TIDMCNKS
RNS Number : 2918Z
Cenkos Securities PLC
09 December 2014
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR
INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, NEW ZEALAND,
CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR INTO ANY OTHER
JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH
OF ANY APPLICABLE LAW
9 December 2014
Cenkos Securities plc
("Cenkos" or the "Company")
Proposed Tender Offer and Notice of General Meeting
The Board announced, on 17 September 2014, in the Company's
interim report for the six months ended 30 June 2014 that as a
result of the Company's recent financial performance, it was, in
addition to the announcement of an interim dividend payment of 7.0
pence per Ordinary Share in respect of the first half of 2014,
evaluating means of returning further value to Shareholders during
the remainder of 2014.
The Company today announces a proposed tender offer to be made
by Smith & Williamson to Qualifying Shareholders to purchase
and/or procure the purchase by an Affiliate of up to 5,727,340
Ordinary Shares, representing approximately nine per cent. of the
Company's issued Ordinary Shares, at a fixed price of GBP1.88 per
Ordinary Share, in accordance with the terms and conditions of the
Tender Offer set out in Part II of the Circular being sent to
Shareholders shortly.
The Circular will shortly be available from the Company's
website at www.cenkos.com.
The implementation of the Tender Offer requires the approval of
Shareholders and a Notice of General Meeting accompanies the
Circular which convenes a General Meeting to be held at 6.7.8
Tokenhouse Yard, London EC2R 7AS at 10.00 a.m. on 6 January 2015.
The Resolution to approve the purchase of Ordinary Shares pursuant
to the Tender Offer at a fixed price of GBP1.88 pence per Ordinary
Share will be proposed at the General Meeting.
Capitalised terms used in this announcement shall have the
meanings given to them in the Circular referred to above.
The Tender Offer
Smith & Williamson, acting as principal, is proposing to
make a Tender Offer to purchase, and/or procure the purchase by an
Affiliate (in each case, acting as principal) of, up to 5,727,340
Ordinary Shares, representing approximately nine per cent. of the
Company's issued share capital as at 8 December 2014 (being the
latest practicable date prior to the posting of the Circular), at
the Tender Offer Price. The Tender Offer Price represents a premium
of approximately 2.7 per cent. to the average middle market closing
price per Ordinary Share of GBP1.83 per Ordinary Share as derived
from the LSE for the five Business Days ended on 8 December 2014
(being the latest practicable date prior to the posting of the
Circular).
The Tender Offer is open to all Qualifying Shareholders on the
Company's share register at the Record Time. Qualifying
Shareholders are invited to participate in the Tender Offer by
tendering up to a maximum of nine per cent. of the Ordinary Shares
registered in their name at the Record Time (rounded down to the
nearest whole Ordinary Share), such percentage to be adjusted
downwards in the event that any Ordinary Shares are issued before
the Record Time whether pursuant to the exercise of an Option or
otherwise. Qualifying Shareholders are entitled to tender such
lower proportion of their Tender Offer Entitlement as Qualifying
Shareholders may see fit.
The Tender Offer will also present Qualifying Shareholders with
an opportunity to sell more than their Tender Offer Entitlement to
the extent that other Qualifying Shareholders tender less than
their full Tender Offer Entitlement. If the number of Ordinary
Shares validly tendered exceeds 5,727,340 and if and to the extent
that any Qualifying Shareholder has tendered less than his/her
Tender Offer Entitlement, 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 5,727,340.
Full terms and conditions of the Tender Offer are set out in
Part II of the Circular.
Expected Timetable of Events
Announcement of the Tender Offer 9 December 2014
Tender Offer opens 9 December 2014
Latest time and date for receipt of 10.00 a.m. on 2 January
Forms of Proxy 2015
General Meeting 10.00 a.m. on 6 January
2015
Latest time and date for receipt of 1.00 p.m. on 6 January
Tender Forms and TTE Instructions from 2015
CREST Shareholders
Record Time for the Tender Offer 5.00 p.m. on 6 January
2015
Announcement of the results of the 7 January 2015
Tender Offer
Cheques despatched for certificated On or before 16 January
Ordinary Shares purchased pursuant 2015
to the Tender Offer and payment through
CREST for uncertificated Ordinary Shares
purchased pursuant to the Tender Offer
CREST accounts credited with uncertificated On or before 16 January
Ordinary Shares unsuccessfully tendered 2015
and despatch of balance share certificates
for unsold certificated Ordinary Shares
Notes:
1. The above times and/or dates are indicative only and may
change. If any of the above times and/or dates change, the revised
times and/or dates will be notified by announcement through a
Regulatory Information Service.
