TIDMPKW
RNS Number : 5769F
Parkwood Holdings PLC
28 April 2011
Embargoed for 7.05am on 28 April 2011
Parkwood Holdings plc
("The Company")
28 April 2011
Cancellation of admission of Ordinary Shares to the Official
List of the UKLA Listing Authority and to trading on the London
Stock Exchange's market for listed securities and Tender Offer to
purchase Ordinary Shares
The Company has today sent a circular to shareholders seeking
shareholders' approval of resolutions to (i) approve the
cancellation of the admission of its ordinary shares to the
Official List of the UK Listing Authority and to trading on the
London Stock Exchange's market for listed securities, (ii)
authorise the purchase of up to 2.1 million Ordinary Shares by the
Company pursuant to a Tender Offer at a tender price of 70p per
Share and (iii) the adoption of new articles of association with
effect from completion of the proposed De-listing.
The following are direct extracts from the Circular:
"1. Introduction
Earlier today, the Company announced its proposals to:
a) Cancel admission of the Ordinary Shares to the Official List
and to trading on the Main Market (referred to herein as
"De-listing"); and
b) purchase up to 2,100,000 Ordinary Shares by way of a Tender
Offer.
The purpose of this letter is to set out the background to and
reasons for the Proposals and why your Board believes them to be in
the best interests of Shareholders as a whole. This letter also
includes a recommendation from the Board.
Resolution 1, which seeks Shareholder approval for the
De-listing, is being proposed as a special resolution and must be
passed on a show of hands by at least 75 per cent. of those
Shareholders present in person or by proxy or (being a corporation)
present by a duly authorised representative and voting or, on a
poll, by at least 75 per cent. of those Shareholders present in
person or by proxy or (being a corporation) present by a duly
authorised representative and voting, at the General Meeting.
Resolution 2, which is being proposed as a special resolution,
seeks authority for the Company to make market purchases of its
Ordinary Shares in relation to the Tender Offer (in substitution
for all existing authorities to make market purchases).
Resolution 3, which is being proposed as a special resolution,
adopts the New Articles. This resolution is conditional upon the
De-listing becoming effective.
As a substantial shareholder in the Company, Mr Tony Hewitt,
your Chairman, is considered to be a related party under Chapter 11
of the Listing Rules. As the Tender Offer could result in his
interest in the Company's share capital increasing from around 61
per cent to a maximum of 68 per cent. the Tender Offer is deemed
therefore to constitute a related party transaction in accordance
with Chapter 11 of the Listing Rules.
Accordingly, Mr Tony Hewitt has undertaken not to vote on
Resolution 2 at the General Meeting and has undertaken to take all
reasonable steps to ensure that any persons associated with him who
hold Ordinary Shares will abstain from voting on that
Resolution.
As a related party under the Listing Rules, Mr Tony Hewitt has
not taken part in the Board's consideration of the terms of the
Tender Offer - i.e. the amounts set aside for use in the Tender
Offer and the Tender Offer Price. The terms of the Tender Offer
have been determined solely by the Independent Directors.
A General Meeting is being convened at 12.00 p.m. on 16 May 2011
for the purpose of seeking Shareholder approval for the
Resolutions.
2. Rationale for De-listing
The Directors have for some time been deliberating the merits of
the Company's Ordinary Shares being admitted to the Official List
and to trading on the Main Market. For the reasons set out below,
the Directors have now concluded that the costs of retaining the
Company's listing outweigh the benefits and can no longer be
justified as being in the best interests of Shareholders.
The share price performance of the Company has been
disappointing for some time and the Directors believe that the
strengths of the business and its future potential are not, and
will continue not to be, reflected in the Company's share price.
The Directors believe that the principal reasons for this
under-valuation include a lack of liquidity impacted by the
structure of the Company's share register, the Company's lack of
size relative to other listed companies and also, historically, an
apparent complexity of, and variable performance within a number
of, the Group's businesses.
The Board has also concluded that the costs and regulatory
requirements associated with maintaining the Listing are a drain on
the Company's financial and management resources and outweigh its
benefits. Such quantifiable cash costs include fees paid to the
Company's financial advisers, lawyers, accountants and registrars,
annual fees paid to the London Stock Exchange and costs relating to
the release of regulatory announcements. In addition there is a
cost of management time which is used in meeting the ongoing
obligations of being a listed company. A particularly pertinent
example of this was the disposal of certain special purpose company
interests by the Company in 2009 which constituted a Class One
transaction under the Listing Rules and which proved to be costly
in terms both of advisory costs and Board level and senior
management involvement.
Your Board believes that these costs can no longer be justified
and that these resources would be better employed in developing the
business and, where appropriate, funding share buy-backs.
