Proposed cancellation of AIM admission
June 07 2011 - 3:31AM
UK Regulatory
TIDMINNO
7 June 2011
Innovise plc
Proposed cancellation of admission of Shares to trading on AIM
and
Notice of General Meeting
Innovise plc (the "Company"), the AIM-quoted software solutions and IT services
provider, announces its intention to seek Shareholder approval for the
cancellation of admission of Shares to trading on AIM.
An explanatory circular will be posted to Shareholders setting out the
background to and reasons for the Cancellation, why the Directors believe the
Cancellation is in the best interests of the Company and its Shareholders and
why they recommend that Shareholders vote in favour of the Cancellation
Resolution as they intend to do in respect of their own current beneficial
holdings of, in aggregate, 31,819,601 Shares, representing 79.64 cent. of the
current issued ordinary share capital of the Company with voting rights.
A General Meeting of the Company will be held at Keypoint, 17-23 High Street,
Slough SL1 1DY at 2.30 pm on Wednesday 29 June 2011 at which Cancellation
Resolution will be proposed to approve the Cancellation. A notice convening
the General Meeting is set out in the circular.
For further information contact:
Mike Taylor, Chief Executive Innovise plc 087 0626 0400
Tony Edwards, Finance Director Innovise plc 087 0626 0400
Edward Hutton, Nominated Northland Capital Partners 020 7796 8800
Advisor Limited
Ian Foster, Shareholder Wordsworth Communication Limited 077 3918 5050
Relations
The Cancellation
Reasons for the Cancellation
The principal reason for the admission of the Shares to trading on AIM was to
provide the Company with the ability to access capital in order to fund its
strategy for growth and to use its Shares as consideration for acquisitions.
Having kept the matter under review over the last 12 months, the Directors
believe that the Cancellation is in the best interests of the Company and
Shareholders. In reaching this conclusion, the Directors have taken the
following factors into account:
* The Board believes that the costs associated with maintaining the AIM
listing can be better deployed as additional working capital in the
business. The Directors estimate that, in the year ended 30 September 2010,
the direct and indirect costs of the Company's AIM listing amounted to at
least GBP100,000. This estimate includes listing expenses and advisory, legal
and audit fees but excludes the considerable amount of senior executive
time which is also spent dealing with the issues related to the AIM
listing. This compares with the audited consolidated profit before tax of
the Company for the same period of some GBP583,000;
* the AIM listing of the Shares does not, in itself, currently offer
investors increased liquidity or marketability and there is no opportunity
to trade in meaningful volumes or with frequency. With little trading
volume, the share price can move up or down significantly following trades
of small numbers of Shares. The Directors do not consider that the
liquidity situation would be materially affected by the Cancellation; and
* the relative lack of liquidity in the Shares means that opportunities for
the Company to issue Shares as consideration for acquisitions are very
limited. Since its admission to AIM in 2001, the Company has issued some
35,897,740 Shares as consideration for acquisitions. The last time the
Company used its Shares as consideration for an acquisition, however, was
in 2009. Subsequent acquisitions which have been made have all been for
cash, funded out of the Company's internal resources, as the Directors
considered debt finance was more in the Company's interests than equity
finance.
Despite the solid first half trading performance of the Company's business as
set out in the Interim Results, the Directors do not anticipate an improvement
in stockmarket conditions in the short to medium term sufficient for the
benefits of the AIM listing to outweigh the associated costs.
For these reasons, the Directors propose that Innovise remains a public company
at this time but cancels its AIM admission.
Principal effects of the Cancellation
The principal effects of the Cancellation include the following:-
a. there will be no public stock market on which Shareholders can trade their
Shares;
b. Shareholders will lose certain protections and rights afforded to them by
the AIM Rules including, inter alia, the disclosure of information relating
to material developments in the Group's business and the publication of
interim reports; and
c. the Company will no longer be required to comply with the specific
corporate governance requirements for companies admitted to trading on AIM.
Even if the Cancellation becomes effective, the Company will remain subject to
the City Code. Accordingly, Shareholders will continue to be entitled to the
minority and other protections afforded by the City Code, for example in the
event that an offer is made to Shareholders to acquire their Shares.
As the Shares are currently admitted to trading on AIM, the Company is not
required to comply with the provisions of the UK Corporate Governance Code.
Nevertheless, the Directors are committed to proper standards of corporate
governance and will continue to keep procedures under review. If the
Cancellation becomes effective, this will not affect the Company's position as
a public company for the purposes of the Companies Act 2006.
The Board intends to continue to provide an investor relations website and to
post information in relation to the Company on that website.