2. All references to times in this announcement are to London
times unless otherwise stated.
The Tender Offer is not being made, directly or indirectly, in
or into, or by any means or instrumentality of interstate or
foreign commerce of, or any facilities of a national securities
exchange of, the United States, Canada, Australia, New Zealand,
Japan or the Republic of South Africa or any other Restricted
Jurisdiction. Copies of the Tender Form are not being and must not
be mailed or otherwise distributed or sent in or into the United
States, Canada, Australia, New Zealand, Japan or the Republic of
South Africa including to Shareholders with registered addresses in
these jurisdictions or to persons whom the Company knows to be
trustees, nominees or custodians holding Ordinary Shares for such
persons.
Smith & Williamson Corporate Finance, which is authorised
and regulated by the Financial Conduct Authority, is acting for the
Company. Neither Smith & Williamson Corporate Finance nor Smith
& Williamson nor Smith & Williamson's Affiliates are acting
for anyone else in connection with the Tender Offer and will not be
responsible to anyone other than the Company for providing the
protections afforded to customers of Smith & Williamson
Corporate Finance and/or Smith & Williamson and/or its
Affiliates or for affording advice in relation to the Tender Offer,
the contents of the Circular or any transaction, arrangement or
other matter described in the Circular.
Neither Smith & Williamson Corporate Finance nor Smith &
Williamson nor its Affiliates has authorised the contents of, or
any part of, this announcement or the Circular and no liability
whatsoever is accepted by Smith & Williamson Corporate Finance,
Smith & Williamson or Smith & Williamson's Affiliates for
the accuracy of any information or opinions contained in this
announcement or the Circular or for the omission of any
information. Smith & Williamson Corporate Finance, as nominated
adviser and broker to the Company, owes certain responsibilities to
the London Stock Exchange which are not owed to the Company or the
Directors.
Enquiries:
Jim Durkin
Chief Executive Officer
Cenkos Securities plc +44 20 7397 8900
Dr Azhic Basirov / David Jones / Ben
Jeynes
Nominated Adviser
Smith & Williamson Corporate Finance
Limited +44 20 7131 4000
David Rydell / Duncan Mayall
Bell Pottinger +44 20 7861 3800
Background to and reasons for the Tender Offer
Following the Company's strong financial results in the first
half of 2014 reported in the Company's interim results announced on
17 September 2014, the Board has evaluated means of delivering
returns to Shareholders, in addition to the interim dividend paid
on 6 November 2014. Current trading is in line with expectations.
Although the Board intends to retain sufficient capital and
reserves to meet the Company's regulatory capital and cash
requirements after taking account of the likely future working
capital needs and potential growth requirements of the Company, the
Board has decided to return up to approximately GBP10.8 million to
Shareholders by way of the Tender Offer.
Benefits of the Tender Offer
The benefits of the Tender Offer, compared to other available
options for a return of capital to Shareholders, are that the
Tender Offer:
(a) provides those Qualifying Shareholders who wish to sell
Ordinary Shares with the opportunity to do so;
(b) allows the Company to broaden the return of cash to include
those Qualifying Shareholders whose Ordinary Shares might not
otherwise be purchased by the Company through a buy back in the
market;
(c) enables Qualifying Shareholders to decide whether to tender
none, some, all, or in excess of their Tender Offer Entitlement
within the overall limits of the Tender Offer;
(d) enables those Qualifying Shareholders who do not wish to
receive capital at this time to maintain their full investment in
the Company;
(e) enables Ordinary Shares to be sold free of commissions or
charges that would otherwise be payable if Qualifying Shareholders
were to sell their shares through their broker; and
(f) enhances earnings per share in respect of Ordinary Shares
not tendered under the Tender Offer.
The Tender Offer
Smith & Williamson, acting as principal, is proposing to
make a Tender Offer to purchase and/or procure the purchase by an
Affiliate (in each case, acting as principal) of, up to 5,727,340
Ordinary Shares, representing approximately nine per cent. of the
Company's issued share capital as at 8 December 2014 (being the
latest practicable date prior to the posting of the Circular), at
the Tender Offer Price. The Tender Offer Price represents a premium
of approximately 2.7 per cent. to the average middle market closing
price per Ordinary Share of GBP1.83 per Ordinary Share as derived
from the LSE for the five Business Days ended on 8 December 2014
(being the latest practicable date prior to the posting of the
Circular).
