27th Sep 2007 13:55
Polar Capital Holdings PLC27 September 2007 Polar Capital Holdings plc Crystallisation of Business Unit Polar Capital Holdings plc ("Polar Capital" or the "Company") announces thecrystallisation of the UK business unit and resultant issue of 5,608,649 newordinary shares which will occur over the next three years. This crystallisationis expected to be immediately earnings enhancing for shareholders. Background As set out at the time of the Company's admission to AIM, Polar Capital hasstructured its fund management operations in such a way that the fund managementteams are placed in separate business units. Each business unit is a separateprofit centre and the fund managers responsible receive each year a paymentwhich comprises a share of their unit's core operating profit (operating profitbefore performance fees and related distributions) and performance fees. In addition to the remuneration structure described above, each fund managementteam is offered the prospect of an interest in the capital of the Companythrough the purchase of an individual class of preference shares in PolarCapital Partners Limited, a wholly owned subsidiary of the Company. Thesepreference shares have been structured in such a way as to become convertibleupon the occurrence of certain events known as crystallisation events into cashor, at the option of the Company, ordinary shares at a ratio that is intended tobe earnings enhancing for the Group. Upon the occurrence of a crystallisation event the fund managers concerned ceaseto be eligible to receive their share of the business unit's core operatingprofit and simultaneously going forward receive a reduced interest in theirperformance fees. UK business unit crystallisation With effect from 31 March 2007 the UK business unit elected to crystallise theirpreference shares and the Company has elected to satisfy the consideration bythe issue of new ordinary shares. The Company will issue a total of 5,608,649 new ordinary shares spread over thenext three years, which will rank pari passu with the existing ordinary sharesat the time of issue, as follows: 28 September 2007 - 560,864 ordinary shares 31 March 2008 - 1,682,595 ordinary shares 31 March 2009 - 1,682,595 ordinary shares 31 March 2010 - 1,682,595 ordinary shares The issue of these new ordinary shares together with options held by employeeswill increase the diluted share capital to 77,792,049 ordinary shares, anincrease of 7.8%. As a product of this crystallisation event, the historic interest that the UKbusiness unit had in its core profitability will revert to the Company andsimilarly their interest in their performance fees will reduce. In the yearended March 2007, the quantum of these interests accounted for a greaterproportion of the profits of the Company than the 7.8% dilution triggered by thecrystallisation event. Application has been made for 560,864 ordinary shares to be admitted to tradingon AIM and dealings are expected to commence on 3 October 2007. For further information contact: Polar Capital Holdings plcJ B MansellChief Operating Officer020 7227 2700 Landsbanki Securities (UK) LimitedBen Money-Coutts020 7426 9000 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Polar Capital