12th Feb 2008 07:01
iimia MitonOptimal plc12 February 2008 Not for release, publication or distribution, in whole or in part, in, into or from the United States, Canada, Australia, Republic of South Africa or Japan 12 February 2008 iimia MITONOPTIMAL plc Proposals for Acquisition of Midas Capital Partners Limited, Placing of Ordinary Shares, Change of Name to Midas Capital plc and Admission of the Enlarged Share Capital to Trading on AIM The Board of iMO, the AIM-traded company encompassing fund management, wealthmanagement and corporate finance, is pleased to announce that the Company hasconditionally agreed to merge with Midas Capital Partners Limited. Highlights • Midas is a fast growing fund management company based inLiverpool. It was formed in 2002 and had grown its FuM to over £1.6 billion asat 31 January 2008. Midas' principal distribution channels are fund and life company platforms, witha large number of IFAs choosing to access Midas' funds for their clients throughthese means. The strength of these distribution channels is demonstrated by thefact that Midas has seen net inflows into its open-ended funds in each month ofthe last four calendar years. Midas has an excellent long-term investment performance record. Its open-endedfunds were both ranked in the top decile of their sectors over the period sincelaunch to 31 January 2008 (appendix 1, note 1). The team's pension fundperformance record puts them in the top quartile over three years, the toppercentile over five years and the top decile over 10 years (appendix 1, note2). Midas has 18 employees, including its investment and business development teamseach comprising six individuals. Midas' directors, staff and families have asignificant ownership interest, collectively holding approximately 53.1 percent. of Midas' issued share capital. • The merger will be effected by iMO acquiring the entire issuedshare capital of Midas in exchange for the issue of 27,500,129 new OrdinaryShares, representing approximately 48.0 per cent. of the Enlarged Share Capital,and the payment of approximately £59.0 million in cash to Midas Shareholders.The Acquisition values Midas at approximately £100.3 million (appendix 1, note3). • The Cash Consideration will be funded through a combination ofa placing of 7,000,000 new Ordinary Shares at 150p per share to raise £10.5million (before expenses), new £40 million term loan facilities with the Bank ofScotland and iMO's existing cash resources. • The Directors believe that the benefits of the Merger include: - creating a pre-eminent player in the multi-asset fund managermarket with: - approximately £2.9 billion of FuM&A (appendix 1, note 4); - one of the most experienced investment teams operating in thisarea within the UK; and - an excellent long-term investment record across its productrange; - further strengthening of the iMO Group's investment expertise,with the addition of a highly rated investment team, and extending itsdistribution capabilities, through Midas' strong distribution channels; - increasing the proportion of the iMO Group's revenues that arerecurring, whilst spreading the iMO Group's central costs over a broaderbusiness base; and - significant merger synergies, currently estimated to be at least£2.5 million per annum (pre-tax) once the Existing Group and Midas have beenfully integrated. • The Directors expect the Acquisition to enhance the Company'sunderlying EPS once the Existing Group and Midas have been fully integrated(appendix 1, note 5). • Whilst turbulent stockmarket conditions will present challengesfor all asset management businesses, the Directors believe that the multi-assetapproach to seeking investment returns should continue to attract a highproportion of inflows into the Enlarged Group's funds in difficult markets. The Acquisition and the proposed change of name of the Company to Midas Capitalplc are conditional on, among others, the approval of Existing Shareholders at ageneral meeting of the Company which has been convened for 10.00 a.m. onThursday, 6 March 2008. Shareholders representing 55.4 per cent. of theExisting Ordinary Shares have irrevocably undertaken or indicated their intentto vote in favour of the resolutions to be proposed at the General Meeting. An electronic copy of the Company's AIM admission document dated 12 February2008 will be available from the Company's website: www.imoplc.co.uk shortly. Michael Phillips, chief executive of iimia MitonOptimal plc, said: "We are excited about the future following the merger with Midas CapitalPartners, one of the fastest growing fund management businesses in the UK. Themerged group will be a leading multi-asset fund management company with one ofthe best-resourced and most experienced investment teams operating in the UK. With excellent long term performance across the product range, we believe themerger positions us to take advantage of the growing demand for reduced risk andmulti-asset investment products." Simon Edwards, chief executive of Midas Capital Partners, said: "We are delighted with the progress we have made since inception in 2002 whichhas been based on a simple business model and strong investment returns sincelaunch. The merger with iimia MitonOptimal represents a new chapter