The Company has majority Shareholders in our Chairman, Mr Tony
Hewitt, together with his wife, Mrs Patricia Hewitt, both
personally and in their capacities as the Hewitt Trustees. The
Company has no institutional Shareholders on its share register and
the register of Shareholders is tightly held. As a consequence the
Company's free float is relatively small which has resulted in
consistently low trading volumes and a general lack of liquidity in
the Company's Ordinary Shares. The Company has actively bought back
over 300,000 Ordinary Shares under its Shareholder approved
buy-back authority at prices ranging from 36.75p to 55.75p per
share since June 2010. Without the Company buying in the market,
the Board believes it is unlikely that there would have been a
material level of liquidity in the shares and Shareholders
generally have a limited ability to trade any meaningful volume of
shares. The Directors also believe that the Company's share
buy-back program has supported the share price whilst in
operation.
In the Board's opinion, given the Company's ongoing
profitability and cash generation, it is unlikely that the Company
will need to raise money through a new share issue and therefore,
the lack of shares in free float and the Company's small market
capitalisation is likely to continue.
Additionally, given the low value placed on the shares, issuing
equity - for example to fund an acquisition - would in all
probability prove expensive. Further to this, should the Company
choose to undertake certain transactions in the future, Shareholder
consent may be required (under the Listing Rules) which could
result in significant legal and other advisory costs being
incurred.
The Board has therefore concluded that it would be in the best
interests of the Company and Shareholders as a whole if the
Company's admissions to the Official List and to trading on the
Main Market were cancelled.
Under the UKLA's Listing Rules, a de-listing can be effected by
a company after securing a special resolution (requiring at least
75% approval of those shareholders who vote) in general meeting and
the expiration of a period of not less than 20 business days from
the date of the shareholder approval. Under the London Stock
Exchange's Admission and Disclosure Standards, the Company must
advise the London Stock Exchange of the De-listing from the Main
Market not less than 20 business days before the date it intends
trading in the Ordinary Shares to be discontinued.
The Company will therefore submit a notice to cancel its
admission to the Official List and to trading on the Main Market
shortly after the General Meeting (assuming that Resolution 1 is
passed).
Resolution 1 set out in the Notice of General Meeting seeks
Shareholder approval for the De-listing. The Company has received
irrevocable undertakings from the Board and connected parties in
respect of 11,165,593 Ordinary Shares, representing approximately
61.02 per cent. of the issued share capital of the Company, either
to vote in favour of or procure that votes are cast in favour of
the De-listing. These irrevocable undertakings include 1,500,000
shares owned by Mrs Patricia Hewitt and 1,725,000 shares owned by
the Hewitt Trustees.
Assuming that Shareholders approve Resolution 1, the Company
will apply for the De-listing and it is proposed that the
De-listing would take place on 15 June 2011.
If the De-listing is approved by Shareholders, the Board intends
to operate the Company's business in the same manner, and with the
same objectives, as at present. The Board has no plans to alter the
existing employment rights, terms and conditions of the employees
of the Company nor to change the location of its business premises
or redeploy any of its fixed assets following conclusion of the
Proposals. However, Shareholders should note that following the
De-listing:
-- the Company will remain subject to the provisions of the
Takeover Code so long as it remains a public limited company and,
in any event, for a period of 10 years after it has ceased to be
admitted to the Official List. However, the regulatory regime which
applies solely to companies with shares admitted to the Official
List and to trading on the Main Market will no longer apply;
-- 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 corporate governance or regulatory requirements
applicable to companies admitted to the Official List and to
trading on the Main Market. These include, inter alia, that under
the Listing Rules transactions out of the ordinary course of
business or with related parties, which are of a certain size,
would no longer require prior Shareholder approval;
-- the Company would no longer be subject to the Disclosure and
Transparency Rules of the UK Financial Services Authority and
Shareholders would therefore no longer be required to disclose
major shareholdings in the Company and the announcement by the
Company of those disclosures would no longer be required;
-- the De-listing might have either positive or negative
taxation consequences for Shareholders; for example, once the
De-listing has become effective, the Ordinary Shares would no
longer be a qualifying investment for an ISA. If Shareholders are
however in any doubt about their own tax position, they should
consult a professional adviser immediately; and
-- Cancellation may have implications for Shareholders holding
shares in a Self-Invested Personal Pension (SIPP). For example
shares in unlisted companies may not qualify for certain SIPPs and
if in any doubt Shareholders should consult with their SIPP
provider immediately.
Following the De-listing it is likely that there will only be
limited opportunities for Shareholders to realise their investment
and whilst the Company intends to put in place a buy-back program,
this cannot be guaranteed as it would be dependent upon the
circumstances at the time.
3. Current Trading and Prospects
Parkwood issued an Interim Management Statement on 28 April 2011
in which the following statements were made:
"The trading performance of the Group's principal divisions,
Parkwood Leisure and Glendale, was consistent with both prior year
performance and the current year budget. No significant new
contracts have been won or lost in the period but the Group
continues to actively work on several tender opportunities.
The much smaller divisions of Healthcare and Parkwood
Consultancy Services have had a slow start to the year and both
businesses are seeking opportunities to improve their profitability
in the face of mixed trading conditions.
The Group's current order book is GBP528 million (31 December
2010: GBP535 million). Cash flow remains strong and the Group
continues to utilise its overdraft facility for short periods. The
Group has no term loans.
