RNS Number:2527E
Akaei PLC
20 October 2004
AKAEI PLC ("Akaei" or the "Company")
Acquisition of All IPO Limited
Placing of 6,000,000 new Ordinary Shares at 25p per share
Change of name to All IPO plc
Re-admission to the Alternative Investment Market
The Company today announces:
* The acquisition of All IPO Limited, the business of which will be to
create an on-line IPO platform, for a consideration of #3.75 million to be
satisfied by the issue of 15,000,000 new Ordinary Shares
* The vendors of All IPO Limited are ADVFN (75%) and Jakob Kinde, Frank
Dullaghan, Peter Greensmith and Libertas Capital Corporate Finance
(totalling 25%), who will receive new Ordinary Shares in proportion to their
shareholdings
* A placing by Noble & Company Limited on behalf of the Company of 6,000,000
new Ordinary Shares at a price of 25p per share to raise #1.5 million before
expenses (#1.1 million after expenses)
* The appointment of Noble & Company Limited as broker to the Company with
immediate effect
* The proposed appointment of Jakob Kinde, Frank Dullaghan and Haakon Overli
to the board, conditional on Admission
* The despatch of a notice of Extraordinary General Meeting to be held on 15
November 2004 to approve, inter alia, the Acquisition
* The proposed change of name of the Company to All IPO plc
All IPO plans to make public offerings available to private investors on the web
via a user friendly website. Retail investors will be able to participate
on-line in IPOs and other fundraisings. The proposed All IPO business is
designed to allow members of the public to apply for new issues of shares in an
IPO via a fully online process. It will allow investors to view investment
opportunities, apply for shares, pay and have their investments confirmed in an
end-to-end electronic process. The Directors and the Proposed Directors believe
that the IPO market has made a recovery and is returning to historic levels, and
that the time is right to launch a platform to take advantage of the upturn in
financial markets and the IPO market in particular.
ADVFN, which operates Europe's number one stocks and shares website for private
investors, has indicated that it will provide All IPO with, inter alia, access
to ADVFN's audience. This will provide a significant distribution channel.
The Directors and Proposed Directors believe that with access to ADVFN's
audience, All IPO will be able to provide a unique internet based end-to-end IPO
service to one of the UK's largest pools of private investors. This will give
All IPO a unique opportunity to bring a large number of private investors
interested in stocks and shares on to a platform that will give them access to
new opportunities. The Directors and Proposed Directors expect to be able to
source transactions through a partner network of corporate finance houses,
investment banks, brokers and venture capital companies.
The Directors and Proposed Directors believe that the Acquisition presents an
opportunity that provides significant prospects to grow shareholder value.
Commenting on the announcement:
Michael Hodges, Chairman of Akaei and of ADVFN, said:
"This is a very attractive opportunity, its gives Akaei a new exciting business
going forward and it gives ADVFN a valuable shareholding in an independent
listed company."
Frank Dullaghan, Director of All IPO, commented:
"All IPO will provide a neutral platform for all product providers to access a
strong retail audience.
It is our hope that the development of our platform will lead to greater levels
of retail participation in IPOs."
This summary should be read in conjunction with the accompanying full
announcement.
Copies of the document being dispatched to Shareholders today will be available,
free of charge, from the Company's registered office and at the offices of Grant
Thornton Corporate Finance, Grant Thornton House, Melton Street, Euston Square,
London NW1 2EP from today until one month after Admission.
Enquiries
Akaei plc and ADVFN plc Michael Hodges, Chairman 020 7070 0946
All IPO Limited Frank Dullaghan, Director 020 7908 2813
Grant Thornton UK Limited - Nominated Adviser Graeme Thom 020 7383 5100
to Akaei plc
Fiona Kindness
Noble & Company Limited - Broker to Akaei plc John Llewellyn-Lloyd 020 7763 2200
David Ovens
Grant Thornton Corporate Finance, which is authorised and regulated by the
Financial Services Authority, is acting as the Company's nominated adviser and
Nobles, which is authorised and regulated by the Financial Services Authority is
acting as the Company's broker in connection with the proposed admission of the
Company's Ordinary Shares to trading on AIM. Their respective responsibilities
as the Company's nominated adviser and broker under the AIM Rules are owed
solely to the London Stock Exchange and are not owed to the Company or to any
Director or Proposed Director or to any other person in respect of his decision
to acquire shares in the Company in reliance on any part of the document
despatched to Shareholders today. No representation or warranty, express or
implied, is made by Grant Thornton Corporate Finance or Nobles as to any of the
contents of the document (without limiting the statutory rights of any person to
whom the document is issued). Grant Thornton Corporate Finance and Nobles will
not be offering advice and will not otherwise be responsible for providing
customer protections to recipients of this document in respect of the Proposals
described in the document.
Nabarro Wells, which is authorised and regulated by the Financial Services
Authority, is acting as the Company's Independent Adviser for the purposes of
The City Code on Takeovers and Mergers. No representation or warranty, express
or implied, is made by Nabarro Wells as to any of the contents of the document
despatched the Shareholders today (without limiting the statutory rights of any
person to whom the document is issued). Nabarro Wells will not be offering
advice to anyone other than the Independent Shareholders and will not otherwise
be responsible for providing customer protections to recipients of this document
in respect of the Proposals described in the document. In giving its advice to
the Independent Shareholders, Nabarro Wells is acting for the Board of Akaei and
no one else in connection with the Acquisition and will not be responsible to
anyone other than the Board of Akaei for providing the protections afforded to
clients of Nabarro Wells.
