14th Oct 2005 07:00
Leeds Group PLC14 October 2005 Leeds Group plc ("the Company") Disposal of the entire issued share capital of Leeds Leasing plc ("Leeds Leasing") Introduction The Company is pleased to announce that Leeds Group plc has entered into aconditional agreement for the disposal, to Bibby Asset Finance Limited, of theentire issued share capital of Leeds Leasing, the Company's wholly ownedsubsidiary that is engaged in the leasing of business equipment (the"Disposal"). The aggregate consideration payable (including the repayment of inter-companyloans) is in excess of 75 per cent. of the Company's market capitalisationimmediately prior to announcement of the Disposal and so the Disposal requiresthe approval of shareholders of the Company at the Extraordinary General Meeting("EGM") convened for 31 October 2005. Background to and reasons for the Disposal In April 2004 the Company announced that it was in discussions which may haveled to the sale of the group's two businesses and although those discussionswere subsequently terminated in September of 2004, the Board believed that,subject to realising appropriate value for shareholders, the future for thegroup's businesses could be best served as part of larger organisations. TheBoard still believes that this strategy is in the best interests of the groupand has agreed terms with Bibby Asset Finance Limited for the sale of the entireissued share capital of Leeds Leasing. Following the Disposal, the Company's only operating business will beHemmers-Itex, the textile business selling, throughout Europe, fabric that hasbeen mainly imported from the Far East. The Board intends to review its optionsfor the future strategy of the group and will make a further announcement in duecourse. The Board has not yet determined any specific application for the proceeds ofthe Disposal and, in the short term, the proceeds will either be placed ondeposit or applied towards the general working capital requirements of theCompany. Key terms of the Disposal The consideration for the Disposal is £3.7 million to be satisfied in cash oncompletion of the Disposal. £500,000 of the consideration will be paid into aretention account and held in escrow for a period of 18 months followingcompletion. The monies in the retention account will be used to satisfy anywarranty claims arising under the sale and purchase agreement. In addition, Bibby Asset Finance Limited has agreed to take an assignment of theinter-company loan owed to the Company by Leeds Leasing for £1.35 millionpayable immediately following completion of the Disposal. Carol Roberts will resign from the Board on completion in order to continue inher role as managing director of Leeds Leasing. The Board would like to thankCarol for her contribution to the group since she joined us in June 2004. Information on Leeds Leasing For the year ended 30 September 2004, Leeds Leasing made a loss before tax andexceptional items of £61,000 on turnover of £2.849 million. The net assets ofLeeds Leasing at 30 September 2004 were £3.851 million. Extraordinary General Meeting The Disposal is conditional upon, inter alia, the approval of shareholders,which is to be sought at an Extraordinary General Meeting convened for 11.30a.m. on 31 October 2005.--------------------------------------------------------------------------------Further Enquiries: Leeds Group plcMalcolm Wilson 0113 391 9000 Seymour Pierce LimitedSarah Wharry 020 7107 8000 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Leeds Group