TIDMINFS
RNS Number : 5018A
Infoserve Group PLC
02 February 2011
Infoserve Group plc
Proposed Cancellation of Admission, proposed change of name
and
Notice of General Meeting
Infoserve Group plc (the "Company") (AIM: INFS), the online
local business search and directory specialist, announces its
intention to seek Shareholder approval for the cancellation of
admission to trading on AIM of the Ordinary Shares. The Company is
also seeking Shareholder approval to change its name to CityVisitor
Group plc.
An explanatory circular (the "Circular") will be posted to
Shareholders today. The Circular will set out the background to and
reasons for the Proposals, why the Directors believe the Proposals
are in the best interests of the Company and its Shareholders as a
whole and why they recommend that Shareholders vote in favour of
the Resolutions as they intend to do in respect of their own
beneficial holdings of Ordinary Shares.
A General Meeting of the Company will be held at 9.30 am on
Friday, 18 February 2011 at The Cafe Bar, Multiflight Training
Centre, South Side Aviation, Leeds Bradford International Airport,
Leeds LS19 7UG at which resolutions will be proposed to approve the
Proposals. A notice convening the General Meeting is set out in the
Circular.
For further information, please contact:
Infoserve Group plc
Steve Barnes, Executive Chairman Tel: 0113 238 6200
steve.barnes@infoserve.com www.infoservegroup.com
Jonathan Simpson, Finance Director
jonathan.simpson@infoserve.com
WH Ireland Limited Tel: 0161 832 2174
Robin Gwyn
Background to the Cancellation
The Ordinary Shares were admitted to trading on AIM on 23 June
2006. For some time the Board has been concerned that liquidity in
the Ordinary Shares has become progressively more limited,
especially now that more than 89% of the Ordinary Shares are in the
hands of the Directors. In conjunction with its advisers therefore,
the Board has conducted a review of the costs and benefits
associated with having the Company's shares traded on AIM.
As a result of this review, the Board has concluded that it is
no longer in the best interests of the Company or its Shareholders
as a whole to maintain the admission to trading on AIM of the
Ordinary Shares and intends to seek the authority of Shareholders
for the cancellation of the Admission.
Rationale for the Cancellation
The Directors have concluded that a resolution should be put to
Shareholders to approve a Cancellation for the following
reasons:
-- there is a lack of liquidity in the Ordinary Shares which, in
the Directors' view, has contributed to the decline in the market
capitalisation of the Company; the Directors believe that this lack
of liquidity makes it very difficult for anyone wishing to buy a
substantial number of shares to do so at a reasonable price. In
addition the small market capitalisation of the Company has made it
difficult for the Company to attract broad analytical coverage or
investor interest, which, the Directors believe, prevents anyone
wishing to sell any substantial number of shares from doing so at a
reasonable price;
-- the ability to secure new equity participation at levels
which fairly reflect the underlying equity value of the Company, in
the opinion of the Directors, is significantly undermined by the
low share price. The Directors believe that this inability to
access additional equity capital at a reasonable valuation severely
limits the Company's ability to grow the business and achieve its
strategic aims and objectives; and
-- the Directors believe that the costs associated with
maintaining Admission are now disproportionate to the value
provided by Admission, and the Directors expect savings arising
from the Cancellation to amount to approximately GBP60,000 per
annum.
Against this background, the Board has spent significant time
evaluating different strategic alternatives for the Company. These
deliberations have taken into account the current financial
position of the Company, the Company's growth strategy, the current
financial climate and the relative benefits compared to the ongoing
costs of maintaining Admission. The Board has also taken into
account the views of the Company's large Shareholders, as well as
assessing the position of the Shareholders as a whole.
Following careful consideration of these factors with its
advisers, the Board has decided that the disadvantages and the
ongoing costs of maintaining Admission outweigh the benefits that
Admission provides to the Company.
Current Trading
On 28 January 2011, the Company issued the following trading
update:
"The Company estimates that the severe weather in late November
and December resulted in reduced revenues, and therefore cash, of
around GBP60,000. It is unlikely that this trading shortfall will
be recovered over the remaining three months of the financial year
and the Directors therefore expect the Company's final results for
the year ending 31 March 2011 to be below previous
expectations."
A number of cost saving measures are being put into place in
order to preserve cash, including the cessation of future funding
to 2i Local Limited, the Company's joint venture with Iliffe News
and Media Limited ("INML"). Despite this, the Directors expect that
Infoserve will continue to have a strong trading relationship with
INML.
The Company now expects that the cash shortfall from trading,
together with the Company's planned investment in new products, the
cost of the proposed cancellation of Admission, and the potential
write off of loans to the joint venture may require the remaining
GBP190,000 of the existing loan facility with David Hood to be
drawn down before the end of the current financial year, slightly
earlier than previously expected.