in ourhistory and provides an infrastructure which will enable a very stronginvestment team to focus on achieving good investment performance for clients.Our confidence in the investment products of the merged group is demonstrated bythe Midas management team's commitment to reinvest a substantial proportion ofthe cash received, at least £20m, into these products. With the depth and experience of talent within the merged group, we view thefuture with optimism and I look forward to working with Mike Phillips and hiscolleagues to build on the success which each business has achieved to date." EnquiriesMichael Phillips, iimia MitonOptimal plc Tel: 07738 181 520Simon Edwards, Midas Capital Partners Limited Tel: 07947 118 670Sue Inglis, Intelli Corporate Finance Limited Tel: 020 7653 6300James Steel, Arbuthnot Securities Limited Tel: 020 7012 2000Roland Cross, Broadgate Tel: 020 7726 6111 Notes Intelli, which is authorised and regulated by the FSA, is acting solely for theCompany and no one else in connection with the Proposals and will not beresponsible to anyone other than the Company for providing the regulatory andlegal protections afforded to customers (as defined by the FSA Rules) of Intellior for providing advice in relation to the contents of this document or anymatter, transaction or arrangement referred to in it. Arbuthnot, which is authorised and regulated by the FSA, is acting as nominatedadviser and broker to the Company and no one else in connection with Admissionand will not be responsible to any person other than the Company for providingthe regulatory and legal protections afforded to customers (as defined by theFSA Rules) of Arbuthnot or for providing advice in relation to the contents ofthis document or any matter, transaction or arrangement referred to in it. Not for release, publication or distribution, in whole or in part, in, into or from the United States, Canada, Australia, Republic of South Africa or Japan 12 February 2008 iimia MITONOPTIMAL plc Proposals for Acquisition of Midas Capital Partners Limited, Placing of Ordinary Shares, Change of Name to Midas Capital plc and Admission of the Enlarged Share Capital to Trading on AIM Introduction The Board announces that iMO is proposing to merge with Midas Capital PartnersLimited, a fast growing fund management company based in Liverpool with FuM ofover £1.6 billion as at 31 January 2008. The merger will be effected by iMOacquiring the entire issued share capital of Midas in exchange for the issue of27,500,129 new Ordinary Shares, representing approximately 48.0 per cent. of theEnlarged Share Capital, and the payment of approximately £59.0 million in cashto Midas Shareholders. The Acquisition values Midas at approximately £100.3million (appendix 1, note 3). The Directors and the Proposed Directors believe that the benefits of the Mergerinclude: • creating a leading multi-asset fund management business withapproximately £2.9 billion of FuM&A (appendix 1, note 4); • further strengthening of the iMO Group's investment expertise,with the addition of a highly rated investment team, and extending itsdistribution capabilities, through Midas' strong distribution channels; • increasing the proportion of the iMO Group's revenues that arerecurring, whilst spreading the iMO Group's central costs over a broaderbusiness base; and • significant merger synergies, currently estimated to be atleast £2.5 million per annum (pre-tax) once the Existing Group and Midas havebeen fully integrated. The Directors and the Proposed Directors expect the Acquisition to enhance theCompany's underlying earnings per share once the Existing Group and Midas havebeen fully integrated (appendix 1, note 5). In order to provide part of the funding for the Cash Consideration, iMO isproposing to raise £10.5 million (before expenses) through the placing of7,000,000 new Ordinary Shares at 150p per share with institutional and otherinvestors. The balance of the Cash Consideration will be funded out of iMO'sexisting cash resources and new facilities with the Bank of Scotland. Owing to the size and relative value of Midas in relation to the Company, theAcquisition constitutes a reverse takeover under the AIM Rules for Companies andtherefore requires the approval of Existing Shareholders at a general meeting ofthe Company which has been convened for 10.00 a.m. on Thursday, 6 March 2008.A resolution will also be proposed at that meeting to change the Company's nameto Midas Capital plc. Shareholders representing 55.4 per cent. of the ExistingOrdinary Shares have irrevocably undertaken or indicated their intent to vote infavour of the resolutions to be proposed at the General Meeting. If the Acquisition is approved, the trading of the Existing Ordinary Shares onAIM will be cancelled and the Company will apply for re-admission of theExisting Ordinary Shares and admission of the New Ordinary Shares to trading onAIM. Information on Midas Introduction Midas is a fast growing fund management company based in Liverpool. It wasformed in early 2002 by Simon Edwards and Alan Borrows, who were responsible formanaging the £3 billion Merseyside Pension Fund from 1995 to 2002. Midas has a specialist multi-asset approach, focusing on attractive