2nd Oct 2006 15:45
Castor Investments Plc02 October 2006 2 October 2006 RNS announcement Castor Investments plc ("Castor Investments" or the "Company") Proposed acquisition of Merchant Securities Holdings Limited ("MSH")Proposed re-admission to trading on AIM as "Merchant Securities plc"Rule 9 whitewash Castor, the cash shell admitted to trading on AIM on 2 March 2005, announcesthat it has entered into an agreement with MSH to acquire the entire issued, andto be issued, share capital of MSH for £8.35 million, to be satisfied by theissue of 16,700,000 New Ordinary Shares at 50 pence per share. Trading on AIM of the Company's Existing Ordinary Shares was suspended on 3April 2006. At that time, the closing mid market price of an Existing OrdinaryShare was 4.875p, valuing Castor at £1.33 million. At that time the Company hadcash of approximately £1.0 million and no other significant assets orliabilities. On its admission to AIM, Castor's strategy was the acquisition ofone or more related businesses in the healthcare/life sciences or supportservices sectors with the prospect of substantial and sustained growth. Castorhas been unable to identify suitable acquisitions within those sectors; however,it believes that the MSH Group is a business which has the potential forsubstantial and sustained growth. The MSH Group's business consists of the provision to clients in both theprivate client and institutional stockbroking markets of corporate finance,private client investment management services (both advisory and discretionary)and institutional sales trading. The Consideration Shares will represent 86 per cent. of the Enlarged ShareCapital. In view of the size of MSH relative to the Company, the Acquisitionwill constitute a reverse takeover of Castor Investments under the AIM Rules andtherefore requires the prior approval of Shareholders at an EGM. The acquisitionvalues MSH at a market capitalisation of £9.7 million. Tony Fabrizi, chief executive of MSH, said: "We believe that the profile and status of MSH will be enhanced by an AIMlisting, enabling us to attract new clients both in the private client andinstitutional stockbroking markets. The experienced management team, with asignificant share ownership position in the business, will help build anddevelop a successful business in our chosen markets." Arden Partners plc have been appointed as nominated adviser and broker to theCompany with immediate effect. The associated admission document has been published and is available for onemonth, free of charge, at the offices of Arden Partners plc, Nicholas House, 3Laurence Pountney Hill, London EC4R 0EU, and also on the website of MerchantSecurities Ltd at www.merchantsecurities.co.uk. Further information on the Acquisition is below. Enquiries: Tony Fabrizi 020 7787 5787 Merchant Securities Limited Paul Davies 020 7398 1635 Arden Partners plc Roland Cross 020 7776 0512Broadgate Public Relations Arden Partners plc, which is regulated by the Financial Services Authority, isacting as nominated adviser and broker to the Company. It will not beresponsible to any person other than the Company for providing the protectionsafforded to its customers or for advising any other person on the contents ofany part this announcement. The responsibilities of Arden Partners plc as theCompany's nominated adviser under the AIM Rules are owed solely to the LondonStock Exchange and are not owed to the Company or any Director or Shareholder orto any other person, in respect of any decision to acquire Ordinary Shares inreliance on any part of this announcement or otherwise. Arden Partners plc isnot making any representation or warranty, express or implied, as to thecontents of this announcement. Introduction MSL, MSH's wholly owned subsidiary, is an FSA registered private client andinstitutional stockbroking company which commenced trading in 1987. Its businessconsists of corporate finance, private client investment management services(both advisory and discretionary) and institutional sales trading. In addition,the MSH Group has built a niche in raising private equity and pre-IPO financefor small to medium sized businesses located mainly in the UK. The Company has conditionally agreed to acquire the entire issued, and to beissued, share capital of MSH for £8.35 million to be satisfied by the issue of16,700,000 New Ordinary Shares at the Issue Price. The Consideration Shares willrepresent 86 per cent. of the Enlarged Share Capital. In view of the size of MSHrelative to the Company, the Acquisition will constitute a reverse takeover ofCastor Investments under the AIM Rules and therefore requires the prior approvalof