TIDMMTR
Metal Tiger plc
("Metal Tiger" or the "Company")
Further information regarding AIM Cancellation and Board
Change
Metal Tiger plc (AIM: MTR, ASX: MTR), the AIM and ASX listed
investor in natural resource opportunities, is today writing to
shareholders to provide further information in relation to the
forthcoming cancellation of the admission of ordinary shares of the
Company (the "Shares") to trading on AIM (the "AIM Cancellation"),
the process for trading Shares on the Australian Securities
Exchange (the "ASX") in the form of CHESS depositary interests
following the AIM Cancellation, and the applicability of the UK
Takeover Code following the AIM Cancellation.
A copy of the letter may be viewed on the Company's website at
www.metaltigerplc.com and is also set out further below.
Further to the announcement of 13 December 2022, the Company
notifies that Mark Potter has stepped down and resigned from the
Board on 12 March 2023.
For further information on the Company, visit
www.metaltigerplc.com:
Enquiries:
Michael McNeilly (Chief Executive Officer) Tel: +44 (0)20 3287 5349
James Dance Strand Hanson Limited Tel +44 (0)20 7409 3494
Richard Johnson (Nominated Adviser)
Robert Collins
Simon Johnson Alexandra Zeus Capital Limited Tel: +44 (0)20 7614 5900
Campbell-Harris (Broker)
Gordon Poole Camarco (Financial PR) Tel: +44 (0)20 3757 4980
Elfie Kent
Rebecca Waterworth
Extract of letter:
Dear Shareholder
AIM Cancellation -- information for Shareholders
1. Introduction
Further to the circular published by Metal Tiger plc (to be
renamed Strata Investment Holdings plc) (the "Company") on 2 March
2023 (the "Circular") convening the general meeting of the Company
to be held on 20 March 2023 (the "General Meeting"), I am writing
to provide you with further information in relation to the
forthcoming cancellation of the admission of ordinary shares of the
Company (the "Shares") to trading on the AIM market ("AIM") of the
London Stock Exchange (the "AIM Cancellation") and the process for
trading your Shares on the Australian Securities Exchange (the
"ASX") in the form of CHESS depositary interests ("CDIs") following
the AIM Cancellation.
The board of directors of the Company (the "Board") appreciates
you may have questions about the AIM Cancellation and what will
happen afterwards. This letter is intended to answer some of those
questions.
Capitalised terms used in this letter shall have the meanings
given to them in Schedule 1 at the end of this letter.
2. Why is the Company cancelling its admission to AIM?
Whilst admission to AIM has generally served the Company well to
date the Board is of the opinion that while the Company remains
admitted to trading on AIM, given the approval process required in
advance of certain investments, it will not be possible to
implement efficiently the more active trading strategy that is
likely to be required in the future. The Board carefully explored
the possibility of applying for admission of the Shares to trading
on the Specialist Fund Segment of the Main Market of the London
Stock Exchange. However following discussions with the Company's
professional advisers, it became clear that such a move is not
viable at this time. As such, the Board has determined that it is
in the best interests of the Company and Shareholders to proceed
with the AIM Cancellation without applying for admission of the
Shares to trading on any other market in the United Kingdom.
However, the Company will retain the admission of the Shares to
listing and trading on the ASX. The Board believes that this will
result in the Company having greater flexibility to manage its
portfolio, either under its existing investing policy or under the
new investing policy of the Company which will be considered for
approval by Shareholders at the General Meeting (the "New Investing
Policy") and better position it to pursue and achieve its
investment objectives in the future by being able to trade in a
more efficient manner. Equally, should it be approved by
Shareholders, the New Investing Policy will provide flexibility to
pursue "Complementary Investments" (as described in paragraph 24
below).
3. When will the AIM Cancellation take place?
The AIM Cancellation will take place at 7.00 am on 31 March
2023. On this basis, the last day of trading of the Shares on AIM
will be 30 March 2023.
