TIDMRES
RNS Number : 5233D
Rugby Estates PLC
17 May 2012
17 May 2012
Rugby Estates plc ("Rugby Estates" or the "Company")
Proposed Return of Cash to Shareholders
1. Introduction
During the three financial years ended 31 January 2012 and
following a strategic review of its business, the Company returned
a total of approximately GBP45.4 million to Shareholders by way of
B and C share schemes. As announced on 17 May 2012, as a result of
GBP4.7 million of property disposals since 31 January 2012, the
Group held free cash balances of GBP7.7 million as at 16 May 2012.
Accordingly, the Circular sets out the Company's intention to make
a further return of cash of 250 pence per share to Shareholders
pursuant to the Proposals. The Directors continue to focus on
realising the remaining properties by the end of 2012. In order to
optimise shareholder value the Board is looking at various
restructuring options and in the absence of a preferable
alternative arising within the next few months, the Directors
consider it likely that they will seek shareholders' consent to put
the Company into solvent liquidation within the next 12 months.
Full details of the Proposals are set out in a Circular which is
being posted to Shareholders today and are summarised below. Terms
used in this announcement have the meaning set out in Appendix 1
below.
The Proposals involve the issue to Shareholders of B Shares
and/or C Shares which is intended to give Shareholders, where
eligible under their prevailing tax regime (such as in the UK), the
flexibility to receive a return of cash from the Company as capital
or income for tax purposes, or a combination of the two. The
Directors believe the Proposals represent the most efficient and
effective way to return cash to Shareholders.
The Proposals require the approval of Shareholders, which will
be sought at a General Meeting to be held at The Lansdowne Club, 9
Fitzmaurice Place, Mayfair, London W1J 5JD at 10.00 a.m. on 6 June
2012. The Reduction of Capital included in the Proposals is also
subject to the confirmation of the Court.
It is intended that the market price of the Company's ordinary
shares should remain approximately similar before and after the
return of cash, subject to market movements, and consequently the
Proposals (through the Share Capital Consolidation) will reduce the
number of such ordinary shares in issue to reflect the return of
cash to Shareholders. For every 7 Existing Ordinary Share held at
the Record Time, Shareholders will receive 3 New Ordinary Shares.
The New Ordinary Shares will be traded on AIM in the same way as
Existing Ordinary Shares and will be equivalent in all material
respects to the Existing Ordinary Shares, including as to their
dividend and voting rights.
2. Summary of the Proposals
The implementation of the Proposals involves a number of steps,
which are all subject to approval of Shareholders at the General
Meeting.
-- Each Existing Ordinary Share in issue on the Share Split
Record Date will be sub-divided into one ordinary share of 6 pence
together with either (at the election of Shareholders) one B Share
or one C Share. The B Shares will entitle their holders to receive
the Capital Repayment of 250 pence per B Share and the C Shares
will entitle their holders to receive the Special Dividend of 250
pence per C Share.
-- Shareholders will receive C Shares unless they elect for B Shares.
-- Following the Share Split, and subject to the confirmation of
the Court, the Company will seek to reduce its share capital and
share premium so as to return 250 pence per B Share to the holders
of such shares. The reduction of capital will involve the
cancellation of the B Shares.
-- The Company will then cancel the C Shares and (to the extent
required) reduce its capital redemption reserve to create the
additional distributable reserves (if any) required to fund the
Special Dividend. In addition, depending on the amount of
distributable reserves required to pay the Special Dividend to
Shareholders who elect (or are deemed to have elected) for the
Dividend Alternative, a further reduction of the Company's capital
redemption reserve is being proposed to create additional
distributable reserves such that after completion of the Proposals,
the Company will have distributable reserves of not less than GBP1
million. This further reduction of capital (if required) will
reduce the probability of the Company showing a retained loss at
the end of the current financial year.
-- The Court will require to be satisfied that the interests of
the Company's creditors will not be prejudiced as a result of the
Reduction of Capital. The Company will put into place such form of
creditor protection (if any) as the Court may require.
-- Following the Reduction of Capital becoming effective, the
ordinary share capital will be subdivided and consolidated on the
basis of 3 New Ordinary Shares for every 7 Existing Ordinary Shares
held at the Record Time. The Share Capital Consolidation is
intended to maintain comparability of the Company's future and
historic share price.
-- New Ordinary Shares will be traded on AIM in the same way as
Existing Ordinary Shares and will be equivalent in all other
respects to the Existing Ordinary Shares, with the exception of the
difference in nominal value and subject to the rights of the B
Shares and the C Shares.