Shareholders at an EGM. In conjunction with the Acquisition, Castor Investments proposes to changeits name to Merchant Securities plc and to make certain changes to its capital. In addition, because the Concert Party will own 9,147,616 New Ordinary Sharesrepresenting more than 30 per cent. of the Enlarged Share Capital, the Companyis seeking the Waiver of Rule 9 of the City Code, which would otherwise requirethe Concert Party to offer to acquire those Ordinary Shares that they do notown. The Acquisition is conditional, inter alia, upon the approval of certain of theResolutions by the Shareholders at the EGM. History and development of MSH MSL was founded in 1987 by Nicholas Edmonstone and Duncan Troy. In its earlyyears, it focused on providing UK high net worth clients with advisory dealingand execution only services in UK and US traded equities and options. Thisservice was extended during the late 1990's to cover advisory and discretionaryinvestment management and was later widened to include traded equities,collective investments and capital protected structures. In the last three years it hasbecome increasingly active in raising capital for private equity and IPOtransactions and raised £50 million in 19 transactions during this time period. In May 2006, MSL was acquired by MSH (formerly named Ghaliston Limited). MSHraised the cash consideration through a private placement to fund theacquisition. The business of MSH was founded by Tony Fabrizi in May 2002 when he acquiredQuantics Limited, an FSA regulated funds advisory business and changed its nameto Ghaliston Limited. In June 2002 Ghaliston Limited obtained corporate financestatus and in December 2002 its regulatory status was extended to includediscretionary fund management. In its four years of operation Ghaliston Limitedhas concluded 16 transactions of which 9 were AIM IPOs and the remainder wereprivate company transactions. Following the acquisition of MSL, the business of MSH has been consolidated intoMSL. Products and services The business is organised into four operating divisions: Corporate Finance The MSH Group's corporate finance operation was introduced following theacquisition of MSL by MSH and specialises in advising clients in pre-IPO andprivate equity transactions. The corporate finance activity focuses on advisingsmall and medium sized companies across a broad range of industry sectors,predominantly in the UK. Although the MSH Group is not currently a qualifiednominated adviser on the AIM Market, the Directors are reviewing various routesto obtaining this status. Private Client Investment Management The private client investment management division provides advisory dealing,advisory management, discretionary management and execution only services forclients including high net worth private individuals, their businesses, pensionfunds and trusts. Products offered include traded equities (mainly on the UK, USand European markets), derivatives, collective investments (such as equity,hedge, property and commodity funds) and capital protected structures. As at 31 August 2006 MSL had over 800 private clients, the majority of whoseportfolios are managed on an advisory basis, with aggregate funds under adviceof approximately £100 million. Institutional Equities The institutional equities business was established in May 2006. The objectiveis to offer institutional clients a specialist sales trading service in UK smalland mid cap securities. The team's execution approach is free from proprietarytrading conflicts with a proven record of matching institutional order flow inthe small and mid cap markets. In order to minimise overheads, the newinstitutional trading division has outsourced all settlement, which allows forthe execution of large block transactions utilising the balance sheet of a majorthird party bank. Private Equity The private equity division works closely with the corporate finance team inidentifying and structuring deals. The main area of focus is UK small companiesand the funding gap in the £1m- £5m market segment. This sector is generallyunattractive for larger private equity houses and therefore remains relativelyuncompetitive. Since March 2004, the private equity division has raisedapproximately £50 million. FSA Licences MSL is regulated by the FSA and has permission to carry out the activitiesdescribed above. Strategy of MSH The Proposed Directors intend to continue to develop the MSH Group's business bybuilding upon its existing expertise. The institutional division has beensuccessfully established and is targeting new clients. A corporate financedivision has been introduced into the MSH Group's business