The expected sale of the Recycling business is proceeding in
line with expectations and is still expected to complete in the
first half of the current year. No significant profit or loss on
sale is anticipated."
4. Tender Offer
The Board recognises that not all Shareholders will be able or
willing to continue to own shares in the Company following the
De-listing. The Board is keen to ensure that any Shareholders who
wish to realise their holding are able to do so to some degree at
this juncture and also, if possible, following the De-listing (see
paragraph 6 : "Future Buy-backs of Ordinary Shares" below). The
Board has therefore resolved to make the Tender Offer to provide
Qualifying Shareholders with the opportunity to sell a proportion
and possibly all (dependent upon the overall take up in the Tender
Offer) of their Ordinary Shares held at 8.00 a.m. on the Tender
Offer Record Date.
The terms of the Tender Offer have been considered by the
Independent Directors only.
The maximum aggregate number of Ordinary Shares which may be
purchased in the Tender Offer is 2,100,000, representing 11.48 per
cent. of the issued share capital of the Company. The price to be
paid for each Ordinary Share subject to the Tender Offer is 70
pence.
A Qualifying Shareholder may tender some, all, or none of their
holding(s). The Tender Offer will enable equally all Qualifying
Shareholders (excluding those having irrevocably committed not to
accept or procure acceptance of the Tender Offer), to sell a
certain minimum percentage of their holding of Tender Offer Shares
(the "Basic Entitlement").
Although it is not possible to know the future behaviour of
Shareholders able to participate in the Tender Offer, it is
possible, given the irrevocable commitments signed by Tony Hewitt,
Mrs Patricia Hewitt and the Hewitt Trustees, to estimate the Basic
Entitlement if certain other assumptions are made. Assuming no
changes to the register from that at 27 April 2011 and that all
Qualifying Shareholders (other than those having given irrevocable
commitments in connection with the Tender Offer) tender their
entire holdings, then the Basic Entitlement would be approximately
29.15 per cent. of their individual shareholdings.
In addition, Tender Offer Shareholders with valid individual
tenders greater than the Basic Entitlement amount may be satisfied
to the extent that other eligible Shareholders tender less than
their Basic Entitlement amount or do not tender any Ordinary
Shares. The Company shall retain the absolute right to determine
any such additional entitlements, with the Board's intention being
to give preference to smaller shareholders, on the basis that the
removal of any shareholders in full from the register is likely to
bring administrative cost savings to the Company and the Company
recognise that Shareholders may not wish to hold uneconomic small
numbers of shares.
Note to holders of Shares held in Nominee accounts
It is common for shares held in nominee accounts to be
aggregated by the nominee service provider and in many cases
therefore the number of shares shown on the register for a nominee
company may represent underlying beneficial interests of a large
number of holders. In order to recognise this, the Company requests
that where nominee service providers are making applications for
multiple Shareholders held within a nominee account, they submit
their requests by both:
1 CREST TTE (in the case of Shares held in CREST); and
2 Either a letter to Share Registrars, Suite E, First Floor, 9
Lion & Lamb Yard, Farnham, Surrey GU9 7LL or by email to
enquiries@shareregistrars.uk.com giving details of the underlying
holdings for which Shares are being tendered including for each
relevant sub-holding: a) the name of the underlying Shareholder b)
the number of Shares held by that Shareholder which is shown within
the Nominee account total and c) for each of those parties, the
number of Shares tendered in the Tender Offer.
Failure to do so by the nominee service provider may adversely
affect their allocation in the Tender Offer in the event that the
Company is able to satisfy applications in excess of individual
holders' Basic Entitlements.
The Tender Offer is only available to Qualifying Shareholders on
the Register at 8.00 a.m. on the Tender Offer Record Date and in
respect of the Parkwood Shares registered in their names at that
time. Parkwood Shares in CREST which are not tendered pursuant to
the Tender Offer will be taken out of CREST on the De-listing and
relevant Shareholders will be issued with share certificates in
respect of their Ordinary Shares held in CREST.
Mr Tony Hewitt, Mrs Patricia Hewitt and the Hewitt Trustees have
undertaken irrevocably to the Company that they will either not
accept the Tender Offer or procure that the Tender Offer is not
accepted in respect of their entire beneficial and non-beneficial
interests in 11,095,000 Ordinary Shares, representing approximately
60.63 per cent. of the issued share capital of the Company.
Assuming that the Tender Offer is fully subscribed, Tony Hewitt
and his family interests will be interested in the following:-
Percentage of Percentage of
issued share issued share
capital at the capital on
Number of Parkwood date of this completion of the
Shareholder Shares document De-listing
Mr A W Hewitt 7,870,000 43.01 48.59
Mrs Patricia
Hewitt 1,500,000 8.20 9.26
Trustees of
the A W Hewitt
Family Settlement 725,000 3.96 4.48
Trustees of
the 2009 A W
Hewitt Family
Settlement 1,000,000 5.47 6.17
------------------- ---------------- ------------------
Total 11,095,000 60.63 68.50
=================== ================ ==================
At the date of this document, Parkwood's issued share capital
(and Total Voting Rights) consists of 18,298,120 Ordinary
Shares.
