28th Apr 2008 17:28
Judges Capital PLC28 April 2008 28 April 2008 Judges Capital plc (the "Company" or "Judges Capital") Proposed approval of Waiver granted by the Panel on Takeovers and Mergers (the "Panel") under Rule 9 of the Takeover Code on Takeovers and Mergers in relationto the purchase of its own shares Authority to make purchases of its own shares Approval of Resolution in relation to Convertible Redeemable Shares Notice of Extraordinary General Meeting to be held on 22 May 2008 The Board of Judges Capital announces that a circular (the "Circular") has beenposted to shareholders today convening an Extraordinary General Meeting of theCompany to be held at 11.30 a.m. on 22 May 2008 (the "EGM"). The purpose of theCircular is: (1) to give details regarding, and seek Shareholder approval for, an authorityfor the Company to purchase in the market up to 14.99 per cent. of the issuedOrdinary Shares of the Company (the "Share Purchase Authority"); (2) to seek the approval by independent Shareholders of a waiver, which has beengranted by the Panel, subject to the approval at the EGM by independentShareholders on a poll, of any obligation on the part of a concert party ofShareholders of the Company (comprising David Cicurel Securities Limited ("DCS"); David Cicurel (Director); Dawnay Day Corporate Finance Limited; ForwardIssueLimited; Totalassist Company Limited; Guy Naggar and the Naggar Family PensionScheme(the "Concert Party")) to make a general offer to Shareholders under Rule9 of the Takeover Code which might otherwise arise upon any exercise by theCompany of the Share Purchase Authority (the "Waiver"); and (3) to seek the approval of a Resolution allowing the exercise by DCS of any ofthe Convertible Redeemable Shares (as defined in the Circular) in the capital ofthe Company held by it. Additionally, the Circular sets out the background to and reasons for the aboveproposals (the "Proposals"), including why the independent Directors of theCompany (being, the Directors of the Company other David Cicurel (the "Independent Directors")), who have been so advised by Shore Capital andCorporate Limited, consider the Proposals to be in the best interests of theCompany and its Shareholders as a whole and unanimously recommend thatindependent Shareholders (being Shareholders other than the Concert PartyShareholders ("Independent Shareholders") vote in favour of the Resolutions atthe EGM as they intend to do in respect of their own shareholdings of 83,791Ordinary Shares, representing approximately 2.35 per cent. of the OrdinaryShares in issue at the date of this announcement. The Company's annual report and accounts for 2007 was also posted toShareholders today together with a notice of Annual General Meeting to takeplace at 12 p.m. on 22 May 2008. Background to and reasons for the proposed Share Purchase Authority On 29 January 2008, the Company issued a trading update announcement relating tothe year ended 31 December 2007. That announcement stated that the Group hadcontinued to trade strongly during the second half and, further, that the Boardanticipated that the results for the full year ended 31 December 2007 wouldexceed the then prevailing market expectations. The Company issued itspreliminary statement of results for the year ended 31 December 2007 on 28 March2008 reporting record sales of £6.2 million (2006: £5.2 million), record profitsof £836,000 (2006: £516,000) before tax, gains on divestments and amortisation,and record adjusted fully diluted earnings per share of 12.9p (2006: 8.6p). The Board also reported that the Company entered the New Year with an almostdoubled order book compared to the level reached at the beginning of 2007 which,in the opinion of the Directors, augured well for 2008. A copy of the AnnualReport and Accounts is enclosed with the Circular for Shareholders' information. The Independent Directors believe that the Company's share price does notreflect the Group's favourable prospects and that this is at least partly as aresult of the limited liquidity in the Company's shares. The IndependentDirectors believe that the proposed Share Purchase Authority can assist inproviding an exit for shareholders who currently may not be able to sell due tothe limited liquidity in the Company's shares. The Takeover Code requirements Rule 9 of the Takeover Code (''Rule 9'') stipulates, inter alia, that if (a) anyperson acquires, an interest (as defined in the Takeover Code) in shares whichtaken together with shares in which persons acting in concert with him areinterested carry 30 per cent. or more of the voting rights of a company; or (b)any person, 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 person acting in concert with him,acquires an interest in any other shares which increases the percentage of thevoting rights in which he is interested; such person will normally be requiredby the Panel to make a general offer to the remaining shareholders to acquiretheir shares. An offer under Rule 9 must be made in cash and at the highestprice paid by the person required to make the offer or any person acting inconcert with him for any interest in shares in the company during the twelvemonths prior to the announcement of the offer. Under Rule 37 of the Takeover Code, when a company purchases its own votingshares, any resulting increase in the percentage of shares carrying votingrights in which a person or group of persons acting in concert is interestedwill be treated as an acquisition for the purpose of Rule 9 (although ashareholder who is neither a director nor deemed to be acting in concert with adirector will not normally incur an obligation to make an offer under Rule 9). The Takeover Code states that persons are acting in concert if, inter alia, theyco-operate, pursuant to an agreement or understanding (whether formal orinformal) to obtain or consolidate control of a company. A person and each ofits affiliated persons will be deemed to be acting