Tender Offer and Delisting
April 22 2009 - 2:00AM
UK Regulatory
TIDMACMH
RNS Number : 9460Q
ACMH Limited
22 April 2009
ACMH Limited ("ACMH" or the "Company")
Cancellation of admission of Ordinary Shares to trading on AIM
Tender offer to
purchase Ordinary Shares
Notice of Extraordinary General Meeting
1. Introduction
Following the events of September 2007 which detrimentally affected the
Company's business and the unprecedented market conditions in our industry in
2008 and 2009, the Board has concluded that there is no longer any advantage to
the Company in maintaining a quotation on AIM. Accordingly, the Board is
proposing to convene an Extraordinary General Meeting on 21 May 2009 to put to
Shareholders a special resolution to cancel admission of the Company's Ordinary
Shares to trading on AIM. In addition to AIM, the Company's Ordinary Shares are
traded on various other stock exchanges. Where necessary, the Company will apply
to such exchanges to cancel any such trading facilities in its Ordinary Shares.
It is expected that such cancellations will become effective by 1 June 2009.
In order that Shareholders who are unable or unwilling to hold shares in an
unquoted company have the opportunity to sell their shares while the Company's
shares remain quoted, it is proposed that the Company will make a tender offer
to buy its shares at a price of 2.5 pence per Ordinary Share, being
approximately the average closing mid-market price of an Ordinary Share for the
30 previous trading days prior to 21 April 2009. The Tender Offer affords Tender
Offer Shareholders the opportunity to sell all of their Ordinary Shares should
they so wish. The Company has received irrevocable commitments from certain
Shareholders representing approximately 32.2 per cent. of the current issued
share capital not to participate in the Tender Offer.
In addition to the special resolution to cancel admission of the Ordinary Shares
to trading on AIM, the Board is proposing two further special resolutions for
consideration at the EGM. Special resolution No. 2 is to amend the Company's
Articles of Association to authorise the Company to make payment in respect of a
redemption or purchase of its own shares otherwise than out of the profits of
the Company or the proceeds of a fresh issue of shares, and special resolution
No. 3 is to authorise the Company's repurchase of shares under the Tender Offer.
The Company has received irrevocable commitments from Shareholders representing
approximately 32.2 per cent. of the issued share capital to vote in favour of
the three resolutions to be proposed at the EGM. Assuming that Shareholders pass
the resolution to cancel the admission of the Ordinary Shares to trading on AIM,
it is proposed that the Delisting would take place on 1 June 2009.
2. Background and current trading and strategy
The Company's business was adversely affected by the sudden resignation of its
former Chief Investment Officer Florian Homm, in September 2007, and the
subsequent discovery that several of the Absolute Funds had a level of illiquid
assets which could not be sold for their carrying values against a background of
a high level of redemption requests. In response, the Company proposed a
restructuring of four of the Absolute Funds to implement side pocket provisions
and a one year lock-in. The restructuring proposals were approved at
extraordinary general meetings of shareholders of the relevant Absolute Funds on
27 October 2007.
In January 2008 the Company closed the Absolute India Fund Limited, which,
despite excellent performance, suffered from high levels of redemptions
following the events of September 2007 and became too small to be viable.
The lock-in on four of the Absolute Funds' A class (liquid) portfolios expired
on 3 November 2008. Redemption levels on the Absolute Funds at the expiry of the
lock-up period ranged from 65 per cent. on the Absolute Return Europe Fund to 85
per cent. on the Absolute East West Fund. As a result, the Company took the
decision to close the A class (non-side pocket) portfolios of the Absolute
Octane Fund, the Absolute East West Fund and the Absolute Activist Value Fund,
effective 3 November 2008. The aggregate assets under management of the Absolute
Large Cap Fund, Absolute Germany Fund, Absolute Return Europe (A class) and
Absolute European Catalyst Fund (A class) was EUR58.8 million at 31 December 2008.
