Agreement with INTL
June 30 2006 - 3:14AM
UK Regulatory
RNS Number:4362F
Baltimore PLC
30 June 2006
30 June 2006
BALTIMORE PLC
("Baltimore" or "the Company")
PROPOSED PLACEMENT OF SHARES AND
INVESTMENT CONSULTING AGREEMENT
Baltimore is pleased to announce an agreement with International Assets Holding
Corporation ("INTL"), the NASDAQ-listed financial services and asset management
group. This agreement was reached following extensive negotiations over the last
four weeks. The agreement is conditional on the unsolicited offer announced by
Oryx International Growth Fund Limited (Oryx) on Tuesday 27th June lapsing or
being withdrawn.
Highlights
Under the proposed arrangements, INTL will acquire up to 30 million new and
existing ordinary shares in Baltimore (or interests in such shares) from
Baltimore at a significant premium to the current market value of an ordinary
share. INTL will also be issued with 5 year warrants to subscribe for an
additional 28,370,000 ordinary shares. If the warrants are exercised in full and
assuming 30 million new and existing ordinary shares in Baltimore (or interests
in such shares) are acquired by INTL, this will result in approximately #13
million being received in aggregate by Baltimore as a result of the proposed
transaction. In addition, INTL has agreed to enter into a consulting agreement
with Baltimore and provide Baltimore with access to a broad range of financial
expertise.
The Board of Baltimore considers this alternative transaction with INTL superior
to the offer by Oryx for the following reasons:
1. it will result in an immediate raising of new capital for Baltimore at a
price substantially above current market price with a potential total
raising of approximately #13 million;
2. it will increase the Company's liquidity by up to approximately 47%;
3. as a result of the transaction there will be a planned reduction in
Baltimore's fixed overheads;
4. this transaction will preserve Baltimore's current tax losses of
approximately #1.2 billion;
5. it will provide access to a proven asset management team with a record
of creating superior shareholder value;
6. it will provide access to a wide range of potential investment
opportunities; and
7. it will further align shareholder and management interests.
INTL, a NASDAQ-listed financial services company was taken over by the current
management some 3 years ago and has been among the best performing financial
stocks in the US, having appreciated over 25 fold over that period (from 60
cents on 22 October 2002 to the current price at the date of this announcement
of $16.08). Since taking over INTL, the current management team has
significantly expanded operations and has established financial expertise in a
number of niche markets, including international debt capital markets,
international equities, commodities, foreign exchange and asset management.
Through its rapidly growing asset management activities, INTL now manages in
excess of $350 million in third party funds. Baltimore was introduced to INTL by
John Radziwill, a shareholder and director of both INTL and Baltimore, who has
taken no part in either the Baltimore Board or the INTL Board's approval of the
arrangements.
Proposed Arrangements with INTL
Under the terms of the proposed arrangements INTL will initially acquire up to
30 million ordinary shares in Baltimore for an average consideration of up to
20.60 pence per ordinary share. Specifically, it will acquire the existing
12,617,700 ordinary shares in Baltimore owned by one of its subsidiaries and
(subject to obtaining the consent of the relevant counterparty) the contract for
differences ("CFD") which Baltimore carries over 8,977,500 Baltimore ordinary
shares (which arose as a result of the completion of the acquisition of
Acquisitor Holdings Limited (now Baltimore Bermuda Limited) earlier this year).
The aggregate consideration to be paid by INTL for these existing shares and for
the CFD will be 18 pence per ordinary share together with the deferred
consideration of up to 3.61 pence dependent upon the amount realised within the
next 2 years from the sale of the Company's existing investments. INTL will also
subscribe for 8,404,800 new ordinary shares in Baltimore for a subscription
price per share of 18 pence per ordinary share.
In addition INTL will be issued 28,370,000 warrants (each warrant representing
one share) with a term of 5 years and an exercise price of 24 pence, (an
approximate 48% premium to current market price). Baltimore will be entitled to
require INTL to exercise the warrants in the event the ordinary shares trade (on
average) at a 30% premium to the exercise price over a 3 consecutive month
period.
As part of the proposals, INTL will enter into a consultancy agreement with
Baltimore and INTL's senior management will join Baltimore's investment
committee, thus providing access to the financial expertise established at INTL.
In order to minimise fixed overheads, under the consultancy agreement, INTL will
be compensated on a variable basis of 1% of managed assets and 10% share of
profits related to the managed assets. The 10% will be subject to a hurdle rate
based on LIBOR and a high water mark. In addition, INTL will receive the right
to appoint 20% of the directors to the Baltimore Board for so long as it retains
at least 10% of the issued ordinary shares in Baltimore (or 8% if the consent of
the relevant counterparty to the CFD is not obtained to its transfer to INTL).
The Baltimore Board believes that the increased capital resources of Baltimore,
combined with the demonstrated expertise and track record of INTL will be
significantly beneficial to Baltimore as it will enable the Company to
accelerate the achievement of the strategic objectives outlined on its admission
to AIM in February 2006. These were capital growth by taking stakes in
undervalued companies, either private or publicly quoted, and potentially to
expand within financial services by establishing asset management capabilities
both in the UK and overseas.
The Board of Baltimore also believes that partnering with INTL provides a unique
opportunity to combine the Company's existing skills and balance sheet with
INTL's established financial expertise.
The arrangement with INTL will allow access to a broad ranging expertise and
deal flow in a very cost efficient manner without incurring any substantial
fixed cost. This is consistent with the Company's efforts to reduce fixed costs
substantially from previous years and it is planned to make further reductions
to a level more appropriate to the current investment strategy.
If the proposed arrangements with INTL are completed, the Board of Baltimore has
decided not to pursue the previously announced objective to establish a
turnaround team to pursue opportunities in "distressed" companies, unless such
opportunities match the investment criteria set for the Company's "small cap"
investments.
Background to INTL
INTL is a financial services and asset management company incorporated in
Delaware, USA and operating in the USA and the UK. INTL is a public company
listed on NASDAQ and as such regulated by the US Securities and Exchange
Commission. INTL conducts trading activities through its wholly owned
NASD-member broker-dealer subsidiary which has an FSA-approved branch in London
and, in addition, owns 50.1% of an asset management company, INTL Consilium LLC,
which is registered as a financial advisor with the SEC and is in the process of
registering a UK branch with the Financial Services Authority ("FSA").
INTL has established a successful track record in managing and trading assets in
a variety of niche markets and now manages over $350 million of third party
assets. It has entered into a number of commercial arrangements to source seed
capital and to further raise third party assets.
Further information can be obtained on the INTL website www.intlassets.com or
through the company's SEC filings (ticker NASDAQ-NM:IAAC).
ENDS
For further information, please call:
Tim Lovell, Chief Executive
Baltimore plc 020 7259 1300
Stephen Benzikie / Nick Lambert
Bell Pottinger Corporate & Financial 020 7861 3232
Jonathan Wright
Seymour Pierce 020 7107 8000
The Directors of Baltimore accept responsibility for the information contained
in this announcement. To the best of the knowledge and belief of the Directors
(who have taken all reasonable care to ensure that such is the case), the
information contained in this document for which they are responsible is in
accordance with the facts and does not omit anything likely to affect the import
of such information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
STRAKKKDOBKKDAN
Oryx International Growth (LSE:OIG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Oryx International Growth (LSE:OIG)
Historical Stock Chart
From Jul 2023 to Jul 2024