-- In the event that the Court does not confirm the Reduction of
Capital, or the Reduction of Capital is otherwise not implemented
by the Long-Stop Date, the share capital of the Company will be
reorganised so as to leave the Company's share capital in its
current position and Shareholders holding their current numbers of
existing ordinary shares of 13 pence each.
Further details of the steps required to implement the Proposals
are set out in the Circular to Shareholders.
3. The Return of Cash
The Proposals will return 250 pence per Existing Ordinary Share
to Shareholders. Under the Proposals, Shareholders will receive, in
respect of their holding of Existing Ordinary Shares at the Record
Time:
-- 1 B Share or 1 C Share (as they may elect) for every 1 Existing Ordinary Share; and
-- 3 New Ordinary Shares for every 7 Existing Ordinary Shares.
Shareholders will be able to elect between the following
Alternatives as to how they receive their cash:
-- the Capital Alternative in respect of the B Shares (cash
expected to be sent by 11 July 2012); and/or
-- the Dividend Alternative in respect of the C Shares (cash
expected to be sent by 11 July 2012).
Shareholders may split the aggregate amount to be returned to
them between the Alternatives. The Alternatives and the Share
Capital Consolidation are described more fully below.
4. The Alternatives
The Alternatives available to Shareholders are summarised below
and explained in further detail in Part 5 of the Circular.
Shareholders may split the aggregate amount to be returned to them
between the Alternatives.
Shareholders who do not make a valid election will be deemed to
have elected for the Dividend Alternative in respect of ALL of
their Share Entitlement.
The general guidance on the UK tax treatment included below is
only a summary, is based on current UK law and practice as at the
date of the Circular and applies only to Shareholders who are
resident and, if they are individuals, ordinarily resident in the
UK for tax purposes and who hold their Existing Ordinary Shares, B
Shares and/or C Shares beneficially as investments and not on
trading account. UK tax resident Shareholders should read Part 7 of
the Circular as the Alternatives will have different UK tax
consequences.
Shareholders who require further information or who are in any
doubt as to their tax position, or are subject to tax in a
jurisdiction other than the United Kingdom, should consult an
appropriate professional adviser without delay.
-- Alternative 1 - Capital Alternative (B Shares)
Shareholders who elect for the Capital Alternative in respect of
some or all of their Share Entitlement will receive one B Share for
each corresponding Existing Ordinary Share they hold at the Record
Time.
It is expected that the B Shares will be cancelled pursuant to
the Reduction of Capital by 28 June 2012 and that the Capital
Repayment will be made in respect of each cancelled B Share.
Proceeds are expected to be sent to Shareholders by 11 July
2012.
The amounts received under the Capital Alternative should
generally be taxed as capital for UK tax purposes. UK tax resident
Shareholders should read Part 7 of the Circular for further
information.
The attention of Non-United Kingdom Shareholders is drawn to
paragraph 6 of Part 5 of the Circular.
-- Alternative 2 - Dividend Alternative (C Shares)
Shareholders who elect or are deemed to have elected for the
Dividend Alternative in respect of some or all of their Share
Entitlement will receive one C Share for each corresponding
Existing Ordinary Share they hold at the Record Time. The Special
Dividend will become payable on each C Share by 28 June 2012 and we
expect to send the Special Dividend to such Shareholders by 11 July
2012. C Shares will be cancelled following declaration of the
Special Dividend pursuant to the Reduction of Capital.
The amounts received under the Dividend Alternative should
generally be taxed as income for UK tax purposes. UK tax resident
Shareholders should read Part 7 of the Circular for further
information.
The attention of Non-United Kingdom Shareholders is drawn to
paragraph 6 of Part 5 of the Circular.
Details of how to complete and return an Election Form are set
out in Part 4 of the Circular. Shareholders electing through CREST
should refer to paragraph 2 of Part 4 of the Circular for further
information.
Shareholders wishing to receive the Special Dividend in respect
of all of their Share Entitlement need NOT complete or return the
Election Form or make an election through CREST as C Shares will be
issued and the Special Dividend paid automatically in respect of
all of the Share Entitlement in relation to which a Shareholder has
not elected for either of the Alternatives.
5. The Share Capital Consolidation
The return of cash proposed to be made pursuant to the Proposals
represents approximately 57.47 per cent of the Company's market
capitalisation as at 16 May 2012, based on the Closing Price of 435
pence per Existing Ordinary Share on that date. The Share Capital
Consolidation will reduce the number of the Company's ordinary
shares in issue by approximately the same percentage as the return
of cash bears to the market capitalisation of the Company.