On 3 February 2009, the Company announced the completion of a reorganisation of
its continuing funds and a rebranding of its asset management business by
combining the Absolute Large Cap Fund with the remaining A class assets of the
Absolute European Catalyst Fund and the Absolute Return Europe Fund. The new
combined fund began trading on that date under the name Xanthus European Fund
("XEF") with opening AUM of EUR42.9 million. The reorganisation also entailed the
transfer of the Absolute Germany Fund's portfolio assets to the Xanthus Germany
Fund ("XGF"), a newly formed fund to take over the Absolute Germany Fund's
investment mandate. Both the XEF and the XGF are managed by a newly formed
subsidiary of the Company, Xanthus Asset Management Limited, incorporated in the
Cayman Islands. On a combined basis, the Xanthus Funds had EUR55.9 million in AUM
as at 1 January 2009.
Despite their predecessor funds having generated commendable performance in 2008
(the Absolute Germany Fund returned 21 .35 per cent., and the Absolute Large Cap
Fund 8.61 per cent.), the Xanthus Funds continue to receive significant
redemption requests. The Xanthus Funds' AUM declined to EUR45.7 million as at 31
March 2009. Management fee revenue has declined with the decrease in AUM. At
1/12th of 2 per cent. of AUM, the Company will earn monthly fee revenue of
approximately EUR77,000 based on the Xanthus Funds' AUM as at 31 March 2009. The
Company's monthly payroll and general overheads total approximately EUR225,000,
leaving a projected monthly loss from operations of approximately EUR150,000. With
the Xanthus Funds below their high watermarks, the Company does not expect to
earn performance fee income in the immediate future. Asset raising has proven
extremely challenging since September 2007, with minimal new subscriptions
having been received by the predecessor Absolute Funds or the new Xanthus Funds
since that date. The Company believes that the near term prospects of raising
new assets for the Xanthus Funds are poor, due in large part to poor and
deteriorating global economic conditions and in particular the deleveraging
affecting the hedge fund industry as a whole.
As at 1 May 2009, the aggregate AUM of the Xanthus Funds will decline to EUR38.2
million due to pending redemption requests, plus or minus the funds' performance
for the month of April 2009.
As at 31 December 2008, the Company had an unaudited net cash balance of
approximately EUR4.9 million, having taken into account receivables and payables.
Since that date the Company has made material unaudited losses of around
EUR650,000 and expects to incur additional non-recurring expenditure following the
events of September 2007.
The Company's strategy for the immediate future is to seek to dispose of the
Xanthus business, as the Xanthus Funds are now too small to generate sufficient
fee revenue to cover the business's overheads and infrastructure. The Company is
currently in discussions with several parties regarding a sale of the Xanthus
business, and expects that should such discussions result in a successful
disposal, the Company will realise no more than EUR1 million in proceeds. Through
its subsidiary ACM Equity Limited, the Company will continue to manage the
Absolute Funds with a view to completing the orderly winding down of their B
class (side pocket) portfolios by midyear.
In this regard, Glenn Kennedy has informed the Company of his intention to
resign as Chief Executive Officer. Mr. Kennedy's resignation will take effect by
the end of June 2009. Thereafter, Mr. Kennedy has agreed to remain available to
the Company as a legal advisor to manage and oversee the Company's pending
litigation, the completion of the winding down of the Absolute Funds' portfolios
and to pursue value recovery strategies concerning the Absolute Funds.
3. Delisting
Reasons for the Delisting
The Board feels that, with the Company's much reduced size and revenues, the
ongoing costs and regulatory requirements of a quotation on AIM can no longer be
justified, and that greater shareholder value will ultimately be derived by
operating the Company's business without these burdens. Additionally it is
unlikely that the Company could raise money through a new share issue, removing
one of the key attractions of maintaining a quotation on AIM. The Board has
accordingly concluded that it is in the best interests of Shareholders as a
whole that the Delisting be approved.
Under the AIM Rules for Companies, the Delisting can only be effected by the
Company after securing 75 per cent. of votes cast by its shareholders given in
general meeting, and the expiration of a period of twenty business days from the
date on which notice of the Delisting is given. In addition, a period of at
least five business days following Shareholder approval of the Delisting is
required before the Delisting may be effective.
Effect of Delisting
The principal effect of the Delisting is that Shareholders will no longer be
able to buy and sell shares in the Company through a public stock market; that
is liquidity in the Company's shares will be very limited. Following the
Delisting, the Board will consider setting up and maintaining a matched bargain
settlement facility. More details concerning such a facility may be given if
appropriate.