4. Why aren't Shareholders being given a vote on the AIM
Cancellation?
In accordance with the notes to AIM Rule 41, as the Company is
maintaining the admission of the Shares to listing and trading on
the ASX, being an AIM Designated Market, Shareholders' consent in a
general meeting of the Company, which would otherwise be required
pursuant to AIM Rule 41, is not required for the AIM
Cancellation.
5. How will Shareholders be able to trade their Shares follow
the AIM Cancellation?
Following the AIM Cancellation, the Shares will remain admitted
to trading on the ASX, providing a formal market mechanism enabling
Shareholders to trade in the Shares through CDIs, with each CDI
representing one Share.
Upon the AIM Cancellation, Shareholders who currently hold their
Shares via the UK register will automatically have their holdings
switched to the Australian register where they will be held as
CDIs. The main difference between holding CDIs and Shares is that
CDI Holders hold the beneficial ownership in the Shares instead of
legal title. CHESS Depositary Nominees Pty Limited (ACN 071 346
506) (the "CHESS Depositary" or "CDN"), a subsidiary of ASX, will
hold the legal title to the underlying Shares. The former
Shareholders, who will become CDI Holders, will be issued Holding
Statements with a Securityholder Reference Number, which represent
Shares held on their behalf. Using the Securityholder Reference
Number, the CDIs will then be able to be traded on the ASX via a
licensed ASX broker.
6. What is CHESS and what are CDIs?
The Company already participates in ASX's CHESS system and
complies with the ASX Listing Rules and ASX Settlement Operating
Rules. CHESS is an electronic transfer and settlement system for
transactions in securities quoted on ASX under which transfers are
effected in an electronic form as CDIs.
Pursuant to the ASX Settlement Operating Rule 13.4.1, CDI
Holders receive all of the economic benefits of actual ownership of
the underlying Shares. CDIs are traded in a manner similar to
shares of Australian companies listed on ASX. CDIs are held in
uncertified form and settled/transferred through CHESS. No
certificates are issued to CDI Holders.
The Shares underlying the CDIs will be registered in the name of
the CHESS Depositary and will be held on behalf of and for the
benefit of the CDI Holder. All Shares underlying the CDIs will
continue to rank equally with other Shares.
7. Who is the CHESS Depositary and what do they do?
The Company has appointed CDN, and an approved general
participant of ASX Settlement, to act as the CHESS Depositary.
The CHESS Depositary holds legal title to the Shares on behalf
of CDI Holders. The CHESS Depositary may not dispose of any of the
Shares unless authorised by the ASX Settlement Operating Rules, and
is not able to create any interest that is inconsistent with the
beneficial title held by the CDI Holders. CDN receives no fees for
acting as the CHESS Depositary for the CDIs.
8. What registers will be maintained recording Shareholders'
interests?
The Company will maintain a certificated principal register of
Shares in the United Kingdom, and in Australia an uncertificated
issuer sponsored sub-register of CDIs and an uncertificated CHESS
sub-register of CDIs.
The Company's uncertificated issuer sponsored sub-register of
CDIs and uncertificated CHESS sub-register of CDIs is maintained by
the Company's Australian registrar, Link Market Services. The
register of Shares is the register of the legal title, and will
reflect legal ownership by the CHESS Depositary of the Shares
underlying the CDIs. The two uncertificated sub-registers of CDIs
combined will make up the register of beneficial title of the
Shares underlying the CDIs.
9. How is local and international trading in CDIs effected?
CDI Holders who wish to trade their CDIs will be transferring
the beneficial interest in the Shares rather than the legal title.
The transfer will be settled electronically by delivery of the
relevant CDI holdings through CHESS. In other respects, trading in
CDIs is similar to trading in other CHESS approved securities, such
as shares in an Australian company.
10. Can CDI Holders convert from a CDI holding to a direct
holding of Shares?