Canaccord Capital (Europe) Limited, which is authorised and regulated by the
Financial Services Authority, is acting as Nominated Adviser and Broker to
ADVFN. It is not acting for anyone else and will not be responsible to anyone
other than ADVFN for providing the protections afforded to clients of Canaccord
Capital (Europe) Limited or providing advice in relation to the contents of this
document or the Proposals. In particular Canaccord Capital (Europe) Limited, in
its capacity as Nominated Adviser to ADVFN, owes certain responsibilities to the
London Stock Exchange which are not owed to the ADVFN or the directors of ADVFN
or to any other person in respect of the matters contemplated in this
announcement. No representation or warranty, express or implied, is made by
Canaccord Capital (Europe) Limited as to the contents of the document, without
limiting the statutory rights of any person to whom the document is issued.
THE PROPOSALS
1. Introduction
The Company has today announced that it has conditionally agreed to acquire the
entire issued share capital of All IPO for a consideration to be satisfied by
the issue of 15,000,000 Consideration Shares to the Vendors.
The Company has also announced a placing by Nobles on behalf of the Company of
6,000,000 new Ordinary Shares at 25p per share to raise #1,500,000 before
expenses (#1,100,000 after expenses) and the appointment of Nobles as the
Company's broker with effect from today.
The Existing Ordinary Shares were suspended on 16 March 2004 following
substantial movement in the share price. As the Board was at an early stage of
discussions regarding the Acquisition but was unable to provide full information
at that time, the Board requested that the Existing Ordinary Shares be suspended
until either the transaction aborted or the Company was able to post a full
document to Shareholders. As the Company has today published such a document,
the Existing Ordinary Shares will be restored to trading on AIM with effect from
7.00 a.m. today.
The business of All IPO will be to create an on-line IPO platform. Via the
Internet, All IPO plans to make available shares of companies that are coming to
the market and wishing to raise capital. Retail investors will be able to
participate on-line in IPOs and other fundraisings. The proposed All IPO
business will be designed to allow anyone to apply for new issues of shares
during an IPO via a fully online process. It will allow investors to view
investment opportunities, apply for shares, pay and have their investments
confirmed in an end-to-end electronic process. The Directors and the Proposed
Directors believe that the IPO market has been quiet but is now returning, and
that the time is right to launch a new platform to take advantage of the upturn
in financial markets and the IPO market in particular.
On completion of the Acquisition, Jakob Kinde, Frank Dullaghan and Haakon Overli
will join the Board of the Enlarged Group and David Crump will resign. Michael
Hodges and Clement Chambers will remain on the Board.
The Acquisition is a related party transaction within the meaning of the AIM
Rules because the major shareholder in All IPO is ADVFN, whose directors include
all of the Directors of Akaei. ADVFN's board is accustomed to act in accordance
with the directions or instructions of those common directors, and thus the
Acquisition is deemed to be with a related party. The independent directors of
ADVFN (comprising Jonathan Mullins, Ray Negus and Roger Emmet) consider, having
consulted with ADVFN's nominated adviser Canaccord Capital (Europe) Limited,
that the terms of the Acquisition are fair and reasonable in so far as ADVFN's
shareholders are concerned.
In addition, by reason of the amount of the consideration payable under the
Acquisition, the Acquisition will constitute a reverse takeover within the
meaning of the AIM Rules and, as required by those rules, is subject to the
approval of Shareholders in general meeting. Shareholder approval will also be
required, inter alia, to approve on a poll a waiver granted by the Panel in
respect of the requirement which would otherwise arise for the Concert Party to
make an offer for the whole of the Company (as the Acquisition will result in
the Concert Party holding more than 30 per cent. of the voting rights of the
Company). In addition, Shareholders' approval will be required to authorise the
Directors to allot the various shares described in the document and to change
the name of the Company.
A document has today been posted to Shareholders to explain the background to
and reasons for the Proposals and to recommend that Shareholders vote in favour
of each of the Resolutions to be proposed at the Extraordinary General Meeting
of the Company to be held on 15 November 2004.
2. Information on All IPO
All IPO aims to enable the marketing of IPOs and private placements to retail
investors using the internet. The aim is to create the leading pan-European
technology platform used by investment banks and other financial intermediaries
to distribute primary equity offerings, both for quoted and unquoted issuers,
via the internet. The proposed business will require the Company to be FSA
regulated. Application for FSA approval will be submitted as soon as possible
after Admission and, if successful, it is expected that such approval should be
granted within six months of application. Until FSA approval is received the
Company will focus on the development of its white-box services, which, as a
technology provision service, does not require FSA approval.
Messrs Kinde and Dullaghan have significant experience in the online IPO arena
from their time at EO plc, a company which operated an online IPO platform in
1999/2000. The EO business raised over #20 million in several fund raisings and
was valued at approximately #70 million at its peak, having over 8,500
registered clients in the UK. The platform was used successfully to distribute a
significant number of IPOs and other products in the UK and Europe, including
Orange, Carphone Warehouse and Deutsche Post.