following theacquisition of MSL and the Proposed Directors are intending to qualify as anominated adviser on the AIM Market. The private client business is also beingdeveloped to attract new clients and to increase revenues through the promotionof MSL's capabilities. The Directors also believe there are a number of trends in the markets in whichthe MSH Group operates which should provide a positive background for itsdevelopment, namely: the continuing trend of consolidation amongst smaller stockbroking businesses; the increasing number of companies listed on AIM and the continuing popularityof the AIM market as a preferred market for UK and overseas companies seeking apublic listing. Since 2003 the number of companies listed on AIM has increasedfrom 552 to 1560; and an increasing focus by a number of MSL's competitors onlarger transactions, which should leave it well placed to exploit the growingnumber of opportunities in the market for advising on and completingfundraisings of less than £10 million. Finally, the Directors and the Proposed Directors believe that MSL's highlyexperienced management team, with a significant share ownership position in thebusiness, is capable of building and developing a successful business in itschosen markets. Directors, senior management and employees MSL has an experienced management team with a track record of senior roles instock broking and investment banking businesses. The current non-executivedirectors provide the Company with a range of sector and general businessexperience. Directors and Proposed Directors The Board of the Company currently comprises two directors as follows: David Barton (aged 61) Non-Executive Chairman David is a qualified Chartered Accountant (FCA). After qualifying in 1969 withCoopers & Lybrand, he decided to leave the profession to pursue a commercialcareer. He has been actively involved in numerous business sectors, which haveincluded banking and finance, property and construction and media. His currentactivities include being a non-executive director of All New Video plc andRuffler Bank Plc. Alan Pereira (aged 57) Finance Director Alan is a qualified Chartered Accountant (FCA). He has worked at severalmulti-national companies,including Dupont UK Holdings Limited and Canon (UK)Limited. He was finance director of the Internet Technology Group plc, Keystoneplc, e-capital investments plc and ukbetting plc, where he assisted with theadmission of these and other companies to trading on AIM. Upon completion of the Acquisition and Admission, both David Barton and AlanPereira will resign from their positions on the Board. Alan Pereira will alsoresign as company secretary and Rose-Marie Sexton, the current secretary of theMSH Group will be appointed Company Secretary. Details of Proposed Directors In addition, upon completion of the Acquisition and Admission, the followingProposed Directors will join the Enlarged Group Board: John Green, aged 61, Non-executive Chairman John is a graduate of Oriel College, Oxford, and a chartered accountant. Afterqualifying as a chartered accountant with Price Waterhouse in 1969 he joinedKleinwort Benson Investment Management as a trainee analyst. After a year heleft to become an analyst in a medium sized firm of brokers, McAnally Montgomery& Co, eventually to become head of investment research. In 1979 he joined JamesCapel (later HSBC Investment Bank) as a salesman in the institutionaldepartment. He was later made head of sales, a partner of the firm and appointed to theexecutive board. His subsequent appointments included head of UK syndication,head of corporate broking, head of equity capital markets and managing directorof HSBC James Capel UK. He retired from the Group as chief executive of JamesCapel Investment Management in 1998. He has subsequently held a number of non-executive positions. These include thechairmanship of AIM quoted Inventive Leisure plc from its flotation in 2000until its MBO in 2006. He has recently been appointed a non-executive directorof MSL. He is also chairman of AIM quoted Internet Business Group plc and ischairman of Principal Investment Management Holdings and Huntress Holdings. Anthony (Tony) Fabrizi, aged 45, Proposed Chief Executive Tony is the CEO and head of Corporate Finance of MSL. Tony qualified as achartered accountant with KPMG in 1986 and joined James Capel (later HSBCInvestment Bank) in 1987. He worked in corporate finance and spent eight yearsundertaking UK transactions, becoming a director in 1993. During his last threeyears at HSBC he was responsible for the other financial and fund managementactivities within corporate broking. He joined