RNS Number : 0675H
Northern Recruitment Group PLC
30 October 2008
NOT FOR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR ANY OTHER JURISDICTION IF TO DO SO WOULD CONSTITUTE A VIOLATION OF THE LAWS OF SUCH JURISDICTION
NORTHERN RECRUITMENT GROUP PLC
(“NRG” or the “Company”)
Cancellation of admission of Ordinary Shares to the Official List and to trading on London Stock Exchange's market for listed securities
and
Tender Offer by Charles Stanley Securities to purchase Ordinary Shares
and
Re-registration as a private limited company
Highlights
Company calls Extraordinary General Meeting to seek shareholder approval for:
§ Tender Offer
o Opportunity for all shareholders to realise their investment in the Company for cash
o Offer price of 40 pence represents a premium of 23.1 per cent. to yesterday’s closing mid-market price of 32.5 pence
§ Proposal to de-list the Company from the Official List and the main market of London Stock Exchange
§ Re-registration as a private limited company
§ The Board of Directors, representing approximately 57.17 per cent of the Total Voting Rights have undertaken to vote or procure votes be cast in favour of all Resolutions
1. Background to the Proposals
On 12 September 2008 the Company announced its preliminary annual results for the year ending 30 June 2008. The results for the year were sales revenue of £19.9 million (2007: £22.3 million) and profit before tax of £1.2 million (2007: £2.0 million). The Company’s net cash position as at 30 June 2008 was £3.9 million (2007: £5.3 million). Despite a strong working capital position and profitability of the Company in difficult markets, which in the Board’s opinion demonstrates the robustness of the Company’s business model, the share price of the Ordinary Shares has continued to fall.
The Board has discussed this concern with its advisers, and whilst there are several factors affecting any company’s share price, the key issue for NRG is the lack of demand for its shares and, in practical terms, a small free float and market capitalisation, which further reduces demand.
In the Board’s opinion, it is unlikely that the Company will need to raise money through a new share issue or to issue more shares in connection with an acquisition and, therefore, the lack of shares in free float and small market capitalisation will continue. The Board are therefore of the opinion that Shareholders should be given the opportunity to realise their investment in the Company for cash.
The Board also believes that the ongoing costs and regulatory requirements of a listing on the Official List can no longer be justified in relation to the Company. Under the UKLA's Listing Rules, the De-listing can only be effected by the Company after securing a special resolution of Shareholders in general meeting, and the expiration of a period of not less than 20 business days from the date of the Shareholder approval. Under the London Stock Exchange's Admission and Disclosure Standards, the Company must advise the London Stock Exchange of the De-listing not less than 20 business days before the date it intends trading in the Ordinary Shares to be discontinued.
Following the De-listing, the Board intends to operate the Company's business in the same manner, and with the same objectives, as at present.
As NRG will be an unlisted company the Board feel that it will no longer require the services of the Non-Executive Directors and the Non-Executive Directors have agreed to resign as directors on conclusion of the De-listing. The Executive Directors all intend to continue serving the Company and to continue leading its direction.
Shareholders should note that following conclusion of the Proposals the Company will remain subject to the provisions of the Takeover Code (pursuant to paragraph 3 (a) (ii) (A) of the Introduction to the Takeover Code), however the regulatory regime which applies solely to companies with shares admitted to the Official List and to trading on the London Stock Exchange’s market for listed securities will no longer apply. Following the De-listing it is likely that there will be limited opportunities for Shareholders to realise their investments and whilst the Company may, in the future, take advantage of opportunities to further buy-in shares, this cannot be guaranteed as it would always be dependent upon the circumstances at the time.
Resolution 1 set out in the Notice of Extraordinary General Meeting seeks Shareholder approval for the De-listing. The Company and Charles Stanley have received irrevocable undertakings from all of the Board in respect of 9,051,963 Ordinary Shares, representing approximately 57.17 per cent. of the Total Voting Rights of the Company, either to vote in favour of or procure that votes cast in favour of the De-listing. Assuming that Shareholders approve Resolution 1, the Company will apply for the De-listing and it is proposed that the De-listing would take place on 23 December 2008.
2. Tender Offer
The Board recognises that not all Shareholders will be able or willing to continue to own shares in the Company following the De-listing. The Board is therefore arranging for Charles Stanley to provide Qualifying Shareholders with the opportunity to sell all of their Ordinary Shares held at the Tender Offer Record Date in the Company.