ADVFN, which operates Europe's number one stocks and shares website for private
investors, has indicated that it will provide All IPO with, inter alia, access
to ADVFN's user base. This should provide a significant distribution channel. As
at 19 October 2004, being the latest practicable date prior to the date of the
document, ADVFN had over 400,000 registered users. ADVFN has confirmed to the
Company that it will not seek to compete with All IPO by either creating its own
IPO system or seeking to use or otherwise gain any benefit from assets it
acquired from the liquidator of EO plc for at least ten years from the date of
the document. In addition ADVFN has confirmed that it will not exercise any
claim against the Company in respect of any intellectual property rights that it
may retain in the assets acquired from the liquidator of EO plc.
The Directors and Proposed Directors believe that with access to ADVFN's
userbase, All IPO will be able to provide the only internet based end-to-end IPO
service to one of the UK's largest pool of private investors. This should give
All IPO a unique opportunity to bring together a large number of people
interested in stocks and shares and a platform to allow them to gain access to
new opportunities as they become available.
3. Background to and reasons for the Acquisition
During 2002 and 2003 it became apparent that market conditions for the Company
had been difficult and that product releases did not achieve expected targets.
In addition, in October 2002 the managing director left the Company. As a result
the Directors were required to restructure the Company and look for acquisition
opportunities outside of software publishing.
The Directors have been reviewing various options with a view to providing the
Company with a way to progress, rather than languishing as a shell company with
little cash and limited prospects for growth. The Directors and Proposed
Directors believe that the Acquisition presents an opportunity that provides
significant prospects to grow shareholder value.
4. Principal terms of the Acquisition
The Acquisition Agreement provides that the Company will acquire the entire
issued share capital of All IPO for a consideration of #3,750,000 to be
satisfied by the allotment and issue by the Company of the Consideration Shares
to the Vendors. The Consideration Shares will rank pari passu in all respects
with the Existing Ordinary Shares.
The Acquisition Agreement is conditional, inter alia, upon:
(1) the passing of all resolutions at the Extraordinary General Meeting, with
resolution 1 being taken on a poll; and
(2) Admission becoming effective.
It is expected that completion of the Acquisition and Admission will take place
on 16 November 2004.
5. Current trading and prospects
Audited results for the Company for the three years ended 30 June 2004 are
included in the document posted to Shareholders today. The Company is currently
being run on an effective care and maintenance basis, with overheads reduced to
minimal levels, whilst the Directors have been reviewing possible acquisition
opportunities.
All IPO is a start-up entity and, on completion of the fund raising, the
Enlarged Group will use the net proceeds of the Placing to develop an IPO
platform, to recruit a small team which will include sales and technical staff,
to promote the All IPO business and for general working capital requirements.
The Directors and Proposed Directors believe that market interest in flotation
opportunities is increasing, and that investor appetite is improving with the
remainder of 2004 on into 2005 having the potential for continued recovery in
the primary markets.
All IPO expects to generate revenue from equity IPO offerings distributed
through the All IPO platform, ''white-boxing'' the All IPO platform for other
financial intermediaries and advertising and promotion. The Directors and
Proposed Directors expect to be able to source transactions through a partner
network of corporate finance houses, investment banks, brokers and venture
capital companies.
The Directors and Proposed Directors believe that the IPO business is one of the
highest margin capital raising businesses in the securities industry. Barriers
to entry are high because, in the traditional model, financial intermediaries
must build, retain and remunerate a research team, a sales team, an origination
team and an executive team. The All IPO model focuses on on-line distribution
and does not incorporate the significant infrastructure costs of an investment
bank. Accordingly, the Directors and Proposed Directors believe the business
should reach profitability more quickly than the traditional model.
6. Directors and Proposed Directors
Board changes
On Admission David Crump will resign as finance director of the Company and
Jakob Kinde, Frank Dullaghan and Haakon Overli will be appointed as new
directors. Michael Hodges and Clement Chambers will remain on the board with
Michael Hodges remaining as Chairman and Clement Chambers taking up the position
of Chief Executive Officer. Akaei has no other employees. The board immediately
following Admission will be as follows:
Directors
Michael Hodges, aged 42, Chairman
Michael Hodges is chairman and co-founder of ADVFN where he takes an active role
in the day to day running and development of the business and is currently
working to expand ADVFN's content. He is director and founder of two other UK
publicly listed software companies, On-line and Akaei. He has participated in a
number of government trade missions to Japan.
Clement Chambers, aged 41, Director, and proposed Chief Executive Officer
Clement Chambers is a director and co-founder of On-line, ADVFN and Akaei. He
became chief executive officer of ADVFN in January 2002, where he takes an
active role in all aspects of the company from product and staff development to
the day to day running of the site. He is a regular contributor to and columnist
for a number of UK and US financial publications.
