5th Jul 2006 07:01
Topps Tiles PLC05 July 2006 Topps Tiles plc £122.4 million return of cash to shareholders Highlights include: - Continued robust balance sheet and strong cash conversion at Topps Tiles - Proposal is to return 54 pence per ordinary share - Return is to be financed by existing cash resources and a new £116 million senior debt facility - Result of proposal is: • A more efficient balance sheet • EPS enhancement for shareholders - Capital reorganisation will be undertaken in conjunction with the return of cash Topps Tiles plc (the "Company") announces that it will shortly be posting acircular to its shareholders and convening an extraordinary general meeting("EGM"), to be held on 31 July 2006, to obtain shareholder approval for theproposed return of £122.4 million of cash to shareholders. Return of cash to shareholders The Board of the Company is proposing to return cash to shareholders as a resultof the Company's current balance sheet strength and strong cash flows, followinga review of the Company's financing requirements. The return of cash, which will equate to 54 pence per ordinary share, is to beimplemented through an issue of redeemable B shares and non-redeemable C sharesand a capital reorganisation, and is subject to approval by shareholders.Subject to such approval, shareholders will have the right to receive one Bshare or one C share for every existing ordinary share, and will be able toelect between the following alternatives in relation to each of their ordinaryshares: • Alternative 1: to receive a C share in relation to which a single dividend of 54 pence will be paid shortly after its issue. Following this, each such C share will automatically be converted into a deferred share which will have negligible value. • Alternative 2: to receive a C share and retain it (without the benefit of the single dividend of 54 pence per share) until the Company exercises its right to purchase each such C share for 54 pence on 30 March 2007. • Alternative 3: to receive a B share which will be redeemed shortly after its issue. The B shares will need to be paid up out of the Company's share premium account and special reserves and elections for the B shares will need to be scaled back to the extent that these reserves are insufficient to pay up all the B shares in relation to which elections are received. To the extent that these elections are scaled back, shareholders will receive C shares. Subject to certain conditions to be set out in the circular, shareholders will be able to choose, in relation to the C shares issued as a result of this scaling back, whether: • to accept an offer from KBC Peel Hunt Ltd of 54 pence per share; • to receive a single dividend of 54 pence per share in relation to all such C shares, following which such C shares will automatically be converted into deferred shares which will have negligible value; or • to retain all such C shares until the Company exercises its right to purchase such C shares for 54 pence per share on 30 March 2007. The circular and election forms in respect of these three alternatives and thechoices available to shareholders whose elections for B shares are scaled backwill be sent to shareholders on or around 7 July 2006, along with the forms ofproxy for the EGM to be held on 31 July 2006. Shareholders who do not elect forany of these alternatives will automatically be deemed to be electing forAlternative 1 and will receive C shares and the single dividend in relation toall of them. Additionally, Alternatives 2 and 3 are not being offered into theUnited States of America and, as a result, US shareholders will only receive Cshares and the single dividend in respect of such shares. Shareholders wishingto receive the single dividend and US shareholders do not therefore need toreturn forms of election. All shareholders are, however, encouraged to return forms of proxy in relationto the resolutions to be proposed at the EGM. A number of changes to thearticles of association of the Company are required in order to implement thereturn of cash. None of the B shares and C shares will be admitted to theofficial list of the UK Listing Authority (the "Official List") or to trading onthe market for listed securities of London Stock Exchange plc (the "London StockExchange") or any other exchange, and therefore no prospectus is required to bepublished in relation to them. In conjunction with the return of cash, a capital reorganisation will beundertaken. Existing ordinary shares will be subdivided and consolidated so thatshareholders will receive 3 new ordinary shares for every 4 existing ordinaryshares they own as at 5.00pm on 31 July 2006. The intention is that, subject tonormal market movements, the share price of one new ordinary share immediatelyafter the listing of these new ordinary shares should be approximately equal tothe share price of one existing ordinary share immediately beforehand. Newordinary shares will be traded on the London Stock Exchange in the same way asexisting ordinary shares and will be equivalent to the existing ordinary sharesin all material respects, including in respect of their dividend, voting andother rights. The effect of the consolidation will be to reduce the number ofissued ordinary shares to reflect the return of 54 pence per B share or C shareto shareholders, but shareholders will own the same proportion of the Company asthey did previously, subject to adjustments for fractional entitlements and todilution as a result of the exercise of options in relation to the Company'sordinary shares. Full details of the return of cash and associated capital reorganisation will becontained in the circular. The return of cash will be conditional on the specialresolution approving the return of cash and associated capital reorganisationbeing passed at the EGM and on all the conditions to a credit agreement to beentered into between a subsidiary of the Company and its banks being andremaining satisfied prior to the return of cash. Further details of this creditagreement will be contained in the circular. Timetable Latest date of posting of circular 7 July 2006 Latest time and date for receipt of forms of proxy for EGM 10am on 29 July 2006 EGM 10am on 31 July 2006 Latest time and date for dealings in existing ordinary 4.30pm on 31 Julyshares 2006 Latest time for receipt of election forms and TTE 4.30pm on 31 Julyinstructions from CREST holders in relation to 2006 Alternatives 1, 2 and 3 Record Date for the return of cash and capital 5.00pm on 31 Julyreorganisation. Existing ordinary share register 2006 closed and existing ordinary shares disabled in CREST Allotment of B shares and C shares 31 July 2006 New ordinary Shares admitted to the Official List and to 8.00am on 1 Augusttrading on the London Stock Exchange's market for listed 2006securities Dealings in the new ordinary shares commence and 8.00am on 1 Augustenablement in CREST. New ordinary shares, B shares 2006 and C shares credited to CREST accounts Single C share dividend declared and C shares in respect 8 August 2006 of which the single C share dividend is payable automatically convert into deferred shares KBC Peel Hunt Ltd to make an offer for C shares by means 8.00am on 8 Augustof an announcement on the Regulatory News Service of the 2006 London Stock Exchange B shares redeemed 14 August 2006 Cheques issued/CREST accounts credited in respect of the 14 August 2006single C share dividend, the redemption of the B shares and for fractional entitlements, together with tax vouchers Cheques issued/CREST accounts credited in respect of the 14 August 2006purchase of C Shares by KBC Peel Hunt Ltd Despatch of new ordinary share certificates and retained C 14 August 2006Share certificates KBC Peel Hunt Ltd, which is regulated by the Financial Services Authority for the conduct of designated investment business in the UK, is acting for Topps Tiles plc and no-one else in connection with the return of cash and willnot be responsible to anyone other than Topps Tiles plc for providing the protections afforded to clients of KBC Peel Hunt Ltd or for providing advice in relation to the return of cash. Shareholders in the United States will only be eligible for the single C sharedividend and will not be offered the other alternatives. - end - Analyst conference call details Nick Ounstead, CEO, will be hosting an analyst conference call at 9.00am (BST)this morning (Wednesday 5 July, 2006). The details are as follows: Participant dial-in no: +44 (0) 208 515 2306Chairperson: Nick Ounstead, CEO, Topps TilesConference call title: Topps Tiles Announcement 05.07.06 Enquiries: Topps TilesBarry Bester, Chairman: 01625 446 700Andrew Liggett, Finance Director: 01625 446 700 Bell Pottinger Corporate & FinancialBen Woodford/Alex Walton: 0207 861 3232 KBC Peel HuntAdam Hart/Megan MacIntyre: 0207 418 8900 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Topps Tiles