The Company intends to continue to keep Shareholders informed of all
material developments through its website and will continue to produce annual
accounts.
Extraordinary General Meeting
Shareholders holding 24,809,734 Ordinary Shares, representing approximately 32.2
per cent. of the current issued share capital of the Company have irrevocably
undertaken to vote in favour of the Delisting and the other Resolutions.
Assuming that Shareholders approve the resolution in respect of the Delisting,
it is proposed that the Delisting would take place on 1 June 2009. Shareholders
should note that neither Resolution 1 (relating to the Delisting) nor Resolution
2 (amendment of Articles to make payment in respect of a redemption or purchase
of its own shares otherwise than out of the profits of the Company or the
proceeds of a fresh issue of share) is conditional upon Shareholder approval of
Resolution 3. Resolution 3 (relating to the Tender Offer) is conditional upon
Shareholder approval of Resolutions 1 and 2.
4. Tender Offer
The Board recognises that not all Shareholders will be able or willing to
continue to own shares in the Company following the Delisting. The Board is
therefore providing Tender Offer Shareholders with the opportunity to sell part
or their entire holding of Ordinary Shares held at the Record Date under the
Tender Offer. The terms of the Tender Offer are set out in Part 2 of the
circular posted to Shareholders today.
The number of Tender Offer Shares subject to the Tender Offer is the total
number of Ordinary Shares in issue as at the Record Date. There are currently
76,931,620 Ordinary Shares in issue. Tender Offer Shareholders will be able to
tender any number of Ordinary Shares, up to their entire holding. Subject to the
Tender Offer becoming unconditional, all valid tenders will be accepted.
Ordinary Shares purchased pursuant to the Tender Offer will be acquired with
full title guarantee, free of all liens, charges, restrictions, claims,
equitable interests and encumbrances and together with all rights attaching to
them.
The Company has received irrevocable undertakings from Shareholders holding
24,806,509 Ordinary Shares, representing approximately 32.2 per cent. of the
current issued ordinary share capital of the Company, that they will not accept
or procure the acceptance of the Tender Offer in respect of their holdings of
Ordinary Shares.
The price to be paid for each Ordinary Share subject to the Tender Offer shall
be 2.5 pence, being approximately the average closing mid-market price of an
Ordinary Share for the 30 previous trading days prior to 21 April 2009.
5. Directors' Shareholdings
The interests (all of which are beneficial) of the Directors and persons
connected with them in the issued share capital of the Company as at today's
date and immediately following the Tender Offer are as set out below:
+----------------------------+----------------+-----------+--------------+-----------------------------------------+
| | | | Shareholding | % |
| | | | | share |
| | | | | capital |
+----------------------------+----------------+-----------+--------------+-----------------------------------------+
| | Current | % current | following | following |
+----------------------------+----------------+-----------+--------------+-----------------------------------------+
| Name5 | Shareholding | share | Tender | Tender |
| | | capital | Offer1, 2 | Offer2 |
+----------------------------+----------------+-----------+--------------+-----------------------------------------+
| Jonathan Treacher | 3,225 | <0.1 | 0 | 0 |
+----------------------------+----------------+-----------+--------------+-----------------------------------------+
| Andreas Rialas | 470,833 | 0.6 | 470,833 | 1.9 |
+----------------------------+----------------+-----------+--------------+-----------------------------------------+
| Farkland Ventures | 15,567,313 | 20.2 | 15,567,313 | 62.8 |
| Inc.3 | | | | |
+----------------------------+----------------+-----------+--------------+-----------------------------------------+
| Wisynco | 8,768,363 | 11 .4 | 8,768,363 | 35.3 |
| Investments Inc.4 | | | | |
+----------------------------+----------------+-----------+--------------+-----------------------------------------+
Notes:
1. Each of Andreas Rialas, Farkland Ventures and Wisynco Investments have
irrevocably undertaken not to accept or procure the acceptance of the Tender
Offer in respect of their holdings of Ordinary Shares. Jonathan Treacher intends
to accept the Tender Offer in respect of his holding of Ordinary Shares.