Yes this is possible. If CDI Holders wish to convert their
holdings to Shares, they can do so by contacting the Company's
Australian registrar, Link Market Services. However, following the
AIM Cancellation, the Shares will no longer be tradeable in
electronic form on a stock exchange and therefore it may be more
difficult for Shareholders to realise their investment without
converting their holdings back to CDIs.
UK stamp duty may also be payable on transfers of Shares (whilst
in the form of Shares rather than CDIs) and on the re-conversion of
Shares back to CDIs. See paragraph 21 below for more detail on the
tax implications of the AIM Cancellation.
11. What are the voting rights of a CDI Holder?
If CDI Holders wish to attend and vote at the Company's general
meetings, they are able to do so. Under the ASX Listing Rules and
the ASX Settlement Operating Rules, any CDI Holder must be allowed
to attend meetings of the Shareholders unless relevant United
Kingdom laws at the time of the meeting prevent CDI Holders from
attending those meetings.
CDI Holders are available to vote at the Company's general
meetings by:
i. instructing the CHESS Depositary, as the legal owner, to vote
the Shares underlying their CDls in a particular manner. A voting
instruction form will be sent to CDI Holders with the notice of
meeting and this must be completed and returned to the Company's
Australian registrar, Link Market Services prior to the meeting;
or
ii. informing the Company that they wish to nominate themselves
or another person to be appointed as the CHESS Depositary's proxy
with respect to their Shares underlying the CDls for the purposes
of attending and voting at the general meeting; or
iii. converting their CDls into a holding of Shares and voting
these at the meeting (however, if thereafter the former CDI Holder
wishes to sell their investment on ASX it would be necessary to
convert the Shares back to CDls). In order to vote in person, the
conversion must be completed prior to the record date for the
meeting. See paragraph 10 above for further information regarding
the conversion process.
As CDI Holders do not appear on the Company's share register
managed by Link Asset Services as the legal owner of the Shares,
they will not be entitled to vote at Shareholder meetings unless
one of the above steps is undertaken. As each CDI represents one
Share, a CDI Holder will be entitled to one vote for every CDl they
hold.
CDI voting instruction forms and details of these alternatives
will be included in each notice of meeting sent to CDI Holders by
the Company. Since the CHESS Depositary is the legal owner of the
applicable Shares and the CDI Holders are not themselves the legal
owners of their applicable Shares, CDI Holders may not directly
enforce their rights under the Company's articles of
association.
12. What dividend and other distribution entitlements do CDI
Holders have?
Despite legal title to the Shares being vested in the CHESS
Depositary, ASX Settlement Operating Rules provide that CDI Holders
are to receive all direct economic benefits and other entitlements
in relation to the underlying Shares, which include dividends and
other entitlements which attach to the underlying Shares. These
rights exist only under ASX Settlement Operating Rules (which have
the force of law by virtue of the Australian Corporations Act 2001
(Cth)), rather than under the UK Companies Act.
If the Company declares dividends, it expects to declare any
dividends in pounds sterling as that is its main functional
currency. As such, an investor whose principle currency is not
pounds sterling will be exposed to foreign currency exchange rate
risk.
The Board intends to maintain its existing policy, which is to
deliver Shareholder returns principally through capital growth
rather than income distribution via dividends.
13. What corporate action entitlement (such as rights issues and
bonus issues) do CDI Holders have?
CDI Holders receive all direct economic benefits and other
entitlements in relation to the underlying Shares. These include
entitlements to participate in rights issues, bonus issues and
capital reductions. These rights exist only under ASX Settlement
Operating Rules, rather than under the UK Companies Act.
14. What rights do CDI Holders have in the event of a
takeover?
If a takeover bid or similar transaction is made in relation to
the Shares of which the CHESS Depositary is the registered
Shareholder, under ASX Settlement Operating Rules, the CHESS
Depositary must not accept the offer made under the takeover bid
except to the extent that acceptance is authorised by the relevant
CDI Holder. The CHESS Depositary must ensure that the offeror
processes the takeover acceptance of a CDI Holder if such CDI
Holder instructs the CHESS Depositary to do so.