long-termreturns through a highly diversified asset mix. It manages two open-endedfunds, together accounting for some 77.1 per cent. of Midas' FuM at 31 January2008, and one investment trust, in addition to a small number of segregatedmandates for pension funds, charitable funds, trusts and high net worthindividuals. More than 2,000 IFA firms have invested in Midas' funds and this numbercontinues to grow. Midas has also established links with major fund platforms,providing investors with direct access to its funds, and relationships with anumber of life offices, enabling Midas' funds to be accessed via life andpension products. Fund platforms and life company platforms are now Midas'principal distribution channels, with a large number of IFAs choosing to accessMidas' funds for their clients through these means. The strength of thesedistribution channels is demonstrated by the fact that Midas has seen netinflows into its open-ended funds in each month of the last four calendar years. The following table shows the aggregate net inflows into Midas' open-endedfunds over that period. Calendar Year Aggregate Net Inflows 2004 £38m 2005 £128m 2006 £292m 2007 £824m As at 31 January 2008, Midas had FuM of over £1.6 billion. Midas has 18 employees, including its investment team of six individuals andbusiness development team of six individuals. Midas' directors, staff andfamilies have a significant ownership interest, collectively holdingapproximately 53.1 per cent. of Midas' issued share capital. Investment Performance Midas has an excellent long-term investment performance record. The open-ended funds were both ranked in the top decile of their sectors overthe period since launch to 31 January 2008 (appendix 1, note 1). The team's pension fund performance record, combining their periods managing theMerseyside Pension Fund and managing a pension fund portfolio at Midas, comparedwith all UK pension funds measured by the WM Company for the period to 31December 2007, puts the team in the top quartile over three years, the toppercentile over five years and the top decile over 10 years (appendix 1, note2). Financial Information The following table summarises the recent historical revenues and profits ofMidas. Year to 31 March 6 Months to 30 September UK GAAP2 IFRS1,2 IFRS1,2 IFRS1,3 IFRS1,3 2005 2006 2007 2006 2007 £m £m £m £m £mAverage FuM&A during period4 n/a n/a 753.4 628.1 1,334.6Net sales 1.4 2.2 4.9 2.1 4.6Growth - 55.2% 118.9% - 118.1%Profit before tax 0.5 1.2 3.5 1.5 3.6Margin 34.7% 55.0% 70.7% 69.9% 79.3%Growth - 146.0% 181.5% - 147.4%Net sales of investment services as % - - 0.6% 0.7% 0.7%average FuM (p.a.)Direct costs of investment services as - - (0.2%) (0.2%) (0.2%)% average FuM (p.a.) Notes: 1 As iMO is required to adopt IFRS as its primary basis of accountingfor the year ended 31 December 2007, Midas has restated its financialinformation for the two years ended 31 March 2007 and has prepared its interimresults for the six months ended 30 September 2007 (and its comparative interimresults for the six months ended 30 September 2006) under IFRS. 2 This information (excluding the ratios) has been reported on byMidas' auditors. 3 This information is unaudited. 4 This is the arithmetic average of Midas' FuM at the end of eachmonth in the period. Prior to the year ended 31 March 2007, Midas' FuM were notrecorded on a monthly basis and, therefore, the average FuM on a monthly basisis not available. As at 30 September 2007, Midas had shareholders' funds of £1.6 million(unaudited). Principal Terms of the Acquisition The Company has entered, or will enter, into the Acquisition Agreements with theMidas Shareholders to acquire the entire issued share capital of Midas. TheMidas Warrantors have entered into the principal Acquisition Agreement.Although the Acquisition Agreements with certain individual Midas Shareholderswill not be entered into until Completion, each of those shareholders hasirrevocably appointed an attorney to enter into the relevant agreement on theirbehalf. Under the terms of the principal Acquisition Agreement, the Company hasconditionally agreed to pay a consideration of approximately £100.3 million(appendix 1, note 3) to be satisfied, on Completion, by the allotment and issueof 27,500,129 new Ordinary Shares to the Vendors and the payment ofapproximately £59.0 million in cash to the Vendors. The Consideration Shareswill rank pari passu in all respects with the Existing Ordinary Shares and thePlacing Shares, including the right to receive all dividends and otherdistributions declared, paid or made on the Ordinary Shares after Admission butwill not rank for the interim dividend of 2.0p per Ordinary Share announced thismorning and payable on Thursday, 20 March 2008. All Midas Shareholders have given, or will give, warranties in relation tocapacity, authority and title to the shares being sold by them. In addition,the Midas Warrantors have given general, commercial and tax warranties and taxindemnities regarding Midas. The Acquisition is conditional upon, among other things, receiving the requisiteclearances from the FSA, the resolutions required to give effect to theAcquisition and the Placing being passed at the General Meeting and Admission. Subject to certain