12th Mar 2008 11:55
Guinness Peat Group PLC12 March 2008 Guinness Peat Group plc The following is the text of a letter sent yesterday to shareholders of NewburyRacecourse Plc ("Newbury") in respect of resolutions to be put to anExtraordinary General Meeting of Newbury to be held on 19 March 2008 pursuant toa requisition by Guinness Peat Group plc. "To shareholders of Newbury Racecourse Plc 11 March 2008 Dear Fellow Shareholder, "Newbury is at the crossroads" At an Extraordinary General Meeting of Newbury Racecourse PLC ("Newbury" or "theCompany") to be held on Wednesday 19 March, Shareholders will vote on theNewbury Board's proposed property development joint venture ("the DWH Proposal")with David Wilson Homes Ltd ("DWH") and GPG's proposal to reconfigure theNewbury Board so that it contains a suitable level of proprietorial involvement.These matters are crucial to the long term future of racing at Newbury and thevalue of your investment. GPG believes the DWH Proposal would prove disastrous for Shareholder value andthat, if implemented, Newbury's share price could fall below £8.00 per Share:- • DWH would gain day-to-day control of more than half of Newbury's assetsand in return Newbury would merely receive, over nine and a half years startingas late as 2014, contingent payments, the amounts of which are highly uncertain. • Newbury, with its paucity of property experience, would be exposed forup to 15 years to the vagaries of the housing market - which the February RICSsurvey reported fell for the seventh consecutive month and at a near-recordrate. • The Newbury Board has, in consequence, been unable to commit to netreturns, in today's money, of at least £7 per Share, preferring instead to swayShareholders with non-committal illustrations of "hope value". We strongly urge Shareholders who share GPG's view that the DWH Proposal wouldbe damaging to Shareholder value and is not in the best interests of the Companyto vote for Resolution 5. GPG believes that the current Newbury Board has lost sight of its mandate ascustodian of the Shareholders' interests in the Company • The "Independent Directors" chose not to follow best practice CorporateGovernance and, despite repeated requests in late 2007, refused voluntarily tosubmit the DWH Proposal to a Shareholder vote. • The Newbury Board has failed to deliver an operating profit over thelast five years - or a dividend for the last two - even after the reinvestmentof the £8.7 million proceeds from the Company's 2002 sale of land to the southof the racecourse. • The inherently ruinous April 2004 Deed of Grant (a precursor to theproposed redevelopment of the surplus land) with Network Rail InfrastructureLimited ("Network Rail") is the sole recent example of the Newbury Board'sexperience in negotiating complicated property contracts. It was only after theintervention of the GPG nominee it recognized the unworkable nature of thecontract, the revision of which, in November 2007, necessitated a payment toNetwork Rail of £250,000, having incurred extensive legal costs. The proposed level of proprietorial involvement will ensure that the NewburyBoard is, in future, focused on delivering value for all Shareholders. As such,we strongly recommend that Shareholders vote in favour of resolutions 1 to 4which would implement the proposed reconfiguration. Action to be taken Shareholders who wish to register their support for the resolutions will findenclosed a Form of Proxy for this purpose. A postage paid envelope is enclosedfor your convenience. Your votes are important and even if you intend to attendthe EGM in person you are strongly urged to lodge a Proxy to arrive no laterthan Friday 14 March. Yours sincerely Blake NixonUK Executive Director" J R Russell Company Secretary Guinness Peat Group plc +44 207 484 3370 12 March 2008 Enquiries Citigate Dewe Rogerson Tel: (020) 7638 9571 Kevin Smith This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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