6th Dec 2005 07:01
Libra Retail PLC06 December 2005 LIBRA RETAIL PLC (the "Company") 6 December 2005 Reverse takeover of Grafton Insurance Services Ltd and Admission to AIM Change of name to LEO INSURANCE SERVICES PLC Placing of 1,443,191 new Ordinary Shares at 14p per share to raise over £200,000 Allotment of 65,000 new Preference Shares at a price of £1 per share 1-for-10 Share Consolidation Libra Retail plc announces today that it has entered into an agreement to investin Grafton Insurance Services Ltd, a newly formed company which is to trade as aproperty insurance broker. Grafton will be owned 50% by Libra Retail plc and 50%by the Management Shareholders. The Grafton Investment constitutes a reverse takeover under the AIM Rules, andso trading in the Ordinary Shares of 0.1p on AIM will be cancelled and theCompany will apply to the London Stock Exchange for its issued and to be issuedordinary share capital to be admitted to trading on AIM. In addition, Libra Retail plc proposes to change the name of the Company to LEOINSURANCE SERVICES PLC, to consolidate its share capital and to raise over£200,000 through Teather & Greenwood to cover the costs of the Proposals. An EGM has been convened for 11.00 a.m. on 5 January 2006, at Dechert LLP, 160Queen Victoria Street, London EC4V 4QQ. Libra Retail plc is managed by a Board of four Directors: Larry Lipman Executive Chairman Paul Davis Finance Director Errol Lipman Executive Director Edward Young Non-Executive Director Expected Timetable for Admission Publication of the document 6 December 2005Last time for receipted Forms of Proxy 11.00 a.m. on 3 January 2006Extraordinary General Meeting 11.00 a.m. on 5 January 2006Record Date for the Share Consolidation Close of business 5 January 2006Admission and dealings in the Ordinary Shares of 1p expected to 6 January 2006commence on AIM and expected date for CREST accounts to be creditedCertificates in respect of the Ordinary Shares of 1p to be despatched 20 January 2006 Placing Statistics Placing price 14pNumber of new Ordinary Shares of 1p being pursuant to the Placing 1,443,191Number of Ordinary Shares of 1p in issue immediately following the 7,062,381PlacingMarket capitalisation following the Placing at the Placing Price £988,733Percentage of the Enlarged Issued Share Capital Placed 20.43 per cent.Estimated gross proceeds of the Placing £202,047 Full details of these proposals have been oultlined in a circular sent toshareholders today. Extracts from this circular are reproduced below. For further information please contact: Libra Retail Plc Teather & Greenwood Binns & Co PR LtdLarry Lipman Paul Davis Jeff Keating Paul McManusExecutive Chairman Finance Director Robert Naylor Tel: 020 7786 9600Tel: 020 8815 1600 Tel: 020 8815 1600 Tel: 020 7426 9000 Mob: 07980 541 893 Extract from Letter from the Chairman circulated to shareholders today: Background Your Directors have a large number of connections in the property industry andwe believe that we can make use of them to sell property insurance services. Paul Davis and I, together with Eddie Young, were formerly directors of Herculeswhere we were, amongst other things, partly responsible for the growth of thatgroup's property insurance business. Whilst we do not suggest that the Companywill replicate the success of Hercules' growth, we believe that the experiencewe gained there can be of value to the Company in its new investment. Reasons for the Grafton Investment The strategy of Grafton is to focus on arranging property insurance for contactsintroduced to it by the Executive Directors. This was the basis on which theHercules group started its insurance broking business and your Directors believethat that formula will be profitable once more. Grafton will be owned as to 50 per cent. by the Company and as to 50 per cent.by the Management Shareholders, who are individuals with experience in theinsurance broking business and who, your directors believe, have the necessaryexpertise to manage Grafton's broking business. Since Grafton is a newly formedcompany, with no assets at this stage, the cost of the investment is nominal. Once the Proposals have been approved by the Company's shareholders, it isenvisaged that both Safeland and Bizspace will appoint Grafton to act as theirinsurance broker for their respective property portfolios. In accordance withcommon practice within the property industry, commission will be shared betweenGrafton and the relevant insured party. The agreements with Safeland andBizspace will be subject to termination by either party on not less than threemonths notice, save that no notice may expire prior to the eighth anniversary ofthe date of each agreement, unless Grafton is sold to a third party prior to thesixth anniversary, in which