RP&C, a US Investment Bank, in1998 to help develop its UK business. In 2002 he established Ghaliston Limited as a corporatefinance advisory business. In May 2006, Ghaliston Limited acquired MSL andchanged its name to Merchant Securities Holdings Limited. Tony is the soledirector of MSH. Patrick Claridge, aged 42, Proposed Executive Director Patrick is head of Institutional Equities at MSL. Patrick began his career inthe City at Scott Goff Hancock & Company and then worked as an equity dealer ata number of city institutions, including UBS, before joining and establishingthe London office of TIR Securities (UK) Limited in 1990 where he was promotedto the position of Co-Head of the Companies Global Insitutional Business. At itspeak, TIR generated in excess of US$120 million of revenues. E\* TRADE Securitiesacquired TIR Securities (UK) Limited in 1999 and Patrick was appointed CEO ofthe London operations of E\* TRADE Securites (UK) Limited in 2001. Steven Whelton, aged 45, Proposed Finance Director Steve is the Finance Director of MSL. Steve qualified as a Chartered Accountantwith Casson Beckman in 1990. After spending seven years in the travel industry,he joined Matrix-Securities Limited as Group Financial Controller, departing in2001 to join Invicta Capital Limited (a company specialising in tax-based filmfinance products) as Finance Director. He joined MSL in December 2003 and wasappointed Finance Director in October 2004. Charles Price, aged 60, Proposed Non-Executive Director Charles is a qualified banker of nearly 40 years' experience, both in the UK andinternationally. He commenced his career at National Westminster Bank andsubsequently joined the Investment Bank, N.M. Rothschild & Sons. Over a periodof 25 years he worked in various capacities in the UK and Far East. Hesubsequently joined Singer & Friedlander as head of Banking and during the eightyears under his control grew the operation to become the largest segment of thegroup. On 1 July 2006, Charles was appointed as a non-executive director of MSL. Employees In addition to the Directors, MSL currently employs 19 staff of whom 12 areemployed in a front office capacity and 7 are employed in settlement andadministration. Directors' service contracts On 2 October 2006 the Company entered into a service agreement with AnthonyFabrizi. The contract is conditional upon the passing of the Resolutions. Thecontract provides for Mr Fabrizi to act as the Chief Executive Officer of theCompany at a salary of £120,000 per annum. Mr Fabrizi will commence in thatoffice on the date of Admission. The contract may be terminable by 6 months'notice in writing by either party. Under the contract, Mr Fabrizi is entitled to30 paid working days holiday each year and is entitled to participate in anymedical health insurance, life assurance permanent health assurance and criticaland terminal illness insurance operated by the Company from time to time and thestakeholder pension scheme. On 2 October 2006 the Company entered into a service agreement with PatrickClaridge. The contract is conditional upon the passing of the Resolutions. Thecontract provides for Mr Claridge to act as an Executive Director of the Companyat a salary of £75,000 per annum. Mr Claridge will commence in that office onthe date of Admission. The contract has a fixed term of 1 year from 1 May 2006and is terminable by 6 months' notice in writing by either party. Under thecontract, Mr Claridge is entitled to 30 paid working days holiday each yearprivate health scheme insurance and life assurance scheme operated by TheCompany from time to time and the stakeholder pension scheme. In addition, MrClaridge will be paid a bonus of £25,000 for the 12 months ending 1 May 2007 inequal instalments. On 2 October 2006 the Company entered into a service agreement with SteveWhelton. The contract is conditional upon the passing of the Resolutions. Thecontract provides for Mr Whelton to act as the Finance Director of the Companyat a salary of £85,000 per annum. Mr Whelton will commence in that office on thedate of Admission. The contract is terminable by 6 months' notice in writing byeither party. Under the contract, Mr Whelton is entitled to 30 paid working daysholiday each year and is entitled to participate in any medical healthinsurance, life assurance permanent health assurance and critical and terminalillness insurance operated by the Company from time to time and the stakeholderpension scheme. On 2 October 2006, the Company entered into letters of appointment with JohnGreen and Charles Price as Non-Executive Directors of the Company (and in the case ofMr Green, also as Chairman). The letters