For every 7 Existing Ordinary Shares held at the Record Time,
Shareholders will receive 3 New Ordinary Shares. The intention is
that, subject to market movements, the market price per New
Ordinary Share immediately after Admission should be approximately
similar to the market price per Existing Ordinary Share immediately
prior to the Proposals whilst the market capitalisation will
reflect the return of cash pursuant to the Proposals.
The New Ordinary Shares will be traded on the London Stock
Exchange in the same way as the Existing Ordinary Shares and will
be equivalent in all material respects to the Existing Ordinary
Shares, including as to their dividend rights. Application will be
made for the New Ordinary Shares to be admitted to trading on AIM
and Admission is expected to take effect at 8.00 a.m. on 28 June
2012. It is expected that share certificates representing the New
Ordinary Shares will be sent to Shareholders who hold their
Existing Ordinary Shares in certificated form by 11 July 2012. The
CREST accounts of Shareholders who hold their Existing Ordinary
Shares in CREST are expected to be credited with New Ordinary
Shares at approximately 8.00 a.m. on 28 June 2012.
Further information on the Share Capital Consolidation, and any
fractional entitlements to New Ordinary Shares that may result, is
set out in paragraph 3 of Part 5 of the Circular.
6. All Employee Share Ownership Plan
The trustees of the All Employee Share Ownership Plan will send
letters to participants in that plan asking them how they wish the
trustees to act in relation to Existing Ordinary Shares held on
their behalf under the plan in respect of the Proposals.
7. Proposed amendments to the Articles of Association
A number of amendments to the Articles of Association are
required to implement the Proposals and require approval at the
General Meeting. The proposed amendments relate to the rights and
restrictions attaching to the B Shares and C Shares and certain
consequential amendments to the Articles of Association. The
changes are summarised in paragraph 8 of Part 5 and Part 6 of the
Circular.
8. Action to be taken
A Form of Proxy for use in connection with the General Meeting
is enclosed with the Circular. Whether or not Shareholders intend
to be present at the General Meeting, they are requested to
complete and sign the accompanying Form of Proxy and return it, in
accordance with the instructions printed on it, by post or (during
normal business hours) by hand to Equiniti, Aspect House, Spencer
Road, Lancing, West Sussex BN99 6DA to arrive as soon as possible
and, in any event, by no later than 10.00 a.m. on 4 June 2012.
Shareholders who hold their Existing Ordinary Shares in CREST may
appoint a proxy by completing and transmitting a CREST Proxy
Instruction to Equiniti so that it is received by no later than
10.00 a.m. on 4 June 2012.
The return of a completed Form of Proxy or CREST Proxy
Instruction will not prevent a Shareholder from attending the
General Meeting and voting in person (in substitution for their
proxy vote) should they wish to do so and are so entitled.
An Election Form for use by Shareholders (with the exception of
Shareholders who hold their Existing Ordinary Shares in CREST) in
connection with the Alternatives is enclosed with the Circular. To
be valid, Election Forms must be validly completed and returned in
the prepaid envelope provided so as to be received by Equiniti by
no later than 11.00 a.m. on 26 June 2012. If Shareholders do not
use the envelope provided, the Election Form should either be sent
by post or by hand (during normal business hours) to Equiniti,
Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA and
postage will (where applicable) be payable.
Full details on how to complete and return the Election Form are
set out in Part 4 of the Circular.
Shareholders who hold their Existing Ordinary Shares in CREST
will not be sent the Election Form and may only elect in respect of
the Alternatives through CREST. Please see paragraph 2 of Part 4 of
the Circular for further information.
9. Recommendation
The Board believes the Proposals to be in the best interests of
Shareholders as a whole. Accordingly, the Board unanimously
recommends that Shareholders vote in favour of the Resolution, as
the Directors intend to do in respect of their own beneficial
holdings, amounting in aggregate to 343,488 Existing Ordinary
Shares representing approximately 13.48 per cent of the current
issued share capital of Rugby Estates Plc. In addition, the
executive Directors have been advised that Rugby Estates Plc
Retirement Benefits Scheme will vote a minimum of 79,466 Existing
Ordinary Shares, representing approximately 3.12 per cent of the
current issued share capital of Rugby Estates Plc, in favour of the
Resolution.
A summary explanation of the Resolution relating to the
Proposals is set out in paragraph 10 of Part 5 of the Circular.
