24th March, 2006
Poly Information Plc
("Poly" or the "Company")
Further re: Disposal of trading subsidiary
Further to the announcement on 17 March, 2006, the Company announces that a
circular has been sent to shareholders today convening an extraordinary general
meeting to be held on 10 April 2006.
The sale and purchase agreement remains conditional, inter-alia, on the passing
of the resolution at the extraordinary general meeting and approval of the
disposal from the Israeli Tax Commissioner ("ITC"), including resolving all
issues relating to the pre-tax ruling issued by the ITC to the Poly Information
Limited's (the "Trading Subsidiary") former shareholders.
Reasons for the Disposal
The last few months have seen a considerable consolidation in the speech
recognition market and a major player in the sector has acquired a number of
its competitors resulting it being able to offer a "one-stop shop" for speech
recognition systems. This has made Poly Information's platform much less
attractive and resulted in much longer sales cycles.
In the light of the difficulties still being encountered by the Trading
Subsidiary and following the breakdown of discussions to raise additional
working capital to invest in the Trading Subsidiary, the directors have
concluded that the business of the Company is unlikely to achieve significant
returns for shareholders in the foreseeable future and accordingly has
concluded that the disposal is in the best interests of the Company and its
shareholders. The offer from the CB Phone Limited (the "purchaser") to acquire
the Trading Subsidiary represents an opportunity for the Company to realise
immediate value from its operations resources, with the possibility of further
consideration if the Trading Subsidiary's intellectual property can be
The Company had cash in hand of £278,000 on 28 February 2006. The directors
estimate that following the completion of the disposal, the Company will have
approximately £250,000 of cash.
Following the disposal, the directors believe that the funds which will be in
the Company could be attractive to a number of potential targets/investments.
The directors intend to seek to acquire another company or business in exchange
for the issue of ordinary shares in a single transaction (a "reverse
takeover"). The directors' main investment criteria are: -
* the travel and leisure sector in the UK, Europe or North America;
* businesses which require little or no funding in excess of the cash
resources available to the Company following the disposal; and
* businesses whose growth prospects, if achieved, will be earnings enhancing
However, these criteria are not intended to be exhaustive and the Company may
make an investment which does not fulfil all the investment criteria if they
believe it is in the interests of shareholders as a whole to proceed with such
an investment. Any acquisition of the Company will be put to shareholders for
their approval at the appropriate time.
Under the AIM Rules, the Company will have to complete a reverse takeover by 10
April 2007 or trading in the ordinary shares on AIM will be suspended for up to
six months, following which the listing on AIM will be cancelled if a reverse
takeover has not been completed by that time.
There is no guarantee that the Company will make a successful acquisition.
However, if an acquisition and/or investment is not completed by 10 October
2007, the directors will give shareholders the opportunity to consider the
future of the Company by convening an extraordinary general meeting to consider
whether the Company should distribute funds to shareholders.
Upon the completion of the disposal, Ofer Alt and Simon Rapoport will resign
from the Board.
Poly Information plc
Anthony Leon Tel. No.: 0161 445 6807
John East & Partners Limited
David Worlidge Tel. No.: 020 7628 2200