Hercules Property - Acquisition of Interest
February 13 1998 - 11:05AM
UK Regulatory
RNS No 0244w
HERCULES PROPERTY SERVICES PLC
13th February 1998
HERCULES PROPERTY SERVICES PLC
PROPOSED ACQUISITION OF SHARES
IN HARMAN HEALY LIMITED
NOT ALREADY OWNED BY THE COMPANY
It was announced today that subject (amongst other things) to the approval
of Hercules shareholders Hercules Property Services PLC ("the Company")
will agree to acquire the 25 per cent. of the share capital of Harman
Healy Limited ("Harman Healy") which the Company does not own from
Jonathan Radgick, a Director of the Company ("Acquisition"). The
acquisition is based upon a value agreed at #690,000 for the Harman
Healy shares.
The consideration for the Acquisition is 200,774 Hercules Shares
("Consideration Shares") which will be allotted at a price equivalent to
343.67p per share, based upon the average mid-market closing price of
Hercules Shares for the three dealing shares ended on 11 February 1998. Of
the Consideration Shares, 133,849 will be retained by Mr Radgick for a
minimum of one year after completion of the Acquisition. The balance of
66,925 Consideration Shares are being placed by Raphael Zorn Hemsley
Limited (at Mr Radgick's cost) conditional upon completion of the
Acquisition and admission of the Consideration Shares to the Alternative
Investment Market. Following completion of the transaction, the Company
will own 100 per cent, of the issued share capital of Harman Healy and Mr
Radgick will be the beneficial owner of 133,849 Hercules Shares
representing 1.97 per cent. of the enlarged issued share capital. The
Consideration Shares, when issued, will rank pari passu with the existing
ordinary shares of 5p each but will not rank for the interim dividend of 1p
per share declared on 9 February 1998.
Harman Healy
Harman Healy is one of London's leading commercial property auctioneers
but in addition it also values and manages a wide range of commercial and
residential property.
The company has been well placed to take full advantage of the improved
economic climate and the corresponding upturn in demand for investment
properties as an increasing number of buyers returned to the auction room.
As a result, auction turnover during the 15 months to 30 June 1997 more
than doubled to #60 million compared with only #25 million during the
previous 12 months. During the six months to 31 December 1997, this trend
has continued. Naturally, there has been a corresponding improvement in
fee income which rose to #790,000 over the 15 month period ended 30 June
1997 and was #441,000 (unaudited) for the six months to 31 December 1997.
The profits attributable to Harman Healy during the 15 month period ended
30 June 1997 amounted to #242,588 before tax and #351,671 (unaudited) for
the six months ended 31 December 1997. The net asset value (unaudited) of
Harman Healy as at 31 December 1997 was #538,012.
While the auction activities represent the principal business of Harman
Healy, the company also has a substantial property management arm that
produces stable long term fee income.
As a result of the demerger which created Hercules, Harman Healy undertook
the management of Resolute Property Management Limited whose main client
is Safeland Plc (a substantial shareholder of the Company), significantly
increasing the number of properties under management to in excess of
1,000. The company's property management activities have received a boost
from rental growth as there is a noticeable increase in fees generated from rent
review work.
Early last year Harman Healy took advantage of an opportunity to acquire
the freehold of an office building in Grays Inn Road, London WC1 for its
new corporate headquarters. Refurbished prior to occupation, the Directors
believe the building now provides a first class working environment which,
combined with upgrading of the company's computer capacity, has improved
operating efficiency, enhanced client service and allows for future
expansion.
Accordingly, the Directors (other than Mr Radgick, who has taken no part
in the Company's deliberations in relation to the Acquisition) believe
that it is in the best interests of the Company and its shareholders for
it to increase its holding in Harman Healy to 100 per cent.
The Directors of Hercules (other than Mr Radgick, who has taken no part
in the Company's deliberations in relation to the Acquisition) who have
received advice from Guinness Mahon & Co Limited ("Guinness Mahon"),
believe that the terms of the Acquisition are fair and reasonable so far
as shareholders are concerned and consider them to be in the best
interests of the Company and its shareholders. In giving its advice,
Guinness Mahon has taken into account the Directors' commercial assessment
of the reasons for, and the benefits of, the Acquisition.
An Extraordinary General Meeting will be held on 3 March 1998 seeking
shareholder approval of the transaction. A circular containing details of
the Acquisition and containing a Notice of an Extraordinary General
Meeting to be held on 3 March 1998 is expected to be posted to
shareholders on 16 February 1998.
Guiness Mahon & Co. Limited, which is regulated by The Securities and
Futures Authority Limited, is acting for Hercules Property Services PLC in
connection with the matters described herein and is not acting for any
other person and will not be responsible to any other person for providing
the protection afforded to customers of Guinness Mahon & Co. Limited or for
advising on the transactions and arrangements proposed in this document.
Contact: Hercules Property Services Tel: 0181 203 9099
Larry Lipman, Chairman
Paul Davis, Finance Director
Baron Phillips Associates Tel: 0171 224 1302
Baron Phillips
Guinness Mahon & Co Tel: 0171 623 9333
Jagjit Mundi
END
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