The Tender Offer is open to all Qualifying Shareholders on the
Company's share register at the Record Time. Qualifying
Shareholders are invited to participate in the Tender Offer by
tendering up to, subject to the below, a maximum of nine per cent.
of the Ordinary Shares registered in their name at the Record Time
(rounded down to the nearest whole Ordinary Share), such percentage
to be adjusted downwards in the event that any Ordinary Shares are
issued before the Record Time whether pursuant to the exercise of
an Option or otherwise. Qualifying Shareholders are entitled to
tender such lower proportion of their Tender Offer Entitlement as
Qualifying Shareholders may see fit.
The Tender Offer will also present Qualifying Shareholders with
an opportunity to sell more than their Tender Offer Entitlement to
the extent that other Qualifying Shareholders tender less than
their full Tender Offer Entitlement. If the number of Ordinary
Shares validly tendered exceeds 5,727,340 and if and to the extent
that any Qualifying Shareholder has tendered less than his/her
Tender Offer Entitlement, 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 5,727,340.
Full terms and conditions of the Tender Offer are set out in
Part II of the Circular.
Repurchase Agreement
Under the terms of the Repurchase Agreement, Smith
&Williamson has the option to sell, through an on market
transaction, all of the Ordinary Shares acquired by it and/or its
Affiliate, in each case as principal, pursuant to the Tender Offer
to the Company at a price per Ordinary Share equal to the Tender
Offer Price (the "Put Option"). Also under the Repurchase
Agreement, the Company has the right to require Smith &
Williamson to sell (and/or procure the sale of) all of the Ordinary
Shares acquired by Smith & Williamson and/or its Affiliate, in
each case as principal, pursuant to the Tender Offer to the Company
at a price per Ordinary Share equal to the Tender Offer Price (the
"Call Option").
The Company intends to cancel any Ordinary Shares purchased by
it under the Repurchase Agreement.
Overseas Shareholders
The attention of Qualifying Shareholders who are citizens,
residents or nationals of countries outside the UK wishing to
participate in the Tender Offer is drawn to the paragraph entitled
"Overseas Shareholders" in Part II of the Circular.
The Tender Offer is not available to Shareholders with an
address in the United States, Canada, Australia, New Zealand, the
Republic of South Africa or Japan or any other Restricted
Jurisdiction. Overseas Shareholders should note that they should
satisfy themselves that they have fully observed any applicable
legal requirements under the laws of their relevant jurisdiction if
they tender Ordinary Shares in the Tender Offer.
Taxation
A summary of the taxation consequences of the Tender Offer for
UK resident Shareholders is set out in Part III of the Circular. It
should be noted that this refers to the current system of taxation.
Shareholders are advised to consult their own professional advisers
regarding their own tax position.
Qualifying Optionholders
Qualifying Optionholders who wish Ordinary Shares arising upon
exercise of Qualifying Options to comprise part of their Tender
Offer Entitlement must exercise their Qualifying Options by 12.00
noon on 18 December 2014 in order to be recorded on the Register at
the Record Time.
Conditional upon approval of the Resolution by Shareholders and
the Tender Offer becoming unconditional, the Company is offering
all Qualifying Optionholders the opportunity to cancel up to nine
per cent. of their Qualifying Options ("Qualifying Option
Entitlement") for a cash option cancellation payment amount which
is equal to the Tender Offer Price less a deduction for the
exercise price which would otherwise be payable on the equivalent
exercise of the Qualifying Option. Such payments will be made
subject to PAYE income tax and employee national insurance (or
similar charges) withholding. Qualifying Optionholders will be able
to cancel more than their Qualifying Option Entitlement to the
extent that other Qualifying Optionholders cancel less than their
Qualifying Option Entitlement. If applications to cancel Qualifying
Options representing in excess of 956,073 Ordinary Shares are made
and if and to the extent that any Qualifying Optionholder has
sought to cancel less than his/her Qualifying Option Entitlement,
surplus applications for cancellation will be accepted in
proportion to the number of additional Ordinary Shares represented
by Qualifying Options in respect of which application for
cancellation has been validly made so that the total Qualifying
Options cancelled do not represent Ordinary Shares in excess of
956,073.
Further details have been sent to Qualifying Optionholders
separately.