Strategy following the Cancellation
Following the Cancellation, the Directors intend to continue to
seek to maximize the value of the Company's assets. The Company has
seen many of its SME customers go through difficult trading times
for the last twelve months and the Directors continue to look for
ways to develop the Company's product offering and value
proposition to maintain volumes and revenues. The Company has seen
little improvement in confidence levels even from those business
sectors that are experiencing growth, and the Directors believe
that discretionary marketing spend by SMEs, even in the online
sector, has been affected.
Although the Directors see little change in macro economic
circumstances in the economy as a whole, they intend to continue to
investigate ways to adapt the business to the current economic
climate. In particular, the Directors believe that strategic
alliances, investment in existing products and exploration of new
products, and investment in the sales force remain the best ways to
achieve Shareholder value.
The Company intends to continue to invest in growth and
development, but will do so slowly and in a planned, steady and
risk averse way in keeping with the current economic climate. In
order to achieve this, the Directors believe that it is essential
that the Company continues to drive down costs, especially those
which do not add to its customer offering.
Cancellation Process
In accordance with Rule 41 of the AIM Rules, the Company has
notified the LSE of the Cancellation. Under the AIM Rules, it is a
requirement that the Cancellation is approved by the requisite
majority of Shareholders voting at the General Meeting (being not
less than 75 per cent. of the votes cast in person or by proxy).
Accordingly, the Resolution numbered 1 set out in the Notice of
General Meeting seeks Shareholders' approval for the Cancellation.
The Resolution approving the Cancellation is not conditional on the
passing of the other Resolution. Subject to the Resolution
approving the Cancellation being passed at the General Meeting, it
is anticipated that trading in the Ordinary Shares on AIM will
cease at close of business on 2 March 2011 with the Cancellation
taking effect at 7.00 a.m. on 3 March 2011. Upon the Cancellation
becoming effective, WH Ireland Limited will cease to be nominated
adviser and broker to the Company.
Principal effects of the Cancellation
The principal effects of the Cancellation will include (inter
alia) the following:
(a) there will be no public stock market on which Shareholders
can trade their Ordinary Shares and, further, no other trading
facility (other than the Third Party Facility referred to in the
paragraph entitled "Transactions in the Ordinary Shares following
the Cancellation" below) will be available to enable trading of the
Ordinary Shares. Consequently following the Cancellation, there can
be no guarantee that a Shareholder will be able to purchase or sell
any Ordinary Shares;
(b) no price will be publicly quoted for the Ordinary
Shares;
(c) it is expected that the Ordinary Shares will continue to be
transferable through CREST;
(d) the Company will not be subject to the AIM Rules and,
accordingly, it will not (amongst other things) be required to
retain a nominated adviser or to comply with the requirements of
AIM in relation to annual accounts and half-yearly reports, the
disclosure of price sensitive information or the disclosure of
information on corporate transactions; and
(e) the Company will no longer be subject to the Disclosure
Rules and Transparency Rules of the UK Financial Services Authority
and will therefore no longer be required specifically to disclose
major shareholdings in the Company.
Shareholders who are in any doubt about their tax position
should consult their own professional independent adviser
immediately.
Shareholders should note that, even if the Cancellation becomes
effective, the Company will remain subject to the City Code on
Takeovers and Mergers (the "Code"). Accordingly, Shareholders will
continue to receive the minority and other protections afforded by
the Code in the event that an offer is made to Shareholders to
acquire their Ordinary Shares.
As the Ordinary Shares are currently admitted to trading on AIM,
the Company is not required to comply with the provisions of the UK
Corporate Governance Code. Nevertheless, the Company seeks, within
the practical confines of being a small company, to act in
compliance with the principles of good governance and the code of
best practice. Shareholders should note that following the
Cancellation, the Directors intend that the Company should continue
to seek to comply with these principles of good governance on the
same basis as currently. If the Cancellation becomes effective,
this will not affect the Company's position as a public company for
the purposes of the 2006 Act.
Transactions in the Ordinary Shares following the
Cancellation
In order to assist Shareholders who wish to trade in Ordinary
Shares following the Cancellation, the Board currently intends to
employ the services of a third-party matched bargain trading
facility (the "Third-Party Facility") for at least one year. Under
this Third-Party Facility, Shareholders or persons wishing to
acquire Ordinary Shares will be able to leave an indication with
the Third-Party Facility provider that they are prepared to buy or
sell at an agreed price. In the event that the Third-Party Facility
provider is able to match that order with an opposite sell or buy
instruction, the Third-Party Facility provider will contact both
parties and then effect the bargain. In these circumstances,
Shareholders who do not have their own broker may need to register
with any such Third-Party Facility provider as a new client. This
can take some time to process and, therefore, Shareholders who
consider they are likely to use this facility would be encouraged
to commence registration at the earliest opportunity.
