12th Dec 2006 07:02
Artisan (UK) PLC12 December 2006 ARTISAN (UK) PLC 12 December 2006 PROPOSED CAPITAL REORGANISATION The Directors have been reviewing the existing shareholding structure of Artisanand believe that it would be in the interests of Shareholders and the Company asa whole to effect a reorganisation of the share capital of the Company. A circular will be sent to Shareholders shortly setting out the reasons for anddetails of the proposed Capital Reorganisation (which are set out below) and togive notice of an extraordinary general meeting of the Company to be held on 19January 2007 at which resolutions will be proposed to give effect to the CapitalReorganisation. Background to and reasons for the proposed Capital Reorganisation The Company's authorised share capital currently comprises 1,000,000,000Existing Ordinary Shares of which 328,530,000 Existing Ordinary Shares are inissue. The average middle market price for the Company's shares taken from theAIM appendix of the Daily Official List for the last five days prior to theannouncement of the proposed Capital Reorganisation was 3.25p. Despite the relatively small market capitalisation, the Company hasapproximately 10,300 Shareholders. The Directors consider that a moreappropriate capital structure and consequent traded market value for theCompany's ordinary capital is now required for the following reasons; • For Shareholders to realise value for their shares, the dealing costsfor many Shareholders would represent a significant proportion of the value oftheir investment. For example, over 3,600 Shareholders each have shares worth£100 or less; • The Capital Reorganisation will make it more cost effective for theCompany to service its Shareholders by removing the large administrative burdenand costs of communicating with large numbers of Shareholders who have only asmall number of shares; and • The Company wishes to establish a dividend policy for Shareholdersbut, based on possible distributions, the cost of administering a dividendpayment (the registrar's costs of preparing and posting a cheque) would exceedthe likely payments for almost 65 % of Shareholders, making the processuneconomic for the Company. The Directors are, therefore, proposing to effect the Capital Reorganisation,details of which are set out below, which they believe to be in the bestinterests of the Company and its Shareholders. Details of the proposed Capital Reorganisation The Directors are proposing to consolidate the Existing Ordinary Shares on thebasis of 1 Consolidated Share for every 6,000 Existing Ordinary Shares held,creating new Consolidated Shares of £30 each. Each Consolidated Share will thenimmediately be sub-divided into 150 New Ordinary Shares of 20p each. To effect the consolidation, it was necessary to issue 574 additional ExistingOrdinary Shares so that the Company's issued share capital is exactly divisibleby 6,000. The Company has issued those 574 Existing Ordinary Shares for a cashat an issue price of 3.25p per Existing Ordinary Share on 11 December 2006 andapplication has been made for them to be admitted to trading on AIM.Accordingly, following the consolidation the Company's issued ordinary sharecapital will comprise 54,755 Consolidated Shares. Each Consolidated Share willthen be sub-divided into 150 New Ordinary Shares resulting in the Company'sauthorised share capital being 25,000,000 New Ordinary Shares and the Company'sissued share capital being 8,213,250 New Ordinary Shares. Other than the change in the nominal value, the New Ordinary Shares arising oncompletion of the Capital Reorganisation will have the same rights as theExisting Ordinary Shares, including, without limitation, the same voting,dividend and other rights. A consequence of the terms of the Capital Reorganisation is that holders offewer than 6,000 Existing Ordinary Shares will not be entitled to receive aConsolidated Share and holders of more than 6,000 Existing Ordinary Shares willonly be entitled to one Consolidated Share for every 6,000 Existing OrdinaryShares they hold at the Record Date. They will not be entitled to receiveConsolidated Shares in respect of their Fractional Entitlements. Furtherinformation about the treatment of Fractional Entitlements is set out below. Based on the Share Register on 7 December 2006, the Directors estimate that thenumber of Shareholders following the Capital Reorganisation becoming effectivewould reduce by approximately 54 percent. to approximately 4,700 Shareholders. Fractional Entitlements Where, as a result of the consolidation of the Existing Ordinary Sharesdescribed above, any Shareholder is entitled to a fraction only of aConsolidated Share (a "Fractional Entitlement"), all such fractions shall beaggregated by the Company so as to form full Consolidated Shares. The Consolidated Shares will then be sub-divided (along with all otherConsolidated Shares) into New Ordinary Shares pursuant to the CapitalReorganisation. The Directors have entered into a Placing Agreement (furtherdetails of which are set out below) to sell these New Ordinary Shares on behalfof the Fractional Shareholders, to Aspen, conditional upon the Resolutions beingpassed at the Extraordinary General Meeting and upon Admission of the NewOrdinary Shares to trading on AIM, at a price of 130 per share (equivalent to ashare price of 3.25p per Existing Ordinary Share, being the average middlemarket price for the Existing Ordinary Shares, as quoted in the AIM appendix ofthe Daily Official List for the last five days prior to the announcement of theproposed Capital Reorganisation.) The proceeds of the sale will then be distributed to the Fractional Shareholdersin proportion to the fractions of Consolidated Shares held by each of them,except where the payment due to any Fractional Shareholder would be less than £2in which case, for purely economic reasons, the Directors have decided, in theexercise of their discretion under the Company's Articles of Association, thatthe payment should be retained by the Company for its own benefit. As stated above, on completion of the Capital Reorganisation any Shareholderholding fewer than 6,000 Existing Ordinary Shares on the Record Date will nolonger be a shareholder in the Company. This is because such Shareholders willnot have any Consolidated Shares which would be