TIDMSTE
RNS Number : 1739S
Stewart & Wight PLC
21 June 2018
STEWART & WIGHT PLC
845 FINCHLEY ROAD, LONDON NW11 8NA
TEL: +44 (0)20 8455 1111 FAX: +44 (0)20 8455 9191
ANNOUNCEMENT
21 June 2018
Proposed Cancellation of Admission of ordinary shares to the
Official List
Further to the Company's announcement earlier today, a circular
setting out the terms of the Tender Offer and details of the
Delisting (together, the "Proposals") is being posted to
Shareholders today (the "Circular"), including a Notice of General
Meeting to be held at 11.00 a.m. on 17 July 2018. The Chairman's
Letter in respect of the Proposals, as contained in the Circular,
is set out below, together with the expected timetable of events.
Terms used and not defined in this announcement bear the meaning
given to them in the Circular.
DAVID CRAMER
Director
Dear Shareholder
PROPOSED CANCELLATION OF ADMISSION OF ORDINARY SHARES TO THE
OFFICIAL LIST AND TO TRADING ON THE LONDON STOCK EXCHANGE'S
MAIN MARKET FOR LISTED SECURITIES
TER OFFER FOR UP TO 335,812 SHARES
NOTICE OF GENERAL MEETING
1 Introduction
Today the Company announced its intention to seek Shareholders'
approval at a General Meeting:
(a) to conduct a Tender Offer to buy the Company's Shares other
than those held by the Majority Shareholders at a Tender Price of
GBP5.90 per Share. This amounts to 335,812 Shares which represents
approximately 21.5% of the total issued share capital of the
Company; and
(b) to apply for the cancellation of the listing of the Shares
on the Official List and their trading on the Main Market,
(together, the "Proposals").
My family control approximately 78.5% of the total Shares in
issue. Many of the remaining Shareholders hold relatively small
shareholdings which offer very little liquidity. The Shares traded
on one day only during the period between 1 January 2018 and 18
June 2018 (being the Latest Practicable Date). As a result of this
lack of liquidity it is extremely difficult for Shareholders to
realise the value of their shareholdings and at the Latest
Practicable Date, the share price stood at a discount of 21% to the
recently published Net Asset Value per Share.
Whilst my family intends to continue the Company's policy of
investing in high street retail properties, the market value of the
Company's portfolio has deteriorated significantly over the past
year and it may be some time before and if recovery takes place. In
these circumstances, we recognise that Shareholders investment
preference may favour a shorter term liquidity profile.
The percentage of the Shares in public hands is less than 25%,
being the level at which the listing in Shares can be cancelled by
the United Kingdom Listing Authority. Maintaining the listing of
the Shares is costly and time consuming and the advantages to the
Company of a continuing listing are elusive. Restoring the
percentage shareholding in public hands to meet the Listing Rule
requirements and thereby maintain the listing of the Shares is not
practicable.
Having considered the lack of alignment between the long term
interests of the Company and the interests of our loyal minority
shareholder base and the risk of the listing of the Shares being
cancelled, the Independent Director has reached agreement with the
Majority Shareholders (being me and my family) that the Company
should offer to buy back all of its Shares other than those held by
the Majority Shareholders at a price of GBP5.90 per Share. The
buyback is being funded by a loan from me to the Company on normal
arms' length commercial terms and on an unsecured basis and
interest-free basis and at the same time request that the listing
of the Shares be cancelled.
The Tender Price represents a premium of 12.4% over the closing
price of GBP5.25 per Share as at the Latest Practicable Date which
also represents the same price at which the Shares were last traded
on 21 March 2018, and represents a discount of approximately 7.1%
to the recently reported Net Asset Value per Share at the last year
end.
If the Tender Offer is taken up in full, the Majority
Shareholders will become the sole Shareholders of the Company and
the Listing of the Shares will be cancelled.
Shareholders (other than the Majority Shareholders) may tender
all but not some only of their Shares pursuant to the Tender
Offer.
The Tender Offer is being made by Stockdale Securities as
principal on the basis that all Shares that it buys under the
Tender Offer will subsequently be repurchased from it by the
Company pursuant to the terms of the Repurchase Agreement and then
cancelled.
