
The Directors are mindful that certain Shareholders may be
unable or unwilling to hold Ordinary Shares in the event that the
Cancellation is approved and becomes effective. The Company has
approved the Tender Offer, due to close on 28 January 2022 ("Tender
Closing Date"), at which point, including the Shares available for
tender in the October Tender, Shareholders will have had the
opportunity to tender in aggregate, 91.4 per cent. of their
interest in Ordinary Shares. Shareholders who are unable or
unwilling to hold Ordinary Shares in the event that the
Cancellation is approved should accept the Tender Offer and should
consider selling the balance of their interest in Ordinary Shares
in the market between the Tender Closing Date and prior to the
Cancellation Date. Prior to a Cancellation, the Company may,
subject to regulatory capital adequacy and liquidity requirements,
normal working capital considerations and otherwise subject to the
satisfaction of all other relevant legal requirements, consider
implementing a buy-back programme to acquire and cancel additional
Ordinary Shares remaining in issue following the Tender Closing
Date. Any such buy-back programme would be limited in nature, and
the total number of Ordinary Shares potentially redeemed by the
Company is unlikely to be material in the context of the total
outstanding Ordinary Shares of the Company after the Tender Offer.
In particular Shareholders should not view any such programme as a
likely source of liquidity.
7 IMPLICATIONS OF PROPOSED CANCELLATION
Set out below is an overview of the principal effects of the
Cancellation, however, this list in not exhaustive. Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them:
-- there will be no formal public market mechanism enabling the
Shareholders to trade Ordinary Shares and no price will be publicly
quoted for the Shares;
-- the Ordinary Shares may be more difficult to sell compared to
shares of companies traded on AIM (or any other recognised market
or trading exchange);
-- while the Ordinary Shares will remain freely transferable
(subject to the provisions in the Company's articles of
association), it is possible that the liquidity and marketability
of the Ordinary Shares will, in the future, be more constrained
than at present and the secondary market value of such shares may
be adversely affected as a consequence;
-- in the absence of a formal market quote, it may be more
difficult for Shareholders to determine the market value of their
investment in the Company at any given time;
-- the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply;
-- the AIM Rules will no longer apply to the Company and,
accordingly, Shareholders will no longer be afforded the
protections given by the AIM Rules. In particular, the Company will
not be bound to:
(a) make any public announcements of material events, or to announce interim or final results;
(b) comply with any of the corporate governance practices applicable to AIM companies;
(c) announce substantial transactions and related party transactions;
(d) comply with the requirement to obtain shareholder approval
for reverse takeovers and fundamental changes in the Company's
business; or
(e) comply with AIM Rule 26, obliging the Company to publish
prescribed information on its website;
-- following the Cancellation, the Company will no longer be
obliged to produce and publish annual and half-yearly reports and
financial statements;
-- the Company will cease to have an independent nominated adviser and broker;
-- whilst the Company's CREST facility will remain in place
following the Cancellation, the Company's CREST facility may be
cancelled in the future and, although the Ordinary Shares will
remain transferable, they will cease to be transferable through
CREST. In this instance, Shareholders who hold Ordinary Shares in
CREST will receive share certificates;
-- as from the date of the Cancellation, stamp duty will be due
on transfers of shares and agreements to transfer shares unless a
relevant exemption or relief applies; and
-- the Cancellation may have additional taxation consequences
for Shareholders. Shareholders who are in any doubt about their tax
position should consult their own professional independent tax
adviser.
These considerations are not exhaustive and Shareholders should
seek their own independent advice when assessing the likely impact
of the Cancellation on them. Shareholders should be aware that if
the Cancellation takes effect, they will at that time cease to hold
Shares in a company whose shares are admitted to trading on AIM and
the matters set out above will automatically apply to the Company
from the date of the Cancellation.
After the Cancellation, the Company will continue to comply with
the applicable statutory requirements of a company incorporated the
BVI.