These rights exist only under ASX Settlement Operating Rules,
rather than under the UK Companies Act.
15. What notices and announcement will CDI Holders receive?
CDI Holders will receive all notices and company announcements
(such as annual reports) that Shareholders are entitled to receive
from the Company. These rights exist under ASX Settlement Operating
Rules and the Company's articles of association, rather than under
the UK Companies Act.
16. What rights do CDI Holders have on liquidation or winding
up?
In the event of the Company's liquidation, dissolution or
winding up, a CDI Holder will be entitled to the same economic
benefit on their CDIs as Shareholders. These rights exist only
under ASX Settlement Operating Rules, rather than under the UK
Companies Act.
17. Will CDI Holders incur any additional ASX or ASX Settlement
fees or charges as a result of holding CDIs rather than Shares?
A CDI Holder will not incur any additional ASX or ASX Settlement
fees or charges as a result of holding CDIs rather than Shares.
18. Can Shareholders convert their holdings to CDIs before the
AIM Cancellation?
Yes, Shareholders may voluntarily convert their holdings into
CDIs in advance of the AIM Cancellation. This can be done by
completing a Register Removal Request (London to Australia) form,
which is available on the Company's website at
www.metaltigerplc.com, and submitting such form to the Company's UK
registrar, Link Asset Services in accordance with the instructions
on the form. Once the form has been received and verified by Link
Asset Services, CDIs will be issued to the registered details on
the form within 72 hours.
19. Where can Shareholders find further information about
transferring CDIs?
If a CDI Holder's CDIs are held on the CHESS sub-register, they
may contact their sponsoring participant (usually a broker). If
CDIs are held on the issuer sponsored sub-register, they may
contact Link Market Services.
The transfer of CDIs may be effected by a proper transfer
(defined as a Proper ASTC Transfer in the ASX Listing Rules). Upon
receipt of a proper transfer and subject to ASX Listing Rules and
ASX Settlement Operating Rules, the Company will approve
registration of a transferee named in the transfer as a CDI Holder.
The transferor will be deemed to remain the holder of such CDIs
until a proper transfer has been effected or the name of the
transferee is entered in the CHESS sub-register or the issuer
sponsored sub-register (as applicable) as the CDI Holder.
The Company may suspend the registration of transfers of CDIs at
the times and for the periods they determine, but only as permitted
by ASX Settlement Operating Rules.
20. Can the Company force a sale of CDIs?
Subject to certain restrictions and procedures, the Company may,
after giving written notice to a CDI Holder, sell a CDI Holder's
CDIs if the CDI Holder holds less than a non-marketable parcel (a
parcel of securities that is less than a marketable parcel within
the meaning of the ASX Operating Rules Procedures).
21. What are the tax implications of the AIM Cancellation?
The Company is incorporated in the United Kingdom and will
continue to be taxed as such. The Directors do not expect the
Company to be taxed in Australia as a public company as a result of
the AIM Cancellation.
No stamp duty will be payable in Australia upon the sale or the
entry into of an agreement for sale of CDIs following the AIM
Cancellation.
As, upon AIM Cancellation, the Shares will automatically
transfer to the CHESS Depositary in order that they can continue to
be traded in the form of CDIs, it is noted that a 1.5 per cent
stamp duty reserve tax ("SDRT") liability is expected to arise,
although the Company is continuing to investigate the application
of this with its professional advisers. If applicable, the
liability is expected to be calculated by reference to the number
of Shares which are transferred to the CHESS Depositary (being the
number of Shares not represented by CDIs at the time of the AIM
Cancellation) and the closing price on the last day of trading of
the Shares on AIM. This liability would be payable in the first
instance by the CHESS Depositary, however the Company is expected
to be required to indemnify the CHESS Depositary for any such
liability. Accordingly this would be a cost to the Company and
there will be no direct cost to be borne by Shareholders. The Board
believes that the long term benefits and cost savings of moving to
a sole listing on the ASX outweigh this initial upfront cost, as
well as the other costs the Company has incurred and will incur in
connection with the AIM Cancellation.