Shareholders are not obliged to tender their Shares if they do
not wish so. If the Resolutions are approved by the requisite
majority and you do not tender your Shares pursuant to the Tender
Offer you will not receive cash for your Shares and the listing of
the Shares will be cancelled. You will then hold your Shares in an
unlisted company. While the Shares will remain freely
transferrable, it is likely that the liquidity and marketability of
the Shares will, in the future, be even more constrained than at
present and the value of such Shares may be adversely affected as a
consequence.
In order for the Proposals to become effective, the Company is
required to seek the approval of Shareholders as follows:
(c) in accordance with the UK Companies Act 2006 (the "Act") and
in compliance with guidelines from the Investment Association, a
company which intends to make an on-market purchase of its own
shares must be authorised by a resolution passed by Shareholders
representing not less than 75% of the total voting rights of the
Shareholders who vote in person or by proxy at a general meeting of
the Company (the "Buyback Resolution"); and
(d) in accordance with the Listing Rules, a company applying for
a delisting must be authorised by a resolution passed by:
(i) not less than 75% of the of the total voting rights of the
Shareholders who vote in person or by proxy at a general meeting of
the Company; and
(ii) a simple majority of the votes attaching to the Shares of
the Shareholders who are not Majority Shareholders who vote in
person or by proxy at a general meeting of the Company (the
"Delisting Resolution", and together with the Buyback Resolution,
the "Resolutions").
Accordingly, the purpose of this Circular is to provide
Shareholders with the background to the Proposals, to seek the
requisite approval from Shareholders and to provide Shareholders
with information regarding how to participate in the Tender
Offer.
As at the Latest Practicable Date, the Majority Shareholders,
holding in aggregate approximately 78.5% of the total Shares in
issue, have irrevocably undertaken that they will: (i) vote in
favour of the Resolutions; and (ii) will not, and shall procure
that none of their duly appointed attorneys will not, tender any of
their Shares as part of the Tender Offer.
Assuming that the Resolutions are passed by the requisite
majority and that the Tender Offer is fully subscribed, the Shares
purchased as part of the Tender Offer will be cancelled and the
Majority Shareholders (including those Majority Shareholders who
are also Directors) will become the sole Shareholders of the
Company.
This Circular contains a Notice of General Meeting at which the
Resolutions to approve the Proposals will be considered. If
approved:
(e) the Delisting will take effect on the date of the Delisting,
which is currently expected to occur on 14 August 2018 (20 Business
Days following the passing of the Delisting Resolution); and
(f) the Tender Offer will become unconditional once the
Conditions set out in paragraph 2.1 of Part 4 have been satisfied
(or waived, as applicable) and is expected to close at 1.00 pm on
17 July 2018.
2 Delisting
2.1 Background
The Company does not meet the "free float" requirement of LR
6.14.1 of the Listing Rules. This stipulates that at least 25% of
the shares in a company listed on the Official List must be held in
"public hands". In calculating this percentage, shares held by
Shareholders who are either directors or who own more than 5% of
the share capital are excluded, as are other categories of
shareholdings set out in LR 6.14.3. Under LR 9.2.15, the Company is
required to comply with the "free float" requirement at all times.
As at the Latest Practicable Date, only approximately 21.5% of the
Shares were held in "public hands" (calculated in accordance with
LR 6.14.1).
Consequently, pursuant to LR 5.2.2(2), the FCA may cancel the
Company's listing or - in certain circumstances - allow a
reasonable amount of time to restore the "public hands"
shareholding to the required level.
In this context the Board has reviewed the Company's options,
including an assessment of the practicalities of the Company
attempting to restore the percentage shareholding to meet the
Listing Rule requirements and thereby maintaining its listing.
2.2 Board considerations
When discussing the option of Delisting, the Board has
considered the advantages and disadvantages of maintaining the
listing of the Shares on the Official List. In the circumstances,
and having regard to the Tender Offer, the Board believes that it
is in the best interests of the Company and the Shareholders as a
whole if the Delisting occurs as soon as possible and in accordance
with the timetable set out in the Listing Rules and the London
Stock Exchange's Admission and Disclosure Standards.