Once such arrangements have been set up by the Company, details
will be made available to Shareholders on the Company's website
(www.infoservegroup.com).
If Shareholders wish to buy or sell Ordinary Shares on AIM they
must do so prior to the Cancellation becoming effective. As noted
above, in the event that Shareholders approve the Cancellation, it
is anticipated that the last day of dealings in the Ordinary Shares
on AIM will be 2 March 2011 and that the effective date of the
Cancellation will be 3 March 2011.
Communications with Shareholders
Following the Cancellation, there is no intention to change the
constitution of the Board and the Directors' current intention is
to continue to:
(a) hold general meetings in accordance with applicable
statutory requirements and the Articles; and
(b) post certain information relating to the Company, including
notices of general meetings, copies of the Company's audited
accounts and details of any arrangements made to assist
Shareholders to trade in Ordinary Shares, on its website
(www.infoservegroup.com) and to notify shareholders by post when
such communications are made available.
Proposed change of name
In order to align the name of the Company more closely with its
major product, the Company proposes, subject to the approval of
Resolution 2 set out in the Notice of General Meeting, to change
its name to CityVisitor Group plc following the Cancellation.
General Meeting
Set out at the end of the Circular is a notice convening a
General Meeting to be held at The Cafe Bar, Multiflight Training
Centre, South Side Aviation, Leeds Bradford International Airport,
Leeds LS19 7UG at 9.30 a.m. on 18 February 2011. The purpose of the
General Meeting is to seek Shareholders' approval for the
Proposals.
Recommendation
The Directors consider that the Resolutions are fair and
reasonable and in the best interests of the Company and its
Shareholders as a whole and the Directors unanimously recommend
that Shareholders vote in favour of the Resolutions to be proposed
at the General Meeting as they intend to do in respect of their own
beneficial holdings, amounting to, in aggregate, 52,617,549
Ordinary Shares representing approximately 89.07 per cent. of the
Company's current issued voting share capital.
Expected timetable of principal events
Last time and date for receipt of Forms 9.30 a.m. on 16 February
of Proxy 2011
General Meeting 9.30 a.m. on 18 February
2011
Last day of dealings of Ordinary Shares 2 March 2011
on AIM
Cancellation of Admission 3 March 2011
Definitions
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"2006 Act" the Companies Act 2006;
"Admission" admission to trading on AIM of the Ordinary
Shares;
"AIM" a market operated by the London Stock Exchange;
"AIM Rules" the AIM Rules for Companies governing the
admission to and operation of AIM published
by the LSE from time to time;
"Board" or "Directors" the directors of the Company as at the date
of this announcement or any duly authorised
committee thereof;
"Cancellation" the proposed cancellation of admission of
the Ordinary Shares to trading on AIM;
"Company" or "Infoserve" Infoserve Group plc;
"CREST" the relevant system (as defined in the
Uncertificated Securities Regulations 2001 (SI
2001 No. 3755), as amended) operated by Euroclear
UK & Ireland Limited in accordance with which
securities may be held or transferred in
uncertificated form;
"EMI Options" the enterprise management incentive options
to subscribe for Ordinary Shares granted
or to be granted by the Company to certain
directors and employees and former directors
and employees of the Company and its group;
"Form of Proxy" the form of proxy for use by Shareholders
in connection with the GM, which is enclosed
with the Circular;
"General Meeting" the general meeting of the Company to be
or "GM" held at The Cafe Bar, Multiflight Training
Centre, South Side Aviation, Leeds Bradford
International Airport, Leeds, LS19 7UG at
9.30 a.m. on 18 February 2011 (or any adjournment
thereof), notice of which is set out in the
Circular;
"LSE" London Stock Exchange plc;
"Ordinary Shares" ordinary shares of 5 pence each in the capital
of the Company;
"Proposals" the proposals set out in the Circular, comprising
the Cancellation and the proposed change
of name of the Company to CityVisitor Group
plc;
"Resolutions" the resolutions to be put to Shareholders
at the General Meeting as set out in the
notice of General Meeting which is set out
in the Circular;
"Share Options" the EMI Options and the Unapproved Share
Options;
"Shareholders" holders of Ordinary Shares;
"SME" small and medium-sized enterprises; and
"Unapproved Share the unapproved options to subscribe for Ordinary
Options" Shares granted by the Company to certain
directors and employees and former directors
and employees of the Company and its group.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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