Whilst investments in companies admitted to AIM would usually
qualify for business property relief from any inheritance tax
liability on the death of a Shareholder, because the Company's
primary business, during the period in which its Shares have been
admitted to AIM, has been mainly to make and hold investments and
to deal in securities, stocks and shares, an investment in the
Shares should not have been expected to qualify for business
property relief and, therefore, would likely have been chargeable
to inheritance tax in the UK. UK domiciled investors who will hold
CDIs, rather than Shares admitted to AIM, following the AIM
Cancellation would also likely be charged to inheritance tax on
such CDIs. The AIM Cancellation is unlikely, therefore, to impact
the inheritance tax implications of an investment by a UK domiciled
investor.
The transfer of the Shares previously admitted to AIM to the
CHESS Depositary prior to the issue of CDIs in respect of such
Shares should not amount to a chargeable disposal by an investor
for UK capital gains tax purposes on the basis that the investor
should, under Australian law, continue to hold a beneficial
interest in the Shares through such investor's holding of CDIs.
22. Will this impact the regulatory status of the Company?
The Company is a closed-ended investment fund incorporated as a
public company limited by shares in England and Wales on 6 April
2001 pursuant to the UK Companies Act. The Company was entered into
the register of small registered UK AIFMs on 18 November 2022 and
will continue to be regulated as such by the Financial Conduct
Authority.
Following the AIM Cancellation, the Company will no longer be
subject to the rules applying to AIM quoted companies such as the
AIM Rules, the UK Disclosure Guidance and Transparency Rules and UK
Market Abuse Regulation. However the Company will continue to be
subject to the ASX Listing Rules which impose many similar
obligations on the Company, such as requirements to publish inside
information and regular financial information through annual
reports.
As an ASX-listed company, the Company is subject to regular
reporting and disclosure obligations under both the Australian
Corporations Act and the ASX Listing Rules. These obligations
require the Company to notify ASX of information about specific
events and matters as they arise for the purpose of ASX making the
information available to the securities market conducted by ASX. In
particular, the Company has an obligation under the ASX Listing
Rules (subject to certain limited exceptions), to notify ASX once
it is, or becomes aware of information concerning the Company which
a reasonable person would expect to have a material effect on the
price or value of the CDIs.
The Company is also required to prepare and lodge with ASIC
yearly and half-yearly financial statements accompanied by a
Directors' statement and report, and an audit review or report.
Copies of documents lodged with the ASIC in relation to the Company
may be obtained from, or inspected at, an ASIC office.
23. What are the implications of the AIM Cancellation with
regards to the Takeover Code?
Following the resignation of Mark Potter (as announced on 13
December 2022 and effective from 12 March 2023), the majority of
the Company's Directors and senior management will be resident
outside of the UK, Channel Islands or Isle of Man. Consequently,
following the AIM Cancellation and on the basis of no further
changes to the Board, the City Code on Takeovers and Mergers (the
"Code") will no longer apply to the Company after the AIM
Cancellation.
However in the event that, subsequent to the AIM Cancellation
further Board changes result in the Company's place of central
management and control being in the UK, Channel Islands or Isle of
Man, the Company will once again become subject to the Code.
Further Information on the Code is set out in Schedules 2 and 3
at the end of this letter.
24. Will this impact the corporate governance of the
Company?
The Board will remain fully committed to a high standard of
corporate governance based on practices which are proportional to
the size, risks and operation of the Group's business.