of appointment are conditional upon thepassing of the Resolutions. Under the letters of appointment Mr Green and MrPrice are appointed for an initial period of 12 months and thereafter theirservices are terminable on 6 months' notice from either party. Under the lettersof appointment Mr Green is paid £25,000 per annum and Mr Price £15,000 perannum. David Barton is engaged by the Company as a Non-Executive Chairman on the termsof a letter of appointment dated 22 February 2005 for an initial fixed term of12 months and terminable thereafter on one month's notice from either party. MrBarton receives a fee of £5,000 per annum and is subject to non-solicitation andconfidentiality undertakings. Alan Pereira is engaged by the Company as Finance Director on the terms of aletter of appointment dated 22 February 2005 for an initial fixed term of 12months and terminable thereafter on one month's notice from either party. Mr Pereirareceives a fee of £5,000 per annum and is subject to non-solicitation andconfidentiality undertakings. Both David Barton and Alan Pereira will be resigning as Directors on completionof the Acquisition and passing of the Resolutions. There are no service agreements in existence between any of the Directors,Proposed Directors and the Company providing for benefits upon termination of employment. There are no service contracts which require more than 12 months' notice of termination. Neither David Barton's nor Alan Pereira's service agreements have been alteredin the past 6 months. Reasons for Admission MSH sees the Acquisition as an opportunity to enhance the MSH Group's visibilityand reputation and to provide access to London's equity capital markets. Inaddition, the Proposed Directors believe that the profile and status of the MSHGroup will be enhanced by Admission which will enable the Enlarged Group toattract new clients both in the private client and institutional stockbrokingmarkets. The Proposed Directors also believe that Admission will enhance opportunities toreward employees for their efforts in developing and growing the business whilstaligning their interests with those of Shareholders through equity basedincentive schemes. Current trading and prospects For the year ended 31 March 2006, MSL reported turnover of £4.1 million whichresulted in a profit after tax of £580,000. In the current financial year todate, MSL has carried out six corporate finance transactions raising a total ofapproximately £12.0 million and trading in the first half of the currentfinancial year for MSL as a whole was marginally ahead of management'sexpectations. Accordingly, the Directors and Proposed Directors are confidentabout the MSH Group's prospects for the current financial year and beyond. Suspension of trading of the Existing Ordinary Shares on AIM In accordance with AIM Rules on investing companies with cash or assets below£3.0 million in aggregate, the Existing Ordinary Shares were suspended fromtrading on AIM at 7.00 a.m. on 3 April 2006. At that time, the closing midmarket price of an Existing Ordinary Share was 4.875p valuing the Company'sentire issued share capital at £1.33 million. Principal Terms of the Acquisition On 2 October 2006 the Company agreed to purchase the entire issued share capitalof MSH for a total consideration of £8.35 million, to be satisfied by the issueand allotment of 16,700,000 New Ordinary Shares, conditional upon the passing ofthe Resolutions and Admission. Tony Fabrizi, who holds 29.7 per cent. of theshares in MSH, has as the main shareholder given certain warranties to theCompany including tax warranties relating to the businesses of MSH and MSL. Change of Name The name of the Company will be changed to Merchant Securities plc, conditionalupon the passing of a Resolution by the Shareholders and completion of theAcquisition. Consolidation of Share Capital Subject to the passing of a Resolution by the Shareholders the Company'sauthorised share capital will be increased from £2,000,000 to £3,000,000 by thecreation of a further 100,000,000 Ordinary Shares of 1p each ranking pari passuin all respects with the Existing Ordinary Shares in the capital of the Company.These will then be consolidated such that every ten Ordinary Shares of 1p eachin issue and unissued in the capital of the Company be consolidated into oneOrdinary Share of 10p each, reducing the authorised share capital from300,000,000 Ordinary Shares to 30,000,000 Ordinary Shares, Share Option Schemes The Share Option Schemes will be adopted following the EGM subject toShareholders' approval. Lock-in Agreements The Proposed Directors (who, immediately following Admission will, in aggregate,hold 