Notwithstanding the Delisting, the Directors intend to continue
as directors of the Company, subject to the relevant re-election
provisions contained in the Articles.
2.3 Matters to be taken into account in considering the Delisting
If the Resolutions are approved at the General Meeting (the
"GM"), the Company will apply formally to the UK Listing Authority
for the Delisting. It is expected that the cancellation of
admission of the Shares to the Official List will take effect from
8.00 am on 14 August 2018 (being 20 Business Days after the date on
which the Delisting Resolution is passed in accordance with the
Listing Rules), and that trading in the Shares on the Main Market
will cease at the close of business on 13 August 2018.
In deciding whether or not to vote in favour of the Delisting
Resolution, Shareholders should take into consideration, amongst
other things, the following:
(a) if the Delisting occurs, it is likely that, thereafter,
there will be no public market for the Shares and the opportunity
for Shareholders to realise their investment in the Company by
selling their Shares will be reduced even more;
(b) following the Delisting, the corporate governance,
regulatory and financial reporting regime which applies to
companies whose shares are admitted to the Official List and to
trading on the Main Market will no longer apply. The Company may
achieve costs and management time savings as a result of no longer
being subject to the provisions of this regime; and
(c) the Company has received irrevocable undertakings to vote in
favour of the Resolutions from Shareholders holding more than 75%
of the Shares.
Shareholders should note in any event that if the Delisting is
not approved by the Shareholders at the GM, the UK Listing
Authority may cancel the listing of the Shares as the Company does
not meet the continuing "free float" requirement under the Listing
Rules. Notwithstanding this, it is the Board's preference that
Shareholders should approve the Delisting.
3 Tender Offer
3.1 Background
Subject to the Resolutions being passed at the GM in accordance
with English law, the Company will undertake a Tender Offer at the
Tender Price to give Shareholders the opportunity to tender all but
not some of their Shares for purchase by Stockdale Securities on
behalf of the Company.
As part of the Tender Offer, the Company has entered into a
back-to-back Repurchase Agreement with Stockdale Securities to
purchase the Shares tendered pursuant to the Tender Offer, details
of which are set out in section 6 of Part 2 of this Circular.
Pursuant to the Tender Offer, Shares will be purchased out of
distributable profits but will be funded by way of an interest-free
loan on normal commercial terms and on an unsecured basis, details
of which are set out at section 3.3, below. In the event that the
Tender Offer is successful it is the Company's intention to cancel
the tendered Shares.
The right to participate in the Tender Offer is subject to the
restrictions set out in this Circular. The Tender Offer gives
Shareholders an option to sell all but not some of their Shares
ahead of the Delisting.
If the Tender Offer lapses or is terminated, the tendered Shares
will be returned to the relevant Shareholders.
3.2 Tender Price
The Tender Price of GBP5.90 per Share represents, at the Latest
Practicable Date:
-- a premium of 12.4% over the closing price of GBP5.25 per
Share as at the Latest Practicable Date which also represents the
same price at which the Shares were last traded on 21 March 2018;
and
-- a discount of 7.1% to the recently reported Net Asset Value
per Share of GBP6.35 as at 31 March 2018.
Subject to the passing of the Resolutions, payment of monies in
respect of the Shares will be made by cheque on or around the week
commencing 23 July 2018.
3.3 Tender Offer Loan
At this stage of the investment cycle, the Company has limited
amounts of cash available with which to meet the funding
requirements of the Tender Offer. As a result, Michael Conn, one of
the Directors of the Company, has agreed to provide a loan to the
Company in order that it may fund the Tender Offer. This loan is
being made available to the Company on an interest free, unsecured
basis and on normal commercial terms.
3.4 Other details
The Tender Offer is only available to Shareholders appearing on
the register of members as at the Record Date and only in respect
of Shares held by them at such time.
Shareholders' attention is drawn to the letter from Stockdale
Securities set out in Part II of this Circular and to Part 4 of
this Circular which, together with the Tender Form, constitute the
terms and conditions of the Tender Offer. Details of how
Shareholders will be able to tender Shares can be found in section
3 of Part 4 of this Circular.
