TIDMDL.
RNS Number : 7864I
Dealogic (Holdings) PLC
21 June 2011
21 June 2011
Dealogic (Holdings) plc
Dealogic announces intention to cancel admission to trading on
AIM
Dealogic (Holdings) plc (LSE DL, "Dealogic" or "the Company"),
announces that it is seeking approval for the cancellation of
admission to trading of its ordinary shares on AIM ("the
Delisting"). A shareholder meeting will be held on 7 July 2011 to
seek approval for the Delisting with the Delisting effective,
subject to that approval, on 19 July 2011.
Background to the delisting
The Company was admitted to trading on AIM in May 2004. Since
that time, the Company has performed well, with revenues increasing
from $59.1 million in 2004 to $103.6 million in 2010 and profit
before tax increasing from $19.2 million in 2004 to $38.6 million
in 2010 (an increase of 100.7 per cent.). On its admission to
trading on AIM, the market value of the Company was GBP153.9
million. The Company's market value now stands at GBP156.5 million,
although it has returned capital of GBP50.3 million to Shareholders
since admission to AIM. The equivalent increase in value therefore
(taking into account the current market value and the capital
returned compared to the original market value) is approximately
34.3 per cent.
The Directors believe that much of the lack of improvement in
the value of the Company, given the improvement in performance, is
due to the limited liquidity of the Ordinary Shares. For example,
during the last 12 months, trading in the Ordinary Shares has
occurred on only 131 days out of a possible 252 trading days and
the 30 day average traded volume is 8,915 Ordinary Shares. The
Company estimates that the free float (that is Shareholders who are
not Directors, employees or former employees) currently comprises
less than 10 per cent. of the issued share capital.
In preparing their recommendation in favour of the Delisting,
the Directors have taken into account the following
considerations:
-- the AIM listing does not, in itself, offer investors
meaningful liquidity or marketability of the Ordinary Shares or the
opportunity to trade in meaningful volumes or with frequency.
Further, the difference (the "spread") between the prices being
quoted to buy Ordinary Shares (the "bid price") and sell Ordinary
Shares (the "ask price") is currently nearly 5 per cent. of the bid
price. This means the cost of buying and selling Ordinary Shares is
relatively expensive for investors;
-- given the Company's cash and borrowing capacity, it is
unlikely that the Company will need to raise money through a new
share issue (even for a significant acquisition) or to issue shares
in connection with an acquisition and, therefore, there is no
expectation of a material increase in the number of shares in free
float;
-- the lack of correlation between the Company's share price and
its operating performance is reducing the overall effectiveness of
the Company's employee share incentive plans; and
-- the ongoing costs and regulatory requirements of maintaining
an AIM listing are not a justifiable expense.
Given the above, the Directors believe that greater shareholder
value will ultimately be derived by operating the Company's
business off-market and consider it to be in the best interests of
the Company and its Shareholders to seek a Delisting at this
time.
The Company appreciates that many Shareholders may not want, or
be able, to hold shares in an unlisted company. Therefore the
Company will communicate with major Shareholders to ascertain their
interest in a buy back of Ordinary Shares. Once interest levels
have been established and the Company has arranged appropriate
financing, the Company proposes to make an offer to Shareholders to
buy back their Ordinary Shares. The Company intends to offer
Shareholders a price of 330 pence per share, representing a premium
of 4 per cent. over the mid market closing price of an Ordinary
Share on 20 June 2011, the day before the announcement of the
Delisting. This price also represents a premium to the all time
high share price. Whilst the Company proposes to make this offer to
buy back shares, it also welcomes any Shareholder who wishes to
continue to hold their Ordinary Shares in the Company once
delisted.
Current trading and prospects
The Company's performance in 2011 is ahead of the Directors'
expectations. Revenue for the first half of the year is expected to
be approximately 19 per cent. ahead of the first half of 2010, in
part due to increased transaction revenues resulting from increased
market activity.
Normal operating costs will increase by 22 per cent., with staff
numbers increasing by 14 per cent. since this time last year, as
the Company continues to invest in the business. As a result,
underlying operating profit will increase by approximately 16 per
cent. In addition, the Company incurred non-recurring expenses of
approximately $2 million related to participation in an acquisition
auction in which the Company was not the winning bidder. These
expenses are not deductible for tax purposes, thereby increasing
the effective tax rate, and resulting in a reduction in profit
after tax of approximately 4 per cent. compared to the same period
in 2010.
The weighted average number of shares in issue has reduced by
24.8 per cent. due to the full effect in the current period of the
reduced number of shares in issue since the tender offer in June
2010, which has a consequent positive effect on diluted earnings
per share.