Action to be taken
Tender Offer
The procedure for tendering Ordinary Shares depends on whether
Ordinary Shares are held in certificated form or uncertificated
form and is summarised below:
(a) Ordinary Shares held in certificated form
Qualifying Shareholders who hold Ordinary Shares in certificated
form and who wish to participate in the Tender Offer should follow
the instructions on the Tender Form accompanying the Circular and
return it to the Receiving Agent to arrive by no later than 1.00
p.m. on 6 January 2015. Qualifying Shareholders who hold their
Ordinary Shares in certificated form should also send their share
certificate(s) in respect of the Ordinary Shares tendered with
their Tender Form.
(b) Ordinary Shares held in uncertificated form
Qualifying Shareholders who hold their Ordinary Shares in
uncertificated form (that is, in CREST) and who wish to participate
in the Tender Offer should tender electronically through CREST so
that the TTE Instruction settles no later than 1.00 p.m. on 6
January 2015.
Further details of the procedures for tendering and settlement
are set out in Part II of the Circular.
Shareholders who do not wish to participate in the Tender Offer
should not complete the Tender
Form and should not make a TTE Instruction.
General Meeting
Shareholders will find enclosed with the Circular a Form of
Proxy for use in connection with the General Meeting. Whether or
not Shareholders intend to attend the General Meeting in person,
they are asked to complete and sign the Form of Proxy and return it
in accordance with the instructions printed thereon as soon as
possible, but in any event so as to be received by post to Capita
Asset Services, PXS1, 34 Beckenham Road, Beckenham, Kent BR3 4ZF
not later than 10.00 a.m. on 2 January 2015.
If Shareholders hold their Ordinary Shares in uncertificated
form (that is, in CREST) they may vote using the CREST proxy voting
service in accordance with the procedures set out in the CREST
manual (please also refer to the accompanying notes to the Notice
of the General Meeting set out at the end of the Circular). Proxies
submitted via CREST must be received by the Registrars not later
than 10.00 a.m. on 2 January 2015.
The appointment of a proxy will not prevent Shareholders from
attending and voting in person at the General Meeting, or any
adjournment thereof, should they wish to do so.
Intentions of the Directors in relation to the Tender Offer
Any increase in a shareholding in the Company's issued ordinary
share capital to 10 per cent. or more would require the prior
approval of the FCA under Part XII of the Financial Services and
Markets Act 2000. So as not to delay the Tender Offer and the
resultant return of capital to Shareholders, Jim Durkin and Paul
Hodges have agreed to tender their entire Tender Offer Entitlement,
subject to such scaling back as is necessary, at the absolute
discretion of Smith & Williamson, to maintain their existing
percentage shareholdings in the Company's issued ordinary share
capital. As a result, the individual shareholdings of Jim Durkin
and Paul Hodges will not increase to 10 per cent. or more of the
Company's issued ordinary share capital. Jeremy Warner Allen and
Joe Nally, whose respective interests in the Company's issued
ordinary share capital are set out in the table below, have also
agreed to be treated in the same way as Jim Durkin and Paul Hodges.
Jim Durkin, Paul Hodges, Jeremy Warner Allen and Joe Nally are
therefore being treated differently to other Shareholders. The
respective interests of the Directors in the Company's issued
ordinary share capital as at 8 December 2014 (being the latest
practicable date prior to the posting of the Circular) are set out
in the table below:
Name Number of Ordinary Percentage of current
Shares issued share capital
(%)
Gerry Aherne 36,200 0.06
Jim Durkin 5,726,716 9.00
Jeff Hewitt 36,480 0.06
Anthony Hotson 20,864 0.03
Mike Chilton 13,716 0.02
Jeremy Warner Allen 1,562,916 2.46
Joe Nally 1,254,216 1.97
Paul Hodges 5,864,966 9.22
None of the Directors other than Jim Durkin, Paul Hodges, Jeremy
Warner Allen and Joe Nally currently intend to tender any of their
Ordinary Shares under the Tender Offer.
Recommendation
The Directors consider that the Tender Offer is in the best
interests of Shareholders as a whole and unanimously recommend that
Shareholders vote in favour of the proposed Resolution.
The Directors, Smith & Williamson Corporate Finance and
Smith & Williamson are making no recommendation to Qualifying
Shareholders in relation to participation in the Tender Offer
itself. Whether or not Qualifying Shareholders decide to tender
their Ordinary Shares will depend, amongst other things, on their
view of the Company's prospects and on their own individual
circumstances (including their own tax position).
If you are in any doubt as to the action you should take, you
are recommended to seek your own independent advice.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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