exceptions, the Midas Shareholders have undertaken not todispose of their interests in Consideration Shares for a period of 12 monthsfollowing Completion and thereafter not to dispose of more than 25 per cent. ofsuch interests for a further 12 months (further details are set out under theheading ''Lock-ins'' later in this announcement) and Midas' management and staffhave agreed to reinvest, in aggregate, at least £20 million of the CashConsideration that they receive in the Enlarged Group's investment funds for aminimum of 12 months following Completion and 50 per cent. of the amountoriginally reinvested for a minimum of 24 months. iMO's Financing Arrangements, Including the Placing In order to finance part of the Cash Consideration, iMO proposes to raise £10.5million before expenses (£7.7 million net of expenses and transaction costsrelated to the Proposals (appendix 1, note 6)) by way of a placing of 7,000,000Ordinary Shares at 150p per share. The Placing Shares will rank pari passu inall respects with the Existing Ordinary Shares and the Consideration Shares,including the right to receive all dividends and other distributions declared,paid or made on the Ordinary Shares after Admission but will not rank for theinterim dividend of 2.0p per Ordinary Share announced this morning and payableon Thursday, 20 March 2008. The Placing is conditional upon, among otherthings, the resolutions required to give effect to the Acquisition and thePlacing being passed at the General Meeting, the Acquisition Agreements havingbecome unconditional and Admission. The balance of the Cash Consideration will be funded out of iMO's existing cashresources and new £40 million term loan facilities with the Bank of Scotland. Benefits of the Merger The Directors and the Proposed Directors believe that iMO and Midas arecomplementary businesses and that their merger will create a pre-eminent playerin the multi-asset fund manager market with approximately £2.9 billion of FuM&A(appendix 1, note 4). The Enlarged Group will have strength and depth in itsinvestment and business development teams. In addition, Midas' strongdistribution channels should provide enhanced distribution opportunities for theExisting Group's funds. The Merger will increase the proportion of the iMO Group's revenues that arerecurring and spread the iMO Group's central costs over a broader business base. In addition, the Directors and the Proposed Directors expect merger synergiesof at least £2.5 million per annum (pre-tax) once the Existing Group and Midashave been fully integrated. The Directors and the Proposed Directors expect the Merger to enhance theCompany's underlying earnings per share once the Existing Group and Midas havebeen fully integrated (appendix 1, note 5). The Enlarged Group Name iMO will continue as the parent company of the Enlarged Group and it is proposedthat its name will be changed at the General Meeting to Midas Capital plc. Operational Structure The Enlarged Group will continue to operate through three divisions: fundmanagement (operating under the ''Midas'' and ''Miton'' brands), wealthmanagement (operating under the ''iimia'' brand) and corporate services(operating under the ''Intelli'' brand). Board A number of changes will be made to the Board with effect from Completion.William Long will step down as non-executive chairman, but continue as anon-executive director, of the Company and Colin Rutherford will be appointed asnon-executive chairman in his place. Bruce McIntosh and Martin Gray will standdown as directors of the Company but will continue as employees of the EnlargedGroup. Simon Edwards will be appointed as managing director, with overallresponsibility for the fund management division. Lord Wade of Chorlton willjoin the Board as non-executive deputy chairman and Adrian Collins will beappointed to the Board as a non-executive director. The Board intends to appoint a group finance director as soon as practicablefollowing Completion. Pending that appointment, Gordon Neilly has agreed toassume responsibility at the Board level for overseeing the operation of theEnlarged Group's finance function. Details of members of the Board following Completion are set out below. Colin Rutherford - Non-executive Chairman (48) Colin was chairman, chief executive officer and a founder of Rutherford MansonDowds, a Scottish firm of chartered accountants which was sold (excluding thebusiness that became Intelli) to Deloitte in 1999. Following that sale, heremained as executive chairman of Intelli until September 2005. He has been oris chairman and director of a number of public and private companies includingEurosales Finance PLC, SGI (formerly Circus Capital) Fund, Renaissance ServicesSAOG, Argent Energy plc and Imagine Homes Limited. He is a chartered accountantand alumnus of Heriot Watt University and Harvard Business School. Lord Wade of Chorlton - Non-executive Deputy Chairman (75) Lord Wade became chairman of Midas in 2002. Following his appointment to theHouse of Lords in 1990, he sold most of his farming and cheese making interests,the focus of his early career. He is chairman of Midas, Nimtech and RisingStars Growth Fund Limited and a consultant to Enterprise Ventures Limited and isinvolved in