TIDMEVOL
RNS Number : 1090J
Evolve Capital PLC
24 June 2011
For immediate release 24 June 2011
Evolve Capital plc
("Evolve" or the "Company")
Proposed cancellation of admission of Astaire Group plc on
AIM
Intentions of Evolve for Astaire Group plc
The Board of Evolve notes the announcement released earlier
today by Astaire Group PLC ("Astaire"), a company in which Evolve
has a 53.6 per cent. interest.
Astaire's announcement makes reference to the settlement of the
company's litigation with Izodia plc ("Izodia"), which the Board of
Evolve considers to be a welcome development. The announcement also
gives details of Astaire's intention to convene a general meeting
of Astaire to consider the cancellation of its admission to trading
on AIM, which is a course of action that the Board of Evolve
supports. In addition the announcement contains statements
regarding the implementation of Astaire's investing policy and
Evolve's possible intentions for Astaire post a de-listing.
Despite the settlement of the litigation with Izodia the Board
of Evolve believes that the realisation by Astaire of its assets
and the settlement of its liabilities in preparation for a return
of any excess cash to its shareholders is likely to require some
considerable period of time and involve presently unquantifiable
costs. The Board of Evolve further believes that the investment
environment may change significantly during the intervening
period.
For these reasons the Board of Evolve is currently considering
whether it might be in the best interests of Evolve shareholders
for an alternative strategy to be pursued which would involve
Astaire becoming a more active investing company. Should this
strategy be implemented Evolve may seek to appoint individuals to
the board of Astaire for this purpose. Under this alternative
strategy Astaire would not then return any excess cash to
shareholders of Astaire but would instead seek to invest the cash
that it currently holds, and any amounts realised from its present
investments, into as yet unspecified investment opportunities with
a view to increasing the value of Astaire's assets for the ultimate
benefit of all of its shareholders.
The Company will make further announcements as appropriate in
the future.
The full text of the announcement released by Astaire earlier
today is set out below.
For further information please contact:
Evolve Capital plc Tel: 020 7937 4445
Oliver Vaughan, Chairman
Allenby Capital Limited Tel: 020 3328 5656
Nick Naylor
Nick Athanas
"
Astaire Group plc
Settlement of litigation
Proposed cancellation of admission of Astaire Shares to AIM
Evolve Capital PLC's intentions for Astaire Group PLC
24 June 2011
Astaire Group plc ("Astaire" or the "Company") announces that
its wholly owned subsidiary, Corporate Synergy Holdings Limited
("CSH") has today reached a settlement with Izodia PLC in relation
to litigation brought by Izodia plc against both it and Edward
Vandyk, a former chief executive of both Astaire and CSH.
Astaire also announces that a general meeting (the "General
Meeting") will be convened to consider the cancellation of the
admission of ordinary shares of 0.1p each in Astaire ("Shares") to
trading on AIM.
This announcement also contains important information about the
Board's implementation of Astaire's investing policy and Evolve
Capital PLC's possible intentions for Astaire. Evolve Capital PLC
("Evolve") is Astaire's controlling shareholder (holding
approximately 53.61% of Astaire's issued share capital).
Astaire intends to release its results for the year ended 31
December 2010 on 28 June 2011.
Settlement of litigation
A claim was made by Izodia PLC in May 2010 against two
subsidiaries of Astaire (Corporate Synergy Holdings Limited and
Astaire Securities PLC) and Edward Vandyk. This claim was for
approximately GBP3.9 million (plus interest) and has been strongly
resisted since that time. In October 2010 Izodia agreed to drop any
claims against Astaire Securities PLC in exchange for a payment of
GBP37,000, which facilitated the sale of Astaire Securities PLC.
Today Izodia PLC has agreed to drop all claims against CSH and Mr
Vandyk. Under the terms of the settlement, under which no party
admitted any liability and the details of which are subject to a
confidentiality clause, CSH has paid a GBP500,000 contribution to
Izodia's legal costs. To date CSH has funded the litigation in
excess of the sum of GBP800,000 for defence counsel's fees. CSH
expects to recover a substantial proportion of these fees from
insurers (but not the GBP500,000 contribution to Izodia's legal
costs). The Board believes that this is the best available result
in the circumstances, in the context of the alternative being an
expensive and very protracted continuation of litigation, the
outcome of which is necessarily subject to a degree of uncertainty
notwithstanding the Board's belief in the strength of the
defence.