The Tender Offer is being made available to all Qualifying Shareholders who are on the Register at 6.00 p.m. on 5 December 2008. Qualifying Shareholders can decide whether they want to tender all of their NRG Shares in the Tender Offer, but they are not obliged to tender all of their NRG Shares if they do not wish to do so. Qualifying Shareholders are not permitted to tender only part of their holding of NRG Shares in the Tender Offer. NRG Shares in CREST which are not tendered pursuant to the Tender Offer will be taken out of CREST on the De-listing and so relevant Shareholders will be issued with share certificates in respect of their Ordinary Shares held in CREST. Unless valid tenders are received for 158,322 Ordinary Shares, representing approximately 1 per cent. of the Total Voting Rights of the Company, the Tender Offer will not proceed.
As the Executive Directors all intend to continue serving the Company following the De-listing, they have each undertaken irrevocably to the Company and Charles Stanley that they will either not accept the Tender Offer or procure that the Tender Offer is not accepted in respect of 9,030,063 Ordinary Shares, representing approximately 57.03 per cent. of the Total Voting Rights of the Company.
The Company and Charles Stanley have received irrevocable undertakings to accept the Tender Offer or procure that the Tender Offer is accepted from the Non-Executive Directors in respect of 21,900 Ordinary Shares, representing approximately 0.14 per cent. of the Total Voting Rights of the Company.
Jupiter Asset Management have informally indicated to the Company that, as at the date of this announcement, it is their current intention to participate fully in the Tender Offer. At the date of this announcement Jupiter Asset Management is interested in 2,951,500 NRG Shares, representing approximately 18.64 per cent. of the Total Voting Rights of NRG.
If the Tender Offer is fully taken up by all of the Shareholders other than the Executive Directors, the distributable reserves of the Company would be reduced by approximately £2.72million. The Board intends to cancel the NRG Shares purchased pursuant to the Tender Offer.
Under the Tender Offer:
· Charles Stanley, acting as agent for NRG, will purchase tendered NRG Shares. Charles Stanley will be under a binding obligation to deliver to NRG any NRG Shares so purchased whereupon such NRG Shares shall be cancelled;
· the price to be paid for each Ordinary Share subject to the Tender Offer shall be 40 pence:
· representing a premium of 23.1 per cent. over the closing mid-market price as derived from the Daily Official List of the London Stock Exchange of an Ordinary Share on 29 October 2008, the day prior to the announcement of the Proposals;
· representing a premium of 22.2 per cent. to the average closing mid-market price as derived from the Daily Official List of the London Stock Exchange of an Ordinary Share on 29 October 2008, for one month prior to the announcement of the Proposals; and
· representing a premium of 7.4 per cent. to the average closing mid-market price as derived from the Daily Official List of the London Stock Exchange of an Ordinary Share on 29 October 2008, for three months prior to the announcement of the Proposals.
· NRG Shares will be purchased free of commission and dealing charges; and
· NRG Shares not validly tendered will not be purchased.
Resolution 2 set out in the Notice of Extraordinary General Meeting contains the proposed authority to effect the Tender Offer. The Company and Charles Stanley have received irrevocable undertakings from all of the Board in respect of 9,051,963 Ordinary Shares, representing approximately 57.17 per cent. of the Total Voting Rights of the Company, to either vote in favour of or procure that votes be cast in favour of Resolution 2.
3. Re-registration
Following the De-listing, the Board believes that the additional regulatory requirements and associated costs of the Company maintaining its public company status will be difficult to justify and that the Company will benefit from the more flexible regulatory requirements and lower costs associated with private limited company status. It is therefore proposed to re-register the Company as a private limited company.
Resolution 3 set out in the Notice of Extraordinary General Meeting seeks Shareholder approval for the Re-registration and makes consequential amendments to the Memorandum of Association, as required by the Companies Act, and also makes amendments to the Articles of Association, to reflect the change in the Company’s status to a private limited company. The amendments to be approved by Shareholders only deal with the proposed change of status of the Company from public limited company to private limited company and do not have any other affect on the provisions of the Memorandum of Association or the Articles of Association.
Following Resolution 3 taking effect, application will be made to the Registrar of Companies for the Company to be re-registered. Re-registration will take effect when the Registrar of Companies issues a certificate of incorporation on re-registration. The Registrar of Companies is unlikely to issue the certificate of incorporation on re-registration until the Registrar of Companies is satisfied that no valid application can be made to cancel Resolution 3 under the Companies Act. Accordingly, it is not possible to provide Shareholders with a date upon which it is expected that the Company will change status to a private limited company.
The Company and Charles Stanley have received irrevocable undertakings from all of the Board in respect of 9,051,963 Ordinary Shares, representing approximately 57.17 per cent. of the Total Voting Rights of the Company, to either vote in favour of or procure that votes be cast in favour of Resolution 3.
4. Circular
A circular (the “Circular”) has today been posted to Shareholders with a Notice of Extraordinary General Meeting to approve matters relating to the De-listing, the Tender Offer and the Re-registration.