Following the AIM Cancellation, the Board expects to continue to
comply fully with the recommendations of the Quoted Companies
Alliance Corporate Governance Code (the "QCA Code") in the short to
medium term, save in respect of Principle 7 ("Evaluate board
performance based on clear and relevant objectives, seeking
continuous improvement"), noting that given the size and nature of
the Group, the Board does not consider it appropriate to have a
formal performance evaluation procedure in place, as described and
recommended in Principle 7 of the QCA Code. The Board will closely
monitor the situation as the Group grows. The Board will keep under
review whether the QCA Code remains the most appropriate corporate
governance code for the Company to follow in the longer term.
Where appropriate, the Board will also continue to comply with
the further requirements of the ASX Corporate Governance Principles
and Recommendations.
25. Will the AIM Cancellation impact the Company's investment
strategy?
As part of this process and to place the Group in a better
position to meet its investment objectives in the future, the
Company will, subject to Shareholder's approval, also implement the
New Investing Policy, in place of the Company's existing investing
policy. The New Investing Policy would come into effect
simultaneously with, and subject to, the AIM Cancellation. Given
the flexibility afforded by the New Investing Policy, it is
unlikely that the implementation of the New Investing Policy will
have any immediate impact on the Company's portfolio or require any
divestments of the Company's assets.
Under the New Investing Policy, the Group will seek to achieve
its investment objectives through a combination of "Core
Investments" and "Complementary Investments". "Core Investments"
would comprise investments in financial products issued by
companies which are predominately admitted to trading on recognised
stock exchanges including, but not limited to, the ASX, the
Canadian Securities Exchange, the London Stock Exchange (including
both AIM and the Main Market), the Stock Exchange of Hong Kong, the
Johannesburg Stock Exchange, the New York Stock Exchange and the
Toronto Stock Exchange (including the TSX Venture Exchange).
"Complementary Investments" would comprise investments in
complementary business verticals, with a focus on commercial
businesses or funds with separate management teams with that
support investment in and the funding of companies and/or projects
within the mining sector, that will generate income for the
Group.
The full form of the New Investing Policy is set out in Part 2
of the Circular.
In line with the Company's increased strategic focus on equity
investments, the Board has also embarked on investments in
appropriate portfolio and risk monitoring systems that would be
expected from a fully-fledged expanding investment company. These
investments incorporate front office order execution functionality
and systems provided by an internationally authorised third party
system provider, as well as an investment in a bespoke third party
middle and back office monitoring platform.
26. When will the Company change its name?
The Board also intends to change the name of the Company to
Strata Investment Holdings plc shortly following the AIM
Cancellation. The Company's website will be updated to reflect the
new name at the same time. The Company's ASX ticker code will also
be changed from "MTR" to "STI" to reflect the new name.
27. Where can further information be obtained?
For further information in relation to CDIs and the matters
referred to above, please refer to the ASX website at
www2.asx.com.au/ and the documents entitled:
i. "Understanding CHESS Depositary Interests" at:
www.asx.com.au/documents/settlement/CHESS_Depositary_Interests.pdf
ii. "ASX Guidance Note 5" at:
www.asx.com.au/documents/rules/gn05_chess_depositary_interests.pdf
Shareholders may also contact the Company's registrar, Link
Asset Services (telephone: 0371 664 0300).
The Board as always will be available to Shareholders who wish
to discuss these matters directly (telephone: +44 (0)20 3287
5349).
Further information is also available on the Company's website
at www.metaltigerplc.com. Shareholders should note that the
Company's website address will change when the Company changes its
name shortly following the AIM Cancellation.
Shareholders who are in any doubt as to the actions they should
take are also recommended to seek their own personal financial
advice from a stockbroker, bank manager, solicitor, accountant or
other independent professional financial adviser, authorised under
the Financial Services and Markets Act 2000 (as amended) if they
are resident in the United Kingdom or, if they are resident outside
the United Kingdom, from another appropriately authorised and
qualified independent professional financial adviser.
28. Conclusion
The Directors unanimously believe that the AIM Cancellation is
in the best interests of the Company and its Shareholders. The
Board believes that having a sole listing on the ASX will result in
the Company having greater flexibility to manage its portfolio,
implement the New Investing Policy and better position it to pursue
and achieve its investment objectives in the future by being able
to trade in a more efficient manner.
