Fourth Tender Offer

RNS Number : 1331H

LMS Capital PLC

27 November 2015

 

27 November 2015

LMS Capital plc

Fourth Tender Offer

LMS Capital plc ("LMS Capital" or the "Company") today announces its intention to return up to £40 million to Shareholders through a tender offer and repurchase of up to 29.98% of the ordinary shares of the Company (the "Tender Offer"). The Tender Offer is the fourth tender offer made since the approval of the Company's realisation strategy in November 2011 and will, if approved, bring to £155 million the total returned to Shareholders since the commencement of that strategy. 

A circular containing details of the Tender Offer and containing the Notice of General Meeting will be sent to Shareholders later today (the "Circular"). Capitalised terms used and not defined in this announcement have the meaning given to them in the Circular.

Tender Offer

The Tender Offer is available to Shareholders (other than certain overseas Shareholders) on the register as at the close of business on 10 December 2015. Shareholders may tender more, equal to or less than their Basic Entitlement, though tenders in excess of a Shareholder's Basic Entitlement will only be accepted to the extent that other Shareholders tender less than their Basic Entitlement and will be satisfied on a pro rata basis.

The Tender Offer Price will be calculated on 14 December 2015 based on the unaudited net asset value of the Company as at 30 September 2015 adjusted, in a manner consistent with the Company's accounting policies, to take into account price movements in quoted investments, changes in foreign currency rates of exchange and purchases and sales of investments between 30 September 2015 and the close of business on 11 December 2015.

The Tender Offer Price will be calculated by dividing this adjusted net asset value by the number of Ordinary Shares in issue at the close of business on 11 December 2015.

Concert Party Undertakings

The Company has received irrevocable undertakings to vote in favour of the Repurchase Resolution and to tender a number of Ordinary Shares not less than their Basic Entitlement from members of the Concert Party holding 49,409,694 Ordinary Shares, representing 97.18% of the total number of Ordinary Shares held by the Concert Party (as described in more detail below) as at 25 November 2015 (being the latest practicable date prior to the publication of this Announcement).

Rule 9 waiver

Robert Rayne, a current non-executive director of the Company, together with members of the extended Rayne family and associated trusts constitute a 'Concert Party' for the purposes of the City Code on Takeovers and Mergers (the "Code").  Given the voluntary nature of the Tender Offer, it is possible that the aggregate holding of the Concert Party in the share capital of the Company (currently 35.01%) could increase if, for example, the Concert Party does not take up its Basic Entitlement in full in circumstances where all other Shareholders do so. Under Rule 9 of the Code, were the Concert Party's aggregate holding to increase, it would be required to make an offer for all of the Ordinary Shares in the Company that it does not already own.

The Company applied to the Panel for a waiver of Rule 9 of the Code in order to permit the Tender Offer  (and subsequent Repurchase (as defined below)) to occur without triggering an obligation on the part of the Concert Party to make a general offer to Shareholders of the kind described above. The Panel has agreed, subject to the approval of Shareholders (excluding members of the Concert Party, who are not permitted to vote) on a poll vote, to waive the requirement for the Concert Party to make a general offer to all Shareholders where such an obligation would arise as a result of the Tender Offer (and subsequent Repurchase)  (the "Waiver").

General Meeting

A General Meeting will be held at 10.00 a.m. on 14 December 2015 at LMS Capital plc, 100 George Street, London W1U 8NU to seek Shareholder approval for: (1) the repurchase to be carried out by the Company in connection with the Tender Offer (the "Repurchase"); and (2) the Waiver. Resolution 1 will be proposed as a special resolution and Resolution 2 will be proposed as an ordinary resolution on which only independent Shareholders will be entitled to vote.

The implementation of the Tender Offer is conditional on the passing of both of these resolutions.  If such approvals are obtained at the General Meeting, the Tender Offer is expected to take place on 15 December 2015. Full details of the Tender Offer timetable, mechanics and settlement procedure are set out in the Circular.

The timetable of the Tender Offer is summarised below:

Tender Offer opens	27 November 2015
Latest time and date for receipt of Tender Forms and TTE instructions in relation to the Tender Offer	1.00 p.m. on 10 December 2015
Tender Offer Record Date	6.00 p.m. on 10 December 2015
Latest time and date for receipt of Forms of Proxy	10.00 a.m. on 11 December 2015
General Meeting	10.00 a.m. on 14 December 2015
Announcement of results of the General Meeting	14 December 2015
Announcement of Tender Offer Price and Basic Entitlement	7.00 a.m. on 15 December 2015
Announcement of results of the Tender Offer	7.00 a.m. on 15 December 2015

Trading update

The Company's unaudited net asset value per share at 30 September 2015 was 96 pence, up 2 pence (2%) from 94 pence as at 30 June 2015. The principal factors in this increase were the gain on the sale of Wesupply and the strengthening of the US dollar against £ sterling which resulted in unrealised currency gains of £2.6 million in the third quarter. These two positive factors were partially offset by the weakening of the share price of Weatherford International. Since the end of September the Weatherford International share price has improved and, as at 25 November 2015, the estimated nest asset value per share has increased by 1p to 97 pence per share.

Martin Knight, Chairman of LMS Capital, said:

"Your Board is pleased to be able to make a further cash return to shareholders reflecting the continued progress with the realization strategy during the year. This fourth tender offer brings to £155 million the total returned to date to shareholders, equivalent to the market capitalization of the Company when the realization strategy commenced."

For further information please contact:

LMS Capital plc                                                                                                                                 020 7935 3555

Nick Friedlos, Executive Director

Tony Sweet, Chief Financial Officer

J.P. Morgan Cazenove                                                                                                                   020 7742 4000

Michael Wentworth-Stanley

MHP Communications                                                                                                                  020 3128 8794

Katie Hunt

Naomi Lane

 

END

 

 

TENLLFFDLILRFIE