in concert all with eachother. The Panel considers that for these purposes, DCS; David Cicurel; DawnayDay Corporate Finance Limited; ForwardIssue Limited; Totalassist CompanyLimited; Guy Naggar and the Naggar Family Pension Scheme, members of theirimmediate families and certain trusts and entities related to them and membersof their immediate families are acting in concert. Full details of theconstituent members of the Concert Party are set out in the Circular. Current and potential shareholding of the Concert Party The aggregate shareholding interests of the Concert Party in the Company as at25 April 2008 was 1,333,988 Ordinary Shares, representing 37.46 per cent. of theissued share capital of the Company. In addition, DCS, a member of the ConcertParty, holds Convertible Redeemable Shares which, if converted, would increasethe aggregate shareholding of the Concert Party. Details of the ConvertibleRedeemable Shares are set out below. Convertible Redeemable Shares Prior to admission of the issued share capital of the Company to AIM on 7January 2003, the founding directors of the Company subscribed for and wereissued a total of 5,000,000 Convertible Redeemable Shares. The holders of theConvertible Redeemable Shares have the right to convert all or part of theirholding of Convertible Redeemable Shares into an amount of Ordinary Shares, suchthat if all the Convertible Redeemable Shares were converted at the same time,the total number of new Ordinary Shares to be issued pursuant to the conversionwould equal 12 per cent. of the enlarged issued share capital. The amount to bepaid on conversion of each Convertible Redeemable Share is 95 pence per newOrdinary Share issued as a result of the conversion. DCS currently holds 4,166,667 Convertible Redeemable Shares. It was stated inthe AIM Re-Admission Document dated 29 April 2005 that it was intended to seek avote of Independent Shareholders to enable DCS to exercise its conversionrights. This Resolution is being sought as part of the Proposals. If the Convertible Redeemable Shares were converted on 25 April 2008 then theywould convert into 485,574 new Ordinary Shares. DCS, a member of the ConcertParty, would hold 404,645 of these new Ordinary Shares. If DCS converted itsConvertible Redeemable Shares (and no others were converted) on 25 April 2008,the aggregate shareholding interests of the Concert Party in the Company wouldbe 1,738,633 Ordinary Shares, representing 43.84 per cent. of the issued sharecapital of the Company. Dispensation from Rule 9 of the Takeover Code in relation to the repurchase bythe Company of its own shares The Independent Directors have applied to the Panel for a waiver of Rule 9 ofthe Takeover Code in order to permit the Share Purchase Authority proposed underResolution 2 to be exercised by the Board (if such authority is approved byShareholders) without triggering an obligation on the part of the Concert Partyto make a general offer to Shareholders. The Panel has agreed, subject toIndependent Shareholders' approval on a poll, to waive any obligation for theConcert Party to make a general offer to all Shareholders where such anobligation would arise as a result of purchases by the Company of up to 533,775Ordinary Shares pursuant to the Share Purchase Authority. The waiver granted bythe Panel relates only to any increase in the percentage of Ordinary Shares heldby the Concert Party as a result of purchases by the Company of Ordinary Sharespursuant to the Share Purchase Authority and is conditional on the passing ofResolution 1 by the Independent Shareholders of the Company on a poll. As themembers of the Concert Party are interested in the outcome of Resolution 1, theywill be precluded from voting on that Resolution. Following exercise of the Share Purchase Authority (either in whole or in part),the Concert Party will remain interested in shares which carry more than 30 percent. but will not hold more than 50 per cent. of the Company's voting sharecapital and any further increase in the number of Ordinary Shares in which it isinterested (other than as a result of a further exercise of the buybackauthority) will be subject to the provisions of Rule 9 of the Takeover Code. DCS's Convertible Redeemable Shares DCS currently holds 4,166,667 Convertible Redeemable Shares. It was stated inthe AIM Re-Admission Document (as defined in the Circular) that it was intendedto seek a vote of Independent Shareholders to enable DCS to exercise itsconversion rights. This resolution is being sought as part of the Proposals(Resolution 3). The Concert Party will be precluded from voting on thatresolution. Panel Waiver Following an application by the Independent Directors, the Panel has agreed,subject to the approval of Resolution 1 on a poll by the IndependentShareholders at the EGM, to grant the Waiver. The effect of the Waiver, ifapproved by the Independent Shareholders, would be that the Concert Party wouldnot be required to make a general offer under Rule 9 of the Takeover Code thatwould otherwise arise due to the increase in the aggregate holding of theConcert Party resulting from the purchase by the Company of its own OrdinaryShares pursuant to the Share Purchase Authority. The Resolution to approve the Waiver is subject to the approval of theIndependent Shareholders on a poll. The Independent Shareholders are theShareholders other than members of the Concert Party. Extraordinary General Meeting The EGM will take place at 8-10 Grosvenor Gardens SW1W 0DH at 11.30 a.m. on 22May 2008. Document availability An electronic copy of the shareholder circular can be accessed at the Company'swebsite: www.judges.uk.com Enquiries: David Cicurel, Chief Executive, Judges Capital plc - 01342 323 600 Pascal Keane, Nominated Adviser, Shore Capital and Corporate Limited- 020 7408 4090 Melvyn Marckus, Cardew Group - 07775 896 491 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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