Mr Tony Hewitt, his wife, Mrs Patricia Hewitt and the Hewitt
Trustees are deemed to be acting in concert for the purposes of the
Takeover Code. As the Concert Party holds more than 50 per cent. of
the Company's issued share capital, it may increase its aggregate
interests in Ordinary Shares without incurring any obligation under
Rule 9 of the Takeover Code to make a general offer.
If the Tender Offer is fully taken up, the distributable
reserves of the Company would be reduced by approximately GBP1.6
million. The Board intends to cancel the Parkwood Shares purchased
pursuant to the Tender Offer.
Terms of the Tender Offer:
Brewin Dolphin, acting as agent for the Company, will purchase
validly tendered Ordinary Shares.
The price to be paid for each Ordinary Share subject to the
Tender Offer shall be 70 pence:
- representing a premium of 41.4 per cent. over the closing
mid-market price of 49.5p as derived from the Daily Official List
of the London Stock Exchange of an Ordinary Share on 27 April 2011,
the day prior to the announcement of the Proposals;
- representing a premium of 41.5 per cent. to the average
closing mid-market price as derived from the Daily Official List of
the London Stock Exchange of an Ordinary Share for the one month
prior to the announcement of the Proposals; and
- representing a premium of 32.2 per cent. to the average
closing mid-market price as derived from the Daily Official List of
the London Stock Exchange of an Ordinary Share for the three months
prior to the announcement of the Proposals;
Parkwood Shares will be purchased free of commission and dealing
charges.
Full details of the Tender Offer, including the terms and
conditions on which it is made, are set out in Part 3 of this
document, and for Shareholders who hold their Parkwood Shares in
certificated form, in the Shareholder Tender Form.
Resolution 2 set out in the Notice of General Meeting contains
the proposed authority to effect the Tender Offer. The Company has
received irrevocable undertakings from members of the Board
(excluding Tony Hewitt and his family interests) in respect of
70,593 Ordinary Shares, representing approximately 0.98 per cent.
of the Shares entitled to vote on this Resolution to either vote in
favour of or procure that votes be cast in favour of Resolution
2.
Indicative Calculation of Basic Entitlement
Although it is not possible to know the future behaviour of
Shareholders able to participate in the Tender Offer, it is
possible, given the irrevocable commitments signed by Tony Hewitt,
Mrs Patricia Hewitt and the Hewitt Trustees, to estimate the Basic
Entitlement if certain other assumptions are made. Assuming no
changes to the Register from that at 27 April 2011 and that all
Qualifying Shareholders (other than those having given irrevocable
commitments in connection with the Tender Offer) tender their
entire holdings, then the Basic Entitlement would be approximately
29.15 per cent. of their individual shareholdings.
For the avoidance of doubt, the approximate Basic Entitlement is
offered only as a guide and on the basis of the assumptions set out
above; in practice the Basic Entitlement is likely to differ as the
factors covered by the assumptions will vary, particularly with
regard to the future actions of Qualifying Shareholders. The above
estimate should therefore not be relied upon by a Qualifying
Shareholder in deciding the number of Tender Offer Shares to
tender.
Cash Set Aside for Tender Offer
As Tony Hewitt is deemed to be a related party for the purposes
of the Tender Offer, the Independent Directors have determined the
amount of cash to be set aside for use in the Tender Offer as well
as the terms and conditions of the Tender Offer.
In determining the quantum of the cash available for the Tender
Offer, the Independent Directors have reviewed the Company's
working capital requirements for 2011 and 2012. They have also
taken account of the Company's banking facilities, its known
capital expenditure and budgeted expectations of financial
performance. The Independent Directors have sought to ensure a
balance between setting aside as large a sum as practicable to
allow for the purchase in the Tender Offer of Shareholders'
holdings (for those holders who do not wish to remain as
Shareholders) whilst ensuring that the Company has sufficient
flexibility within its cash projections to operate the business.
Having reviewed this, the Independent Directors determined that an
amount of GBP1.47 million (excluding the expected costs of the
De-listing and Tender Offer) was the appropriate sum for this
purpose.
Tender Offer Price
In setting the Tender Offer Price, the Independent Directors
have taken account of a number of factors. These have included:
- the values placed upon businesses in the sectors in which
Parkwood operates as a result of recent corporate activity;
- the valuations placed by UK stock markets upon companies
classified in the sectors in which Parkwood operates
- their expectations of the Company's financial performance over
the short/medium term and the potential risks against achieving
that performance;
- the Company's historical record of meeting its budgeted and
forecast financial expectations;
- their view as to the likelihood of the share price re-rating
were the Company to remain on the market;
- the lack of liquidity in the Company's shares;
- recent levels of "bid premia" in de-listings and takeover
offers for companies traded on UK stock markets; and
- the fact that the Company is effectively under the control of
a majority shareholder and that no "control premium" is
appropriate.
After weighing up all these factors and having consulted with
Brewin Dolphin, the Independent Directors have concluded that a
fair and reasonable price for the Tender Offer is 70p per
Share.
