11th Oct 2012 14:25
11 October 2012
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND AND THE REPUBLIC OF SOUTH AFRICA AND ANY OTHER RESTRICTED JURISDICTION
Terms used in this announcement will have the meaning ascribed to them in the Definitions section below unless otherwise stated
Alternative Networks plc ("Alternative Networks" or the "Company")
PROPOSED RETURN OF CASH TO SHAREHOLDERS BY WAY OF TENDER OFFER
The Company today announces its intention to return capital to Qualifying Shareholders by way of a tender offer, pursuant to which Investec Investment Banking, acting as principal, will offer to purchase up to £5 million of the Company's Ordinary Shares, following which and upon exercise of a put option in accordance with a repurchase agreement between Investec Investment Banking and the Company, Alternative Networks will repurchase from Investec Investment Banking and cancel all those Shares purchased by Investec under the terms of the Tender Offer.
The Tender Offer is being made available to all Qualifying Shareholders who are on the Company's register of members at 5 p.m. on 25 October, 2012. Shareholders can decide whether they want to tender any or all of their Ordinary Shares in the Tender Offer. The Tender Offer Price will be calculated as 105 per cent. of the average closing middle market price per Ordinary Share for the five Business Days immediately preceding the date on which Ordinary Shares are purchased and such price will be rounded down to the nearest whole penny.
A Circular providing more information in relation to the Tender Offer and setting out the formal terms and conditions of the Tender Offer is expected to be posted to Shareholders later today and will shortly be available to view on the Company's website (http://www.alternativenetworks.com) (the "Circular").
Background to and reasons for the Tender Offer
As the Company has funds surplus to the operational requirements of its continuing activities, the Board believes that now is an appropriate time to return through the Tender Offer up to £5 million of cash to its Shareholders. Shareholders now have the opportunity to realise some or all of their Ordinary Shares in cash. In arriving at the level of cash available to be returned to Shareholders, the Board has taken account of the levels of funding remaining in the Group to enable it to meet working capital requirements.
The Tender Offer will provide all Qualifying Shareholders with an opportunity to sell part or all of their respective shareholdings and to receive their respective share of the cash which the Company is seeking to return. The Tender Offer will allow the Company to broaden the return of cash to include those Qualifying Shareholders whose Ordinary Shares might not otherwise be purchased by the Company through a buy back in the market. Qualifying Shareholders who decide to tender all or some of this Ordinary Shares may also be able to participate in the cash distribution in excess of their otherwise pro rata entitlement, up to their maximum shareholding in the Company, to the extent that other Qualifying Shareholders decide not to participate fully in the Tender Offer.
Details of the Tender Offer
Shareholders do not have to tender any Ordinary Shares if they do not wish to do so. The Tender Offer is available to Qualifying Shareholders on the register of members of the Company on the Record Date and in respect of their Ordinary Shares held on the Record Date.
The Tender Offer is to be effected by Investec Investment Banking purchasing, as principal, up to £5 million of Ordinary Shares at the Tender Offer Price, being 105 per cent. of the average middle market price per Ordinary Share as derived from the Daily Official List of the London Stock Exchange for the five Business Days immediately preceding the date on which the Ordinary Shares will be purchased and rounded down to the nearest whole penny. In relation to the five business days immediately preceding the date of this announcement, such price, for the purposes of illustration only, would be £2.27.
The Ordinary Shares purchased by Investec Investment Banking under the Tender Offer (or otherwise a corresponding number of Ordinary Shares) will be subsequently purchased by the Company if the put option is exercised pursuant to the terms of the Repurchase Agreement. All of the Ordinary Shares purchased by the Company will be cancelled.
The Existing Authority from the Company's shareholders to purchase shares on market requires that the maximum price (exclusive of any expenses) which may be paid for an Ordinary Share shall not be more than 105 per cent. of the average of the middle market quotations for an Ordinary Share as derived from the Daily Official List of the London Stock Exchange for the five Business Days immediately preceding the day on which the Ordinary Share is purchased. This is the price at which the Ordinary Shares shall be purchased under the Tender Offer rounded down to the nearest whole penny. The Tender Offer Price cannot be calculated until closing of the Tender Offer.
The Tender Offer is open to Qualifying Shareholders on the Company's register of members at 5.00 p.m. on 25 October 2012.
The Tender Offer is conditional on:
·; the Tender Offer being within the maximum price requirements specified under the Existing Authority;
·; the aggregate consideration to be paid by Investec Investment Banking in respect of the Tender Offer being no more than £5 million; and
·; the total number of Ordinary Shares purchased pursuant to the Tender Offer being not more than 4,436,085.
