TIDMARGO
RNS Number : 3321H
ARGO Group Limited
16 August 2016
Argo Group Limited ("Argo" or "the Company")
Notice of Extraordinary General Meeting
Proposed authority to make purchases of its own shares and Rule
9 Waiver
Argo Group Limited ("AGL"), the independent alternative
investment manager offering a multi-strategy platform for investing
in global emerging markets, announces that it has today posted a
circular to shareholders in connection with a proposed authority to
make purchases of its own shares and Rule 9 Waiver. An
extraordinary general meeting of the Company will be held at its
registered offices, at 3.00pm on Monday 19 September 2016. All
documents relating to the Buyback can be found on the Company's
website: http://www.argogrouplimited.com.
The Company intends to use up to GBP2 million to acquire
Ordinary Shares in the market. The minimum price Argo intends to
pay is 8p per Ordinary Share over a twelve month period.
The Independent Directors believe it is in the best interests of
the Company to be able to buy Ordinary Shares if they become
available for purchase at an attractive price as an important
mechanism for creating liquidity in the stock market.
The Whitewash Resolution is proposed to seek approval for a
waiver granted by the Takeover Panel of the obligations under Rule
9 of the Code which would otherwise apply to Kyriakos Rialas and
Andreas Rialas as the holders together of 51.15% of the Company's
issued share capital.
Enquiries:
Argo Group Limited
Andreas Rialas
020 7016 7660
Panmure Gordon
Dominic Morley
020 7886 2500
Argo Group Limited ("Argo" or "the Company")
Notice of Extraordinary General Meeting
Proposed authority to make purchases of its own shares and Rule
9 Waiver
Introduction
The Board is proposing that the Company undertakes the purchase
of Ordinary Shares in the market, and cancels them. The Company
will undertake this purchase in accordance with the provisions of
Isle of Man law. The Board intends to use up to GBP2 million to
acquire the Ordinary Shares in the market, with the minimum price
of 5p to be paid per Ordinary Share, over a twelve month
period.
The Whitewash Resolution is proposed to seek approval for a
waiver granted by the Panel of the obligations under Rule 9 of the
Code which would otherwise apply to Kyriakos Rialas and Andreas
Rialas as the holders of 36.20% per cent. of the Company's net
issued share capital as at 3 February 2016 (being 23.19% held by
Andreas Rialas and 13.00% held by Kyriakos Rialas), the last
practicable date prior to this announcement, if that shareholding
increased as a result of the Company purchasing and cancelling some
or all of its own Ordinary Shares.
The Independent Directors believe it is in the best interests of
the Company to be able to buy Ordinary Shares if they become
available for purchase at an attractive price as an important
mechanism for creating liquidity.
It is important to note that the Board would only proceed if it
considered that the effect of such purchase would be to increase
earnings and/or net assets per Ordinary Share and that such
exercise would be in the best interests of Shareholders generally.
In addition, the Board would only proceed where the acquisition is
in accordance with Isle of Man law.
Waiver of Requirements of the City Code
As indicated above, the terms of the proposals set out in this
announcement give rise to certain considerations under the City
Code. Brief details of the Panel, the City Code and the protection
they afford are given below.
The purpose of the City Code is to supervise and regulate
takeovers and other matters to which it applies. The City Code is
issued and administered by the Panel. The Company is a company to
which the Code applies and as such its Shareholders are therefore
entitled to the protections afforded by the City Code.
Under Rule 9 of the City Code, where any person acquires,
whether by a single transaction or a series of transactions over a
period of time, an interest (as defined in the City Code) in shares
which (taken together with shares in which persons acting in
concert with him are interested) carry 30 per cent. or more of the
voting rights of a company which is subject to the City Code, that
person is normally required by the Panel to make a general offer to
all the remaining shareholders to acquire their shares.
Additionally, under Rule 9 of the City Code, where any person,
together with persons acting in concert with him, is interested in
shares which in the aggregate carry not less than 30% of the voting
rights of a company but does not hold shares carrying more than 50%
of such voting rights and such person, or any person acting in
concert with him, acquires an interest in any other shares which
increases the percentage of shares carrying voting rights in which
he is interested, that person is normally required by the Panel to
make a general offer to all the remaining shareholders to acquire
their shares.
An offer under Rule 9 must be made in cash and at the highest
price paid by the person required to make the offer or any person
acting in concert with him for any interest in shares of the
company during the 12 months prior to the announcement of the
offer. Under the City Code, a concert party arises when persons
who, pursuant to an agreement or understanding (whether formal or
informal), co-operate to obtain or consolidate control of that
company.
Under the City Code, control means an interest, or aggregate
interests, in shares carrying 30 per cent. or more of the voting
rights of a company, irrespective of whether the interest or
interests gives de facto control. Kyriakos Rialas and Andreas
Rialas are considered by the Panel to be acting in concert and
therefore a Concert Party.
Following the Buyback (assuming the Company buys back the
maximum number of Ordinary Shares it is able to buy back under the
authority being sought, at the minimum price per share), as a
result of the reduced number of Ordinary Shares in issue, the
Concert Party's interest in the Company, of 24,406,509 Ordinary
Shares, will represent a maximum of 88.98% per cent. of the issued
share capital of the Company (being 57.01% held by Andreas Rialas
and 31.97% held by Kyriakos Rialas). This will have the effect of
increasing the amount to which the Concert Party will be able to
exercise significant influence over all matters requiring
Shareholder approval, including election of Directors, significant
corporate transactions and the ability to pass special
resolutions.