a number of North West initiatives covering wealth creation,innovation and technology. He is an adviser to Davies Wallis Foyster and KingSturge & Co. He is also currently chairman, non-executive director or adviserto a number of other commercial organisations. Michael Phillips - Chief Executive (45) Michael is a fellow of the Securities Institute and is chief executive of theiMO Group. He co-founded Christows in 1991, and in a period of nine years builtChristows into a group with FuM&A of over £500 million on behalf ofapproximately 3,000 clients. He was responsible for the day-to-day operationsof Christows until January 2001 when, following the acquisition of Christows byThe Evolution Group plc, he left and went on to form the original business ofthe iMO Group. He joined the Board in 2004 at the iMO Group's inception, havingbeen chief executive of the predecessor iimia Group since its foundation in2001. Simon Edwards - Managing Director (44) Simon was chief investment manager of the Merseyside Pension Fund from 1995until 2002. Over this time he built up the team and was closely involved in theselection of specialist third party funds, property and venture capitalinvestment as well as overall equity market investment. He left the MerseysidePension Fund to set up Midas. Between 1992 and 1995 he was a director at CreditSuisse First Boston, based in London. Gordon Neilly - Chairman, Intelli Corporate Finance (47) Gordon qualified as a chartered accountant with Thompson McLintock & Co. Gordonwas business development director of Ivory & Sime plc (1993-1997) withresponsibility for developing its investment trust business, and formerly itsfinance director (1990-1993). He joined RMD Corporate Finance's (now Intelli's)listed advisory business in 1997 and has extensive corporate finance experience,particularly in the closed-end fund and asset management sectors. He joined theBoard in September 2005. Scott Campbell - Executive Director, International Fund Management (39) Scott commenced his career with AMP Group in 1989. He then joined Appleton in1996 and was appointed managing director of Appleton International in 1997.Scott moved the location of the operation to London in 2000 and successfullycontinued the development of the business as chief executive officer whilst alsoacting as chief investment officer. He resigned from Appleton in April 2002 toset up his own institutional offshore fund management company, which resulted inthe creation of Optimal Fund Management in July 2002. Scott has achieved a fivestar ranking and awards from Standard & Poor's for the management of a varietyof offshore funds. Optimal Fund Management merged with Miton Investments in2005. Scott joined the Board in October 2007 following the completion of themerger of iMO and MitonOptimal. Adrian Collins - Non-executive Director (53) Adrian has worked in the fund management business for over 30 years, a largepart of which was at Gartmore Investment Management Limited where, latterly, hewas managing director. He is a consultant to Strand Partners Limited, acorporate finance business based in the West End of London. He is chairman ofCorvus Capital plc and is also on the boards of City Natural Resources HighYield Trust plc, Deutsche Land plc, New City High Yield Trust plc and a numberof other companies. Nicholas Hamilton - Non-executive Director (58) Nicholas, a fellow of the Securities Institute, qualified as a charteredaccountant with Deloitte where he remained until 1984, latterly in the roles ofgroup manager of both corporate finance and marketing. He spent six years atSchroder Securities as head of corporate finance. In 1991 he joined Carr Kitcat& Aitken in the same role. He became a non-executive director of the listedClaremont Garments plc, a leading ladieswear supplier to Marks & Spencer, in thesame year and, in 1994, he became executive group finance director. In 1998 helaunched his own consultancy business as part of which he has been a director ofa number of public and private companies. He joined the Board in July 2005 asan independent non-executive director. William Long - Non-executive Director (64) William joined the Board as chairman in 2004 at the iMO Group's inception,having chaired the predecessor iimia Group since its foundation in 2001. He isa fellow of the Securities Institute with over 30 years' experience of thesecurities industry. He became a member of the Stock Exchange in 1972 and apartner in Laing & Cruickshank. In 1981 he joined the Exeter partnership ofMilton Mortimer & Co, which was acquired by National Investment Group (NIG) in1986, of which he became business development director. William subsequentlymanaged the Southern division of Capel-Cure Myers Capital Management Ltd andbecame private client director of CCM after its acquisition by Old Mutual,responsible for turnover of over £55 million. Ownership Structure of the Enlarged Group and Implications under the TakeoverCode On Admission, the Vendors will hold, in total, Ordinary Shares representingaround 50 per cent. of the Enlarged Share Capital. The largest single Vendorwith Ordinary Shares representing approximately 16.7 per cent. of the EnlargedShare Capital will be Simon Edwards, currently chief executive of Midas