Proposed Directors
Jakob Kinde, aged 45, Director
Jakob Kinde has over 20 years of investment banking experience. He began his
career with Samuel Montagu in 1982, before moving to Kleinwort Benson (now
Dresdner Kleinwort Wasserstein) where, between 1987 and 1999, he held several
senior positions, latterly as director and head of the Nordic corporate finance
team. In 1999, he became a director and shareholder at NewMedia Investors
Limited (now part of NewMedia Spark plc, of which he is a co-founder). In
September 1999 he, together with a number of partners, founded EO plc, an online
share distribution platform, and in 2000 became managing director and eventually
chief executive officer of the company. In 2002, Jakob and Frank Dullaghan
co-founded Libertas Capital Corporate Finance. Jakob is Executive Chairman of
Libertas Capital Group plc, the holding company of Libertas Capital Corporate
Finance, which was admitted to trading on AIM in July 2004 having raised #2.2
million. Jakob holds a Certified Diploma in Accountancy and Finance, is a Member
of the Securities Institute and obtained a B.Sc (Econ) from University College
London in 1982. In addition, he is FSA registered as chief executive,
appointment and oversight and investment adviser with Libertas Capital
Group plc.
Frank Dullaghan, aged 49, Director
Frank Dullaghan has over 17 years' experience in financial services. He began as
a management consultant with Coopers and Lybrand (now PricewaterhouseCoopers)
before moving to Lehman Brothers International where he became head of
compliance Europe. In 2000, he moved to EO plc and was the company's chief
financial officer, chief operating officer and compliance officer. It was in
November 2002 that Frank and Jakob Kinde left EO plc to co-found Libertas
Capital Corporate Finance. Frank is Chief Operating Officer of Libertas Capital
Group plc. Frank has a BA in economics from University College Dublin, is also a
member of the Securities Institute, FCMA and FSA registered as director,
compliance oversight, money laundering reporting and investment adviser with
Libertas Capital Group plc.
Haakon Overli, aged 34, Non-executive Director
Haakon Overli has extensive financial services experience as an entrepreneur,
having co-founded SelfTrade S.A. (France), an online broker, and acted as the
CEO for the successful British part of the business. SelfTrade S.A. was floated
in April 2000 and then sold in October 2000 to Direkt Anlage Bank GmbH (a
subsidiary of Hypo-Vereins Bank GmbH of Germany) for Euro 911 million.
Previously, he was a director of the investment banking startup MC Securities
Ltd, part of which was sold to the ING Group, where he subsequently became a
director and co-head of technology investment banking at ING Barings. Mr. Overli
started his career at JP Morgan Ltd in the M&A departments of New York and
London. Mr. Overli is a guest lecturer at Salford Oxford Business School on the
topic of management of high growth technology companies. Mr. Overli studied
mathematics at the University of Oslo and holds a B.A. (Hons) in Economics from
University of Durham.
7. Share option arrangements
The Directors and Proposed Directors consider that the Company's remuneration
strategy should include equity incentives and in particular share options for
key employees. The Company has in place an unapproved Share Option Scheme and
will comply to the greatest extent practicable with the guidelines issued by
institutional investment protection committees. The Directors and Proposed
Directors intend that no more than 20 per cent. of the Company's share capital
will be under option at any one time. A total of 2,830,539 options have been
granted under the Share Option Scheme. There is no current intention to grant
any further options under this scheme.
8. Dealing restrictions
Each of the Directors and Proposed Directors (as appropriate), Peter Greensmith,
Libertas Capital Corporate Finance, On-line and ADVFN has agreed that he/it will
not dispose of any interest in their Existing Ordinary Shares or New Ordinary
Shares for a period of one year from Admission, save in the event of an
intervening court order, the death of an individual or in respect of an
acceptance of a takeover offer for the Company which is open to all
Shareholders. Each party has further agreed with the Company and Nobles to
dispose of any interest in such Ordinary Shares held by them only through the
Company's broker and on an orderly market basis for a further 12 months after
the first anniversary of the date of Admission.
9. Marketability of Ordinary Shares
Application will be made for the Enlarged Issued Share Capital to be admitted to
trading on AIM and the completion of the Acquisition and Placing are subject to
Admission. No application is being made for the admission of any Ordinary Shares
to the Official List of the UK Listing Authority.
10. Dividend policy
The Board anticipates that, following the completion of the Proposals, cash
resources generated by the Company will be retained for the development of the
Company's business. The Company currently has a deficit on reserves of some #2
million and thus has no profits available for distribution and will be unable to
pay a dividend until that deficit is reversed. The declaration and payment by
the Company of any dividends and the amount thereof will depend on the results
of the Company's operations, its financial position, cash requirements,
prospects, profits available for distribution and other factors deemed to be
relevant at the time.
11. Details of the Placing
Nobles has conditionally placed, as agent for the Company, 6,000,000 new
Ordinary Shares at the Placing Price, representing 25.75 per cent. of the issued
ordinary share capital of the Company on Admission. The Placing is intended to
raise approximately #1,100,000 for the Company (after expenses). The Placing
Shares will, when issued and fully paid, rank pari passu in all respects with
the Existing Ordinary Shares, and will rank in full for all dividends and other
distributions hereafter declared, paid or made in respect of the Ordinary
Shares.
The Placing is conditional, inter alia, on Shareholder approval at the
Extraordinary General Meeting. If the resolutions are passed at the EGM, it is
expected that dealings in the Placing Shares will commence on 16 November 2004.