The Company will, if the Buyback Resolution to approve such
authority is passed at the GM in accordance with English law, be
authorised to make on-market purchases of up to 335,812 Shares,
representing all of the Shares other than those held by the
Majority Shareholders and approximately 21.5% of the Company's
total issued share capital. If approved, such authority will expire
on the earlier of:
(a) the completion by the Company of the repurchase from
Stockdale Securities of the Shares tendered pursuant to the Tender
Offer and pursuant to the terms of the Repurchase Agreement;
(b) the withdrawal of the Tender Offer by the Company;
(c) the Tender Offer lapsing in accordance with the terms and
conditions set out in this Circular; or
(d) the date of the next annual general meeting of the Company
or 17 October 2019 save that, the Company may, prior to the expiry
of this authority, make a contract or contracts to purchase Shares
under this authority which will or may be completed or executed
wholly or partly after such expiry and may make a purchase of
Shares pursuant to any such contract or contracts as if the
authority conferred hereby had not expired.
Shareholders are not obliged to tender any Shares and those
Shareholders who do not wish to tender their Shares in the Tender
Offer should not return the Tender Form or share certificate. Once
submitted, a Tender Form is irrevocable and cannot be withdrawn
without the consent of the Company. Shareholders should note that,
once tendered, Shares may not be switched, sold, transferred,
charged or otherwise disposed of other than in accordance with the
Tender Offer.
Whether or not Shareholders decide to tender any Shares is a
matter for each Shareholder and will depend, among other things, on
their view of the Delisting, the Company's prospects and their
individual circumstances, including their tax position. In making
their own decisions Shareholders are recommended to consult their
own financial and tax adviser.
4 General Meeting
In order for the Proposals to become effective, the Resolutions
must first be approved by the requisite majority of Shareholders at
the General Meeting. The GM has been convened for 11.00 am on 17
July 2018 to be held at Blinkhorns, 27 Mortimer Street, Fitzrovia,
London, W1T 3BL for the purpose of considering and, if thought fit,
approving the Resolutions.
The Company will propose that Resolutions regarding the
on-market purchase of the Shares not held by the Majority
Shareholders and the Delisting be approved by Shareholders at the
GM, as set out in the Notice of General Meeting.
The Resolutions are set out in the Notice of General Meeting,
which you will find at the end of this Circular. To be passed:
(a) the Buyback Resolution must be authorised by a resolution
passed by Shareholders representing not less than 75% of the total
voting rights of the Shareholders who vote in person or by proxy at
the GM; and
(b) the Delisting Resolution must be authorised by a resolution passed by:
(i) not less than 75% of the of the total voting rights of the
Shareholders who vote in person or by proxy at the GM; and
(ii) a simple majority of the votes attaching to the Shares of
the Shareholders who are not Majority Shareholders who vote in
person or by proxy at the GM.
If the Resolutions are approved:
(c) the Delisting will take effect on the date of the Delisting,
which is currently expected to occur on 14 August 2018 (being 20
Business Days following the passing of the Delisting Resolution);
and
(d) the Tender Offer will become unconditional once the
Conditions set out in paragraph 2.1 of Part 4 have been satisfied
(or waived, as applicable) and is expected to close at 1.00 pm on
17 July 2018.
5 Irrevocable Undertakings
The Majority Shareholders, holding, in aggregate, approximately
78.5% of the Shares in issue, have irrevocably undertaken that they
will: (i) vote in favour of the Resolutions; and (ii) will not, and
shall procure that none of their duly appointed attorneys will not,
tender any of their Shares as part of the Tender Offer. Assuming
that the Resolutions are passed by the requisite majority and that
the Tender Offer is fully subscribed, the Shares purchased as part
of the Tender Offer will be cancelled and the Majority Shareholders
(including those Majority Shareholders who are also Directors) will
become the sole Shareholders of the Company.
Copies of these undertakings will be available for inspection on
request at the registered office of the Company during normal
business hours on any Business Day (Saturdays, Sundays and public
holidays excepted) during the period up to and including the day of
the GM. Copies will also be made available on the Company's website
(www.stewartandwightplc.co.uk).