andproposed managing director of the Enlarged Group. In total, approximately 44.6per cent. of the Enlarged Share Capital will be held by the Directors, ProposedDirectors and staff of the Enlarged Group. The Takeover Panel has accepted the view of the Company and its nominatedadviser, Arbuthnot, that the Vendors should not be deemed to be acting inconcert (as defined in the Takeover Code) and that, accordingly, on Admission noperson, together with persons acting in concert with him, will be interested inOrdinary Shares carrying 30 per cent. or more of the voting rights exercisableat a general meeting of the Company for the purposes of Rule 9 of the TakeoverCode. The Company will remain subject to the Takeover Code. Prospects for the Enlarged Group Based on figures for unit trust/OEIC sales released by the IMA, the unit trust/OEIC market experienced a net outflow from retail investors in November 2007,the first time that redemptions have exceeded sales, and this trend continued inDecember 2007. The credit crisis and higher volatility in equity markets havereduced the risk appetite of retail investors which has been reflected in strongnet sales of cautious managed funds (November 2007: +£150.4 million; December2007: +£129.8 million), balanced managed funds (November 2007: +£37.0 million;December 2007: +£57.4 million), money market funds and guaranteed protectedfunds (Source: IMA Monthly Statistics (Sector Summary)). In contrast, mostequity sectors were firmly out of favour during November and December 2007. Notwithstanding the more volatile market conditions, both the Existing Group andMidas saw net inflows into their funds in November 2007, December 2007 andJanuary 2008. The Directors and Proposed Directors believe that the Enlarged Group will bewell positioned to take advantage of the growing demand for reduced risk andmulti-asset investment products, with one of the most experienced investmentteams operating in this area within the UK, combined with an excellent long-terminvestment record across its product range, as shown in the following table. Performance of the Enlarged Group's UK Open-ended Funds (to 31 January 20081) Last 5 Years Since LaunchFund Launched Peer Group1 Return Quartile Return Quartile (%) Ranking (%) RankingCF iimiaAccelerated Apr-03 AM - - 112.5 1stGrowth Jan-05 AM - - 31.7 3rdGrowth & Income Jan-05 BM - - 35.8 1stIncome Fund Jan-05 CM - - 32.1 1st2CF MidasBalanced Growth Apr-02 BM 116.6 1st2 66.0 1st2Balanced Income Apr-02 CM 83.9 1st 53.4 1st2CF MitonArcturus Fund Nov-06 CM - - 3.8 1stCautious Income Portfolio Mar-01 CM 57.7 2nd 30.2 3rdGlobal Portfolio Mar-01 AM 103.5 2nd 62.7 1st2Strategic Portfolio Dec-96 BM 60.1 4th 96.2 1stSpecial Situations Portfolio Dec-97 BM 128.4 1st2 211.9 1st2 Notes: 1 AM: IMA Active Managed; BM: IMA Balanced Managed; CM: IMA Cautious Managed. 2 Decile ranking. 3 For source, please see appendix 1, note 1. The Directors and Proposed Directors believe that the agreement of Midas'management, staff and families to re-invest, in aggregate, at least £20 millionof the Cash Consideration in the Enlarged Group's investment funds on the basisdescribed under the heading ''Principal Terms of the Acquisition'' abovedemonstrates their confidence in the Enlarged Group's future investmentperformance. Whilst turbulent stockmarket conditions will present challenges for all assetmanagement businesses, the Directors and Proposed Directors believe that themulti-asset approach to seeking investment returns should continue to attract ahigh proportion of inflows into the Enlarged Group's funds in difficult markets. The Directors and Proposed Directors expect the wealth management division,which is already benefiting from the acquisition of John K Miln, to make furtherprogress in the current year. Difficult stockmarket conditions will undoubtedly present challenges forIntelli's business but the Directors and Proposed Directors are encouraged bythe strong pipeline and diversity of activity and clients with which Intelli hascommenced the current year. In view of the prospects for the individual divisions and the expected benefitsof the Merger referred to earlier in this letter, the Directors and ProposedDirectors view the Enlarged Group's long-term prospects with confidence. Lock-ins Immediately following Admission, the Vendors will be interested in, inaggregate, approximately 27.5 million Consideration Shares, representingapproximately 48.0 per cent. of the Enlarged Share Capital. The Vendors willundertake to the Company and Arbuthnot, subject to certain exceptions (includingthe ability to accept a takeover offer for the Company and to give anirrevocable undertaking to accept a takeover offer for the Company), not todispose of or transfer any Consideration Shares for a period of 12 months fromAdmission and, thereafter, not to dispose of or transfer more than 25 per cent.of the Consideration Shares in which they are interested prior to the secondanniversary of Admission. Dividend Policy The Directors have declared an interim dividend of 2.0p per Ordinary Share inrespect of the year ended 31 December 2007, which will be payable on Thursday,20 March 2008 to Shareholders on the register of members at the close ofbusiness on Friday, 22 