Proposed Delisting from AIM & Notice of GM
February 15 2010 - 7:07AM
UK Regulatory
TIDMAPA
RNS Number : 1535H
Apace Media PLC
15 February 2010
Apace Media plc ("Apace" or the "Company")
Proposed Cancellation of Admission to AIM & Notice of General Meeting
The following announcement incorporates extracts from the Chairman's letter
contained in a circular posted to the Company's shareholders today to convene a
General Meeting ("GM") of the Company to be held at Midday on 5 March 2010 at
the offices of Seymour Pierce Limited, 20 Old Bailey, London, EC4M 7EN. The
purpose of the GM is to seek Shareholders' approval to cancel admission of its
Ordinary Shares to trading on AIM.
Enquiries:
Apace Media Plc:
Martin Johnston/ Robert Burke
+44 207 471 9393
Seymour Pierce:
Chris Howard/Catherine Leftley
+44 207 107 8000
Background to the Cancellation
The principal reasons for the admission of the Ordinary Shares to trading on AIM
have been (amongst other things) to provide the Company with the ability to
access capital in order to fund its strategy and to use its Ordinary Shares for
acquisitions. Having recently undertaken a review of both the advantages and
disadvantages of maintaining admission of the Ordinary Shares to trading on AIM,
the Independent Directors have concluded that the admission should be cancelled.
In reaching this conclusion, the Independent Directors have taken the following
factors into account:
· in the Independent Directors' opinion, the trading price of the Ordinary
Shares on AIM does not reflect the true asset value of Apace and its businesses;
· given the overall market conditions for small listed companies, the
Independent Directors are of the opinion that it is (and will continue to be)
difficult for the Company to attract meaningful equity investment through its
listing on AIM;
· the AIM listing of the Ordinary Shares does not, in itself, offer
investors the opportunity to trade in meaningful volumes or with frequency
within an active market. With little trading volume, the Company's share price
can move up or down significantly following trades of small numbers of shares;
and
· the Independent Directors estimate that annual direct and indirect costs
of the Ordinary Shares' AIM listing are at least GBP125,000. This estimate
includes listing expenses and advisory, legal and audit fees but excludes any
costs associated with the considerable amount of senior executive time which is
also spent dealing with the issues related to the AIM listing.
Pursuant to AIM Rule 41, cancellation of the admission of the Ordinary Shares to
trading on AIM requires the consent of not less than 75 per cent. of votes cast
by Shareholders (in person or by proxy) given in a general meeting.
The Company has notified the London Stock Exchange of the proposed Cancellation.
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 15 March 2010 and
that the effective date of the Cancellation will be 16 March 2010.
Current trading
UK Content
The Company's UK television production businesses in 2009 performed well in a
very difficult commissioning environment. Forward visibility into 2010 is
uncertain as broadcasters continue to be cautious in the aftermath of the
economic downturn of the previous 18 months.
Steadfast Television Limited and Steadfast International Limited, the factual
television production and distribution companies, turned in combined unaudited
revenues of GBP7.3 million (2008: GBP7.1 million) from better than expected
international sales and the strength of returning series.
Pro-Active Projects Limited's sports production business had a good year with
unaudited revenues of GBP2.1 million (2008: GBP1.8 million) from the production
and distribution of sports events and programmes in rugby, sailing, power
boating, mountain biking and air sports.
Apace Music Limited, the Group's CD label, has been put into creditors'
voluntary liquidation. The Group will continue to exploit its music publishing
catalogue and library of TV production music through Apace Rights Limited.
The Directors are considering the Group's options in respect of its factual
television production and distribution businesses and are considering all
alternatives, including the possible disposal of these businesses to a third
party. The Directors' current considerations may or may not lead to a
transaction. Shareholders will be kept informed of any material developments.
Eastern European Broadcasting
From 5 August 2009, the Company's five per cent. share of Nova Televizija EAD
(Bulgaria) ("TV Nova") has been held as a non-consolidated equity shareholding.
Shareholders are referred to the website of our partner Modern Times Group
("MTG") (www.mtg.se) to review the results and commentary of TV Nova, including
the recent impairment of goodwill, which indicates MTG's current carrying value
of that business. A shareholder agreement exists between the Company and MTG
allowing minority protection to Apace and providing for staged disposal of
Apace's shareholding to MTG.
Liquidity
The Group had approximately GBP2.1 million of net cash at 31 December 2009
(2008: GBP0.25 million).
