TIDMREC
RNS Number : 6609I
Record PLC
21 June 2017
21 June 2017
This announcement is not for release, publication or
distribution in whole or in part, into any jurisdiction where to do
so would constitute a violation of the relevant laws of such
jurisdiction. Neither this announcement, nor the Circular,
constitutes an offer to purchase, nor solicitation of an offer to
sell, Ordinary Shares in any jurisdiction in which, or to or from
any person to or from whom it is unlawful to make such offer or
solicitation under applicable securities laws.
RECORD PLC
PROPOSED TER OFFER AND NOTICE OF GENERAL MEETING
Further to the change in capital policy announced on 16 June
2017 with the Final Results for the year ended 31 March 2017,
Record plc ("Record" or "the Company"), the specialist currency
manager, is pleased to announce a Tender Offer to return up to
approximately GBP10 million to Shareholders via the purchase of a
maximum of 22,326,475 Ordinary Shares representing a maximum of
10.0851 per cent of the entire issued share capital of the
Company.
Under the Tender Offer, each Qualifying Shareholder is entitled
to tender up to 10.0851 per cent of his or her shareholding at the
Tender Price of GBP0.44790 per Ordinary Share, with the potential
to tender a greater number of Ordinary Shares depending on the
number of Ordinary Shares tendered by other Shareholders. The
Tender Price represents the closing middle market quotation of an
Ordinary Share on 20 June 2017, being the last practicable date
prior to the publication of the Circular. The Tender Price has been
adjusted for the final dividend and special dividend totalling
GBP0.02085 for the year ended 31 March 2017 announced on 16 June
2017, as the Company's Ordinary Shares will be ex-dividend prior to
completion of the Tender Offer. The Tender Offer is being made
available to all Qualifying Shareholders who are on the Register as
at 5.00 p.m. on 12 July 2017.
The Company requires the authority from Shareholders to purchase
Ordinary Shares under the Tender Offer and this is being sought at
a General Meeting which is to be held at 10 Snow Hill, London, EC1A
2AL at 3.00 p.m. on 14 July 2017. The Circular which sets out the
formal terms and conditions of the Tender Offer and details of how
Qualifying Shareholders will be able to participate in the Tender
Offer is expected to be posted to Shareholders today.
The Circular will be submitted to the National Storage Mechanism
and will shortly be available for inspection at:
www.morningstar.co.uk/uk/NSM. The Circular will also be available
on the Company's website at: http://www.recordcm.com.
The Tender Offer is being made by Cenkos Securities plc
("Cenkos"), the Company's corporate broker, as principal, on the
basis that all Ordinary Shares that it buys under the Tender Offer
will be purchased from it by the Company and subsequently
cancelled.
Further details of the Tender Offer are set out below and in the
Circular. Capitalised terms used, but not defined in this
announcement shall have the same meaning as set out in the
Circular.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
Expected timetable of events
Publication of the Circular 21 June 2017
Tender Offer opens 21 June 2017
Latest time and date for receipt 1.00 p.m. on 12
of Tender Forms and TTE instructions July 2017
from CREST Shareholders
Latest time and date for receipt 3.00 p.m. on 12
of forms of proxy July 2017
Record date for the Tender Offer 5.00 p.m. on 12
July 2017
Time and date of General Meeting 3.00 p.m. on 14
July 2017
Outcome of General Meeting announced 14 July 2017
by
Outcome of Tender Offer announced 14 July 2017
by
Purchase of Ordinary Shares under 17 July 2017
the Tender Offer
Cheques despatched for certificated By 24 July 2017
Ordinary Shares purchased pursuant
to the Tender Offer and payment
through CREST for uncertificated
Ordinary Shares purchased pursuant
to the Tender Offer
CREST accounts credited with By 31 July 2017
uncertificated Ordinary Shares
unsuccessfully tendered and despatch
of balance share certificates
for unsold certificated Ordinary
Shares and share certificates
for unsuccessful tenders of certificated
Ordinary Shares
For further information, please contact:
Record plc Tel: +44 (0) 1753
852 222
James Wood-Collins, Chief Executive
Officer
Steve Cullen, Chief Finance Officer
Cenkos Securities plc Tel: +44 (0) 20
7397 8900
Nicholas Wells
Elizabeth Bowman
Jeremy Osler
MHP Tel: +44 (0) 20
3128 8100
Nick Denton record@mhpc.com
Ollie Hoare
Further details of the Tender Offer
1. Background to and reasons for the Tender Offer
Since the financial crisis of 2008 and 2009, the Board's focus
has been on building a robust business by continuing to develop its
diverse suite of currency-related products and strategies, by
investing in the business's people and infrastructure, and by
building a strong and liquid balance sheet and regulatory capital
buffer.