Upon the Cancellation becoming effective, Northland Capital Partners Limited
will cease to act as nominated adviser and broker to the Company.
Shareholders who are in any doubt about their tax position should consult their
own professional independent adviser immediately.
If Shareholders wish to buy or sell Shares on AIM, they must do so prior to the
Cancellation becoming effective. As noted above, in the event that the
Cancellation Resolution is passed, it is anticipated that the final day of
dealings in the Shares on AIM will be Wednesday 6 July 2011 and that the
Cancellation will be effective from 7.00 am on Thursday 7 July 2011.
Share dealing following the Cancellation
Whilst the Board believes that the Cancellation is in the best interests of
Shareholders and the Company, it recognises that the Cancellation will make it
more difficult for Shareholders to buy and sell Shares should they wish to do
so. The Company therefore intends to put in place a matched share trading
service to assist shareholders to trade in the Company's shares. Full details
of this process will be made available to Shareholders on the Company's website
at www.innovise.com
CREST
The Shares will remain eligible for settlement in CREST. Accordingly,
Shareholders will continue to be able to hold their Shares in CREST after the
Cancellation.
Current trading
The Company`s Interim Results were announced today and can be found on the
Company's website, www.innovise.com
General Meeting
Set out at the end of the circular is a Notice convening a General Meeting of
the Company to be held at 2.30pm on Wednesday 29 June 2011 for the purpose of
considering, and if thought fit, passing the Cancellation Resolution.
The Cancellation Resolution requires the approval of not less than 75 per cent.
of the votes cast by Shareholders at the General Meeting.
If the Cancellation Resolution is passed, the Cancellation would take place
with effect from 7.00 am on Thursday 7 July 2011.
Recommendation
The Directors believe that the Cancellation is in the best interests of the
Company and Shareholders. Accordingly, they unanimously recommend that
Shareholders vote in favour of the Cancellation as they have undertaken so to
do in respect of their own current beneficial holdings of, in aggregate,
31,819,601 Shares, representing 79.64 cent. of the current issued ordinary
share capital of the Company with voting rights.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Latest time and date for receipt of Forms of 2.30 pm on Monday 27 June 2011
Proxy
General Meeting of the Company 2.30 pm on Wednesday 29 June
2011
Final day of dealing in Shares on AIM Wednesday 6 July 2011
Cancellation of admission of Shares to trading 7.00 am on Thursday 7 July 2011
on AIM*
All of the times and dates are subject to change at the Company's discretion.
In the event of any change, the revised times and dates will be notified to
Shareholders through a Regulatory Information Service.
*the Cancellation requires the approval of not less than 75 per cent. of the
votes cast by Shareholders at the General Meeting.
DEFINITIONS
"AIM" the market of that name operated by London
Stock Exchange plc
"AIM Rules" the AIM Rules for Companies
"Cancellation" the cancellation of the admission to trading
on AIM of the Shares
"Cancellation Resolution" the resolution set out in the Notice relating
to the Cancellation
"City Code" the City Code on Takeovers and Mergers
"Company" Innovise plc
"Directors" or the "Board" the directors of the Company whose names
appear on page 4 of the circular
"General Meeting" the General Meeting of the Company, convened
for 2.30 pm on Wednesday 29 June 2011, and any
adjournment thereof, notice of which is set
out at the end of the circular
"Form of Proxy" the form of proxy enclosed with the circular
for use by holders of Shares in connection
with the General Meeting (or any adjournment
thereof)
"Group" the Company and its subsidiaries
"London Stock Exchange" London Stock Exchange plc
"Notice" the notice of General Meeting set out at the
end of the circular
"Registrars" Share Registrars Limited, Suite E, First
Floor, 9 Lion and Lamb Yard, Farnham, Surrey
GU9 7LL
"Shareholder(s)" holder(s) of Shares
"Shares" the ordinary shares of 1p each in the capital
of the Company
Note to editors:
Innovise plc is a fast growing IT solutions company with two divisions, each of
which has its own management team and focused growth strategy.
Innovise ESM enables major organisations to transform complex IT environments,
resulting in improved performance and service. The division partners with the
leading global vendors to deliver best-in-class solutions to Fortune 500
businesses across a range of industries.
The Innovise Software & Solutions division consists of two complementary units:
Innovise Software's products are extensively used to improve efficiency within
the facilities management, support services and public sectors, while Innovise
Solutions provides customised and highly cost-effective managed services
including remote database administration, infrastructure management and
Microsoft solutions.
Innovise has offices in Brierley Hill, Slough, Southampton, London and Mumbai.
For more information, please visit www.innovise.com
END
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