While the Board remains cognisant that the current political and
economic turmoil could potentially impact the capital markets in
which the Company operates in the short term, the Board remains
confident in the long term prospects of the business.
Effect of the Delisting on Shareholders
The principal effects of the Delisting would be that:
-- there would no longer be a formal market mechanism enabling
Shareholders to trade their Ordinary Shares on AIM;
-- the Company would not be bound to announce material events,
administrative changes or material transactions, nor to announce
interim or final results;
-- the Company would no longer be required to comply with any of
the additional specific corporate governance requirements for
companies admitted to trading on AIM;
-- the Company will no longer be subject to the AIM Rules and
Shareholders will no longer be required to vote on certain matters
as provided in the AIM Rules; and
-- upon the Delisting becoming effective, the Company's CREST
facility will be cancelled and Shareholders who hold Ordinary
Shares in uncertificated form prior to Delisting will receive share
certificates.
Shareholders should note, however, that the Company will
nevertheless remain subject to the provisions of the City Code on
Takeovers and Mergers for a period of up to ten years after the
delisting.
Immediately following the Delisting, there will be no market
facility for dealing in the Ordinary Shares and no price will be
publicly quoted. As a result, the Board recognises that the
Delisting will make it more difficult for the Shareholders to buy
and sell Ordinary Shares should they want to do so. In view of
this, and in order to assist Shareholders, the Board intends, at an
appropriate time following the Delisting, to facilitate a dealing
arrangement to enable Shareholders to trade the Ordinary Shares.
Once the facility has been arranged, details will be made available
to Shareholders.
In addition, the Delisting might have either positive or
negative taxation consequences for Shareholders. Shareholders who
are in any doubt about their tax position should consult their own
professional independent adviser.
The Board intends, however, to continue to:
-- hold general meetings in accordance with the applicable
statutory requirements and the Company's articles of association;
and
-- provide copies of the Company's annual report and audited
accounts to Shareholders.
Following the Delisting
The Company will continue to work at maximising value for its
Shareholders which the Directors believe will be easier to achieve
if the Delisting is approved as management time can be focussed on
driving the business forward.
The Company intends to continue paying dividends generally in
line with the Company's financial results.
Carl Anderson and Joan Beck have agreed to remain as independent
non-executive directors on the Board.
Process for Delisting
In accordance with Rule 41 of the AIM Rules, the Company has
notified the London Stock Exchange of the intention to delist
subject to Shareholder approval. Under the AIM Rules, it is a
requirement that the Delisting is approved by the requisite
majority of Shareholders voting at the General Meeting (being not
less than 75 per cent. of the votes cast).
The Company will send a circular to Shareholders shortly
convening a General Meeting. The Resolution set out in the Notice
of General Meeting in the circular seeks Shareholders' approval of
the Delisting. Subject to the Resolution approving the Delisting
being passed at the General Meeting, it is anticipated that trading
in the Ordinary Shares on AIM will cease at the close of business
on 18 July 2011 with Delisting taking effect at 7.00 a.m. on 19
July 2011.
Irrevocable Undertakings
The Company has received irrevocable undertakings from each of
the directors of the Company and Simon Hessel, who together hold
38,457,472 Ordinary Shares, representing 78 per cent. of the
current Issued Ordinary Share Capital, that they will vote in
favour of the Resolution.
Exchange Rights Agreement
Thomas Fleming does not currently hold any Ordinary Shares but
instead has a right to exchange his interest in the Company's US
subsidiary, Dealogic LLC, for up to 9,083,748 Ordinary Shares. The
Company, Thomas Fleming and others have entered into the ERA Deed
of Amendment pursuant to which the Exchange Rights Agreement will
be amended so as to remove the obligation for the Company to
provide shares which are traded on AIM on the exercise of the
exchange right.
Existing Share Options
The rights of Optionholders under the Share Option Schemes will
remain unaffected by the Delisting. In particular, the Delisting
will not cause any options which are not currently exercisable to
become exercisable.
General Meeting
The General Meeting of the Company will be held at Thanet House,
231-232 Strand, London WC2R 1DA at 3.00 p.m. on 7 July 2011. At the
General Meeting, the Delisting will be proposed.
The Directors unanimously recommend that you vote in favour of
the Resolution as they have undertaken to do so in respect of their
own beneficial holdings of 31,553,573 Ordinary Shares, representing
64 per cent. of the existing Issued Ordinary Share Capital.
Enquiries
Dealogic (Holdings) PLC Tel: 020 7379 5650
Rick McHattie, CFO
J.P. Morgan Cazenove (NOMAD) Tel: 020 7742 4000
Andrew Hodgkin
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Dealogic (LSE:DL.)
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Dealogic (LSE:DL.)
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