February 2008, having an ex-dividend date of Wednesday,20 February 2008. This dividend will not be payable in respect of theConsideration Shares or the Placing Shares. This will be the first dividendpaid by the Company. The Board intends to adopt a progressive dividend policywhich will reflect the long-term earnings and cashflow potential of the Company,whilst maintaining an appropriate level of dividend cover. It is envisaged thatthe Company will pay a final dividend in May of each year, commencing in 2009. Admission to AIM and Dealings Application will be made to the London Stock Exchange for Existing OrdinaryShares to be re-admitted and the New Ordinary Shares to be admitted to tradingon AIM. Admission is expected to become effective, and dealings in the EnlargedShare Capital are expected to commence, at 8.00 a.m. on Friday, 7 March 2008. General Meeting Due to the size and relative value of Midas in relation to the Company, theAcquisition constitutes a reverse takeover under the AIM Rules for Companies andtherefore requires the approval of Existing Shareholders at a general meeting ofthe Company which has been convened for 10.00 a.m. on Thursday, 6 March 2008.Resolutions will also be proposed at that meeting to give the Directors therequired powers and authorities to issue and allot the New Ordinary Shares, tochange the Company's name to Midas Capital plc and to adopt new articles ofassociation of the Company to bring the Articles into line with recent changesin company law and current practice. Shareholders representing 55.4 per cent. of the Existing Ordinary Shares haveirrevocably undertaken or indicated their intent to vote in favour of theresolutions to be proposed at the General Meeting. Availability of AIM Admission Document Copies of the Company's AIM admission document, which will be published andposted to Existing Shareholders later today, will be available free of chargefrom: (i) the Company's registered office; (ii) the offices of Arbuthnot Securities Limited, Arbuthnot House, 20Ropemaker Street, London EC2Y 9AR; and (iii) the offices of Taylor Wessing LLP, Carmelite, 50 Victoria Embankment,Blackfriars, London EC4Y ODX; during normal business hours on any weekday (Saturdays, Sundays and publicholidays excepted) from today until one month after the date of thisannouncement. An electronic copy of the AIM admission document will also be available from theCompany's website: www.imoplc.co.uk shortly. Expected Timetable 2008Interim dividend of 2.0p per Existing Ordinary Share declared Tuesday, 12 February 2008Publication of AIM admission document and posting to Shareholders Tuesday, 12 FebruaryEx-dividend date for interim dividend of 2.0p per Existing Ordinary Wednesday, 20 February 2008ShareRecord date for interim dividend of 2.0p per Existing Ordinary Share Friday, 22 February 2008General meeting of iMO 10.00 a.m. on Thursday, 6 MarchAdmission of the Enlarged Share Capital effective 8.00 a.m. on Friday, 7 MarchAcquisition completed Friday, 7 MarchCREST accounts credited with the Placing Shares issued in Friday, 7 Marchuncertificated formDespatch of definitive share certificates for the Placing Shares by Friday, 14 Marchissued in certificated formInterim dividend of 2.0p per Existing Ordinary Share paid Thursday, 20 March 2008 Admission StatisticsNumber of Existing Ordinary Shares 22,824,041Number of Consideration Shares to be issued to Midas Shareholders 27,500,129Placing Price 150pNumber of Placing Shares to be issued 7,000,000Number of Ordinary Shares in issue immediately following Admission 57,324,170Gross proceeds of the Placing £10.5mEstimated net proceeds of the Placing (appendix 1, note 6) £7.7mMarket capitalisation on Admission (at the Placing Price) £86.0mOrdinary Share RIC codeCurrent IMOOn Admission MDSOrdinary Share ISIN number GB00B01WR582Ordinary Share SEDOL number B01WR58 Appendix 1 - NOTES 1. The performance of open-ended funds referred to in this announcementhas been sourced from Financial Express, with the return on investmentcalculated on the basis of UK sterling, NAV-NAV, net income reinvested. 2. With the exception of the period between April 2002 and September 2002,the Midas team's performance record has been calculated using the WM SpectrumPerformance Measurement system and is based solely on data provided by MerseyPension Fund and the mutual clients of both the World Markets Company plc (''WM'') and Midas. The data used for the period between April 2002 and September2002 is based on calculated returns extracted from the WM All Funds Universe offund data. Due to the requirement for the insertion of a model portfolio forthe period between April 2002 and September 2002, the data used to calculate theperformance record does not constitute an official WM Company Track Record andis not recognised as National Association of Pension Funds or Global InvestmentPerformance Standards compliant. 3. Valuing the Consideration Shares at the Placing Price, the Acquisitionvalues Midas at approximately £100.3 million. 4. The value of the Enlarged Group's FuM&A is based on the aggregate valueof the Existing Group's and Midas' FuM&A as at 31 January 2008. 