Over this period, the yardstick for the Group's balance sheet
has been broadly to hold excess capital equivalent to two years'
worth of overheads. With net assets of GBP41.6 million at 31 March
2017, own cash (defined as Group assets managed as cash excluding
non-controlling interests) of GBP29.2 million and a surplus over
regulatory capital (adjusted for the final and special dividends
for the year to 31 March 2017) of GBP23.1 million at the same date,
and overheads of GBP11.7 million in the year to 31 March 2017, the
current capital structure, with a surplus of just under 24 months,
reflects this policy.
In the Group's results announced on 16 June 2017, Record
reported its highest-ever assets under management equivalents,
increased revenues and earnings, and further growth in revenue
diversification, with revenues from passive hedging now covering
all overheads excluding variable remuneration. Given this, the
Board decided that conditions are now right for a change in the
capital policy. The new policy will be to ensure retained capital
is broadly equivalent to one year's worth of future estimated
overheads (excluding variable remuneration), in addition to capital
assessed as required for regulatory purposes, for working capital
purposes and for investing in new opportunities for the business.
This new policy will still ensure a significant capital buffer over
regulatory requirements.
The Tender Offer is intended to provide an efficient way for the
Board to reduce the Group's retained capital and return excess
capital to shareholders. The Board has chosen to implement this
return of capital by means of a Tender Offer in order that all
Shareholders may elect whether or not to participate, and to do so
on the same terms, based on their pro-rata shareholdings.
Undertaking a Tender Offer at a fixed price may require
authorisation from Shareholders in addition to that sought at the
Company's previous Annual General Meeting, hence the Tender Offer
Resolution to be put to the General Meeting.
The Company's Chairman, and largest Shareholder, Neil Record has
irrevocably undertaken to fully participate in the Tender Offer
with respect to his Basic Entitlement and has indicated his
intention to tender an additional 8,017,632 Ordinary Shares. As a
result Mr. Record's percentage of Ordinary Shares will not exceed
its current level of 32.06% and may decline to a minimum of 27.06%
following the Tender Offer.
Neil Record established the Company in 1983 and has made very
significant contributions to its development since then. Mr. Record
served as Chairman and Chief Executive Officer from the Company's
admission to trading on the Main Market of the London Stock
Exchange in 2007 until the appointment of his successor as Chief
Executive Officer from 1 October 2010, from when he remained as
Chairman. Mr. Record is a Non-executive Chairman, and holds all his
Ordinary Shares directly in his own name.
Given these latter two facts, Mr. Record considers the Tender
Offer and the potential to tender Ordinary Shares in addition to
his Basic Entitlement represents an appropriate opportunity for him
to reduce his overall holding of Ordinary Shares (subject to
participation in the Tender Offer by other Qualifying Shareholders)
whilst giving the opportunity to other Qualifying Shareholders to
participate.
Mr. Record intends to continue as the Company's Chairman and to
play an active role in supporting its management and overseeing the
continued development of its business for the foreseeable future.
No material changes to Mr. Record's involvement in the Group are
anticipated as a result of the Tender Offer.
2. Details of the proposed Tender Offer
Subject to certain conditions (including the Tender Offer
Resolution being passed at the General Meeting), the Tender Offer
will be implemented by Cenkos, acting as principal, and through a
subsequent Repurchase of the tendered Ordinary Shares from Cenkos
by the Company, in both cases at the Tender Price. It is expected
that Qualifying Shareholders who successfully tender their shares
will receive payment for such shares on or about 24 July 2017.
To give effect to these arrangements, Cenkos has entered into a
Purchase Agreement with the Company. The Company intends to cancel
any Ordinary Shares repurchased in connection with the Tender
Offer.
The Tender Offer will be open to all Shareholders on the
Register on the Record Date, save for those who are Shareholders
subject to the securities laws of a Restricted Jurisdiction (i.e.,
Qualifying Shareholders).
Qualifying Shareholders may participate in the Tender Offer by
tendering either all or a proportion of their registered holdings
of Ordinary Shares. Each Qualifying Shareholder will be entitled to
sell their Basic Entitlement under the Tender Offer. The Tender
Offer will also present tendering Qualifying Shareholders with an
opportunity to sell an Individual Excess Tender to the extent that
other Shareholders tender less than their pro rata entitlement.