The Company owns 1.77% of the issued ordinary capital of Catalyst Media Group
plc ("CMG"). On 1 February 2010, CMG announced a strategic review which may lead
to the sale of CMG. Since this announcement, the share price of CMG has
significantly increased, valuing the Company's holding at 12th February 2010 at
GBP447,000. There is no certainty regarding the liquidity of this asset.
Litigation
As stated in the annual report for the year ended 31 December 2008, the Company
is a defendant in civil proceedings issued in the Tirana District Court in the
Republic of Albania by certain ex-shareholders in Television Arberia, claiming
damages of EUR1.1m for breach of contract, plus interest. This claim has been
upheld at first instance, but will be appealed by the Company, which has also
filed counter proceedings against the two plaintiffs.
2009 Performance
The Directors expect the profit before taxation for the Group for the year ended
31 December 2009, before allowing for the effect of any possible disposal as
mentioned above and before any possible impairment of the Group's music assets,
to be not less than GBP200,000 (2008: loss GBP3.05m).
Strategy following the Cancellation
The Directors intend to continue to seek to maximize the value of the Company's
assets in Bulgaria and in the UK. The Directors continue to believe that the
Company's UK television production and music businesses lack scale and could be
valuable components to larger concerns and the Directors are considering the
Group's options in respect of these businesses.
However, the Company's investment in TV Nova has resulted in a permanent
management presence in Bulgaria, banking relationships, access to potential
deal-flow and the potential to co-operate with co-investors. The Directors also
consider that Apace is in a position to take advantage of depressed valuations
in Eastern Europe.
The Directors intend that the Company should continue to investigate
opportunities for investment in businesses in Eastern Europe or, if attractive
opportunities do not occur, following a disposal of all of its investments and
trading assets, to return capital to its Shareholders.
If the Cancellation does not become effective, any disposal by the Company of
all or substantially all of its trading business, activities or assets will,
under the AIM Rules, require the consent of Shareholders in general meeting and
result in the Company being treated as an investing company for the purposes of
the AIM Rules. In such circumstances the Company will be required to have an
investing policy that has been approved by Shareholders. However, if the
Cancellation becomes effective, the requirements of the AIM Rules will not apply
to the Company.
Principal effects of the Cancellation
The principal effects of the Cancellation will include (amongst others):
(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 paragraph 6 below) will be available to
enable trading of the Ordinary Shares. Consequently, following 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) although the Ordinary Shares will remain transferable they will cease
to be transferable through CREST. Instead, Shareholders who hold shares in
uncertificated form prior to Cancellation, will receive share certificates; and
(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.
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") for a period of 10 years from the date of Cancellation. 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.
The Code is issued and administered by the Takeover Panel. The Code and the
Takeover Panel operate principally to ensure that shareholders of companies 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 Code also provides an orderly framework within
which takeovers are conducted.
As the Ordinary Shares are currently admitted to trading on AIM, the Company is
not required to comply with the provisions of the Combined Code of Corporate
Governance. 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. It is therefore intended that (amongst other things)
William Vanderfelt will continue to be the senior independent non-executive
director of the Company. If the Cancellation becomes effective, this will not
affect the Company's position as a public limited company for the purposes of
the UK Companies Act 2006.
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.apacegroup.co.uk).
Following Cancellation, transfers of Ordinary Shares may only be effected in
accordance with those provisions of the Articles concerning off-market transfers
of shares in certificated form. In summary, to effect a transfer of Ordinary
Shares following Cancellation, once a proposed transferee has been found, a duly
executed and stamped stock transfer form will need to be submitted (together
with the relevant share certificate(s)) to the Company's secretary at the
Company's registered office for registration.
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 15 March 2010 and that the
effective date of the Cancellation will be 16 March 2010.
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;
(b) send Shareholders copies of the Company's audited accounts in
accordance with applicable statutory requirements and the Articles; and
(c) post certain information relating to the Company, including details
of any arrangements made to assist Shareholders to trade in Ordinary Shares, on
its website (www.apacegroup.co.uk).
General Meeting
The General Meeting is to be held at midday on 5 March 2010 for the purpose of
seeking Shareholders' approval to the Resolution.