5. The impact of the Acquisition on the Company's underlying EPS once theExisting Group and Midas have been fully integrated has been calculated based onthe adjusted EPS from continuing operations, including other operating incomebut before exceptional items, share based payments, amortisation and anyperformance fees, on a diluted basis. Statements in this announcement regardingthe impact of the Acquisition on the Company's underlying EPS once the ExistingGroup and Midas have been fully integrated should not be interpreted to meanthat the Company's underlying EPS will necessarily be greater than that for theyear ended 31 December 2007. 6. iMO's expenses in connection with the Acquisition referred to in thisannouncement exclude the fee (but not VAT) payable to Intelli as its financialadviser as such fee will be eliminated in iMO's consolidated accounts. 7. Details of the letters of appointment and service contracts of theProposed Directors are set out in the AIM admission document which is beingpublished today. Appendix 2 - DEFINITIONS"Acquisition" or "Merger" the proposed acquisition by iMO of the entire issued share capital of Midas from the Midas Shareholders pursuant to the Acquisition Agreements"Acquisition Agreements" the principal sale and purchase agreement dated 12 February 2008 between iMO and the Midas Warrantors and the individual sale and purchase agreements to be entered into between iMO and each of the other Midas Shareholders pursuant to which iMO has conditionally agreed to acquire the entire issued share capital of Midas"Admission" re-admission of the Existing Ordinary Shares and admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules for Companies"AIM" the AIM market operated by the London Stock Exchange"AIM Rules for Companies" the rules for AIM companies as issued by the London Stock Exchange from time to time"Arbuthnot" Arbuthnot Securities Limited"Bank of Scotland" Bank of Scotland PLC"Board" the board of directors of the Company from time to time"Cash Consideration" the cash consideration payable by iMO to the Vendors pursuant to the terms of the Acquisition Agreements"Company" or "iMO" iimia MitonOptimal plc, a company incorporated and registered in England and Wales with registered number 5160210"Completion" completion of the Acquisition in accordance with the terms of the Acquisition Agreements"Consideration Shares" the 27,500,129 new Ordinary Shares to be issued to the Vendors pursuant to the terms of the Acquisition Agreements"Directors" the directors of the Company as at the date of this announcement"Enlarged Group" the Company and its subsidiary undertakings, including, following Completion, Midas or any one or more of them as the context may require"Enlarged Share Capital" the issued share capital of iMO as it will be immediately following Admission, comprising the Existing Ordinary Shares and the New Ordinary Shares"EPS" earnings per share"Existing Group" the Company and its subsidiary undertakings as at the date of the AIM admission document or any one or more of them as the context may require"Existing Ordinary Shares" the 22,824,041 Ordinary Shares in issue at the date of the AIM admission document"Existing Shareholders" holders of Existing Ordinary Shares"FSA" the Financial Services Authority"FuM" funds under management"FuM&A" funds under management and advice"GAAP" Generally Accepted Accounting Principles"General Meeting" the general meeting of iMO convened for 10.00 a.m. on Thursday, 6 March 2008, or any adjournment thereof"IFAs" independent financial advisers"IMA" Investment Management Association"iMO Group" the Company and its subsidiary undertakings from time to time"Intelli" Intelli Corporate Finance Limited, a subsidiary of the Company"London Stock Exchange" London Stock Exchange plc"Midas" Midas Capital Partners Limited, a company incorporated and registered in England and Wales with registered number 4325961"Midas Shareholders" or "Vendors" the holders of the entire issued share capital of Midas"Midas Warrantors" the directors and senior management of Midas, being Lord Wade of Chorlton, Alan Borrows, Michael Carr, Adrian Collins, Simon Edwards, Alec Foster and David Thomas"NAV" net asset value"New Ordinary Shares" the Consideration Shares and the Placing Shares"Ordinary Shares" ordinary shares of 10p each in the share capital of iMO"Placing" the conditional placing of the Placing Shares by Arbuthnot, as agent on behalf of the Company, pursuant to the Placing Agreement"Placing Price" 150p, being the price at which each Placing Share is to be issued under the Placing"Placing Shares" the 7,000,000 new Ordinary Shares proposed to be issued by iMO pursuant to the Placing"Proposals" the Acquisition, the Placing, Admission, the proposed change of name of the Company, the proposed adoption of new articles of association of the Company and related matters, all as described in this announcement"Proposed Directors" the persons who are to be appointed directors of iMO on Completion, being Colin Rutherford, Lord Wade of Chorlton, Simon Edwards and Adrian Collins"Shareholders" holders of Ordinary Shares"Takeover Code" the City Code on Takeovers and Mergers"Takeover Panel" the Panel on Takeovers and Mergers This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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