6,394,786 New Ordinary Shares, representing approximately 32.92 per cent.of the Enlarged Issued Share Capital) have each given undertakings to Arden thatthey will not dispose of any New Ordinary Shares that they hold on Admission(subject to certain exceptions) for a period of 12 months from Admission (''theLock-in Period''), and thereafter for a further period of 6 months, that theywill not dispose of any interest in such shares other than through Arden. In addition, certain other members of the MSH Group senior management team (who,immediately following Admission will, in aggregate, hold 478,928 New OrdinaryShares, representing approximately 2.47 per cent. of the Enlarged Share Capital)have given undertakings to Arden that they will not dispose of any New OrdinaryShares that they hold on Admission (subject to certain exceptions) during theLock-in Period, and thereafter for a further period of 6 months, they will notdispose of any interest in such shares other than through Arden. Dividend Policy In the short term it is the Directors' intention to re-invest funds directlyinto the Company rather than to fund the payment of dividends. Thereafter, thepayment of dividends will be subject to the availability of distributablereserves whilst maintaining an appropriate level of dividend cover and havingregard to the need to retain sufficient funds to finance the development of theCompany's activities. City Code on Takeovers and Mergers The terms of the Proposals give rise to certain considerations under the CityCode. Brief details of the Panel, the City Code and the protection they affordare given below. The City Code is issued and administered by the Panel. The City Code is designedprincipally to ensure fair and equal treatment of all shareholders in relationto takeovers. Under Rule 9 of the City Code, where any person acquires, whether by a series oftransactions over a period of time or not, an interest (as defined in the CityCode) in shares which (taken together with shares in which persons acting inconcert with them are interested) carry 30 per cent. or more of the votingrights of a company which is subject to the City Code, that person is normallyrequired by the Panel to make a general offer in cash to the holders of anyclass of equity share capital or other class of transferable securities carryingvoting rights in that company to acquire the balance of their interests in thecompany at the highest price paid by that person or any person acting in concertwith it in the previous 12 months. Similarly Rule 9 of the City Code further provides that, inter alia, where anyperson, together with persons acting in concert with him, is interested inshares which in the aggregate carry not less than 30 per cent. of the votingrights of a company but does not hold shares carrying more than 50 per cent. ofsuch voting rights and such person, or any such person acting in concert withhim, acquires an interest in any other shares which increases the percentage ofshares carrying voting rights in which he is interested, such person is normallyrequired by the Panel to make a general offer in cash to holders of any class ofequity share capital or other class of transferable securities carrying votingrights of that company to acquire the balance of their interests in the companyat the highest price paid by that person or any person acting in concert with itin the previous 12 months. Under the City Code, a concert party arises when persons who, pursuant to anagreement or understanding (whether formal or informal), co-operate to obtain orconsolidate control of that company. Under the City Code, control means aninterest or interests in shares carrying in aggregate 30 per cent. or more ofthe voting rights of a company, irrespective of whether such interest orinterests give de facto control. The Panel has deemed the following vendors of MSH, as a result of their businessand personal relationships, to be a concert party: Anthony Fabrizi, PatrickClaridge, Steve Whelton, Charles Price, John Green, Adrian Messina, GraemeSmith, Chris Coleman, Christopher Taylor, David Barton, Colura Holdings Limited,Ruffler Bank Plc and Goldings Estates Limited (''the Concert Party''). Thosepersons listed are all either directly or indirectly interested in shares inMSH. Upon Admission, the Concert Party will between them be interested in 9,147,616New Ordinary Shares representing approximately 47.10 per cent. of the Company'sEnlarged Share Capital attracting Voting Rights. Pursuant to the Share Option Schemes or stand alone options, certain members ofthe Concert Party will, following Admission, have been granted Options over