NEB Netb2B2

RNS Number:1711J
Net b2b2 PLC
04 December 2007


Netb2b2 plc ("Netb2b2" or "the Company")

Notice of General Meeting

Netb2b2 plc (AIM:NEB) announces that, today, it has posted a notice to
Shareholders convening a General Meeting to be held on 21 December 2007 at the
offices of Smith & Williamson, 25 Moorgate, London EC2R 6AY at 09:45 a.m., at
which two resolutions will be proposed as ordinary resolutions, to be decided on
a poll, to approve the waiver of the requirements of Rule 9 of the Takeover Code
("the Rule 9 Waiver") in relation to a placing of ordinary shares of #0.10 each
in the Company ("Ordinary Shares") to Keith Young, the Company's Chairman ("the
Placing").

The Placing

Keith Young has entered into a conditional agreement (the "Subscription Letter")
with the Company to subscribe for 5 million Ordinary Shares ("Placing Shares")
at a price of #0.10 per share. The gross proceeds of the Placing, which amount
to #500,000, will be used to fund the on-going working capital requirements of
the Company. The Placing is conditional only on the Rule 9 Waiver, details of
which are set out below.

Under the terms of the Subscription Letter, assuming the Rule 9 Waiver is
approved by the Shareholders (other than Keith Young) at the General Meeting,
the Placing Shares will be issued to Mr Young in two tranches. The first tranche
of 2.5 million Ordinary Shares ("First Tranche") will be issued to Mr Young
immediately following the General Meeting. The balance of the Placing Shares
("Second Tranche") will be issued to him at a future date, being no later than
20 February 2008.

Application will be made to the London Stock Exchange plc for the Placing Shares
to be admitted to trading on AIM. In the event that the Shareholders (other than
Keith Young) approve the Rule 9 Waiver at the General Meeting, it is anticipated
that admission of the First Tranche will become effective and that dealings will
commence on 24 December 2007. The admission of the Second Tranche will become
effective following the issue of such Placing Shares to Mr Young and will be
notified to Shareholders at that time.

The Takeover Code

The Placing gives rise to certain considerations under the Takeover Code. Brief
details of the Panel, the Takeover Code and the protection they afford to
Shareholders are given below.

The purpose of the Takeover Code is to supervise and regulate takeovers and
other matters to which it applies. The Takeover Code is issued and administered
by the Panel. Netb2b2 is a company to which the Code applies and as such its
Shareholders are therefore entitled to the protections afforded by the Takeover
Code.

Under Rule 9 of the Takeover Code, any person who acquires an interest (as
defined in the Takeover Code) in shares which, taken together with shares in
which he is already interested and in which persons acting in concert with him
are interested, carry 30 per cent. or more of the voting rights of a company
which is subject to the Takeover Code, is normally required to make a general
offer to all the remaining shareholders to acquire their shares.

Similarly, where any person who, together with persons acting in concert with
him, is interested in shares which in aggregate carry not less than 30 per cent.
of the voting rights of such a company but does not hold more than 50 per cent.
of such voting rights, a general offer will normally be required if any further
interests in shares are acquired by any such person.

An offer under Rule 9 must be made in cash and at the highest price paid by the
person required to make the offer, or any person acting in concert with him, for
any interest in shares of the company during the 12 months prior to the
announcement of the offer.

Keith Young holds 1,375,826 Ordinary Shares and has options over a further
204,750 Ordinary Shares. As at the date of the notice of General Meeting, Mr
Young's interest in the issued share capital of the Company ("Issued Share
Capital") is 22.70 per cent., or 25.22 per cent. assuming only Mr Young
exercises his options. Following the issue of the First Tranche, Mr Young will
have an interest in 3,875,826 Ordinary Shares representing 45.27 per cent. of
the Issued Share Capital, or 46.55 per cent. assuming only Mr Young exercises
his options. As Mr Young will be interested in Ordinary Shares which in
aggregate carry not less than 30 per cent. of the voting rights of the Company
but does not hold more than 50 per cent. of such voting rights prior to the
issue of the Second Tranche, a general offer will normally be required if he
acquires any further interests in Ordinary Shares, other than the Second
Tranche.

Following the issue of the Placing Shares (ie both the First Tranche and Second
Tranche), Mr Young will have an interest in 6,375,826 Ordinary Shares
representing 57.64 per cent. of the Issued Share Capital, or 58.41 per cent.
assuming only Mr Young exercises his options.

The Panel has agreed to waive the obligation for Mr Young to make a offer under
Rule 9 that would otherwise arise on completion of the Placing and any
subsequent exercise of the options currently held by Mr Young, subject to the
approval of the Shareholders (other than Keith Young) at the General Meeting
voting on a poll. Accordingly, Resolutions 1 and 2 are being proposed at the
General Meeting and, to be passed, will require the approval of a simple
majority of votes cast on the poll by the Shareholders (other than Keith Young).
As the potential controller, Mr Young is not independent and is, therefore,
disenfranchised from voting.

