Takeover Panel Armour Group plc - Criticism of Mr Bob Morton (6001F)
23 2월 2015 - 8:23PM
UK Regulatory
TIDMAMR
RNS Number : 6001F
Takeover Panel
23 February 2015
2015/3
ARMOUR GROUP PLC ("ARMOUR")
Introduction
This is a public statement of censure by the Panel Executive
of Mr Bob Morton for his failure to make an offer under
Rule 9 of the Takeover Code (the "Code") in compliance
with the Code in connection with the purchases of shares
in Armour by Mr Morton's four sons in June and August 2011,
and certain associated breaches of Rule 5 and Rule 2.
Background
The Executive became aware in late November 2014 of the
share purchases which gave rise to the breaches of the
Code described below.
As a result of a placing of new Armour shares in February
2011 (the "Placing"), Mr Morton and persons acting in concert
with him (the "Morton Concert Party") became interested
in shares carrying approximately 39.1% of the voting rights
of Armour. This issue of new shares to the members of the
Morton Concert Party was approved by a vote of independent
shareholders at a general meeting of Armour on 23 February
2011 and the obligation for the Morton Concert Party to
make an offer for Armour that would otherwise have arisen
under Rule 9.1(b) was "whitewashed" in accordance with
Note 1 of the Notes on the Dispensations from Rule 9.
In the whitewash circular published by Armour on 28 January
2011 in connection with the Placing (the "Whitewash Circular"),
the Morton Concert Party was disclosed as including:
(a) Mr Morton;
(b) Mrs Sue Morton, his wife;
(c) Hawk Investment Holdings Limited ("Hawk"), a company
wholly-owned by Mr and Mrs Morton;
(d) the Hawk Pension Fund;
(e) Groundlinks Limited, a company owned by the trustees
of a trust for the benefit of Mr Andrew Morton, Mr
Morton's son;
(f) Retro Grand Limited, a company owned by the trustees
of a trust for the benefit of Mr Edward Morton, Mr
Morton's son; and
(g) Serrafina Holdings Limited, a company owned by the
trustees of a trust for the benefit of Mr Charles Morton,
Mr Morton's son.
The Executive understands that, later in 2011, certain
investors who had participated in the Placing wished to
sell their shareholdings in Armour. Mr Morton told the
Executive that he was asked if he would like to buy these
shares. Mr Morton declined to do so because he was aware
that he would not have been able to acquire an interest
in any further shares without incurring an obligation to
make an offer for Armour under Rule 9.1(b). Instead, believing,
incorrectly, that his adult sons would be regarded by the
Panel as independent of him (and not as part of the Morton
Concert Party) and that it was an opportunity to purchase
Armour shares at a good price, Mr Morton arranged for an
aggregate of approximately 6.8 million shares in Armour
to be purchased in the names of his four sons from the
sellers in August 2011. Mr Morton took this action despite
knowing that the trusts set up for the benefit of three
of his four sons were part of the Morton Concert Party
disclosed in the Whitewash Circular. Separately, in June
2011, Mr Charles Morton purchased 385,174 shares in Armour.
These share purchases together resulted in Mr Morton's
four sons each then becoming interested in 1.8 million
shares in Armour which, collectively, carried 7.4% of the
voting rights of Armour (in addition to the pre--existing
interests of the Morton Concert Party referred to above).
Mr Morton made gifts of an equal sum of money to each of
his sons, which were used to purchase the Armour shares
referred to above.
Neither Mr Morton nor his sons consulted the Executive
nor sought advice regarding the implications of these share
purchases under the Code.
Relevant provisions of the Code
The definition of "acting in concert"
Under the Code, persons acting in concert comprise persons
who, pursuant to an agreement or understanding (whether
formal or informal), co-operate to obtain or consolidate
control of a company or to frustrate the successful outcome
of an offer for a company.
The Executive's long-standing practice is to treat a person's
close relatives as acting in concert with that person unless
it can be demonstrated clearly that there has been a breakdown
in the relationship between that person and other members
of the family.
The requirement for a mandatory offer - Rules 9.1(b), 9.2
and 2.2(b)
In summary, Rule 9.1(b) provides that, except with the
consent of the Panel, when any person, together with persons
acting in concert with him, is interested in shares which
in aggregate carry not less than 30% of the voting rights
of a company but does not hold shares carrying more than
50% of such voting rights and such person, or any person
acting in concert with him, acquires an interest in any
other shares which increases the percentage of shares carrying
voting rights in which he is interested, such person shall
make an offer for each class of the remaining equity share
capital of the company in cash.
The prime responsibility for making an offer under Rule
9.1 normally attaches to the member of the concert party
who makes the acquisition which triggers the requirement
to make the offer. However, Rule 9.2 provides that, in
addition, each of the principal members of the concert
party may, according to the circumstances, have an obligation
to extend an offer. The Note on Rule 9.2 provides that
if the person who makes the triggering acquisition is not
a principal member of the concert party, the obligation
may attach to the principal member or members.