8 SHAREHOLDERS ACCESS TO INFORMATION FOLLOWING CANCELLATION
The Company currently intends that it will continue to provide
certain facilities and services to Shareholders that they currently
enjoy as shareholders of a company whose shares are admitted to
trading on AIM. In particular the Company will:
-- continue to communicate selected information about the
Company to its Shareholders; and
-- continue, until the date of any winding-up, to maintain its
website, www.mmx.co and to post updates (where deemed necessary or
appropriate) on the Company's website from time to time, although
Shareholders should, however, be aware that there will be no
obligation on the Company to include all of the information
required under AIM Rule 26 or to update its website as required by
the AIM Rules.
9 TRANSACTIONS IN ORDINARY SHARES PRIOR TO AND POST THE PROPOSED CANCELLATION
Prior to Cancellation
If Shareholders wish to buy or sell Ordinary Shares on AIM they
must do so prior to the Cancellation becoming effective. If
Shareholders approve the Cancellation, it is anticipated that the
last day of dealings in the Ordinary Shares on AIM will be 21
February 2022. The Board is not making any recommendation as to
whether or not Shareholders should buy or sell their Ordinary
Shares.
Prior to its Cancellation, the Company may, subject to
regulatory capital adequacy and liquidity requirements, normal
working capital considerations and otherwise subject to the
satisfaction of all other relevant legal requirements, consider
implementing a buy-back programme. Should the Company buy-back
Ordinary Shares prior to Cancellation (outside of the Tender Offer
process) there can be no guarantee that the price at which the
Company will buy-back Ordinary Shares will be equal to the Tender
Price and, subject to market conditions leading up to the date of
Cancellation (if approved), it is likely that the price of any
buy-back may be a material discount to the Tender Price. If a
buy-back programme is approved by the Board further details will be
announced separately post completion of the Tender Offer.
Post Cancellation
The Directors are aware that the proposed Cancellation, should
it be approved by Shareholders at the General Meeting, would make
it significantly more difficult for Shareholders to buy and sell
Ordinary Shares should they wish to do so. Subject to the
Cancellation being approved by Shareholders, the Directors shall
take such steps as required to solvently wind-up the Company as
early as possible in 2022 and return the remainder of the Company's
Net Assets to Shareholders in 2022. Accordingly, the Company does
not intend to establish any sort of "Matched Bargain Facility"
which would enable Shareholders to trade their Ordinary Shares by
matching buyers and sellers through periodic auctions during the
period following Cancellation. However, prior to the winding-up
process of the Company (and final distribution to Shareholders)
being completed, if for any reason the winding-up process takes
longer than the Board currently anticipates then the Company will
review this decision and potentially engage a party regulated by
the Financial Conduct Authority to provide a Matched Bargain
Facility or seek to provide other liquidity options for
Shareholders at such time. There is however no guarantee that
Shareholders will have any liquidity for their Ordinary Shares in
the period between a Cancellation and the winding-up of the
Company.
Shareholders will continue to be able to hold their Ordinary
Shares in the CREST uncertificated form and should check with their
existing stockbroker that they are able to hold unquoted
shares.
Shares held through an ISA account
The Ordinary Shares will cease to be eligible to be held within
an ISA upon the Cancellation taking effect. An ISA manager will
have to either sell Ordinary Shares held in a Shareholder's ISA or
transfer them to the Shareholder to be held outside an ISA, within
30 calendar days of the Cancellation.
When the title of an investment in an ISA is transferred from an
ISA manager to an investor, the investor is deemed to have sold the
investment for a market value sum and immediately reacquired it for
the same amount. Any notional gain on the deemed sale is exempt
from charge. Any future capital gains or losses are calculated by
reference to the value of the shares when they left the ISA. This
is the combined effect of regulations 22 and 34 of the Individual
Savings Account Regulations 1998. It is not, however, clear how
this general tax treatment applies when shares are transferred out
of an ISA after a delisting.
This summary is for general information purposes only. It is not
intended to constitute tax or other advice and should not be relied
on or treated as a substitute for specific advice relevant to a
Shareholder's specific circumstances. Shareholders should consult
their own professional advisers as soon as possible.