5. Dividend Policy
The Board continues to believe that dividends should be
distributed to Shareholders from the Company's reserves whilst
maintaining an appropriate level of dividend cover and sufficient
cash reserves for future investment opportunities. Historically the
Board has targeted a dividend policy whereby the dividend is
covered 2.5 times by normalised earnings, albeit this has only been
achieved twice in the last three years. The Company will aim, under
normal conditions, to pay a total dividend for each financial year
that meets this objective.
It must be noted however that the ability of the Company to pay
dividends is a function of the Company's profitability and the
extent to which, as a matter of law, the Company is able to pass a
statutory solvency test at the time the dividend is to be paid.
This test requires the Directors to be able to be satisfied, on
reasonable grounds, that immediately after the payment of the
dividend, the Company will be able to satisfy its liabilities as
they become due in the ordinary course of its business and the
realisable value of the assets of the Company will not be less than
the sum of its liabilities, other than deferred taxes, as shown in
the books of account, and its capital.
If the Tender Offer is fully taken up, the distributable
reserves of the Company would be reduced by approximately GBP1.6
million and the Company can give no assurance that it will be able
to pay a dividend in the future.
6. Future Buy-backs of Ordinary Shares
The principal effect of the De-listing is that Shareholders will
no longer be able to buy and sell shares in the Company through a
public stock market; accordingly there will be limited liquidity in
the Company's shares.
Given that the Tender Offer will, as a maximum, only allow
Qualifying Shareholders (in aggregate) to sell around 29.15 per
cent of the Shares in issue (other than those held by Tony Hewitt
and his family interests), assuming that all such Shareholders
tender Shares at least equal to their Basic Entitlement under the
Proposals, the Independent Directors have been mindful of availing
Shareholders of the opportunity to exit their remaining
shareholdings in the future.
The Company intends, therefore, in normal circumstances, to set
aside a sum of at least GBP200,000 per annum out of which it is
able to fund share buy-backs for Shareholders wishing to sell
Shares. Whilst it is the Company's intention in the future to
provide Shareholders with this opportunity to realise their
investments through further buy-backs of Shares, this cannot be
guaranteed as it will be dependent upon the circumstances at the
time, including, inter alia, the level of the Company's
distributable reserves and available bank facilities, having regard
to the Company's other commitments at the relevant time and the
obtaining of relevant Shareholder authorities.
The Board intends to set up a Share Valuation Committee
comprising the Independent Directors to determine the terms
(including the price) of any future buy-backs. It is intended that
the Share Valuation Committee will determine an annual price at
which any buy-backs for the following period may be conducted.
7. Corporate Governance
Following the De-listing, the Directors wish to maintain the
Company's existing standards of corporate governance. Whilst it
will not be obliged to adhere to the UK Corporate Governance Code,
the Company intends to continue to follow best practice in this
regard as far as is practicable. Additionally, the Board will
continue to maintain Audit, Remuneration and Nomination Committees
(each chaired by an Independent Director) post De-listing.
Sarah Kling was due to step down from the Board at the Annual
General Meeting after serving as a director for eight years. She
has agreed to remain on the Board until 16 May 2011, to allow her
to participate in the Directors' consideration of the
Proposals.
8. Board Structure
The Company intends to maintain an appropriate board structure
post De-listing including independent non-executive directors. As
detailed in section 7 above, Sarah Kling has agreed to resign from
the Board following the General Meeting on 16 May 2011, at which
point the Company will have 3 executive and 3 non-executive
directors. Whilst it is not possible to determine the requirements
of the Company in the future, the Board anticipates that the
Company will have at least 2 independent non-executive directors at
all times.
Additionally the Company announced in the preliminary results
that the roles of Chairman and Chief Executive will be separated
with effect from 1 January 2012. At this point Andrew Holt will
become Chief Executive of the Company and Tony Hewitt will remain
as Chairman.
9. Strategy for the Future
Following the De-listing, the Board intends to continue the
Company's existing strategy. The Board has no plans to alter the
existing employment rights, terms and conditions of the employees
of Parkwood nor to change the location of Parkwood's business
premises or redeploy any of Parkwood's fixed assets following
conclusion of the Proposals.
10. Provision of Information to Shareholders
The Company will continue to maintain an "Investors" section on
its website at www.parkwood-holdings.co.uk. In addition to sending
to Shareholders the Annual Report and convening Annual General
Meetings (as required by the Companies Act), the Company intends to
post on its website details of its half year financial performance
and details of any significant events of developments in which
Shareholders may be interested.
11. General Meeting
A General Meeting is being convened at 12.00 p.m. on 16 May 2011
for the purpose of seeking Shareholder approval for the
Resolutions.
Resolution 1, which seeks Shareholder approval for the
De-listing, is being proposed as a special resolution and must be
passed on a show of hands by at least 75 per cent. of those
Shareholders present in person or by proxy or (being a corporation)
present by a duly authorised representative and voting or, on a
poll, by at least 75 per cent. of those Shareholders present in
person or by proxy or (being a corporation) present by a duly
authorised representative and voting, at the General Meeting.
