4th Dec 2007 16:33
Net b2b2 PLC04 December 2007 Netb2b2 plc ("Netb2b2" or "the Company") Notice of General Meeting Netb2b2 plc (AIM:NEB) announces that, today, it has posted a notice toShareholders convening a General Meeting to be held on 21 December 2007 at theoffices of Smith & Williamson, 25 Moorgate, London EC2R 6AY at 09:45 a.m., atwhich two resolutions will be proposed as ordinary resolutions, to be decided ona poll, to approve the waiver of the requirements of Rule 9 of the Takeover Code("the Rule 9 Waiver") in relation to a placing of ordinary shares of £0.10 eachin the Company ("Ordinary Shares") to Keith Young, the Company's Chairman ("thePlacing"). The Placing Keith Young has entered into a conditional agreement (the "Subscription Letter")with the Company to subscribe for 5 million Ordinary Shares ("Placing Shares")at a price of £0.10 per share. The gross proceeds of the Placing, which amountto £500,000, will be used to fund the on-going working capital requirements ofthe Company. The Placing is conditional only on the Rule 9 Waiver, details ofwhich are set out below. Under the terms of the Subscription Letter, assuming the Rule 9 Waiver isapproved by the Shareholders (other than Keith Young) at the General Meeting,the Placing Shares will be issued to Mr Young in two tranches. The first trancheof 2.5 million Ordinary Shares ("First Tranche") will be issued to Mr Youngimmediately following the General Meeting. The balance of the Placing Shares("Second Tranche") will be issued to him at a future date, being no later than20 February 2008. Application will be made to the London Stock Exchange plc for the Placing Sharesto be admitted to trading on AIM. In the event that the Shareholders (other thanKeith Young) approve the Rule 9 Waiver at the General Meeting, it is anticipatedthat admission of the First Tranche will become effective and that dealings willcommence on 24 December 2007. The admission of the Second Tranche will becomeeffective following the issue of such Placing Shares to Mr Young and will benotified to Shareholders at that time. The Takeover Code The Placing gives rise to certain considerations under the Takeover Code. Briefdetails of the Panel, the Takeover Code and the protection they afford toShareholders are given below. The purpose of the Takeover Code is to supervise and regulate takeovers andother matters to which it applies. The Takeover Code is issued and administeredby the Panel. Netb2b2 is a company to which the Code applies and as such itsShareholders are therefore entitled to the protections afforded by the TakeoverCode. Under Rule 9 of the Takeover Code, any person who acquires an interest (asdefined in the Takeover Code) in shares which, taken together with shares inwhich he is already interested and in which persons acting in concert with himare interested, carry 30 per cent. or more of the voting rights of a companywhich is subject to the Takeover Code, is normally required to make a generaloffer to all the remaining shareholders to acquire their shares. Similarly, where any person who, together with persons acting in concert withhim, is interested in shares which in aggregate carry not less than 30 per cent.of the voting rights of such a company but does not hold more than 50 per cent.of such voting rights, a general offer will normally be required if any furtherinterests in shares are acquired by any such person. An offer under Rule 9 must be made in cash and at the highest price paid by theperson required to make the offer, or any person acting in concert with him, forany interest in shares of the company during the 12 months prior to theannouncement of the offer. Keith Young holds 1,375,826 Ordinary Shares and has options over a further204,750 Ordinary Shares. As at the date of the notice of General Meeting, MrYoung's interest in the issued share capital of the Company ("Issued ShareCapital") is 22.70 per cent., or 25.22 per cent. assuming only Mr Youngexercises his options. Following the issue of the First Tranche, Mr Young willhave an interest in 3,875,826 Ordinary Shares representing 45.27 per cent. ofthe Issued Share Capital, or 46.55 per cent. assuming only Mr Young exerciseshis options. As Mr Young will be interested in Ordinary Shares which inaggregate carry not less than 30 per cent. of the voting rights of the Companybut does not hold more than 50 per cent. of such voting rights prior to theissue of the Second Tranche, a general offer will normally be required if heacquires any further interests in Ordinary Shares, other than the SecondTranche. Following the issue of the Placing Shares (ie both the First Tranche and SecondTranche), Mr Young will have an interest in 6,375,826 Ordinary Sharesrepresenting 57.64 per cent. of the Issued Share Capital, or 58.41 per cent.assuming only Mr Young exercises his options. The Panel has agreed to waive the obligation for Mr Young to make a offer underRule 9 that would otherwise arise on completion of the Placing and anysubsequent exercise of the options currently held by Mr Young, subject to theapproval of the Shareholders (other than Keith Young) at the General Meetingvoting on a poll. Accordingly, Resolutions 1 and 2 are being proposed at theGeneral Meeting and, to be passed, will require the approval of a simplemajority of votes cast on the poll by the Shareholders (other than Keith Young).As the potential controller, Mr Young is not independent and is, therefore,disenfranchised from voting. Following completion of the Placing, Mr Young will hold more than 50 per cent.of the Company's voting rights and may accordingly increase his