Under the Tender Offer, Qualifying Shareholders may tender any number of Ordinary Shares up to the number of Ordinary Shares they own on the Record Date. However, if, on closing of the Tender Offer and calculation of the Tender Offer Price, the aggregate consideration to be paid by Investec Investment Banking for the tendered Ordinary Shares is more than £5 million, then applications will be scaled back on a pro rata basis according to the number of Ordinary Shares tendered by Qualifying Shareholders who have validly tendered their Ordinary Shares. In the event of scaling back, tenders will be rounded down to the nearest whole number of Ordinary Shares.
Authority
By a resolution passed at the Company's annual general meeting on 29 March 2010, the Company was authorised to make one or more market purchases of fully paid Ordinary Shares provided, inter alia, that:
(i) the maximum aggregate number of Ordinary Shares to be purchased is 4,436,085 Ordinary Shares which is approximately 9.2 per cent. of the current issued share capital of the Company;
(ii) the maximum price (exclusive of any expenses) which may be paid for an Ordinary Share shall not be more than 105 per cent. of the average of the middle market quotations for an Ordinary Share as derived from the Daily Official List of the London Stock Exchange for the five Business Days immediately preceding the day on which the Ordinary Share is purchased; and
(iii) the authority to purchase Ordinary Shares shall expire three years after the Company's annual general meeting on 29 March 2010.
If the put option is exercised pursuant to the Repurchase Agreement, the proposed repurchase of £5 million of Ordinary Shares subject to a maximum of 4,436,085 Ordinary Shares is therefore within the parameters stipulated under the authority. Furthermore, an ordinary resolution was passed at the Company's annual general meeting on 29 March 2010, waiving the obligation under Rule 9 of the City Code on Takeovers and Mergers on the James Murray Concert Party to make a general offer to shareholders of the Company as a result of any market purchases of Ordinary Shares by the Company under that authority. The Panel on Takeovers and Mergers has confirmed that the Tender Offer remains within this authority granted by shareholders of the Company on 29 March 2010 and as such the general offer waiver granted at that time in relation to the impact on the James Murray Concert Party as a result of the Tender Offer remains effective.
Overseas Shareholders
The Tender Offer is not available to Overseas Shareholders.
Director's Intentions
On the basis that 105 per cent. of the average closing price on an Ordinary Share for the three business days preceding 24 October 2012 is not lower than £2.25, certain Directors and the EBT trustees currently intend to tender Ordinary Shares as follows (though the Directors and the EBT trustees reserve the right to tender Ordinary Shares at the Tender Offer price if lower than this level).
Ben Marnham's wife intends to tender 650,000 Ordinary Shares, representing 29.8 per cent. of his total holding, under the Tender Offer. It was announced on 3 September 2012 that the Company had been notified by Ben Marnham of his intention to step down as a Director on 3 January 2013.
Jim Sewell intends to tender 100,000 Ordinary Shares, representing 3.9 per cent. of his total holding, under the Tender Offer.
The EBT trustees intend to tender 200,000 Ordinary Shares, representing 10.4 per cent. of the trust's total holding, under the Tender Offer. This 200,000 Ordinary Shares will be tendered on behalf of Edward Spurrier and family, representing 6.3 per cent. of his total holding.
James Murray does not currently intend to tender any Ordinary Shares under the Tender Offer in relation to his or his wife's shareholding.
None of the other Directors hold any Ordinary Shares.
Expected Timetable
Tender Offer opens
| 11 October, 2012 |
Latest time and date for receipt of Tender Forms and TTE instructions from CREST in relation to the Tender Offer
| 1.00 p.m. on 25 October, 2012 |
Record Date for Tender Offer
| 5.00 p.m. on 25 October, 2012 |
Announcement of results of the Tender Offer
| 26 October, 2012 |
Cheques issued/CREST accounts credited for Tender Offer proceeds in respect of Ordinary Shares sold
| by 9 November, 2012 |
CREST accounts credited/share certificates issued for revised holdings of Ordinary Shares following the sale of Ordinary Shares under the Tender Offer
| by 9 November, 2012 |
Return of share certificates in respect of unsuccessful tenders or the balance of tenders that have been scaled back
| by 9 November, 2012 |
The dates and times given are based on the Company's current expectations and may be subject to change. Any changes to the expected timetable will be announced via a Regulatory Information Service.