The Placing is also conditional on receipt of Inland Revenue advance assurance
that the Placing Shares will rank as qualifying for the purposes of the VCT and
EIS legislation.
It is expected that the proceeds of the Placing will be received by the Company
on or before 19 November 2004. In the case of Placees requesting Placing Shares
in uncertificated form, it is expected that the appropriate stock accounts of
these Placees will be credited with the Placing Shares comprising their Placing
participation with effect from 16 November 2004. In the case of Placees
requesting Placing Shares in certificated form, it is expected that certificates
in respect of the Placing Shares will be despatched by post, within 14 days of
the date of Admission.
12. City Code
The Acquisition gives rise to certain considerations under the City Code. Brief
details of the Panel, the City Code and the protections they afford to
Shareholders are described below.
The City Code has not, and does not seek to have, the force of law. It has,
however, been acknowledged by both the UK government and other UK regulatory
authorities that those who seek to take advantage of the facilities of the
securities markets in the UK should conduct themselves in matters relating to
takeovers in accordance with best business standards and so according to the
City Code.
The City Code is issued and administered by the Panel. The City Code applies to
all takeovers and merger transactions, however effected, where the offeree
company is, inter alia, a listed or unlisted public company resident in the UK
and to certain categories of private limited companies. Akaei is such a company
and its Shareholders are therefore entitled to the protections afforded by the
City Code.
Under Rule 9 of the City Code (''Rule 9'') where (i) any person acquires shares
which, when taken together with shares already held by him or shares held or
acquired by persons acting in concert with him, carry 30 per cent. or more of
the voting rights of a company subject to the City Code or (ii) any person who,
together with persons acting in concert with him, holds not less than 30 per
cent. but not more than 50 per cent. of the voting rights of a company subject
to the City Code and such person, or persons acting in concert with him,
acquires any voting rights, that person is normally obliged to make a general
offer to all shareholders to purchase, in cash, their shares at the highest
price paid by him, or any person acting in concert with him, within the
preceding 12 months.
For the purposes of the City Code, the members of the Concert Party are to be
treated as acting in concert. Certain members of the Concert Party own 100 per
cent. of All IPO and the additional persons who make up the Concert Party are
considered to be sufficiently closely related that they should be considered to
be acting in concert. Accordingly, the Concert Party is considered to have the
obligation under Rule 9 for which a waiver is sought from the Panel. Further
information on the Concert Party is set out in Part 9 of the document.
Immediately following Completion, the shareholding of the Concert Party will be,
in aggregate, 16,885,529 Ordinary Shares, representing approximately 72.5 per
cent. of the Enlarged Issued Share Capital. The maximum potential shareholding
of the Concert Party, assuming that the members of the Concert Party exercise
all of their options in Akaei, and that no other options are exercised, will be
18,932,555 Ordinary Shares, representing approximately 74.7 per cent. of the
then Enlarged Issued Share Capital (including the Ordinary Shares issued
pursuant to the exercise of the options by the Concert Party).
Of the options held by the Concert Party, 300,000 are currently exercisable and
the balance can be exercised from 20 October 2005 in accordance with the terms
of grant.
The Panel has agreed, subject to the resolution numbered 1 set out in the notice
of Extraordinary General Meeting being passed on a poll by the Independent
Shareholders at the Extraordinary General Meeting, to waive the obligation on
the Concert Party to make a general offer to Shareholders under Rule 9 which
would otherwise arise on Completion. As On-line is a member of the Concert Party
it will abstain from voting on resolution 1 set out in the notice of
Extraordinary General Meeting.
Shareholders should be aware that following completion of the Proposals the
Concert Party will own or control more than 50 per cent. of the voting rights of
the Company and, save as set out below, will therefore be able to acquire any
number of Ordinary Shares, without incurring any further obligation under Rule 9
to make a general offer.
Following completion of the Proposals, ADVFN will own 48.3 per cent. of the
voting rights of the Company and therefore will not be permitted to increase its
shareholding in the Company without incurring an obligation to make a general
offer to Shareholders under Rule 9. The individual interests of the remaining m
members of the Concert Party are all less than 30 per cent. of the voting rights
of the Company. Each member of the Concert Party (save for ADVFN) may increase
their shareholdings in the Company without incurring an obligation under Rule 9
as long as their individual holdings do not amount to 30 per cent. or more of
the Enlarged Issued Share Capital.
No member of the Concert Party nor any person acting in concert with any of them
has purchased Ordinary Shares in the 12 months immediately preceding the date of
the document dispatched to Shareholders today. The Waiver, which the Panel has
agreed to provide subject to the passing of Resolution 1, will be invalidated if
any purchases of Ordinary Shares are made by any member of the Concert Party or
any person acting in concert with any of them in the period between the date of
the document and the Extraordinary General Meeting. Each member of the Concert
Party has undertaken to the Company that it will not make any such purchases of
Ordinary Shares.