10 GENERAL MEETING
COVID-19 special arrangements
The Board is closely monitoring the evolving Coronavirus
(COVID-19) situation and public health concerns, including the
related social distancing requirements, public health guidance and
legislation. At the time of publication of this notice, indoor
public gatherings remain subject to a number of restrictions. The
Board recognises that the General Meeting represents an opportunity
to engage with Shareholders, and provides a forum that enables
Shareholders to ask questions of, and speak directly with, the
Board. However, in light of current restrictions, the Board hopes
that Shareholders will understand that the General Meeting will be
held via the 'Investor Meet Company' digital platform. To attend
the General Meeting please register using the following link :
https://www.investormeetcompany.com/minds-machines-group-limited/register-investor
. Questions can be submitted pre-event via the 'Investor Meet
Company' dashboard, or at any time during the live presentation via
the "Ask a Question" function. The Company will make arrangements
such that the legal requirements to hold the meeting can be
satisfied through the physical attendance of a minimum number of
members.
Shareholders are therefore strongly encouraged to submit a proxy
vote in advance of the meeting. A Form of Proxy for use at this
meeting accompanies this notice. To be valid, the Form of Proxy
must be completed and returned to Computershare Investor Services
(Jersey) Limited at c/o Computershare Investor Services PLC in
accordance with the instructions in the Notes appended to the
Notice. Given the restrictions on attendance, members are strongly
encouraged to appoint the 'Chair of the Meeting' as their proxy
rather than a named person who will not be permitted to attend the
meeting.
This situation is constantly evolving, and guidance and/or
legislation may change during the notice period for the General
Meeting. Any changes to the arrangements for the General Meeting
(including, without limitation, as to proxy appointments,
attendance, venue, format, the business to be considered or timing,
as the case may be) will be communicated to members before the
meeting through our website and, where appropriate, via the
Regulatory News Service.
Cancellation of admission of the Ordinary Shares to trading on
AIM
Under the AIM Rules, it is a requirement that the Cancellation
must be approved by not less than 75 per cent. of votes cast by
Shareholders at a General Meeting of the Company. Accordingly, the
Notice of General Meeting set out in Part II of this Document
contains a special resolution (Resolution 1) to approve the
Cancellation.
11 ACTION TO BE TAKEN
Voting on the Authorising Resolution set out in the Notice of
General Meeting will be conducted on a poll which reflects
Shareholders' voting intentions in respect of shares held and votes
tendered.
A Form of Proxy for use at the General Meeting is enclosed with
this Document.
Shareholders holding Ordinary Shares in certificated form should
complete and sign the Form of Proxy and return it to Computershare
Investor Services (Jersey) Limited at c/o Computershare Investor
Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY as
soon as possible, but in any event the Form of Proxy is to be
received not later than 3.00 p.m. GMT on 3 February 2022, being 48
Business Day hours before the time fixed for holding the General
Meeting. We encourage Shareholders to appoint the Chair of the
Meeting as their proxy with their voting instructions. In light of
the COVID-19 measures being taken at the General Meeting, no
Shareholder will be allowed entry into the physical meeting, but
Shareholders may access the General Meeting virtually by
registering using the following link:
https://www.investormeetcompany.com/minds-machines-group-limited/register-investor
.
Shareholders holding Ordinary Shares in uncertificated form
should complete and sign the Form of Instruction and return it to
Computershare Investor Services PLC, The Pavilions, Bridgwater
Road, Bristol BS99 6ZY or by email to
#UKCSBRS.ExternalProxyQueries@computershare.co.uk as soon as
possible but in any event to be received not later than 3.00 p.m.
GMT on 2 February 2022, or 72 Business Day hours before any
adjourned meeting. The Company is accepting returns by email in
relation to the General Meeting due to current Covid restrictions
and potential delays returning the same by post. There is no
guarantee that returns by email will be accepted by the Company or
the Registrar in future years or for future shareholder
meetings.
12 RECOMMENDATION
For the reasons noted above, the Directors consider the
Authorising Resolution to be put to the General Meeting is in the
best interests of the Company and, therefore, unanimously recommend
that Shareholders vote in favour, as they intend to do in respect
of the Ordinary Shares they are directly or indirectly interested
in, which amount to, in aggregate, 44,877,292 Ordinary Shares,
representing 16.5 per cent. of the current issued share capital of
the Company.
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END
TENBJMTTMTABTJT
(END) Dow Jones Newswires
January 14, 2022 02:00 ET (07:00 GMT)
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