The Board thanks Shareholders for their continued support and
looks forward to this exciting next stage of the Company's
journey.
Yours faithfully,
Charles Hall
Chair
SCHEDULE 1: DEFINITIONS
The following definitions apply throughout this letter, unless
otherwise specified:
AIM the AIM market of the London Stock
Exchange
AIM Cancellation the cancellation of admission of the
Shares to trading on AIM, which will
take place on 31 March 2023
AIM Rules the AIM Rules for Companies published
by the London Stock Exchange
ASIC the Australian Securities and
Investment Commission
ASX the Australian Securities Exchange
ASX Corporate Governance Principles the 4(th) Edition Corporate Governance
and Recommendations Principles and Recommendations
published by the ASX Corporate
Governance Council in February 2019
ASX Listing Rules the listing rules made by the ASX
ASX Operating Rules Procedures the Procedures relevant to the ASX
Settlement Operating Rules updated as
of 30 May 2022
ASX Settlement ASX Settlement Pty Ltd
ASX Settlement Operating Rules the rules of the ASX Settlement
Australian Corporations Act the Australian Corporations Act 2001
(Cth)
Board the board of Directors of the Company
CDI a CHESS depositary interest
CDI Holder(s) the holder of one or more CDIs
CHESS the Clearing House Electronic
Subregister System used by the ASX to
record shareholdings and manage the
settlement of share transactions
CHESS Depositary or CDN CHESS Depositary Nominees Pty Ltd
Circular the shareholder circular published by
the Company on 2 March 2023
Company Metal Tiger plc (to be renamed Strata
Investment Holdings plc shortly
following AIM Cancellation)
Directors the directors of the Company from time
to time
General Meeting the general meeting of the Company to
be held on 20 March 2023 at which the
New Investing Policy is proposed to be
approved
London Stock Exchange the London Stock Exchange plc
Main Market the main market for listed securities
of the London Stock Exchange
New Investing Policy the new investing policy of the
Company set out in Part 2 of the
Circular, which is proposed to be
approved by Shareholders at the
General Meeting and which, subject to
Shareholder's approval, will come into
effect simultaneously with the AIM
Cancellation
Panel the Panel on Takeovers and Mergers
QCA Code the Quoted Companies Alliance
Corporate Governance Code
SDRT UK Stamp Duty Reserve Tax
Shareholder(s) the holder of one or more Shares
Shares the ordinary shares of 0.1 pence each
in the Company
UK Companies Act the UK Companies Act 2006
All references to times are to London times.
SCHEDULE 2: THE CITY CODE ON TAKEOVERS AND MERGERS
The Code applies to all offers for companies which have their
registered office in the UK, the Channel Islands or the Isle of Man
if any of their equity share capital or other transferable
securities carrying voting rights are admitted to trading on a UK
regulated market or a UK multilateral trading facility or on any
stock exchange in the Channel Islands or the Isle of Man.
The Code also applies to all offers for companies (both public
and private) which have their registered office in the UK, the
Channel Islands or the Isle of Man which are considered by the
Panel to have their place of central management and control in the
UK, the Channel Islands or the Isle of Man.
As a result, following the AIM Cancellation becoming effective,
the Code will cease to apply to the Company and Shareholders will
no longer be afforded the protections provided by the Code.
This includes the requirement for a mandatory cash offer to be
made if either:
1. a person acquires an interest in shares which, when taken together with
the shares in which persons acting in concert with it are interested,
increases the percentage of shares carrying voting rights in which it is
interested to 30% or more; or
2. a person, together with persons acting in concert with it, is interested
in shares which in the aggregate carry not less than 30% of the voting
rights of a company but does not hold shares carrying more than 50% of
such voting rights and such person, or any person acting in concert with
it, acquires an interest in any other shares which increases the
percentage of shares carrying voting rights in which it is interested.