13. Arrangements with ADVFN
Relationship Agreement
The Company and ADVFN have entered into a Relationship Agreement which regulates
the relationship between ADVFN and the Company while ADVFN is a controlling
shareholder of the Company (by holding 30 per cent. or more of the voting rights
of Akaei alone or with its associates). ADVFN has agreed that, while it is a
controlling shareholder, it will not take any action which inhibits the Company
or its subsidiaries from carrying on their business independently from ADVFN,
that all transactions and relationships between it and the Company will be
conducted on arms' length terms and on a normal commercial basis, and that it
will exercise its voting rights so as to ensure that the independence of the
Board is maintained. In the event that a transaction is proposed between ADVFN
and the Company, ADVFN has undertaken to ensure that such a transaction would be
at arm's length and on a normal commercial basis and further that the
representative directors of ADVFN would absent themselves from the Akaei Board
discussions and from voting at the Akaei Board meetings on such matters.
In addition, the board of ADVFN has resolved that any director of ADVFN, also
being a director of Akaei, would absent himself from the ADVFN Board discussions
and from voting at the ADVFN Board meetings on such matters.
Intentions with respect to shareholding
Although ADVFN reserves the right to buy, sell or otherwise deal in the
Company's securities in the market, or otherwise (subject to the lock-in
agreement, details of which are set out in paragraph 8 above), it regards itself
as a long term strategic investor in Akaei and has no present intention to
reduce its shareholding below 48.3 per cent.
14. Enterprise Investment Scheme and Venture Capital Trusts
The Company has applied for advance assurance from the Inland Revenue that the
Placing Shares will rank as qualifying for the purposes of the EIS and VCT
legislation. The availability of tax relief will depend, inter alia, upon the
investor and the Company satisfying various qualifying conditions, normally for
a period of not less than three years. It is emphasised that advance assurance
has not yet been received and the Company does not make any representations as
to whether an investment will be or will continue to be one in respect of which
relief under the EIS and VCT legislation will be available.
15. Extraordinary General Meeting
Shareholders will find at the end of the document a notice convening an
Extraordinary General Meeting of the Company to be held at the offices of Field
Fisher Waterhouse, 35 Vine Street, London EC3N 2AA at 10.00 a.m. on 15 November
2004 at which the following resolutions will be proposed:
1. an ordinary resolution on a poll to approve the Acquisition for the purposes
of Rule 13 of the AIM Rules and the Waiver;
2. a special resolution that the Directors be authorised to allot the New
Ordinary Shares and that the Directors be authorised to allot a certain number
of Ordinary Shares for cash other than pro rata to existing members; and
3. a special resolution that the name of the Company be changed to All IPO plc.
16. Action to be taken
Shareholders will find enclosed with the document a Form of Proxy for use at the
Extraordinary General Meeting. Whether or not Shareholders intend to be present
at the meeting, they are requested to complete, sign and return the Form of
Proxy to the Company's registrars, Capita Registrars (Proxies), P.O. Box 25,
Beckenham, Kent BR3 4BR as soon as possible but, in any event, so as to arrive
no later than 10.00 a.m. on 13 November 2004. The completion and return of a
Form of Proxy will not preclude Shareholders from attending the meeting and
voting in person should they wish to do so.
17. Recommendation
As Michael Hodges, Clement Chambers and David Crump are members of the Concert
Party all of the Directors are precluded by the City Code from providing advice
to Shareholders on the terms of the Acquisition and on an appropriate course of
action. Consequently, as there are no independent Directors of Akaei, Nabarro
Wells, Akaei's Independent Financial Adviser, has in its letter to the
Independent Shareholders set out in Part 2 of the document advised the
Independent Shareholders of Akaei with regard to the terms of the Acquisition.
Nabarro Wells considers the terms of the Acquisition and the Waiver of the
obligation on the members of the Concert Party (both individually and
collectively) to make a general offer to Shareholders under Rule 9 to be fair
and reasonable and in the best interests of Independent Shareholders as a whole
and recommends Independent Shareholders to vote in favour of Resolution 1 to be
proposed at the Extraordinary General Meeting. In giving its advice, Nabarro
Wells has taken into account the Directors' and Proposed Directors' commercial
assessments.
In addition, as the Acquisition is a related party transaction under the AIM
Rules, the Directors would normally make a statement to the Shareholders that,
having consulted with the Company's nominated adviser, the terms of the
transaction are fair and reasonable insofar as the Shareholders are concerned.
In this case, as there are no independent Directors, the Shareholders are being
separately advised by Nabarro Wells whose opinion is given in the paragraph
above and in Part 2 of the document.
On-line will abstain from voting on Resolution 1 to be proposed at the EGM.
All of the Directors believe that Resolutions 2 and 3 are in the best interests
of Shareholders and therefore recommend Shareholders to vote in favour of these
Resolutions. On-line has given an irrevocable undertaking to vote in favour of
Resolutions 2 and 3 to be proposed at the EGM in respect of its holding of
1,885,529 Ordinary Shares representing 81.97 per cent. of the Existing Ordinary
Shares.