Copies of the Circular have also today been submitted to the UKLA and will shortly be available for inspection at the UKLA’s Document Viewing Facility, which is situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
For further information please contact:
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Northern Recruitment Group plc
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0191 232 1222
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Lorna Moran, Chief Executive
Wayham Moran, Finance Director
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Charles Stanley Securities – Sponsor and Financial Advisor to the Company
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020 7149 6000
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Philip Davies / Richard Thompson / Ben Johnston
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EXPECTED TIMETABLE OF PRINCIPAL EVENTS
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Tender Offer opens
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30 October 2008
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Latest time and date for receipt of Forms of Proxy for the Extraordinary General Meeting
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10.00 a.m. on 22 November 2008
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Date and time of Extraordinary General Meeting
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10.00 a.m. on 24 November 2008
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Latest time and date for receipt of Shareholder Tender Forms and TTE Instructions in relation to the Tender Offer
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1.00 p.m. on 5 December 2008
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Tender Offer Record Date
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6.00 p.m. on 5 December 2008
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Announcement of the results of the Tender Offer
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8 December 2008
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Cheques despatched and CREST accounts credited, in respect of Tender Offer proceeds
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19 December 2008
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Ordinary Shares cancelled from admission to the Official List and to trading on the London Stock Exchange's market for listed securities
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23 December 2008
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Despatch of share certificates in respect of any Ordinary Shares held in CREST not tendered pursuant to the Tender Offer
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by 9 January 2009
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DEFINITIONS
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'Articles of Association'
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the Company's Articles of Association
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'Board'
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the board of directors of NRG
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'Charles Stanley'
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Charles Stanley Securities, a trading division of Charles Stanley & Co. Limited
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'CREST'
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the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations)
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'Companies Act'
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Companies Act 1985 (as amended)
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'De-listing'
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the cancellation of the admission of the Ordinary Shares to the Official List and to trading on the London Stock Exchange's market for listed securities
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'Executive Directors'
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Lorna Moran MBE, Wayham Moran and Therese Liddle
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'Extraordinary General Meeting'
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the general meeting of NRG to be held at 10.00 a.m. at the offices of Ward Hadaway, Keel Row House, 1 Sandgate, Newcastle upon Tyne, NE1 2NG on 24 November 2008
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“Euroclear”
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Euroclear UK and Ireland Limited
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'Listing Rules'
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the rules and regulations made by the UK Listing Authority under Part VI of the Financial Services and Markets Act 2000 as amended from time to time
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'London Stock Exchange'
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London Stock Exchange plc
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'Memorandum of Association'
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the Company's Memorandum of Association
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'Non-Executive Directors'
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Leo Finn and Richard Hutton
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'Notice of Extraordinary General Meeting'
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the notice of the Extraordinary General Meeting which appears at the end of the Circular
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'NRG' or 'the Company'
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Northern Recruitment Group plc, registered in England and Wales with number 1756216 and whose registered office is at 56 Grey Street, Newcastle upon Tyne, NE1 6AH.
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'NRG Shares' or 'Ordinary Shares'
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the ordinary shares of 5 pence each in the capital of NRG
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'Official List'
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the Official List of the UKLA
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“Overseas Shareholder”
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a Shareholder who is resident in, or a citizen of, a jurisdiction outside the United Kingdom
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'Proposals'
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the De-listing, the Tender Offer and the Re-registration
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'Qualifying Shareholders'
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NRG Shareholders other than those Overseas Shareholders with registered addresses in a Restricted Jurisdiction
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'Re-registration'
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the re-registration of NRG as a private limited company and the consequential amendment of the Memorandum of Association and the Articles of Association required due to the change in the Company’s status to a private company
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“Resolutions”
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The resolutions to be proposed at the Extraordinary General Meeting to obtain approval of Shareholders for the De-listing, to authorise the Company to make market purchases of its shares in order to complete the Tender Offer and to approve the Re-registration, all as set out in the Notice of Extraordinary General Meeting
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'Shareholders'
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holders of NRG Shares from time to time
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'Shareholder Tender Form'
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the tender form issued with the Circular to Qualifying Shareholders who hold their NRG Shares in certificated form
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'Tender Offer'
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the invitation by NRG to Qualifying Shareholders to tender NRG Shares on the terms and subject to the conditions set out in the Circular and also, in the case of certificated NRG Shares only, the Shareholder Tender Form
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'Tender Offer Record Date'
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5 December 2008
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“Total Voting Rights”
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as defined by the Disclosure and Transparency Rules, as published by the Financial Services Authority
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'TTE Instruction'
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a transfer to escrow instruction (as defined by the CREST Manual issued by Euroclear)
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'UK or United Kingdom'
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the United Kingdom of Great Britain and Northern Ireland
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'UK Listing Authority' or 'UKLA'
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the Financial Services Authority in its capacity as competent authority under the Financial Services and Markets Act 2000
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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