6 Recommendation
The Board considers that the passing of the Resolutions is in
the best interests of the Company and the Shareholders as a whole.
Accordingly, the Directors unanimously recommend Shareholders to
vote in favour of the Resolutions to be proposed at the GM as the
Directors intend to do in respect of their beneficial holdings
amounting, in aggregate, to 1,089,960 Shares, representing
approximately 70% of the Shares in issue as at 18 June 2018 (being
the last practicable date prior to the publication of this
document).
The Directors make no recommendations to Shareholders in
relation to participation in the Tender Offer.
If you are in doubt about what action to take or need advice in
relation to the Tender Offer, you should consult an independent
financial adviser, authorised under the Financial Services and
Markets Act 2000, without delay.
The Board unanimously recommends that Shareholders vote in
favour of the Resolutions to be proposed at the General
Meeting.
7 Action to Be Taken
General Meeting
You will find enclosed with this Circular a Form of Proxy for
use at the General Meeting. Whether or not you intend to be present
at the GM and whether or not you wish to tender any of your Shares
under the Tender Offer, you are requested to complete and sign the
Form of Proxy in accordance with the instructions printed thereon
and to return it to Stewart & Wight Plc, 845 Finchley Road,
London, NW11 8NA as soon as possible and, in any event, so as to be
received not later than 11.00 am on 13 July 2018. Completion and
return of the Form of Proxy will not preclude you from attending
the GM and voting in person if you wish to do so.
Only Shareholders who hold Shares at the close of business on
the Record Date may participate in the Tender Offer.
Tender Offer
Shareholders wishing to tender Shares for purchase under the
Tender Offer should ensure that in respect of Shares tendered
(which may be all but not some of their Shares), their completed
Tender Form(s), along with their share certificate(s), are returned
by post or by hand (during normal business hours only) to Link
Asset Services, Corporate Actions, The Registry, 34 Beckenham Road,
Beckenham, Kent, BR3 4TU so as to be received no later than 1.00 pm
on 17 July 2018.
A Tender Form once lodged may not be withdrawn without the
consent of the Company. Further details of the procedures for
tendering Shares and settlement are set out in Part 4 of this
Circular.
Shareholders who do not wish to sell any Shares under the Tender
Offer should not submit a completed Tender Form.
Yours faithfully
Michael Conn
Chairman
8 Indicative Timetable
Announcement of the Tender 21 June 2018
Offer and cancellation of
listing
Circular, Notice of Meeting, 21 June 2018
Form of Proxy, and Tender
Forms posted to Shareholders
Latest time and date for 11.00am on 13 July 2018*
receipt of completed Forms
of Proxy
General Meeting 11.00am on 17 July 2018
Latest time and date for 1.00pm on 17 July 2018
receipt of the Tender Forms
and share certificates in
relation to the Tender Offer
Announcement of results 17 July 2018
of the General Meeting
Tender Offer Record Date Close of business on
17 July 2018
Announcement of results 18 July 2018**
the Tender Offer
Purchase of shares under 18 July 2018**
the Tender Offer
Despatch of cheques for On or around week commencing
the Tender Offer consideration 23 July 2018**
in respect of Shares sold
under the Tender Offer
Last day of dealing in Shares 13 August 2018
Cancellation of Listing 14 August 2018
All references to times of day in this Circular are to London
time unless otherwise stated. If any of the above times and/or
dates change, the revised time(s) and/or date(s) will be notified
to Shareholders by an announcement through a Regulatory Information
Service.
* Please note that the latest time for receipt of the Forms of
Proxy in respect of the General Meeting is 48 hours (excluding days
which are not Business Days) prior to the time allotted for the
relevant meeting.
** Assuming the relevant Buyback Resolution is approved at the GM.
For enquiries about buying and selling shares in Stewart and
Wight Plc please contact Mr
Neil Morss ,Walker Crips Stockbrokers Limited, Old Change House,
128 Queen Victoria Street,
London ,EC4V 4BJ.Telephone:44 (0)20 3100 8660
Registered office as above. Registered in England No. 57142
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of this information may apply. For further information, please
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END
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