Resolution 2, which is being proposed as a special resolution,
seeks authority for the Company to make market purchases of its
Ordinary Shares pursuant tothe Tender Offer (in substitution for
the existing authorities to make market purchases).
Resolution 3, which is being proposed as a special resolution,
adopts the New Articles. These amend the Existing Articles by
deleting certain provisions which will no longer be relevant to the
Company following the De-listing. In particular, the following
provisions are proposed to be removed:
-- provisions relating to uncertificated securities;
-- provisions relating to treasury shares; and
-- the requirement for the Directors to retire by rotation at
the annual general meeting.
The New Articles will be available for inspection during normal
business hours at the registered office of the Company from the
date of this document until the time of the General Meeting and at
the place of the General Meeting from at least 15 minutes before
the General Meeting until it ends. Resolution 3 will be conditional
upon completion of the De-listing.
12. Taxation
A summary of the UK tax consequences of the Tender Offer for
Shareholders resident in the UK is set out in Part 4 of this
document.
If you are in any doubt about your tax position and/or are
subject to tax in a jurisdiction other than the UK, you should
consult an appropriate independent professional adviser.
13. Overseas Shareholders
The Tender Offer is not available to Shareholders with a
registered address in a Restricted Jurisdiction. Overseas
Shareholders should note that they should satisfy themselves that
they have fully observed any applicable legal requirements under
the laws of the relevant jurisdictions before they tender Parkwood
Shares in the Tender Offer. The attention of Shareholders with
registered addresses outside the UK is drawn to paragraph 3 of Part
3 of this document.
14. Action to be taken
14.1 In relation to the Tender Offer
The procedure for tendering some or all of your Parkwood Shares
on the Register at 8.00 a.m on the Tender Offer Date, depends on
whether your Parkwood Shares are held in certificated or
uncertificated form.
(i) Parkwood Shares held in certificated form
Qualifying Shareholders who hold Parkwood Shares in certificated
form and who wish to tender some or all of their Parkwood Shares
held at 8.00 a.m. on the Tender Offer Record Date, should complete
a Shareholder Tender Form in accordance with the instructions
printed thereon (including a witnessed signature) and set out in
Part 3 of this document, and return it, together with their share
certificate(s) by post or (during normal business hours only) by
hand to Share Registrars, Suite E, First Floor, 9 Lion & Lamb
Yard, Farnham, Surrey GU9 7LL as soon as possible and in any event
so as to arrive by no later than 1.00 p.m. on 23 May 2011.
(ii) Parkwood Shares held in uncertificated form
Qualifying Shareholders who hold their Parkwood Shares in
uncertificated form and who wish to tender some or all of their
Parkwood Shares held at 8.00 a.m. on the Tender Offer Record Date,
should tender electronically through CREST so that the relevant TTE
Instruction settles by no later than 1.00 p.m. on 23 May 2011.
Further details of the procedures for tendering are set out in
Part 3 of this document.
Qualifying Shareholders who do not wish to sell their Parkwood
Shares under the Tender Offer should not take any action in
relation to the Shareholder Tender Form and should not submit a TTE
Instruction.
14.2 In relation to the General Meeting
A Form of Proxy to be used in connection with the General
Meeting accompanies this document. Whether or not you intend to
attend the General Meeting in person, you are requested to complete
the Form of Proxy in accordance with the instructions printed on it
and return it as soon as possible by post or (during normal
business hours only) by hand but, in any event, so as to be
received by Share Registrars, Suite E, First Floor, 9 Lion &
Lamb Yard, Farnham, Surrey GU9 7LL, as soon as possible and in any
event so as to arrive by no later than 12.00 p.m. on 14 May 2011.
Completion of a Form of Proxy does not prevent you from attending
the General Meeting and voting in person.
15. Related Party Circular
The Board intends to operate the Company's business in the same
manner, and with the same objectives, as at presentunder the
Listing Rules; however, the Tender Offer is deemed to be classified
as a related party transaction under the Listing Rules.
As the Tender Offer is classified as a related party transaction
under the Listing Rules, Mr Tony Hewitt will abstain, and has taken
all reasonable steps to ensure that any persons associated with him
who hold Ordinary Shares will abstain, from voting at the General
Meeting in respect of Resolution 2.
16. Further information
The expected timetable of principal events for the Proposals is
set out on page 2 of this document.
Shareholders are advised to read the whole of this document and
not merely rely on the summary information set out in this letter.
In particular, Shareholders should consider carefully the risk
factors set out in Part 2 of this document associated with voting
in favour of the Resolutions and/or tendering their Parkwood Shares
pursuant to the Tender Offer.
If you require assistance in completing the Shareholder Tender
Form or the Form of Proxy, please call Share Registrars on 01252
821390 or, if telephoning from outside the UK, on +44 1252 821390.
Calls to the Share Registrars' 01252 821390 number are charged at
your service provider's standard network rates. Calls to the Share
Registrars' +44 1252 821390 number from outside the UK are charged
at applicable international rates. Calls may be recorded and
monitored randomly for security and training purposes. Share
Registrars cannot provide advice on the merits of the Proposals nor
give any financial, legal or tax advice.