Following completion of the Placing, Mr Young will hold more than 50 per cent.
of the Company's voting rights and may accordingly increase his aggregate
interest in Ordinary Shares without incurring any obligation under Rule 9 to
make a general offer.

Information on the Company

Audited financial information on the Company for the three years ended 30 June
2006 and the unaudited interim results for the six months to 31 December 2006
are set out in Appendix I of the Circular.

Since the release of the interim results in March 2007, the Company has
continued to implement

structural changes and reduce administrative overheads. The Board has also
sought to divest non-core operations where growth possibilities have been less
visible in order to focus more strongly on certain fast-growth niches in the
digital media and entertainment markets, extracting more value from established
relationships with blue chip clients that include ITV, BBC, ITN and Sky and
broadening its customer base through more effective sales and marketing.

However, the above actions continue to be slow in feeding through into improved
financial performance and profitability has continued to be depressed at the
Company's cScape subsidiary partially as a result of the problems experienced on
the major project alluded to in the interim results.

Unfortunately although it is possible that a contract might be obtained in the
future through the Group's Netpen division, it is considered prudent to provide
in full against the current work in progress. The One Stop Racing website has
proved disappointing in revenue terms and full provision has been made against
the assets of that operation.

On the positive side, encouraging progress has been made in resolving the
deficit resulting from a pension fund operated by a liquidated subsidiary of the
Group and it is currently expected that some write back will be made of the 
amount currently provided.

The net result of the above has been to put pressure on the Group's cash flow
and scope for the selective deferral of creditors mentioned in our interims has
significantly reduced. The Independent Directors have therefore become of the
view that it is very important that new equity is raised for the Group and have
welcomed Keith Young's offer to subscribe for the Placing Shares.

Save as disclosed in this paragraph, there have been no known material changes
to the financial or trading position of the Company since the last published
accounts.

Subject to the foregoing matters and any further matters resulting from
Company's ongoing structural review, this process is considered an important
stepping stone in the implementation of Netb2b2's strategic plans and there are
no current intentions that there will be any repercussions on the employment and
locations of the Group's places of business, any redeployment of fixed assets or
change to the continued employment of the Group's employees and management,
directly resulting from this further investment in the Company.

Information on Keith Young

Keith Young joined the Board in December 1999 and became executive Chairman in
2000. He has extensive experience in the internet, communications and publishing
sectors. He is a co-founder and deputy chairman of Group NBT plc, a listed
internet domain name and services provider. He was also a founder shareholder in
Easynet plc, a leading UK-based internet service provider.

Mr Young, who holds a degree in economics from the London School of Economics,
also has a broad background of investment in and management of companies in a
number of other sectors.

Mr Young was also a co-founder and non-executive director of Private Equity
Investor plc (formerly Net Investor plc), a listed information technology
investment company, together with Timothy Childs through a private company,
Chamelle Limited. Both Messrs Young and Childs stepped down from the board of
Private Equity Investor plc in October 2004.

In addition, Mr Young and Geoffrey Griggs are board members of Global News Net
Limited which has a subsidiary company, Firstlight Online Limited which provides
search and contextual advertising solutions for online publishers.

Action to be taken

You will find enclosed with the Notice of General meeting a form of proxy for
use at the General Meeting. Whether or not you are intending to be present at
the meeting, you are requested to complete this form of proxy, which should be
returned to the Company's registrars, Capita Registrars, The Registry, 34
Beckenham Road, Beckenham Kent BR3 4TU as soon as possible and, in any event, so
as to be received no later than 48 hours before the time of the General Meeting.
Completion and return of this form of proxy will not prevent you from attending
or voting at the General Meeting if you so wish.

Recommendation

The Directors, other than Keith Young ("Independent Directors"), who have been
so advised by Smith & Williamson Corporate Finance Limited, consider that the
proposed Rule 9 Waiver is in the best interests of the Company and the
Shareholders as a whole and unanimously recommend that you vote in favour of the
Resolutions 1 and 2 as they intend to do themselves in respect of their own
beneficial holdings amounting, in aggregate, to 533,577 Ordinary Shares
representing approximately 8.80 per cent. of the Issued Share Capital.

In providing advice to the Independent Directors, Smith & Williamson has taken
into account the commercial assessments of the Independent Directors. As the 
potential controller, Keith Young is not independent and therefore, under the 
Takeover Code, is disenfranchised from voting.

4 December 2007

For further information, please contact:

Smith & Williamson Corporate Finance Limited                 Tel: 020 7131 4000
Azhic Basirov / Siobhan Sergeant




                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
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