Cancellation of admission to trading on AIM
At a meeting of the Board held yesterday, the Board resolved to
notify the London Stock Exchange pursuant to Rule 41 of the AIM
Rules of its intention to cancel the admission of Shares from
trading on AIM ("the Cancellation"), subject to the passing of the
special resolution at the General Meeting. If Shareholders approve
the Cancellation, it is anticipated that the last day of dealings
in the Shares will be 3 August 2011 and the effective date of
cancellation will be 4 August 2011.
The Shares have been admitted to trading on AIM since 30 July
2002 and in light of the completion of the sale of the Group's main
operating businesses, the Board have undertaken a review of the
benefits of the Shares continuing to be traded on AIM, and have
recognised the following key factors:
a. the costs and administrative burden associated with
maintaining admission to AIM, the Board estimates that the annual
costs of maintaining the admission are approximately
GBP100,000;
b. the management time and the legal and regulatory burden
associated with maintaining the Company's admission to AIM is now
disproportionate to the benefit to the Company; and
c. the Company, like many other quoted AIM companies of its
size, suffers from a lack of liquidity for its Shares and, in
practical terms, a small free float and market capitalisation,
which reduces trading demand.
Following careful consideration, the Board believe that it is in
the best interests of the Company and Shareholders to seek the
Cancellation at the earliest opportunity. The Company has therefore
separately notified the London Stock Exchange of its preferred date
for the cancellation of the admission of the Shares to trading on
AIM, being 4 August 2011.
The Board is aware that the Cancellation will restrict the
ability of Shareholders to realise their shareholdings, as there
will be no market facility for dealing in the Shares and no price
will be publicly quoted for the Shares. The Board are aware that
Shareholders may still wish to acquire or dispose of their Shares
and accordingly have arranged with Dowgate Capital Stockbrokers
Limited ("Dowgate") that Dowgate will endeavour to provide a
dealing facility in Ordinary Shares on a matched bargain basis
following the Cancellation.
The Company will no longer be subject to the AIM Rules after the
Cancellation and, accordingly, it will not be required to retain a
nominated adviser or to comply with the requirements of AIM in
relation to annual accounts, half-yearly reports, the disclosure of
price-sensitive information and retaining a restricted investing
policy.
Astaire has entered into a controlling shareholder agreement
with Evolve which provides that, conditional on the Cancellation
taking place on or before 31 August 2011, Evolve will continue to
support the presence of at least one independent director on the
Astaire Board and will seek the consent of such independent
director(s) for any transaction involving Astaire in which Evolve
has an interest (other than as a Shareholder) for so long as Evolve
continues to hold over 50 per cent. of Astaire's issued share
capital
Shareholders should note that following the Cancellation, the
Company will remain subject to the City Code on Takeovers and
Mergers (the "Takeover Code") for a period of 10 years from the
effective date of cancellation of the admission of the Shares to
trading on AIM (expected to be 4 August 2011). Accordingly,
shareholders will continue to receive the protections afforded by
the Takeover Code in the event that an offer is made to
shareholders to acquire their Shares.
Investing policy
Following the Cancellation, the Board intends to continue
implement the investing policy set out in the circular dated 11
February 2011. This is to continue to hold its present investments
until they can be realised, acquiring additional investments (apart
from liquid securities of predominantly debt instruments, such as
gilts,) only when contractually required to do so or in order to
obtain value for any warrants and options which are "in the money"
(i.e. capable of being exercised to buy securities at prices which
give Astaire a profit on disposal).
The process of realisation is expected to continue for some
time, due to limited liquidity in the underlying investments. As
stated in the circular of 11 February 2011, the Board do not
propose to run an accelerated or "fire sale" disposal programme as
this is not believed to be in the best interests of all
Shareholders.
Evolve's intentions for Astaire
The Board of Astaire stated in the circular dated 11 February
2011 that it would consider steps to return cash to shareholders
(which would involve some form of capital restructuring requiring
the approval of Evolve, which holds approximately 54% of Astaire's
issued share capital).
The Board of Astaire has recently been informed that Evolve may
hold the view that Astaire should become a more active investing
company and that Evolve may wish to appoint individuals to the
Board of Astaire to implement such a strategy. Were such a strategy
to be implemented it would mean that rather than seeking
shareholder approval for returning any excess cash to shareholders,
as previously proposed, the Company would instead be seeking to
invest the cash that it currently holds, and any amounts realised
from its present investments, into as yet unspecified investment
opportunities with a view to increasing the value of the Company's
assets for the ultimate benefit of all of its Shareholders. Evolve
are expected to make an announcement on this matter today,
following which the Astaire board will consider Evolve's position
with its advisers.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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