2. Assuming maximum take-up of the Tender Offer by all other Shareholders.
3. Farkland Ventures Inc. is a company belonging to Rialco Trust, the beneficiaries
of which are Andreas Rialas and his family.
4. Wisynco Investments Inc. is a company, the shareholders of which comprise
Kyriakos Rialas and his family.
5. Michael Kloter and Glenn Kennedy are not Shareholders.
Recommendation
The Board expects that the Proposals will be approved by Shareholders, having
received the irrevocable support of Shareholders holding approximately 32.2 per
cent. of the issued Ordinary Shares.
The Board considers the passing of the Resolutions to be in the best interests
of the Company and its Shareholders. Accordingly, the Directors unanimously
recommend that Shareholders vote in favour of the Resolutions as they or their
connected parties have irrevocably undertaken to do (in respect of 24,809,734
Ordinary Shares, representing approximately 32.2 per cent. of ACMH's existing
issued share capital).
The Directors recommend that all Tender Offer Shareholders consult their duly
authorised independent advisers before they make a decision as to whether or not
to accept the Tender Offer, in order to obtain advice relevant to their
particular circumstances.
EXPECTED TIMETABLE
Tender Offer Opens
22 April 2009
Latest time for receipt of Forms of Instruction for the 2:00
p.m. (Cayman Islands time)3
Extraordinary General Meeting
on 18 May 2009
Latest time for receipt of Forms of Proxy for the
2:00 p.m. (Cayman Islands time)
Extraordinary General Meeting
on 19 May 2009
Final date for receipt of Tender Forms and share certificates 2:00 p.m.
(Cayman Islands time)
for Certificated Shares
on 19 May 2009
Transfer to escrow account of tendered
Depositary Interests settled
2:00 p.m.(BST) on 19 May 2009
Record Date for the Tender Offer
6:00 p.m. (Cayman Islands time)
on 19 May 2009
Announcement of take-up level under Tender Offer
20 May 2009
Extraordinary General Meeting 2:00 p.m. (Cayman Islands time)
on 21 May 2009
Announcement of results of EGM
22 May 2009
Purchase of Tender Offer Shares under the Tender Offer1
1 June 2009
CREST Account credited with Tender Offer proceeds1
1 June 2009
Dispatch of cheques for Tender Offer proceeds1
1 June 2009
Cancellation of admission of Ordinary Shares to trading on AIM2
1 June 2009
Notes:
1. Conditional on the approval of all resolutions at the Extraordinary General
Meeting and Delisting becoming effective.
2. Conditional on the approval of resolution 1 at the Extraordinary General
Meeting.
3. Unless otherwise stated, all times and dates referred to in the circular
posted today to Shareholders are references to the time in the Cayman Islands.
As at today, Cayman Islands time is 6 hours behind British Summer Time.
If any of the above times and/or dates change, the revised times and/or dates
will be notified to Shareholders by announcement through a Regulatory
Information Service.
Terms used in this announcement have the same meaning as those defined in the
circular being posted to Shareholders today.
+-----------------------------------+-----------------------------------+
| Enquiries: | |
| | |
+-----------------------------------+-----------------------------------+
| ACMH | Tel: +41 41 560 9660 |
+-----------------------------------+-----------------------------------+
| Glenn Kennedy | |
| Jonathan Treacher | |
+-----------------------------------+-----------------------------------+
| | |
+-----------------------------------+-----------------------------------+
| Panmure Gordon | Tel: +44 (0) 20 7459 3600 |
+-----------------------------------+-----------------------------------+
| Dominic Morley | |
+-----------------------------------+-----------------------------------+
| Giles Stewart | |
+-----------------------------------+-----------------------------------+
| Callum Stewart | |
+-----------------------------------+-----------------------------------+
| | |
+-----------------------------------+-----------------------------------+
| Cardew Group | Tel: +44 (0) 020 7930 0777 |
+-----------------------------------+-----------------------------------+
| Tim Robertson | |
+-----------------------------------+-----------------------------------+
| Shan Shan Willenbrock | |
+-----------------------------------+-----------------------------------+
| David Roach | |
+-----------------------------------+-----------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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