Definitions
"Business Day" | any day other than a Saturday, Sunday or public holiday on which banks are open in the City of London for the transaction of general commercial business |
"Capita Registrars" | a trading name of Capita Registrars Limited |
"City Code" | the City Code on Takeovers and Mergers |
"Company" | Alternative Networks plc |
"CREST Member" | a person who has been admitted by Euroclear as a system-member (as defined in the CREST Regulations) |
"CREST Participant" | a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations) |
"CREST Regulations" | the Uncertificated Securities Regulations 2001 (SI 20013755) |
"CREST Sponsor" | a CREST participant admitted to CREST as a CREST sponsor |
"CREST Sponsored Member" | a CREST member admitted to CREST as a CREST sponsored member |
"Directors" or the "Board" | the board of directors of the Company |
"EBT" | the Employee Benefit Trust established by the Company during the year ended 30 September 2005 and which holds 3,915,200 Ordinary Shares on trust in which each of James Murray, Jim Sewell, Edward Spurrier and Ben Marnham have an interest |
"Escrow Agent" | Capita Registrars |
"Euroclear" | Euroclear UK and Ireland Limited |
"Existing Authority" | the authority of the Company to make one or more market purchases of up to a total of 4,436,085 fully paid Ordinary Shares pursuant to a resolution passed on 29 March 2010 more particularly described in paragraph 5 of Part II of this document |
"Group" | the Company and its subsidiaries |
"Independent Directors" | all Directors other than James Murray |
"Investec Investment Banking" | Investec Investment Banking, a division of Investec Bank plc |
"James Murray" | James Murray of 50 Paultons Square, London SW3 5DT |
"James Murray Concert Party" | the following shareholders who, for the purposes of the City Code, are deemed to be acting in concert: James Murray, Natasha Murray (the wife of James Murray) George Murray (the father of James Murray), Susan Murray (the mother of James Murray), Victoria Bilborough (the sister of James Murray), Anthony Forrest-Hay (the father-in-law of James Murray), Kate Forrest-Hay (the mother-inlaw of James Murray) Edward Spurrier (the brother-in-law of James Murray, who is married to Lucinda Spurrier and who is also a Director), Lucinda Spurrier (the sister of James Murray), Nicholas Spurrier (the father of Edward Spurrier), Didi Spurrier (the wife of Nicholas Spurrier) and the trustees of the EBT |
"Latest Price" | £2.27 per Ordinary Share, being 105 per cent. of the average of the middle market quotations for an Ordinary Share as derived from the Daily Official List of the London Stock Exchange for the five Business Days immediately preceding the date of this document and rounded down to the nearest whole penny |
"London Stock Exchange" | London Stock Exchange plc |
"Ordinary Shares" | ordinary shares of 0.125p each in the capital of the Company |
"Overseas Jurisdiction" | a jurisdiction or territory other than the UK |
"Overseas Shareholder" | a Shareholder whose address in the Company's register of members is outside the UK |
"Panel" | the Panel on Takeovers and Mergers |
"participant ID" | the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant |
"Qualifying Shareholders" | Shareholders who are entitled to participate in the Tender Offer, being a Shareholder on the register of members of the Company at the Record Date who is not an Overseas Shareholder |
"Repurchase Agreement" | the put option agreement dated 11 October 2012 between (1) the Company and (2) Investec Investment Banking for the repurchase by the Company of an equivalent number of Ordinary Shares that are purchased by Investec Investment Banking pursuant to the Tender Offer (or otherwise a corresponding number of Ordinary Shares) by way of an on market transaction |
"Record Date" | 5.00 p.m. on 25 October, 2012 |
"Shareholders" | holders of Ordinary Shares in the Company |
"tender" and "tendered" | refers to tenders by Shareholders in relation to the Tender Offer |
"Tender Form" | the personalised form of tender enclosed with this document for use in respect of Ordinary Shares held in certificated form in relation to the Tender Offer |
"Tender Offer" | the invitation by Investec Investment Banking to Qualifying Shareholders to tender Ordinary Shares for sale to Investec Investment Banking on the terms and subject to the conditions set out in this document and also, in the case of certificated Ordinary Shares only, in the Tender Form |
"Tender Offer Price" | 105 per cent. of the average closing middle market price per Ordinary Share as derived from the Daily Official List of the London Stock Exchange for the five Business Days immediately preceding the date of calculation rounded down to the nearest whole penny, being the price at which Investec Investment Banking is to purchase Ordinary Shares under the Tender Offer |
"TFE instruction" | a transfer from escrow instruction (as defined by the CREST manual issued by Euroclear) |
"TTE instruction" | a transfer to escrow instruction (as defined by the CREST manual issued by Euroclear) |
"United Kingdom" or "UK" | the United Kingdom of Great Britain and Northern Ireland |
The Directors accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
Enquiries:
Alternative Networks plc 020 7801 7156
James Murray, Chief Executive Officer
Edward Spurrier, Chief Financial Officer
Investec Bank plc 020 7597 5970
Patrick Robb
Andrew Pinder
Pelham Bell Pottinger 020 7861 3112 / 07802 442 486
Archie Berens
Investec Investment Banking, a division of Investec Bank plc, which is regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Alternative Networks plc in connection with the proposals in this Circular, and will not be responsible to anyone other than Alternative Networks plc for providing the protections afforded to customers of Investec Investment Banking or for providing advice in relation to the proposals in the Circular or any other matter in relation to the contents of the Circular or this announcement.
Related Shares:
AN..L