Rule 2.2(b) provides that an announcement is required to
be made immediately upon an acquisition of any interest
in shares which gives rise to an obligation to make an
offer under Rule 9.1.
Restrictions on share purchases - Rules 5.1(b) and 5.2
In summary, the effect of Rule 5.1(b) is that an acquisition
of an interest in shares which triggers an obligation to
make an offer under Rule 9.1(b) can only be made if one
of the exceptions in Rule 5.2 applies.
Application of the Code in this case
The definition of "acting in concert"
Mr Morton and his sons are close relatives. Mr Morton arranged
and/or financed the purchase of Armour shares by his sons
in June and August 2011. Trusts set up for the benefit
of three of his four sons were part of the Morton Concert
Party described in detail in the Whitewash Circular published
a few months previously. In the light of the facts in this
case and the Executive's long-standing practice in respect
of close relatives, the Executive concluded that Mr Morton
and his sons should be regarded as acting in concert with
each other.
The requirement for a mandatory offer - Rules 9.1(b), 9.2
and 2.2(b)
Immediately prior to the first of the share purchases by
Mr Morton's sons in June 2011, the Morton Concert Party
held shares carrying approximately 39.1% of the voting
rights of Armour. Each of the purchases of shares in Armour
by Mr Morton's sons in June and August 2011 triggered an
obligation to make an offer under Rule 9.1(b) and to make
an immediate announcement under Rule 2.2(b). No such offer
was made and no announcements were published.
In December 2014, the Executive ruled that an offer must
be made for Armour in accordance with Rule 9 at 4.75p per
share, being the highest price paid by any of Mr Morton's
sons for Armour shares in the period between June and August
2011 and in the 12 months previously (in accordance with
Rule 9.5). Mr Morton was a principal member of the Morton
Concert Party and he accepted that he was responsible for
making this offer.
On 24 December 2014, Hawk, a company wholly-owned by Mr
and Mrs Morton and the largest shareholder in Armour, announced
a cash offer at 4.75p per share for Armour shares not held
by the Morton Concert Party. On 16 January 2015, Hawk published
its offer document. The offer became unconditional on 3
February 2015 and closed on 20 February 2015, at which
time the Morton Concert Party held and had received acceptances
in respect of an aggregate of 62,718,210 shares carrying
64.62% of the voting rights of Armour.
Restrictions on share purchases - Rules 5.1(b) and 5.2
No exemption under Rule 5.2 applied to the purchases of
shares by Mr Morton's sons in 2011. Rule 5.1(b) was breached
as a result.
Conclusion
The Executive considers that the failure by Mr Morton to
make an offer under Rule 9 in compliance with the Code
in connection with the purchases of shares in Armour by
Mr Morton's four sons in June and August 2011, and the
associated breaches of Rule 5 and Rule 2, were serious
breaches of the Code.
The Executive considers these breaches to be particularly
concerning in view of the following:
(a) Mr Morton has a record of failing to comply with his
obligations under the Code. Mr Morton had, on two
occasions within the two years preceding the 2011
share purchases, committed other serious breaches
of the Code and, on each occasion, Mr Morton was sent
a private statement of censure by the Executive pursuant
to Section 11(a) of the Introduction to the Code.
In the first of these cases, Mr Morton was privately
censured by the Executive for a failure immediately
to announce under Rule 2.2(b) that an obligation to
make an offer under Rule 9.1(b) had been incurred;
(b) Mr Morton is an experienced investor who has been
closely involved in several transactions subject to
the Code including, through Southwind Limited, mandatory
offers for Lorien plc in 2007 and PSG Solutions plc
in 2009. As the chairman of Armour, he was involved
in the "whitewash" of the Morton Concert Party in
respect of the Placing, a matter of months before
his sons first purchased Armour shares. This involved
a detailed description of the Morton Concert Party
being included in the Whitewash Circular, a document
for which Mr Morton was responsible. Mr Morton was
therefore aware that the trusts which he had set up
for the benefit of three of his four sons were regarded
by the Panel as acting in concert with him; and
(c) Mr Morton had the opportunity to consult the Executive
and his advisers, but chose not to do so.
Mr Morton has apologised to the Executive for the breaches
of the Code in relation to Armour described above. Mr Morton
has co-operated fully with the Executive throughout its
investigation and has been open and transparent in his
dealings with the Executive. Mr Morton accepted that he
should be regarded as acting in concert with his sons and
agreed to make an offer for Armour.
Nonetheless, Mr Morton's actions showed a disregard for
the Code and his previous breaches of the Code must also
be taken into consideration in determining the appropriate
disciplinary sanction.
Mr Morton is hereby criticised for his conduct in this
case and his record of failing to comply with his obligations
under the Code. Mr Morton has agreed the facts set out
in this statement and has accepted this sanction in accordance
with Section 11(a) of the Introduction to the Code.
23 February 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEAFADAFXSEFF
Armour Group (LSE:AMR)
과거 데이터 주식 차트
부터 12월(12) 2024 으로 1월(1) 2025
Armour Group (LSE:AMR)
과거 데이터 주식 차트
부터 1월(1) 2024 으로 1월(1) 2025