EXPECTED TIMETABLE
Despatch of the document 20 October 2004
Latest time and date for receipt of Forms of Proxy for the EGM 10.00 a.m. on 13 November 2004
Extraordinary General Meeting 10.00 a.m. on 15 November 2004
Admission effective and dealings expected to commence on AIM 8.00 a.m. on 16 November 2004
Completion of the Acquisition 16 November 2004
CREST accounts credited 16 November 2004
Definitive certificates for New Ordinary Shares expected to be 30 November 2004
despatched by
PLACING STATISTICS
Number of Existing Ordinary Shares in issue 2,300,362
Placing Price 25p
Number of Placing Shares 6,000,000
Placing Shares as a percentage of the Enlarged Issued Share Capital 25.75%
Number of Consideration Shares 15,000,000
Number of Consideration Shares as a percentage of the Enlarged 64.38%
Issued Share Capital
Number of Ordinary Shares in issue following Admission 23,300,362
Market capitalisation of the Company at the Placing Price following #5,825,091
completion of the Proposals
Gross proceeds of the Placing #1,500,000
Net proceeds of the Placing receivable by the Company #1,100,000
INFORMATION REQUIRED BY SCHEDULE 2(f) and SCHEDULE 4(g) OF THE AIM RULES
Proposed Directors' service contracts
Harald Torbjorn Gabriel Jakob Kinde (known as Jakob Kinde) has agreed,
conditional on Admission, to become a director of the Company pursuant to a
letter of appointment dated 20 October 2004. In addition, pursuant to a
consultancy agreement between the Company, Libertas Capital Corporate Finance
Limited (''Libertas'') and Jakob Kinde dated 20 October 2004, Libertas has
agreed, conditional on Admission, to provide the services of Jakob Kinde to act
as a director of the Company for a minimum of one day per week. Libertas
receives a fee of #25,000 per annum pursuant to the consultancy agreement. The
consultancy agreement is for an initial period of one year and may be terminated
thereafter by any party giving at least six months' written notice.
Frank Joseph Dullaghan has agreed, conditional on Admission, to become a
director of the Company pursuant to a letter of appointment dated 20 October
2004. In addition, pursuant to a consultancy agreement between the Company,
Libertas and Frank Dullaghan, Libertas has agreed, conditional on Admission, to
provide the services of Frank Dullaghan to act as a director of the Company for
a minimum of one day per week. Libertas receives a fee of #25,000 per annum
pursuant to the consultancy agreement. The consultancy agreement is for an
initial period of one year and may be terminated thereafter by any party giving
at least six months' written notice.
Haakon Overli has agreed, conditional on Admission, to become a non-executive
director of the Company pursuant to a letter of appointment dated 20 October
2004. In addition, pursuant to a consultancy agreement between the Company,
Verdande Limited and Haakon Overli dated 20 October 2004, Verdande Limited has
agreed, conditional on Admission, to provide the services of Haakon Overli to
act as a non-executive director of the Company. Verdande Limited will receive a
fee of #15,000 per annum pursuant to the consultancy agreement. The consultancy
agreement may be terminated by either the Company or Verdande Limited giving the
other party three months' written notice of termination.
Current and previous directorships
The Proposed Directors are or have been directors or partners of the following
companies and partnerships at any time in the previous five years. Other than
disclosed below there is no information to be disclosed under AIM Schedule 2
(f) (iii) - (viii).
Jakob Kinde
Current Directorships Past Directorships
Libertas Capital Corporate Finance Limited EO Plc (in liquidation)
Equity Growth Research Limited EPO.com AB
(formerly EO (UK) Limited) EO Nordic AB
Kinde & Co. Limited EO News Limited
Supercart plc EO.Com Limited
The BTJ Foundation, UK EO.Net Limited
Libertas Capital Group plc Glasshouse Associates Limited
Libertas Capital Asset Management Limited Glasshouse Investors Limited
Libertas Capital Ventures Limited Spark Investors Limited (formerly
Libertas Capital Securities Limited NewMedia Investors Limited)
Libertas Capital Nordic AB NewMedia Spark AB
All IPO Limited Metropolis Property Company Limited
Jetweb AB
Funplanet AB
Opuswish Limited
Jakob Kinde was an executive director of EO plc which was put into voluntary
solvent liquidation in September 2002 with positive net assets in excess of #5
million.
