TIDMSARS
RNS Number : 4534H
Sarossa PLC
01 December 2015
Proposed cancellation of Shares from Admission to AIM
Proposed buyback of Shares
Proposed waiver of Rule 9 of the City Code on Takeovers and
Mergers
and
Notice of General Meeting
Sarossa has today posted to Shareholders a notice of general
meeting ("General Meeting") of the Company, along with a circular
(the "Circular") in connection with the proposed cancellation of
its Shares from Admission to AIM, a proposed buyback of Shares and
the proposed waiver of Rule 9 of the City Code on Takeovers and
Mergers.
The General Meeting is to be held at the Company's registered
office, 17 The Esplanade, St Helier, Jersey JE2 3QA at 11.00 a.m.
on 6 January 2016.
A copy of the Circular will be available for download from the
Company's website, www.sarossaplc.com, today.
Enquiries :
Sarossa Plc
Mike Bretherton, Chairman 01534 719761
WH Ireland Limited (Nominated adviser)
Chris Fielding, Head of Corporate Finance 0207 2201650
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Latest time and date for receipt
of Forms of Proxy in respect of 11.00 a.m. on 4 January
the General Meeting 2016
General Meeting 11.00 a.m. on 6 January
2016
Expected last day of dealings in 29 January 2016
Shares on AIM*
Cancellation of Admission effective* 7.00 a.m. on 1 February
2016
*Assuming the Proposals are approved on 6 January 2016.
Introduction
The Company announces today that it is seeking Shareholder
approval to cancel the admission of its Shares to trading on AIM
and to obtain an authority to enable the buyback of up to 15 per
cent. of its Shares.
The purpose of this announcement is to provide:
(a) information about the background to and reasons for the
Cancellation;
(b) further information about the background to and reasons for
the Buyback; and
(c) information about the background to and reasons for the Code Waiver.
A General Meeting has been convened to be held at the Company's
registered office, 17 The Esplanade, St Helier, Jersey JE2 3QA at
11.00 a.m. on 6 January 2016.
If the resolution to approve the Cancellation is passed at the
General Meeting, it is proposed that Cancellation will take effect
at 7.00 a.m. on 1 February 2016. The Company intends, subject to
the passing of Resolution 2, to provide Shareholders with an
opportunity to sell Shares to the Company ahead of the Cancellation
(and generally to approve buybacks in the event that the
Cancellation is not approved).
Information on the Proposals
Sarossa has been admitted to trading on AIM as a Jersey
incorporated and domiciled company since 2 May 2014 and, previous
to that, Sarossa's wholly owned subsidiary, Sarossa Capital
Limited, had been admitted to trading on AIM as an English
incorporated and domiciled investing company since 11 January
2012.
Sarossa is an investment holding and management company whose
principal activity is investment in, and growth and development of,
businesses which present opportunities for value creation. The
Company is mainly focused on portfolio businesses with product and
service platforms targeting major international markets through
customers and partners with an international profile.
Since becoming an investing company, Sarossa has successfully
grown its NAV per Share (3.35 pence per Share as at 30 June 2015),
but its Shares have traded at a sustained discount thereto (at a
mid-price of no more than 1.91 pence per Share over the last twelve
months). This is believed by the Directors to be due in part to a
lack of liquidity in the Shares and also to the difficult capital
market conditions over recent years.
In light of the above situation, the Board has been reviewing
the merits of Sarossa's AIM quote and has now concluded that the
cancellation of the Shares' admission to trading on AIM would be
beneficial for the Company and Shareholders as a whole for the
following reasons:
-- there is limited liquidity in the Shares;
-- the ability for the Company to issue Shares at levels which
fairly reflect the existing NAV per Share, as consideration for
proposed investment opportunities, is significantly undermined by
the low share price; and
-- the costs associated with being admitted to trading on AIM
are now disproportionate to the value provided, with the Board
expecting savings arising from the Cancellation to amount to
approximately GBP50,000 per annum.
An AIM cancellation would not alter the Board's strategy for
Sarossa which would be to continue the development and growth of
companies within its business portfolio.
The Directors are aware that certain Shareholders may be unable
or unwilling to hold Shares in the event that the Cancellation is
approved and becomes effective. To the extent that Shareholders are
unable or unwilling to hold Shares following the Cancellation
becoming effective, such Shareholders should consider selling their
interests in the market prior to the Cancellation becoming
effective.