aggregateinterest in Ordinary Shares without incurring any obligation under Rule 9 tomake a general offer. Information on the Company Audited financial information on the Company for the three years ended 30 June2006 and the unaudited interim results for the six months to 31 December 2006are set out in Appendix I of the Circular. Since the release of the interim results in March 2007, the Company hascontinued to implement structural changes and reduce administrative overheads. The Board has alsosought to divest non-core operations where growth possibilities have been lessvisible in order to focus more strongly on certain fast-growth niches in thedigital media and entertainment markets, extracting more value from establishedrelationships with blue chip clients that include ITV, BBC, ITN and Sky andbroadening its customer base through more effective sales and marketing. However, the above actions continue to be slow in feeding through into improvedfinancial performance and profitability has continued to be depressed at theCompany's cScape subsidiary partially as a result of the problems experienced onthe major project alluded to in the interim results. Unfortunately although it is possible that a contract might be obtained in thefuture through the Group's Netpen division, it is considered prudent to providein full against the current work in progress. The One Stop Racing website hasproved disappointing in revenue terms and full provision has been made againstthe assets of that operation. On the positive side, encouraging progress has been made in resolving thedeficit resulting from a pension fund operated by a liquidated subsidiary of theGroup and it is currently expected that some write back will be made of the amount currently provided. The net result of the above has been to put pressure on the Group's cash flowand scope for the selective deferral of creditors mentioned in our interims hassignificantly reduced. The Independent Directors have therefore become of theview that it is very important that new equity is raised for the Group and havewelcomed Keith Young's offer to subscribe for the Placing Shares. Save as disclosed in this paragraph, there have been no known material changesto the financial or trading position of the Company since the last publishedaccounts. Subject to the foregoing matters and any further matters resulting fromCompany's ongoing structural review, this process is considered an importantstepping stone in the implementation of Netb2b2's strategic plans and there areno current intentions that there will be any repercussions on the employment andlocations of the Group's places of business, any redeployment of fixed assets orchange to the continued employment of the Group's employees and management,directly resulting from this further investment in the Company. Information on Keith Young Keith Young joined the Board in December 1999 and became executive Chairman in2000. He has extensive experience in the internet, communications and publishingsectors. He is a co-founder and deputy chairman of Group NBT plc, a listedinternet domain name and services provider. He was also a founder shareholder inEasynet plc, a leading UK-based internet service provider. Mr Young, who holds a degree in economics from the London School of Economics,also has a broad background of investment in and management of companies in anumber of other sectors. Mr Young was also a co-founder and non-executive director of Private EquityInvestor plc (formerly Net Investor plc), a listed information technologyinvestment company, together with Timothy Childs through a private company,Chamelle Limited. Both Messrs Young and Childs stepped down from the board ofPrivate Equity Investor plc in October 2004. In addition, Mr Young and Geoffrey Griggs are board members of Global News NetLimited which has a subsidiary company, Firstlight Online Limited which providessearch and contextual advertising solutions for online publishers. Action to be taken You will find enclosed with the Notice of General meeting a form of proxy foruse at the General Meeting. Whether or not you are intending to be present atthe meeting, you are requested to complete this form of proxy, which should bereturned to the Company's registrars, Capita Registrars, The Registry, 34Beckenham Road, Beckenham Kent BR3 4TU as soon as possible and, in any event, soas to be received no later than 48 hours before the time of the General Meeting.Completion and return of this form of proxy will not prevent you from attendingor voting at the General Meeting if you so wish. Recommendation The Directors, other than Keith Young ("Independent Directors"), who have beenso advised by Smith & Williamson Corporate Finance Limited, consider that theproposed Rule 9 Waiver is in the best interests of the Company and theShareholders as a whole and unanimously recommend that you vote in favour of theResolutions 1 and 2 as they intend to do themselves in respect of their ownbeneficial holdings amounting, in aggregate, to 533,577 Ordinary Sharesrepresenting approximately 8.80 per cent. of the Issued Share Capital. In providing advice to the Independent Directors, Smith & Williamson has takeninto account the commercial assessments of the Independent Directors. As the potential controller, Keith Young is not independent and therefore, under the Takeover Code, is disenfranchised from voting. 4 December 2007 For further information, please contact: Smith & Williamson Corporate Finance Limited Tel: 020 7131 4000Azhic Basirov / Siobhan Sergeant This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Chesterfield Sp