Brief details of the Panel, and of the protections afforded by
the Code (which will cease to apply following the AIM
Cancellation), are set out below.
The Code
The Code is issued and administered by the Panel. The Code
currently applies to the Company and, accordingly, its Shareholders
are entitled to the protections afforded by the Code.
The Code and the Panel operate principally to ensure that
shareholders are treated fairly and are not denied an opportunity
to decide on the merits of a takeover, and that shareholders of the
same class are afforded equivalent treatment by an offeror. The
Code also provides an orderly framework within which takeovers are
conducted. In addition, it is designed to promote, in conjunction
with other regulatory regimes, the integrity of the financial
markets.
The General Principles and Rules of the Code
The Code is based upon a number of General Principles which are
essentially statements of standards of commercial behaviour. The
General Principles apply to takeovers and all other matters with
which the Code is concerned. They are applied by the Panel in
accordance with their spirit to achieve their underlying
purpose.
In addition to the General Principles, the Code contains a
series of Rules. Some of the Rules provide more detail on how the
General Principles will be applied by the Panel and others govern
specific aspects of takeover procedure. Like the General
Principles, the Rules are to be interpreted to achieve their
underlying purpose. Therefore, their spirit must be observed as
well as their letter. The Panel may derogate or grant a waiver to a
person from the application of a Rule in certain circumstances.
Giving up the protection of the Code
A summary of key points regarding the application of the Code to
takeovers generally is set out in Schedule 3. You are encouraged to
read this information carefully as it outlines certain important
protections which will no longer apply to the Company following the
AIM Cancellation.
SCHEDULE 3: KEY PROVISIONS OF THE CODE
The following is a summary of key provisions of the Code which
apply to transactions to which the Code applies. You should note
that, following the AIM Cancellation, the following protections
afforded by the Code will no longer apply to the Company.
Equality of treatment
General Principle 1 of the Code states that all holders of the
securities of an offeree company of the same class must be afforded
equivalent treatment. Furthermore, Rule 16.1 requires that, except
with the consent of the Panel, special arrangements may not be made
with certain shareholders in the Company if there are favourable
conditions attached which are not being extended to all
shareholders.
Information to shareholders
General Principle 2 requires that the holders of the securities
of an offeree company must have sufficient time and information to
enable them to reach a properly informed decision on the takeover
bid. Consequently, a document setting out full details of an offer
must be sent to the offeree company's shareholders.
The opinion of the offeree board and independent advice
The board of the offeree company is required by Rule 3.1 of the
Code to obtain competent independent advice as to whether the
financial terms of an offer are fair and reasonable and the
substance of such advice must be made known to shareholders. Rule
25.2 requires the board of the offeree company to send to
shareholders and persons with information rights its opinion on the
offer and its reasons for forming that opinion. That opinion must
include the board's views on: (i) the effects of implementation of
the offer on all the company's interests, including, specifically,
employment; and (ii) the offeror's strategic plans for the offeree
company and their likely repercussions on employment and the
locations of the offeree company's places of business.
The document sent to shareholders must also deal with other
matters such as interests and recent dealings in the securities of
the offeror and the offeree company by relevant parties and whether
the directors of the offeree company intend to accept or reject the
offer in respect of their own beneficial shareholdings.
Rule 20.1 states that, except in certain circumstances,
information and opinions relating to an offer or a party to an
offer must be made equally available to all offeree company
shareholders and persons with information rights as nearly as
possible at the same time and in the same manner.
Option holders and holders of convertible securities or
subscription rights
Rule 15 of the Code provides that when an offer is made and the
offeree company has convertible securities outstanding, the offeror
must make an appropriate offer or proposal to the holders of those
securities to ensure their interests are safeguarded. Rule 15 also
applies in relation to holders of options and other subscription
rights.
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CONTACT:
Metal Tiger plc
SOURCE: Metal Tiger plc
Copyright Business Wire 2023
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