Independent Directors' recommendation
The Independent Directors consider that the Resolution is in the best interests
of the Company and its Shareholders as a whole and the Independent Directors
unanimously recommend Shareholders to vote in favour of the Resolution to be
proposed at the General Meeting as they intend to do in respect of their own
direct or indirect shareholdings representing, in aggregate, 5.07 per cent. of
the issued Ordinary Share capital of the Company.
Didier Stoessel, who beneficially holds, in aggregate, 66.38 per cent. of the
issued Ordinary Share capital of the Company, has not participated in the
Independent Directors' recommendation but intends to vote, or procure the vote
of, such beneficial holdings in favour of the Resolution to be proposed at the
General Meeting.
Expected Timetable of Principal Events
+--------------------------------------+----------------------+
| Despatch of this document, the | 15 February 2010 |
| Notice of General Meeting and the | |
| Form of Proxy: | |
+--------------------------------------+----------------------+
| Latest time and date for receipt of | Midday on 3 March |
| Forms of Proxy: | 2010 |
+--------------------------------------+----------------------+
| General Meeting: | Midday on 5 March |
| | 2010 |
+--------------------------------------+----------------------+
| Last day of dealings of Ordinary | 15 March 2010 |
| Shares on AIM and in CREST: | |
+--------------------------------------+----------------------+
| Cancellation of admission to trading | 7.00 a.m. on 16 |
| on AIM: | March 2010 |
+--------------------------------------+----------------------+
| Expected despatch of share | 23 March 2010 |
| certificates (if applicable): | |
+--------------------------------------+----------------------+
DEFINITIONS
+--------------------------+------------------------------------------+----------+
| "AIM" | AIM, the market of that name operated by London |
| | Stock Exchange; |
+--------------------------+-----------------------------------------------------+
| "AIM Rules" | the rules and guidance for companies whose shares |
| | are admitted to trading on AIM entitled "AIM Rules |
| | for Companies" published by London Stock Exchange, |
| | as amended from time to time; |
+--------------------------+-----------------------------------------------------+
| "Articles" | the Company's articles of association from time to |
| | time; |
+--------------------------+-----------------------------------------------------+
| "Board" or "Directors" | the board of directors of the Company; | |
+--------------------------+------------------------------------------+----------+
| "Cancellation" | the proposed cancellation of admission | |
| | of the Ordinary Shares to trading on AIM | |
+--------------------------+------------------------------------------+----------+
| "Code" | the City Code on Takeovers and Mergers | |
| | as amended from time to time; | |
+--------------------------+------------------------------------------+----------+
| "Company" or "Apace" | Apace Media 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; | |
+--------------------------+------------------------------------------+----------+
| "Form of Proxy" | the form of proxy for use in connection | |
| | with the General Meeting; | |
+--------------------------+------------------------------------------+----------+
| "General Meeting" | the general meeting of the Company | |
| | convened for midday on 5 March 2010; | |
+--------------------------+------------------------------------------+----------+
| "Group" | the Company and its subsidiaries and | |
| | subsidiary undertakings; | |
+--------------------------+------------------------------------------+----------+
| "Independent Directors" | the Directors, other than Didier | |
| | Stoessel; | |
+--------------------------+------------------------------------------+----------+
| "London Stock Exchange" | London Stock Exchange plc; | |
+--------------------------+------------------------------------------+----------+
| \"Notice of General | the notice of the General Meeting; | |
| Meeting" | | |
+--------------------------+------------------------------------------+----------+
| "Ordinary Shares" | the fully paid ordinary shares in the | |
| | capital of the Company which have a | |
| | nominal value of GBP0.01 each, and | |
| | "Ordinary Share" means any one of them; | |
+--------------------------+------------------------------------------+----------+
| "Resolution" | the Resolution set out in the Notice of | |
| | General Meeting; | |
+--------------------------+------------------------------------------+----------+
| "Shareholders" | holders of Ordinary Shares; | |
+--------------------------+------------------------------------------+----------+
| "Takeover Panel" | the United Kingdom Panel on Takeovers | |
| | and Mergers; | |
+--------------------------+------------------------------------------+----------+
| "Third Party Facility" | third-party matched bargain trading | |
| | facility; | |
+--------------------------+------------------------------------------+----------+
| "GBP" or "pence" | the lawful currency of the United | |
| | Kingdom; and | |
+--------------------------+------------------------------------------+----------+
| "EUR" | the lawful currency of the states of the | |
| | European Union which are from time to | |
| | time participating in the Economic and | |
| | Monetary Union. | |
+--------------------------+------------------------------------------+----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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