The Tender Offer is subject to, amongst other things, the
passing of the Tender Offer Resolution.
To the extent that any Shareholders have tendered less than
their pro rata entitlement under the Tender Offer, Individual
Excess Tenders will be accepted in proportion to the Total Excess
Tenders so that the total number of Ordinary Shares purchased
pursuant to the Tender Offer does not exceed 22,326,475. The
process by which Individual Excess Tenders will be scaled back, if
necessary, is described further in paragraph 2.18 of Part II of the
Circular.
The Tender Offer will close at 1.00 p.m. on 12 July 2017 and
tenders received after that time will not be accepted unless
otherwise approved by Cenkos (with the consent of the Company).
The Tender Price for Ordinary Shares tendered by Qualifying
Shareholders under the Tender Offer is GBP0.44790. This is equal to
the Closing Price on 20 June (being GBP0.46875), adjusted for the
final dividend and special dividend totalling GBP0.02085 per share
payable to Shareholders on the register on 30 June 2017.
The Tender Offer will not affect the satisfaction or otherwise
of the earnings per share related performance conditions to which
all share options awarded to the Company's executive Directors
under the Record plc Share Scheme are subject, since the terms of
such options provide for earnings per share to be adjusted to take
account of any capital reorganisation.
Further information relating to the Tender Offer is set out in
Part II of the Circular.
3. Overseas Shareholders
The attention of Shareholders who are citizens, residents or
nationals of countries outside the UK wishing to participate in the
Tender Offer is drawn to paragraph 6 of Part II of the
Circular.
4. Taxation
A summary of the tax consequences of the Tender Offer for UK
resident Shareholders is set out in Part III of the Circular.
It should be noted that this refers to the current system of
taxation. Shareholders are strongly advised to obtain independent
tax advice regarding their own tax position.
5. The General Meeting
Notice of a General Meeting of the Company to be held at 10 Snow
Hill, London, EC1A 2AL on 14 July 2017 at 3.00 p.m. is set out at
the end of the Circular, together with a form of proxy for use at
the meeting.
Whilst the Company has existing authority to purchase its own
shares, pursuant to the Annual General Meeting held on 28 July
2016, the Company wishes to obtain fresh authority from
Shareholders in connection with the proposed Tender Offer and
Repurchase. The Tender Offer Resolution is subject to different
parameters than the authority previously granted by Shareholders,
including with respect to the aggregate number of Ordinary Shares
that may be purchased and the price at which such Ordinary Shares
may be acquired.
Each Shareholder registered on the Register at 5.00 p.m. on 12
July 2017 is entitled to vote on the resolution contained in the
Notice of General Meeting (the "Tender Offer Resolution"). The
Tender Offer Resolution is proposed as a special resolution. This
means that, for the resolution to be passed, at least
three--quarters of the votes cast must be in favour.
6. Further information
On 20 June 2017 (being the last practicable date prior to the
publication of the Circular) the issued share capital of the
Company was 221,380,800 Ordinary Shares. The Company holds no
treasury shares.
The Directors have entered into irrevocable undertakings, in
respect of an aggregate number of 101,271,657 Ordinary Shares, to
vote in favour of the Tender Offer Resolution at the General
Meeting.
Shareholders' attention is drawn to the Terms and Conditions of
the Tender Offer as set out in Part II of the Circular.
7. Recommendation
The Directors consider that the Tender Offer and the Tender
Offer Resolution to be put to the General Meeting are in the best
interests of the Company and its Shareholders as a whole. The
Directors intend to vote in favour of the Tender Offer Resolution
and unanimously recommend that Shareholders do as well.
The Directors are making no recommendation in relation to
participation in the Tender Offer itself. Whether or not Qualifying
Shareholders decide to tender their Ordinary Shares will depend,
amongst other things, on their view of the Company's prospects and
their own individual circumstances (including their own tax
position).
Cenkos, which is authorised and regulated by the Financial
Conduct Authority, is acting for the Company and for no one else in
connection with the Tender Offer and will not be responsible to
anyone other than the Company for providing the protections
afforded to customers of Cenkos or for affording advice in relation
to the Tender Offer, the contents of this announcement or any
transaction, arrangement or other matter referred to in the
Circular.
Certain statements in this announcement may be forward-looking.
Although the Company believes that the expectations reflected in
these forward looking statements are reasonable, it can give no
assurance that these expectations will prove to have been correct.
Because these statements involve risks and uncertainties, actual
results may differ materially from those expressed or implied by
these forward looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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