anaggregate of 2,474,090 New Ordinary Shares. If all such Options granted to thosemembers of the Concert Party were exercised in full and no other options wereexercised and no other New Ordinary Shares were issued whatsoever, the Concert Party could hold up to approximately 53.06 per cent. of the thenenlarged issued ordinary share capital and Voting Rights of the Company. The relevant holdings of the members of the Concert Party, now and at Admissionand as they would be if the maximum amount of Consideration Shares were issuedand all Options held by them were exercised, are set out in the admissiondocument, together with details of the members of the Concert Party. The Panel has agreed, subject to the passing of a Resolution in the notice ofEGM by independent Shareholders on a poll, that it will not require the Concert Party or any memberthereof to make a general offer in cash for shares in the Company which mightotherwise arise under Rule 9 as a result of the Acquisition or the exercise ofany Options held by them. Immediately following Admission, the Concert Party will be interested in sharescarrying 30 per cent. or more of the Company's voting share capital but will notbe interested in shares carrying more than 50 per cent. of such voting rightsand, so long as they continue to be treated as acting in concert, any furtherincreases in their aggregate interests in shares will be subject to theprovisions of Rule 9. Shareholders should note however that subject to thepassing of a Resolution, the Concert Party will also be able to increase theiraggregate shareholding to 53.06 per cent. of the Enlarged Group without any Rule9 consequences as a result of the issue to them of further New Ordinary Sharespursuant to the terms of the exercise of the 2,474,090 Options granted to thempursuant to the Share Option Schemes or stand alone options. Should the members of the Concert Party exercise their share options in full(which apart from those granted to David Barton can only occur after 30 June2008) and no other share issues take place, the members of the Concert Partcould, between them, hold more than 50 per cent. of the Company's voting sharecapital and (for so long as they continue to be treated as acting in concert)may accordingly increase their aggregate interests in shares without incurringany obligations under Rule 9 to make a general offer, although individualmembers of the Concert Party will not be able to increase their percentageinterests in shares through or between a Rule 9 threshold without Panel consent. DEFINITIONSThe following definitions apply throughout this document, unless otherwise stated or unless the contextotherwise requires:''Acquisition'' the proposed acquisition of MSH by the Company''Acquisition Agreements'' the conditional agreements dated 2 October 2006 pursuant to which the Company has conditionally agreed to acquire the entire issued share capital of MSH''Act'' the Companies Act 1985, as amended''Acting in concert'' shall bear the meaning ascribed thereto in the City Code on Takeovers and Mergers published by the Panel on Takeovers and Takeovers and Mergers published by the Panel on Takeovers and Mergers (as amended from time to time)''Admission'' the admission of the Consideration Shares to trading on AIM and such admission becoming effective in accordance with the AIM Rules''AIM'' the AIM market of the London Stock Exchange''AIM Rules'' the rules for companies whose securities are traded on AIM and their nominated advisers published by the London Stock Exchange as amended from time to time''Arden'' Arden Partners plc, which is authorised and regulated in the United Kingdom by the FSA''Articles'' the articles of association of the Company''Board'' the board of directors of the Company''certificated'' or ''in the description of a share or other security which is not in uncertificatedcertificated form'' form (that is, not in CREST)''City Code'' the City Code on Takeovers and Mergers issued and regulated by the Panel''Combined Code'' the Principles of Good Governance and Code of Best Practice, issued by the London Stock Exchange''Company'' or ''Castor Castor Investments plcInvestments''''Completion'' completion of the Acquisition being conditional, inter alia, upon certain of the Resolutions being passed at the EGM and Admission''Concert Party'' Anthony Fabrizi, Steven Whelton, Patrick Claridge, John Green, Charles Price, David Barton, Adrian Messina, Christopher Taylor, Chris Coleman, Graeme Smith, Ruffler Bank Plc, Colura Holdings Limited and Goldings Estate Limited''Consideration'' £8,350,000 to be satisfied by the issue of the Consideration Shares at the Issue