17. Recommendation to Shareholders
De-listing Resolution (numbered 1)
The Board considers the De-listing to be in the best interests
of Shareholders as a whole. Accordingly, the Board unanimously
recommends that Shareholders vote in favour of Resolution 1
relating to the De-listing as they intend either to do so or
procure that votes are cast in favour in relation to 11,165,593
Ordinary Shares, representing approximately 61.02 per cent. of the
issued share capital of the Company. These figures include
1,500,000 Shares owned by Mrs Patricia Hewitt and 1,725,000 Shares
owned by the Hewitt Trustees.
Tender Offer Resolution (numbered 2)
The Board, which has been so advised by Brewin Dolphin, consider
the terms of the Tender Offer to be fair and reasonable and in the
best interests of Shareholders as a whole. Accordingly, the Board
unanimously recommend you to vote in favour of Resolution 2
relating to the Tender Offer. In providing its advice to the Board,
Brewin Dolphin has taken into account the commercial assessments of
the Board.
As a substantial shareholder in the Company, Mr Tony Hewitt,
your Chairman, is considered to be a related party under Chapter 11
of the Listing Rules. The Tender Offer constitutes a related party
transaction in accordance with Chapter 11 of the Listing Rules.
Accordingly, Mr Tony Hewitt has undertaken not to vote on
Resolution 2 at the General Meeting and has undertaken to take all
reasonable steps to ensure that any persons associated with him who
hold Ordinary Shares will abstain from voting on Resolution 2 at
the General Meeting. Mr Tony Hewitt has not taken part in the
Board's consideration of the terms of the Tender Offer.
The Independent Directors have undertaken to either vote in
favour of or procure that votes be cast in favour of Resolution 2
in respect of Parkwood Shares amounting, in aggregate, to 70,593
Ordinary Shares, representing approximately 0.98 per cent. of the
Shares able to vote on this Resolution.
Resolution to adopt the New Articles (numbered 3)
The Board unanimously recommends that Shareholders vote in
favour of Resolution 3 relating to the adoption of the New Articles
as they intend either to do so or procure that votes are cast in
favour in relation to 11,165,593 Ordinary Shares, representing
approximately 61.02 per cent. of the issued share capital of the
Company. These figures include 1,500,000 Shares owned by Mrs
Patricia Hewitt and 1,725,000 Shares owned by the Hewitt
Trustees.
Yours faithfully
The Board
DEFINITIONS
"account ID" the identifications code or
number attached to any member
account in CREST
"Board" or "Directors" the board of directors of Parkwood
"Business Day" a day other than a Saturday,
Sunday or public holiday in
England and Wales on which
banks are open in London for
general commercial business
"Basic Entitlement" the minimum percentage of a
Qualifying Shareholder's holding
at the Tender Offer Record
Date that the Qualifying Shareholder
may expect to be able to sell
via the Tender Offer
"Brewin Dolphin" Brewin Dolphin Limited, a trading
division of Brewin Dolphin
Holdings plc
"Concert Party" Mr A W Hewitt, Mrs Patricia
Hewitt and the Hewitt Trustees,
who are deemed to be a concert
party for the purposes of the
Takeover Code
"CREST" the relevant system (as defined
in the CREST Regulations) in
respect of which Euroclear
is the Operator (as defined
in the CREST Regulations)
"CREST member" a person who
has been
admitted by
Euroclear as a
system member
(as defined in
the CREST
Regulations)
"CREST participant" a person who is, in relation
to CREST, a system participant
(as defined in the CREST Regulations)
"CREST Regulations" the Uncertificated Securities
Regulations 2001 (SI 2001/3755)
"CREST Sponsor" a CREST participant admitted
to CREST as a CREST sponsor
being a sponsoring system participant
(as defined in the CREST Regulations)
"CREST sponsored member" a CREST member admitted to CREST as a sponsored member
"Combined Code" the combined code on corporate
governance issued by the Financial
Reporting Council
"Companies Act" Companies Act 2006
"De-listing" the cancellation of admission
of the Ordinary Shares to the
Official List and to trading
on the Main Market
"Escrow Agent" Share Registrars
"Euroclear" Euroclear UK and Ireland Limited
"Existing Articles" the articles of association
of the Company in force as
at the date of this document
"Form of Proxy" the form of proxy accompanying
this document to be used in
connection with the General
Meeting, as referred to in
the letter from the Board in
Part 1 of this document
"General the general meeting of Parkwood
Meeting" to be held at 12.00 p.m. on
16 May 2011 at the offices
of DLA Piper UK LLP, 101 Barbirolli
Square, Manchester M2 3DL,
notice of which is set out
at the end of this document
"Hewitt Trustees" together the trustees of the
Hewitt Trusts
"Hewitt Trusts" together the A W Hewitt Family
Settlement, and the 2009 A
W Hewitt Family Settlement
"HMRC" H M Revenue & Customs
"Independent Directors" members of the Board from time
to time, excluding Tony Hewitt
"Listing" admission of the Ordinary Shares