sub-divided into New OrdinaryShares. Instead, such Shareholders would receive a cash sum equal to the numberof Existing Ordinary Shares held by them at the Record Date multiplied by 3.25p,being the price being subscribed for the Fractional Entitlements by Aspenpursuant to the Placing Agreement, provided, as explained above, the payment dueis £2 or more. Any Shareholder holding more than 6,000 Existing Ordinary Shares, on the RecordDate, but a holding which is not exactly divisible by 6,000, will be entitled toone Consolidated Share for each 6,000 Existing Ordinary Shares held togetherwith the proceeds of sale of his or her Fractional Entitlement to a ConsolidatedShare (which will be aggregated and sold as described above) subject to theminimum payment of £2. The Record Date The Record Date for the proposed Capital Reorganisation (being the date theFractional Entitlements will be calculated) will be the close of business on 19January 2007 and, if approved by Shareholders, it is expected that the proposedCapital Reorganisation will become effective on Admission of the New OrdinaryShares to trading on AIM which is expected to take place at 8.00 a.m. on Monday22 January 2007. Placing of the Fractional Entitlements The Company has entered into a Placing Agreement with Aspen Finance Limited ("Aspen"), a company in which Michael Stevens, the Chairman of Artisan, has abeneficial interest, whereby Aspen has undertaken to subscribe for the NewOrdinary Shares created by the aggregation of the Fractional Entitlements, butsubject to a limit such that Aspen cannot be obliged to subscribe for suchnumber of Fractional Entitlements as would result in Aspen holding more than29.5 per cent of the Company's issued share capital, when combined with Aspen'sexisting holding of 21.97 per cent. The Placing Agreement is conditional on theapproval by Shareholders of the Resolutions to be proposed at the ExtraordinaryGeneral meeting of the Company to be held on 19 January 2007 and Admission ofthe New Ordinary Shares to trading on AIM. Following the Capital Reorganisationbecoming effective, Aspen will have a beneficial interest in up to 29.5 per centof the issued share capital of the Company. As this agreement is classified as arelated party transaction under the AIM rules, the Board, with the exception ofMichael Stevens, having consulted with the Company's Nominated Adviser, BrewinDolphin Securities, consider that the terms of the transaction are fair andreasonable insofar as the Shareholders of the Company are concerned. To the extent that the number of Fractional Entitlements arising from theCapital Reorganisation would, but for the limit contained in the PlacingAgreement, result in Aspen being beneficially interested in more than 29.5 percent of the Company's issued share capital, the Directors propose that theCompany itself purchase the "excess" Fractional Entitlements, and hold theshares so purchased as treasury shares. Any such purchase would have to be madeout of distributable profits, but the Directors estimate that the purchase costof such excess number of Fractional Entitlements should not exceed £150,000.TheCompany cannot purchase its own shares without authority from Shareholders to doso, and Resolution 2 on the Notice of Extraordinary General Meeting would givesuch authority for the Company to purchase its own shares up to a nominal valueof £23,076. Enquiries: Artisan (UK) plc Chris Musselle Chief Executive01480 436666 Brewin Dolphin Securities Nominated Advisors 0121 236 7000Ian StanwayIfor Williams EXPECTED TIMETABLE OF EVENTSLatest time and date for receipt of Forms of Proxy 11.00 a.m on 17 January 2007Extraordinary General Meeting 11.00 a.m on 19 January 2007Record date Close of business on 19 January 2007Expected date on which New Ordinary Shares will be admitted to 8.00 a.m. on 22 January 2007trading on AIMExpected date on which CREST accounts are to be credited with New 22 January 2007Ordinary SharesExpected date by which definitive new share certificates are to be 2 February 2007despatchedExpected date by which cheques for Fractional Entitlements (where 2 February 2007applicable) are to be despatchedExpected date on which CREST accounts are to be credited with 2 February 2007payment for Fractional Entitlements This announcement does not constitute, or form part of, an offer or aninvitation to purchase any securities. APPENDIX In this announcement, the following words and expressions shall, except wherethe context requires otherwise, have the following meanings: "Admission" admission to trading on AIM of all of the issued New Ordinary Shares and such admission becoming effective in accordance with the AIM Rules "AIM" the AIM Market of the London Stock Exchange plc "AIM Rules" the rules for AIM companies and their nominated advisers, as issued by the London Stock Exchange plc, as amended from time to time "Artisan" or "the Company" Artisan (UK) plc "Aspen" Aspen Finance Limited, a company in which Michael Stevens, a director of the Company, has a beneficial interest "Board" or "Directors" the directors of the Company "Brewin Dolphin Securities" Brewin Dolphin Securities Limited, the Company's nominated adviser and broker "Capital Reorganisation" the proposed capital reorganisation of the Company as described in this Circular "Consolidated Share" a new share of £30 nominal value in the share capital of the Company pursuant to the Capital Reorganisation "Existing Ordinary Shares" the existing ordinary shares of 0.5p each in the capital of the Company "Extraordinary General Meeting" the Extraordinary General Meeting of the Company to be held at 11.00 a.m. on Friday, 19 January 2007 "Form of Proxy" the form of proxy for use at the Extraordinary General Meeting enclosed with this Circular "Fractional Entitlement" has the meaning ascribed to that expression in this announcement "Fractional Shareholders" the Shareholders entitled to Fractional Entitlements " New Ordinary Shares" the new ordinary shares of 20p each in the Company arising from the Capital Reorganisation "Record Date" close of business on 19 January 2007, being the record date for the Capital Reorganisation "Shareholders" holders of ordinary shares in the capital of the Company This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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