Price ''Consideration Shares'' the 16,700,000 New Ordinary Shares to be issued as consideration for the Acquisition''Controlling Interest'' means shares representing not less than 30 per cent. of Voting Rights''CREST'' the relevant system (as defined in the CREST Regulations) in respect of which CREST Co Limited is the Operator (as defined in the CREST Regulations)''CREST Regulations'' the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended''Directors'' the directors of the Company''EGM'' or ''Extraordinary the extraordinary general meeting of the Company to be held at theGeneral Meeting'' offices of Lawrence Graham at 190 Strand, London WC2R 1JN on 25 October 2006''EMI Scheme'' the enterprise management incentive share option scheme''Enlarged Group'' Castor Investments and the MSH Group together''Enlarged Group Board'' the directors of the Company upon and immediately following Admission''Enlarged Share Capital'' the entire issued share capital of Castor Investments upon Admission as enlarged by the issue of the Consideration Shares''Existing Directors'' David Barton and Alan Pereira''Existing Ordinary Shares'' the ordinary shares of 1p each in the capital of the Company as at the date of this document''FSA'' the Financial Services Authority Limited, the single statutory regulator under FSMA''FSMA'' the Financial Services and Markets Act 2000, as amended, including any regulations made pursuant thereto''Independent Director'' Alan Pereira''Issue Price'' 50p per share''London Stock Exchange'' London Stock Exchange plc''MSH'' Merchant Securities Holdings Limited, a company incorporated in England and Wales with company number 3660054''MSL'' Merchant Securities Limited, a company incorporated in England and Wales with company number 2146985''MSH Director'' the director of MSH, being Anthony Fabrizi''MSH Group'' MSH and its subsidiaries from time to time including MSL''MSH Scheme'' the MSH enterprise management incentive share option scheme''New Ordinary Shares'' the ordinary shares of 10p each in the capital of the Company following the Share Consolidation''Official List'' the official list of the UK Listing Authority''Options'' or ''Share Options'' rights to acquire New Ordinary Shares''Ordinary Shares'' the ordinary shares of 1p each (or, after the Share Consolidation, 10p each) in the capital of the Company from time to time''Panel'' the Panel on Takeovers and Mergers, the regulatory body which regulates the City Code on Takeovers and Mergers''Proposals'' the proposed Acquisition, change of name, Share Consolidation, adoption of the Share Option Scheme and approval of the Waiver''Proposed Directors'' the proposed directors of the Company, whose appointment will be effective on Admission''Resolutions'' the resolutions to be proposed at the EGM, set out in the notice of EGM. Reference to a ''Resolution'' shall be the relevant resolution set out in the notice of EGM the obligation under Rule 9 of the City Code to make a general cash offer to all shareholders of a company to which the Code applies''Rule 9 Obligation''''Share Consolidation'' the consolidation of the Existing Ordinary Shares into New Ordinary Shares on the basis of 10 Existing Ordinary Shares for 1 New Ordinary Share as set out in the Resolution ''Shareholders'' holders of Ordinary Shares in the Company ''Share Option Schemes'' the EMI Scheme and the Unapproved Scheme ''Share Scheme Deed'' the deed of release and grant of replacement options relating to the MSH Scheme ''UK Listing Authority'' a division of the FSA acting as a competent authority for the purposes of Part VI of FSMA''Unapproved Scheme'' the unapproved share option scheme of the Company''uncertificated'' or ''in an Ordinary Share recorded on the Company's register as being held inuncertificated form'' uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST''United Kingdom'' or ''UK'' the United Kingdom of Great Britain and Northern Ireland''Vendors'' the shareholders of MSH at the date of this document''Voting Rights'' means the right to receive notice of, attend (in person or by proxy or by corporate representative), speak (in person or by corporate representative) and to cast (in person or by proxy or by corporate representative) one vote per share at general meetings of the Company''Waiver'' the waiver by the Panel of the Rule 9 obligations that would otherwise arise on the members of the Concert Party, collectively and individually, as a result of the Proposals. This obligation would require the Concert Party to make a cash offer for the entire issued share capital of the Company. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Mercia Asset