The Directors are therefore also seeking Shareholder approval to
obtain an authority to enable the Company to buy back up to a
further 81,518,446 Shares (representing approximately 15.00 per
cent. of the Company's current issued ordinary share capital),
having already bought back 95,904,055 Shares in the year to date.
The Buyback is intended to provide demand for the Shares, thereby
affording Shareholders with an opportunity to realise their
investment prior to the Cancellation becoming effective, which as
stated above is expected to be on 1 February 2016.
Richard Griffiths, Michael Bretherton and James Ede-Golightly,
who are considered by the Panel to be a Concert Party, currently
have an interest in 187,787,514 Ordinary Shares, representing
approximately 34.55 per cent. of the current issued share capital
of the Company. If the Company was to acquire further Ordinary
Shares pursuant to the Buyback, the Concert Party's interest in the
Company would be likely, as a result of the reduced number of
Ordinary Shares that would be in issue following such Buyback, to
increase to up to 40.65 per cent. of the Company's issued share
capital following any such acquisitions. As detailed below, this
would ordinarily result in the Concert Party being required to make
a mandatory cash offer, under the City Code, to remaining
Shareholders to acquire their Shares. To enable the Company to buy
back further Ordinary Shares without the Concert Party being
required to make a mandatory cash offer to the remaining
Shareholders, Resolution 3 (the "Whitewash Resolution") is being
proposed.
Effect of Cancellation
The Cancellation will take effect at 7.00 a.m. on 1 February
2016, 18 Business Days following the General Meeting, assuming the
Resolutions are approved on 6 January 2016.
In the event that the Cancellation proceeds, there will be no
market facility for dealing in the Shares and no price will be
publicly quoted for Shares as from close of business on 29 January
2016, assuming the Resolutions are approved on 6 January 2016. As
such, interests in Shares are unlikely thereafter to be readily
capable of sale and where a buyer is identified, it may be
difficult to place a fair value on any such sale.
As a public company with its registered office, place of central
management and control in the Channel Islands, the Company will
remain subject to the City Code. The City Code is issued and
administered by the Takeover Panel. The City Code and the Takeover
Panel operate principally to ensure that Shareholders are treated
fairly and are not denied an opportunity to decide on the merits of
a takeover and that Shareholders of the same class are afforded
equivalent treatment by an offeror. The City Code also provides an
orderly framework within which takeovers are conducted. In
addition, Shareholders may be required to approve other
transactions, such as share buybacks or the issue of further
equity, so as to ensure that no obligation arises for any
Shareholder or potential Shareholder to make a mandatory offer
under Rule 9 of the City Code.
The Company will continue to post relevant information on its
website (www.sarossaplc.com) and to hold general meetings in
accordance with the applicable statutory requirements and the
Company's articles of association.
Material change in the financial or trading position of the
Company
Section 8 of the additional information in Part III of the
Circular highlights that as a result of changes since 30 June 2015
in the London Stock Exchange market price quotations of shares in
the Company's principal investment portfolio businesses, comprising
Silence Therapeutics Plc, in which the Company has an equity
interest of 3.14 per cent. and Plant Health Care Plc, in which the
Company has an equity interest of 5.35 per cent, the investment
valuations at the date of the Circular are around 20 per cent.
lower than those at 30 June 2015 (the date to which the latest
published audited accounts of the Company were prepared).
The General Meeting
The Circular contains a notice convening the General Meeting to
be held at the Company's registered office, 17 The Esplanade, St
Helier, Jersey JE2 3QA at 11.00 a.m. on 6 January 2016 which sets
out:
Resolution 1
Resolution 1 is a special resolution to approve the cancellation
of admission of the Shares to trading on AIM;
Resolution 2
Resolution 2 is a special resolution and gives the Company the
authority to buy back up to a further 81,518,446 Ordinary Shares,
such authority expiring at the conclusion of the next annual
general meeting of the Company, unless such authority is renewed
prior to that time; and
Resolution 3 (the Whitewash Resolution)
(MORE TO FOLLOW) Dow Jones Newswires
December 01, 2015 06:15 ET (11:15 GMT)
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