10. Expected timetable of key events
Latest time and date for receipt of 10.00 a.m. on 4 June
the Form of Proxy or CREST Proxy Instruction 2012
for the General Meeting
General Meeting 10.00 a.m. on 6 June
2012
Latest time and date for receipt of 11.00 a.m. on 26 June
Election Forms or TTE Instructions 2012
from CREST holders in relation to
the Alternatives
Latest time and date for dealings 4.30 p.m. on 26 June
in Existing Ordinary Shares 2012
Existing Ordinary Shares disabled 5.00 p.m. on 26 June
in CREST and Existing Ordinary Share 2012
register closed
Share Split Record Date 5.00 p.m. on 26 June
2012
Record Time (for determining entitlement 5.00 p.m. on 26 June
to the Capital Repayment on the B 2012
Shares and the Special Dividend on
the C Shares)
Court hearing to confirm the Reduction 27 June 2012
of Capital
Effective date for Reduction of Capital 27 June 2012
Cancellation of trading of Existing 8.00 a.m. on 28 June
Ordinary Shares 2012
New Ordinary Shares admitted to trading 8.00 a.m. on 28 June
on AIM and dealings in the New Ordinary 2012
Shares commence
CREST accounts credited with New Ordinary 28 June 2012
Shares
Credit CREST accounts with, make BACS On or before 11 July
payments to mandated accounts in respect 2012
of or despatch cheques in respect
of the Capital Repayment on the B
Shares and the Special Dividend on
the C Shares
Despatch of share certificates in On or before 11 July
respect of New Ordinary Shares 2012
Notes:
1. References to times in the Circular are to London times. If
any of the above times or dates should change, the revised times
and/or dates will be notified to Shareholders by an announcement on
a Regulatory Information Service.
2. All events in the above timetable following the holding of
the General Meeting are conditional on (i) the passing of the
Resolution and (ii) Admission.
11. Circular to Shareholders
The Circular is being posted to Shareholders today and will be
available later today on the Company's website,
www.rugbyestates.plc.uk.
Enquiries:
David Tye, Chairman Rugby Estates Plc
Andrew Wilson, Chief Executive www.rugbyestates.plc.uk 020 7016 0050
Katy Birkin/Laura Littley Fairfax I.S. PLC 020 7598 5368
Stephanie Highett / Dido
Laurimore / Will Henderson FTI Consulting 020 7831 3113
Appendix 1
Definitions
"Act" the Companies Act 2006, as amended
"Admission" admission of the New Ordinary Shares
to trading on AIM becoming effective
in accordance with the AIM Rules
"Admission Date" 28 June 2012 (or such later date
as the Directors may determine)
"AIM" a market operated by the London Stock
Exchange
"AIM Rules" the AIM rules for companies issued
by the London Stock Exchange, as
amended from time to time
"Alternatives" the Dividend Alternative and the
Capital Alternative, or either of
them as the context may require
"Articles" or "Articles the articles of association of the
of Association" Company from time to time
"B Shares" the preference shares of 7 pence
each in the capital of the Company
carrying the rights and restrictions
summarised in Part 6 of the Circular
"BACS" the Bankers Automated Clearing System
"Board" or "Directors" the board of directors of the Company
or a duly appointed committee of
the board
"Business Day" a day (other than a Saturday, Sunday
or public holiday) on which sterling
deposits may be dealt in on the London
inter-bank market and commercial
banks are open for general business
in London
"C Shares" the non-cumulative preference shares
of 7 pence each in the capital of
the Company carrying the rights and
restrictions summarised in Part 6
of the Circular
"Capital Alternative" the election for B Shares to be cancelled
pursuant to the Reduction of Capital
and conferring a right to the Capital
Repayment as more fully described
in Parts 1 and 5 of the Circular
"Capital Reorganisation" the reorganisation of the Company's
share capital comprising the Share
Split and the Share Capital Consolidation
"Capital Repayment" the proposed repayment of 250 pence
per B Share
"Circular" the circular sent to Shareholders
on 17 May 2012
"Closing Price" the closing middle market quotations
as derived from the AIM Appendix
of the Daily Official List on a particular
day
"Company" or "Rugby Estates Rugby Estates Plc, incorporated in
Plc" England and Wales with company number
2548935
"Court" the High Court of Justice in England
and Wales
"Court Order" the order of the Court confirming
the Reduction of Capital
"CREST" the relevant system (as defined in
the Uncertificated Securities Regulations
2001) in respect of which Euroclear
is the Operator (as defined in such
regulations)
"CREST Proxy Instruction" a properly authenticated CREST message
appointing and instructing a proxy
to attend and vote in place of a
Shareholder at the General Meeting
and containing the information required
to be contained in the manual published
by Euroclear
"CTA 2009" the Corporation Tax Act 2009
"Daily Official List" the daily record setting out the
prices of all trades in shares and