case such notice may expire on or after the sixthanniversary (but not before). The maximum aggregate commission payable toSafeland under the proposed agreement with Safeland is £600,000 and theagreement will terminate upon that limit being achieved. The amount ofcommission estimated to be payable to Safeland under the agreement isapproximately £20,000 per annum. Accordingly, your Directors do not envisagethat this upper limit will be exceeded. My brother Errol and I have interests (through our investments in SHC) in over50 per cent. of the share capital of Safeland. Due to those interests, thearrangements between Grafton and Safeland will also require the approval ofSafeland's shareholders and a separate circular will be sent to them seekingtheir consent. The agreement between Grafton and Safeland will be entered intofollowing that consent being obtained. Under the proposed Management Shareholders Agreement, the parties will have theoption to require Grafton to be marketed for sale for the period beginning onand from 1 April 2010 and ending on (and including) 30 November 2010. If thebest offer received from any potential third party buyer of Grafton is less thanGrafton's net income during the twelve months prior to their offer (but is atleast equal to 85 per cent. of that income) then the Management Shareholdersshall be entitled to purchase the Company's shares in Grafton at the priceoffered by that third party or if higher for a price equal to Grafton's netincome multiplied by the proportion of Grafton's shares then held by theCompany. Grafton will apply to the FSA for authorisation to carry on business as aninsurance broker in the UK as soon as possible after entering into theManagement Shareholders' Agreement. Until such authorisation is given, it isintended that Grafton will (subject to the appropriate requirements of the FSAbeing satisfied) operate as an appointed representative of Anthony Jones (UK)Limited, a company in which one of the Management Shareholders is interested,which is authorised and regulated for the purposes of general insurance by theFSA. Other Proposals It is proposed to change the name of the Company to Leo Insurance Services Plcto reflect the nature of its new activities. The opportunity is also being takento consolidate the Company's share capital into 5,619,190 Ordinary Shares of 1peach. The consolidation of the Company's share capital will take place on thebasis of 1 new Ordinary Shares of 1p each for 10 existing Ordinary Shares of0.1p each. It is also proposed that the Company's articles of association be alteredpursuant to the Resolution in order to enable any fractions arising from theShare Consolidation to be aggregated and sold in the market for the benefit ofthe Company. Terms of the Placing The Company and Teather & Greenwood have, on 5 December 2005, entered into aPlacing Agreement pursuant to which Teather & Greenwood have agreed, subject tothe fulfilment of certain conditions, to use its reasonable endeavours toprocure subscribers for the Ordinary Shares of 1p at the Placing Price. Unicorn Asset Management Limited has agreed, conditionally upon Admission takingplace, to subscribe for 1,443,191 Ordinary Shares of 1p each at 14p per share,which will represent 20.43 per cent. of the Enlarged Ordinary Share Capital.This subscription will raise £202,047 for the Company, which will be used tocover the professional fees and other costs which the Company has incurred inconnection with the Proposals. The Placing is not a rights issue or open offer and no new shares are beingoffered generally to shareholders, whether on a pre-emptive basis or otherwise.The Directors believe that the considerable additional costs and delay to whicha rights issue or an open offer would give rise would not be in the bestinterests of the Company in the circumstances, given the size of the Placing. Preference Shares In order to provide the Company with sufficient funds to meet administration andoverhead costs, it is proposed that 65,000 Preference Shares be created,allotted and issued to Safeland at the price of £1 per Preference Share. ThePreference Shares provide for a fixed cumulative dividend at a rate of six percent. per annum on the nominal amount of the Preference Shares which accrues ona daily basis from issue. The Preference Shares can be redeemed by Libra at anytime on seven days written notice or at Safeland's request when all or any partof the dividend is in arrears for at least 12 months or, in any event, upon thesecond anniversary of issue. If the Preference Shares are not redeemed by theappropriate date, the dividend rate will increase to nine per cent. per annum.The Preference Shares do not confer a right to attend, speak or vote at anygeneral meeting of the Company. It