Frank Dullaghan
Current Directorships Past Directorships
Libertas Capital Corporate Finance Limited EO News Limited
Equity Growth Research Limited (formerly EO EPO.com AB
(UK) Limited) EO.Com Limited
Libertas Capital Group plc EO.Net Limited
Libertas Capital Asset Management Limited
Libertas Capital Ventures Limited
Libertas Capital Securities Limited
Libertas Capital Nordic AB
All IPO Limited
Haakon Overli
Current Directorships Past Directorships
Verdande Limited Self Trade UK Nominees Limited
Self Trade UK Services Limited
Self Trade UK Marketing Services Limited
DEFINITIONS
In this announcement, unless the context otherwise requires, the following
expressions have the following meanings:
''Acquisition Agreement'' the agreement dated 20 October 2004 between the Company and the
Vendors relating to the Acquisition, a summary of the principal terms
and conditions of which is set out in paragraph 10(a) of Part 10 of
the document
''Acquisition'' the proposed acquisition of All IPO Limited by the Company pursuant
to the Acquisition Agreement
''Act'' the Companies Act 1985, as amended
''Admission'' admission of the Enlarged Issued Share Capital to trading on AIM
becoming effective in accordance with Rule 6 of the AIM Rules
''AIM Rules'' the rules of AIM as issued by the London Stock Exchange
''AIM'' a market operated by the London Stock Exchange
''ADVFN'' ADVFN plc
''All IPO'' All IPO Limited
''City Code'' The City Code on Takeovers and Mergers
''Combined Code'' the Principles of Good Governance and the Code of Best Practice
included with the listing rules of the FSA
''Company'' or ''Akaei'' Akaei plc
''Completion'' completion of the Acquisition in accordance with the Acquisition
Agreement
''Concert Party'' ADVFN, Jakob Kinde, Frank Dullaghan, Peter Greensmith, Libertas
Capital Corporate Finance, On-line, Libertas Capital Group plc and
the directors of ADVFN namely Clement Chambers, Michael Hodges,
Jonathan Mullins, David Crump, Raymond Negus and Robert Emmet
''Consideration Shares'' 15,000,000 new Ordinary Shares to be issued as consideration for the
Acquisition
''CREST'' the computer based system and procedures which enable title to
securities to be evidenced and transferred without a written
instrument
''Directors'' or ''Board'' the directors of the Company at the date of this document whose names
are set out on page 3 of the document
''Deferred Shares'' the 911,500 deferred shares of 49p each in issue at the date of the
document
''Enlarged Group'' the Company and, following completion of the Acquisition, its
subsidiary All IPO
''Enlarged Issued Share Capital'' the ordinary share capital of the Company as enlarged by the
Proposals comprising the Existing Ordinary Shares and the New
Ordinary Shares
''EU'' European Union
''Existing Ordinary Shares'' the 2,300,362 Ordinary Shares of 1p each in issue at the date of the
document
''Extraordinary General Meeting'' or the extraordinary general meeting of the Company convened for 10.00
''EGM'' a.m. on 15 November 2004 (or any adjournment thereof), notice of
which is set out at the end of the document
''Form of Proxy'' the form of proxy enclosed with the document for use in connection
with the EGM
''FSA'' The Financial Services Authority
''Grant Thornton Corporate Finance'' the corporate finance division of Grant Thornton UK LLP which is
authorised in the UK by the FSA to carry on investment business
''Grant Thornton International'' a non-practising, non-trading international umbrella organization
comprising a network of independent member and correspondent firms
throughout the world. For the avoidance of doubt please be aware that
Grant Thornton International is not an international/global/
worldwide partnership either in relation to all of the members
collectively or any two or more members together. In particular,
Grant Thornton UK LLP does not carry on business in the United States
of America or Canada and is a separately owned and managed business
from entities known as Grant Thornton LLP carrying on business in
those territories
''Grant Thornton UK LLP'' a limited liability partnership with its registered office at Grant
Thornton House, Melton Street, Euston Square, London NW1 2EP and
which is the UK member firm of Grant Thornton International
''IPO'' initial public offering
''Independent Shareholders'' the shareholders of the Company, excluding On-line
''Libertas Capital group'' Libertas Capital Group plc and its subsidiaries
''Libertas Capital Corporate Libertas Capital Corporate Finance Limited
Finance''
''London Stock Exchange'' London Stock Exchange plc
''Nabarro Wells'' Nabarro Wells & Co. Limited
''Nobles'' Noble & Company Limited which is authorised and regulated by the FSA
''New Ordinary Shares'' the 21,000,000 new Ordinary Shares to be issued pursuant to the
Placing and the Acquisition
''Official List'' the Official List of the UK Listing Authority
''Ordinary Shares'' ordinary shares of 1p each in the share capital of the Company
''On-line Group'' On-line and its subsidiaries and associates as at the date of the
document
''On-line'' On-line plc
''Panel'' the Panel on Takeovers and Mergers
''Placees'' persons subscribing for the Placing Shares at the Placing Price
''Placing'' the conditional placing of the Placing Shares at the Placing Price as
described in the document
''Placing Agreement'' the conditional agreement dated 20 October 2004 between Nobles, the
Company and the Directors and Proposed Directors relating to the
Placing, details of which are set out in paragraph 10(a) of Part 10
of the document
''Placing Price'' 25p per Ordinary Share
''Placing Shares'' the 6,000,000 new Ordinary Shares to be issued pursuant to the
Placing
''POS Regulations'' the Public Offers of Securities Regulations 1995, as amended
''Proposals'' the Acquisition, Placing, change of name and the Waiver as described
in the document
''Proposed Directors'' the persons whose names are set out on page 3 of the document who
have conditionally agreed to become directors of the Company on
Completion
''Relationship Agreement'' the agreement dated 20 October 2004 between the Company and ADVFN
which governs the relationship between the Company and ADVFN
following completion of the Proposals, details of which are set out
in paragraph 10(a) of Part 10 of the document
''Resolutions'' the resolutions to be proposed at the EGM as detailed in the notice
set out at the end of the document
''Shareholders'' holders of Existing Ordinary Shares
''Share Option Scheme'' the Akaei Unapproved Share Option Plan
''UK'' the United Kingdom of Great Britain and Northern Ireland
''US'' or ''United States'' United States of America
''Vendors'' Jakob Kinde, Frank Dullaghan, Peter Greensmith, Libertas Capital
Corporate Finance and ADVFN
''Waiver'' the waiver by the Panel of Rule 9 of the City Code as described in
Part 1 of the document
This information is provided by RNS
The company news service from the London Stock Exchange
END
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