other securities conducted on the
London Stock Exchange
"Directors" the directors of the Company from
time to time
"Dividend Alternative" the election (or deemed election)
for C Shares to be cancelled pursuant
to the Reduction of Capital and conferring
a right to the Special Dividend as
more fully described in Parts 1 and
5 of the Circular
"Election Deadline" 11.00 a.m. on 26 June 2012 (or such
later time and/or date as the Directors
in their absolute discretion may
determine)
"Election Form" the election form enclosed with the
Circular, where the Circular is sent
to Shareholders who hold their Existing
Ordinary Shares in certificated form
"Election Period" the period from the date of the Circular
until the Election Deadline during
which time Shareholders may make
elections for one or more of the
Alternatives
"Equiniti" the Company's registrars, Equiniti
Financial Services Limited and Equiniti
Limited (together or separately "Equiniti")
of Aspect House, Spencer Road, Lancing,
West Sussex BN99 6DA
"ESA Message" a message through CREST to Equiniti
in its capacity as escrow agent requesting
a withdrawal of Existing Ordinary
Shares from the escrow balance
"Euroclear" Euroclear UK & Ireland Limited, the
operator of CREST (formerly known
as CRESTCo Limited)
"Existing Ordinary Shares" the existing ordinary shares of 13
pence each in the capital of the
Company or, as the case may be, issued
ordinary shares of 6 pence each resulting
from the Share Split
"Form of Proxy" the form of proxy enclosed with the
Circular for use by Shareholders
in connection with the General Meeting
"FSA" Financial Services Authority
"FSMA" Financial Services and Markets Act
2000, as amended
"General Meeting" the General Meeting of the Company
(or any adjournment thereof) to be
held at The Lansdowne Club, 9 Fitzmaurice
Place, Mayfair, London W1J 5JD at
10.00 a.m. on 6 June 2012
"Group" the Company and its subsidiaries
from time to time
"HM Revenue & Customs" Her Majesty's Revenue & Customs
"ITA 2007" the Income Tax Act 2007
"London Stock Exchange" London Stock Exchange plc
"Long-Stop Date" the close of business on 28 June
2012, or such later time and/or date
as the Directors in their absolute
discretion may determine
"New Ordinary Shares" following the Capital Reorganisation,
the new ordinary shares of 14 pence
each in the capital of the Company
"Non-United Kingdom Shareholder" a Shareholder who is not resident
in the United Kingdom or who is a
citizen, resident or national of
a country other than the United Kingdom.
For the avoidance of doubt, a Shareholder
who is not resident in the United
Kingdom includes a Shareholder who
is resident in the Channel Islands
or the Isle of Man
"Proposals" the Share Split, the Reduction of
Capital, the Capital Repayment, the
Special Dividend and the Share Capital
Consolidation
"Record Time" 5.00 p.m. on 26 June 2012 (or such
later time and/or date as the Directors
in their absolute discretion may
determine)
"Reduction of Capital" the proposed cancellation of the
B Shares and reduction of the share
premium account of the Company and
the proposed cancellation of the
C Shares and (to the extent required)
reduction of the capital redemption
reserve, as described in the Circular
"Regulatory Information a Regulatory Information Service
Service" on the list of Regulatory
Information Services maintained by
the FSA
"Resolution" the resolution set out in the notice
of the General Meeting contained
in Part 9 of the Circular to implement
the Proposals
"Share Capital Consolidation" the consolidation and division of
the Existing Ordinary Shares in the
manner set out in the Resolution
"Share Entitlement" the entitlement of each Shareholder
to be allotted one B Share or one
C Share for each Existing Ordinary
Share held at the Record Time
"Shareholders" holders of Existing Ordinary Shares,
New Ordinary Shares, B Shares or
C Shares, as the context may require
"Share Split" the proposed sub-division and redesignation
of each Existing Ordinary Share in
issue at the Share Split Record Date
into one ordinary share of 6 pence
and either (at the discretion of
Shareholders) one B Share or one
C Share
"Share Split Record Date" 5.00 p.m. on 26 June 2012 (or such
other time and/or date as the Directors
in their absolute discretion may
determine)
"Special Dividend" a special dividend of 250 pence per
C Share to be declared and paid in
accordance with the Dividend Alternative
"TTE Instruction" transfer to escrow instruction
"United Kingdom" or "UK" the United Kingdom of Great Britain
and Northern Ireland
"United States" or "US" the United States of America, its
territories, possessions, any State
of the United States of America and
the District of Columbia
"US Securities Act" the United States Securities Act
of 1933 (as amended) and the rules
and regulations promulgated thereunder
This information is provided by RNS
The company news service from the London Stock Exchange
END
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