is not intended that the Preference Shareswill be admitted to trading on AIM. Directors Libra is managed by a Board of four Directors, whose details are given below: Larry Glenn Lipman, Executive Chairman, aged 49 I have gained extensive experience of the property market over the last twentyyears. I am managing director of Safeland, where my primary focus is on tradingopportunities and the assessment of potential investments and refurbishmentprojects. I am also chairman of Bizspace and, until its recent takeover, wasexecutive chairman of Hercules. I have been closely involved in the successfuldevelopment and rapid growth of both companies. Errol Alan Lipman, Executive Director, aged 47 Errol gained a diploma in hotel management and catering in 1978. He started towork in the property sector in 1985, when he joined in the sales and rentaldepartments of a local estate agency which Safeland then owned. Errol has been adirector of Safeland since its flotation in 1988 and he is primarily responsiblefor the group's acquisitions and sales of commercial and residential property aswell as for the refurbishment and management of the building projects which theSafeland group undertakes from time to time. Paul Malcolm Davis, Finance Director, aged 52 Paul qualified as a chartered accountant in 1975. Having worked as a financedirector in the music industry for 14 years at a major publishing house hejoined Safeland in 1991 and was appointed finance director in early 1992. Paulis also an executive director of Bizspace and prior to its takeover byErinaceous plc he was commercial director of Hercules. In each capacity he hashad considerable experience in negotiating and arranging corporate transactionsand being instrumental in the growth of each of those companies. Edward George Young, Non-Executive Director, aged 63 Edward qualified as a solicitor in 1968 after graduating from UniversityCollege, London. He is a senior partner of the London firm of solicitorsPhilippsohn Crawfords Berwald and has extensive experience in commercialproperty law and practice. He is a senior legal adviser to a major publishinggroup and holds non-executive directorships on the boards of other companies. Inparticular, he was a non executive director of Hercules until its take over byErinaceous plc last year. Following James Caan's resignation from the Board, asannounced on 4 November 2005, the Company intends to appoint a new non-executiveDirector to the board in due course. Directors' interests and lock-in arrangements After the Share Consolidation and Placing have been implemented, SHC will hold2,665,926 Ordinary Shares of 1p each representing approximately 37.30 per cent.of the Enlarged Ordinary Share Capital and Unicorn Asset Management Limited willhold 1,443,191 Ordinary Shares of 1p each representing approximately 20.43 percent. of the Enlarged Ordinary Share Capital. In addition, the Directors'aggregate interest in Ordinary Shares of 1p will amount to 176,183 OrdinaryShares of 1p each representing approximately 2.49 per cent. of the EnlargedOrdinary Share Capital. Safeland will hold 511,919 Ordinary Shares of 1prepresenting approximately 7.25 per cent. of the Enlarged Ordinary ShareCapital. The Directors, Safeland and SHC have agreed not to dispose of anyinterests in the securities of the Company for a period of 12 months followingAdmission, save in certain specific circumstances permitted by the AIM Rules. On 3 February 2005, Errol Lipman, Paul Davis and I were each conditionallygranted options over Ordinary Shares of 0.1p worth £175,000 valued by referenceto the average closing middle market quotation for an Ordinary Share of 0.1p (asderived from the Official List) for the first three dealing days after theinitial admission, which was 1.92p. Each option is exercisable at any time after18 months and before 10 years following the date of grant. Recommendation and Directors' Intention The Directors consider the Proposals are in the best interests of the Companyand its shareholders. Accordingly the Directors unanimously recommend you votein favour of the resolution to be proposed at the EGM. The Directors haveundertaken to vote in favour of the resolution to be proposed at the EGM inrespect of their beneficial holdings of 1,761,832 Ordinary Shares of 0.1p inaggregate representing 3.14 per cent. of the existing issued share capital, withthe exception of Edward Young who is not beneficially interested in any OrdinaryShares of 0.1p. In addition, SHC, which holds 26,339,257 Ordinary Shares of 0.1p(amounting to 46.87 per cent. of the existing issued ordinary share capital ofthe Company) has undertaken to the Directors that it will vote in favour of theResolution. ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Palace Capital