to the Official List
"Listing Rules" the rules and regulations made
by the UK Listing Authority
under Part VI of the Financial
Services and Markets Act 2000
as amended from time to time
"London Stock Exchange" London Stock Exchange plc
"Main Market" the London Stock Exchange's
market for listed securities
"New Articles" the new articles of association
proposed to be adopted by the
Company pursuant to Resolution
3 set out in the Notice
"Notice" the notice of the General Meeting
which appears at the end of
this document
"Official List" the Official List of the UKLA
"Overseas Shareholder" a Shareholder who is resident
in, or a citizen of, a jurisdiction
outside the United Kingdom
"Parkwood" or "the Company" Parkwood Holdings plc, registered
or "the Group" in England and Wales with number
02733592
"Parkwood Shares", "Ordinary Shares" or "Shares" the ordinary shares of 1 pence
each in the capital of Parkwood
"participant ID" the identification code or
membership number used in CREST
to identify a particular CREST
member or other CREST participant
"Proposals" the De-listing and the Tender
Offer
"Qualifying Shareholders" Parkwood Shareholders other
than those Shareholders with
registered addresses in a Restricted
Jurisdiction
"Register" the register of members of
Parkwood
"Registrar" Share Registrars Ltd, Suite
E, First Floor, 9 Lion and
Lamb Yard, Farnham,, Surrey,
GU9 7LL
"Resolutions" the resolutions to be proposed
at the General Meeting to obtain
approval of Shareholders for
the De-listing, to authorise
the Company to make market
purchases of its shares pursuant
to the Tender Offer and to
adopt the New Articles, all
as set out in the Notice
"Restricted Jurisdiction" Australia, Canada, Japan, the
United States and any other
jurisdiction where participation
in the Tender Offer would constitute
a violation of the laws of
such jurisdiction
"Share Registrars" a trading name of Share Registrars
Limited
"Shareholders" holders of Parkwood Shares
from time to time
"Shareholder Tender Form" the tender form issued with
this document to Qualifying
Shareholders who hold their
Parkwood Shares in certificated
form
"Takeover Code" the City Code on Takeovers
and Mergers
"Tender Offer" the invitation by Parkwood
to Qualifying
Shareholders to tender Shares
on the terms and subject to
the conditions set out in this
document and also, in the case
of certificated Parkwood Shares
only, the Shareholder Tender
Form
"Tender Offer Closing Date" 23 May 2011
"Tender Offer Price" 70p per Ordinary Share
"Tender Offer Record Date" 8.00 a.m. on 23 May 2011
"TFE Instruction" a transfer from escrow instruction
(as defined by the CREST Manual
issued by Euroclear)
"Total Voting Rights" has the same meaning as defined
by the Disclosure and Transparency
Rules, as published by the
Financial Services Authority
"TTE Instruction" a transfer to escrow instruction
(as defined by the CREST Manual
issued by Euroclear)
"UK or United Kingdom" the United Kingdom of Great
Britain and Northern Ireland
"UK Listing Authority" or "UKLA" the Financial Services Authority
in its capacity as competent
authority under the Financial
Services and Markets Act 2000
"uncertificated" or "uncertificated form" Parkwood Shares which are recorded
on the Register as being held
in uncertificated form in CREST
and title to which, by virtue
of the CREST Regulations, may
be transferred by means of
CREST
Note - the Definitions above are extracted in their entirety
from the Circular
EXPECTED TIMETABLE OF PRINCIPAL EVENTS 2011
Tender Offer opens 8.00 a.m. on 3 May
Latest time and date for receipt of Forms 12.00 p.m. on 14
of Proxy for the General Meeting May
Date and time of General Meeting 12.00 p.m. on 16
May
Tender Offer Record Date 8.00 a.m. on 23
May
Latest time and date for receipt of Shareholder 1.00 p.m. on 23
Tender Forms and TTE Instructions in relation May
to the Tender Offer
Announcement of the results of the Tender 26 May
Offer
Cheques despatched in respect of Tender Offer No later than 8
proceeds June
Cancellation of admission of Ordinary Shares 15 June
to the Official List and to trading on the
Main Market
Despatch of share certificates in respect 16 June
of any Ordinary Shares held in CREST not tendered
pursuant to the Tender Offer and return of
balance share certificates
(1) If any of the above times and/or dates change, the revised
times and/or dates will be notified to Shareholders by
an announcement through the Regulatory Information Service
of the London Stock Exchange.
(2) All references in this document are to London times unless
otherwise stated.
(3) All events in the above timetable following the General
Meeting are conditional upon approval by Shareholders of
the relevant Resolutions.
Copies of the Circular are available on the Company's website :
www.parkwood-holdings.co.uk .
For further information:
Parkwood Holdings plc
Mike Quayle, Group Finance Director 01772 627 111
Brewin Dolphin Limited
Neil Baldwin 0845 213 4726
This information is provided by RNS
The company news service from the London Stock Exchange
END
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