Under Rule 37 of the City Code, when a company purchases its own
voting shares, any resulting increase in the percentage of shares
carrying voting rights in which a person or group of persons acting
in concert is interested will be treated as an acquisition for the
purpose of Rule 9.
The Panel has been consulted and has agreed to waive the
requirement for the Concert Party to make a general offer under
Rule 9 of the City Code in cash for Ordinary Shares in the Company
which might otherwise arise as a result of the exercise by the
Company of the Buyback (whether exercised in whole or in part),
subject to the Whitewash Resolution (as set out in the notice
convening the General Meeting) being passed on a poll by the
Independent Shareholders. To be passed, the Whitewash Resolution
will require a simple majority of the votes cast by the Independent
Shareholders. Members of the Concert Party will not vote on the
Whitewash Resolution.
Following completion of the proposals set out in this
announcement, the Concert Party will between them be interested in
shares carrying more than 30 per cent. of the Company's voting
share capital and may, depending on the price per share and the
number of shares purchased, hold more than 50% of the Ordinary
Shares. If the Concert Party comes to hold more than 50% of the
Ordinary Shares, then, for so long as they continue to be treated
as acting in concert, the Concert Party may accordingly increase
their aggregate interests in shares without incurring any
obligation under Rule 9 of the City Code to make a general offer,
although each individual member of the Concert Party will not be
able to increase his percentage interest in shares through or
between a Rule 9 threshold without Panel consent.
The members of the Concert Party will not be restricted from
making an offer for the Company.
The intentions of the Concert Party
Argo Group Limited is an independent alternative investment
manager offering a multi-strategy platform for investing in global
emerging markets. The Company is focused on delivering a
diversified approach to investing in emerging markets with the aim
of seeking lower volatility than, and lower correlation to, wider
global markets. The members of the Concert Party have each
confirmed to the Company that they intend to operate the Company's
business in the future as they currently do and that they have no
intention to make any changes, following any increase in their
percentage interests in Ordinary Shares or voting rights as a
result of any buyback of its Ordinary Shares by the Company, to the
Company's current plans regarding:
-- the continued employment of its employees and management (and
those of its subsidiaries), including any material change in
conditions of employment;
-- the strategic plans and investment strategy of the Company
and their likely repercussions on employment and the locations of
the Company's places of business;
-- employer contributions into the Company's pension schemes,
the accrual of benefits for new members and the admission of new
members;
-- the deployment of the Company's fixed assets; and
-- maintenance of the Company's trading on AIM.
The General Meeting
The Circular contains a notice convening an extraordinary
general meeting of the Company, to be held at its registered
offices, at 3.00 p.m. on Thursday, 3 March 2016 at which the
Resolution will be proposed.
Recommendation
The Independent Directors, having been so advised by PGD
Strategy, consider the Proposals to be in the best interests of the
Independent Shareholders and the Company as a whole and therefore
recommend that you vote in favour of the Proposals. In providing
advice to the Independent Directors, PGD Strategy has taken into
account their commercial assessment. Accordingly, your Independent
Directors unanimously recommend that Shareholders vote in favour of
the Whitewash Resolution as they intend to do in respect of their
own shareholdings of 1,088,141 Ordinary Shares, representing
approximately 1.61 per cent. of the Ordinary Shares as at 3
February 2016. The Concert Parties will abstain from voting in
respect of their own holdings.
Definitions
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"acting in concert" shall have the meaning
ascribed thereto in the
City Code
"AIM" the market of that name
operated by the London
Stock Exchange
"Buyback" the acquisition by the
Company of its own shares
in the market, spending
up to a maximum of GBP2
million, with the minimum
price of 5p per Ordinary
Share over a twelve month
period
"Circular" the circular to Shareholders
posted in connection with
the Proposals
"City Code" the City Code on Takeovers
and Mergers
"Code Waiver" the waiver by the Panel,
conditional upon the passing
of the Whitewash Resolution,
of the obligation on the
Concert Party (arising
as a result of the Buyback)
that may otherwise arise
under Rule 9 of the City
Code to make a mandatory
cash offer for the issued
Ordinary Shares not already
owned by it
"Company" " Argo Group Limited
"Concert Party" Kyriakos Rialas and Andreas
Rialas
"Directors" or "the Board" the directors of the Company
at the date of this announcement
"General Meeting" the extraordinary general
meeting of the Company
(or any adjournment of
such meeting) convened
for 3.00 p.m. on 3 March
2016 to be held at 33-37
Athol Street, Douglas,
Isle of Man, IM1 1LB
"Independent Directors" Michael Kloter, David
Fisher and Kenneth Watterson
"Independent Shareholders" Shareholders other than
the members of the Concert
Party
"Ordinary Shares" or "Shares" ordinary shares of US$0.01
each in the capital of
the Company
"Panel" the Panel on Takeovers
and Mergers
"PGD Strategy" PGD Strategy Limited of
Kemp House, 152 - 160
City Road, London EC1Y
2NX
"Proposals" the passing of the Whitewash
Resolution
"Shareholder" a holder of Ordinary Shares
"Whitewash Resolution" Resolution 1 set out in
the notice of General
Meeting at the end of
the Circular, to be taken
on a poll, in relation
to approval by Independent
Shareholders of the Code
Waiver
This information is provided by RNS
The company news service from the London Stock Exchange
END
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