N30/03
London Stock Exchange Plc
19 December 2003
London Stock Exchange
Old Broad Street
19 December 2003 London EC2N 1HP
Telephone +44 (0)20 7797
1000
www.londonstockexchange.com
For the attention of the chairman/senior partner/
compliance officer, at market counterparties which are
due to deliver, or to receive, unsettled transactions in N30/03
Azure Holdings Plc
STOCK EXCHANGE NOTICE
DIRECTION - AZURE HOLDINGS PLC (FORMERLY ROOM SERVICE GROUP PLC)
1. This Notice is for the attention of all market counterparties which are due
to deliver, or to receive, securities under unsettled transactions in Azure
Holdings Plc ("Azure"), an AIM company, which was suspended from trading on
22 October 2003. Significant short selling in the market has resulted in a
situation where no further settlement of outstanding positions is likely to
occur. Trading in this security is unlikely to resume until the
significant short position is settled, to ensure an orderly market.
2. The Exchange is aware that the pending Rule 9 offer for Azure under the
City Code, together with an announced non-renounceable 10 for 1 open offer
entitlement issue ("the Open Offer"), represents extreme circumstances that
make an unassisted resolution of this issue very unlikely. Further, in
order for participating shareholders to evaluate the terms of the Open
Offer, trading should resume for the duration of the Open Offer to allow a
market price to be determined. The Exchange is also aware that a number of
investors, having bought shares in Azure, may be unclear as to their
entitlements pursuant to these transactions.
3. Given that the short position referred to in the Exchange's AIM Notice
dated 2 December 2003 significantly exceeds the number of entitlements that
will be created upon the making of the Open Offer, it has been necessary to
consider alternative settlement solutions which do not involve delivery of
the physical shares and associated entitlements, but which ensure that
settlement obligations are fulfilled on terms no less favourable than this.
4. Therefore, in accordance with the Exchange's obligations as a Recognised
Investment Exchange, and having consulted the Financial Services Authority
("FSA"), the Exchange has directed the market makers in Azure to undertake
the course of action set out below, in order to ensure an orderly market
and protection for investors.
Action Required
5. The market makers in Azure will contact their counterparties for the
purpose of making an offer to qualifying counterparties to settle the short
position in the market for Azure shares ("the Settlement Offer") in lieu of
all delivery obligations relating to the purchase of Azure shares,
including entitlements to participate in the Open Offer.
6. A qualifying counterparty is a counterparty who entered into a contract for
the purchase of Azure shares on the Exchange during the period between 25
September 2003 and 22 October 2003 ("the Transaction") and has not yet
received delivery of Azure shares in accordance with the Transaction. A
qualifying investor is a client of a qualifying counterparty on whose
behalf the Transaction was undertaken.
7. Acceptance of either option requires a qualifying counterparty, if acting
as agent, to obtain instructions from the qualifying investor and to
specify which option they wish to accept. A qualifying counterparty will
be required to furnish evidence appropriate to support each qualifying
investor's claim. The Exchange requires all market counterparties that are
involved in the above process to cooperate fully in this process.
The Offer
8. The market makers shall offer all qualifying counterparties the following
options in settlement of all delivery obligations under the Transaction:
1. A cash payment equal to that paid or payable by a qualifying
counterparty in relation to each Transaction plus an amount equivalent
to any associated direct costs of the Transaction (including those
shown on the contract note for the Transaction such as dealing charges
and Stamp Duty Reserve Tax) incurred by the qualifying counterparty;
or, alternatively
2. A cash payment of 11.2p per share for each undelivered Azure share.
That sum includes an amount equivalent to the value of the entitlement
under the open offer that is attached to each share.
9. The cash payment under the second option is based on a valuation
commissioned by the Exchange and undertaken by an independent third party
approved by the Exchange, in consultation with the FSA, for this purpose.
Terms and Conditions
10. Qualifying counterparties accepting either of the options outlined above on
behalf of qualifying investors shall receive only a cash payment in lieu of
their entitlement to receive Azure shares. If a qualifying investor traded
at a price above 11.2p, that investor is able to claim the higher amount in
accordance with option 1, paragraph 8. Qualifying investors/counterparties
are under no obligation to accept either offer and may, in the alternative,
take no action. This will be without prejudice to any rights a qualifying
investor has under the Exchange's Rules or otherwise.
11. The Settlement Offer to qualifying counterparties will be available for
acceptance by those counterparties from 19 December 2003 until, and
including, 14 January 2004, a period of 15 business days, or a later date
as determined by the Exchange. Any cash payment due to qualifying
counterparties should be made 3 days after the close of the Settlement
Offer.
12. Where either option 1 or 2 are taken up, market counterparties should enter
a match delete instruction to CREST. CREST can be used to transfer monies
or this can be done inter-office.
13. This Notice should be read in conjunction with the AIM Notice released via
RNS today.
14. Any comments or queries on this Notice should be addressed to John Newbury,
Trading Services, telephone 020 7797 1615 (STX 31615) or email:
jnewbury@londonstockexchange.com
David Shrimpton
Head of Trading Services
This Stock Exchange Notice will be available on the website at
www.londonstockexchange.com/regulation/notices/
Calls to London Stock Exchange plc may be recorded to enable the Exchange to
carry out its regulatory responsibilities.
This information is provided by RNS
The company news service from the London Stock Exchange
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