Update re loan stock
Brainspark PLC
08 March 2006
For immediate release 8 March 2006
BRAINSPARK PLC
('Brainspark' or the 'Company')
Update re Loan Stock
On 2nd December, 2005 Brainspark announced that it had raised £850,000 by the
issue of £850,000 of interest free loan stock (the 'Loan Stock') convertible
into ordinary shares of 0.01p each in Brainspark ('shares') at a price of 0.46p
per share on or before 31st March, 2006. The shares to be issued rank pari passu
in all respects with the existing shares in issue.
Two of the subscribers for the Loan Stock were:
+----------------------------------------+-----------------+--------------+
| |Amount subscribed|No of shares |
| | | |
| |£ |on conversion |
+----------------------------------------+-----------------+--------------+
|Francesco Gardin, Chairman |378,850 |82,358,695 |
+----------------------------------------+-----------------+--------------+
|Luigi Fogliani (who is not a Director) |135,246 |29,401,304 |
+----------------------------------------+-----------------+--------------+
On 3rd January, 2006 it was announced that Professor Gardin had converted part
of his Loan Stock and that all other subscribers, including Mr. Fogliani, had
converted all of their Loan Stock into shares and that the resultant
shareholdings of Professor Gardin and Mr. Fogliani, together with shares held
previously by Professor Gardin, were as follows:-
+--------------------------------------+-------------+-----------+-------------+
| |Shares held |New Shares |% of enlarged|
| | | | |
| |before 3rd |Following |Issued |
| | | | |
| |January, 2006|conversion |capital |
+--------------------------------------+-------------+-----------+-------------+
|Francesco Gardin, Chairman |31,903,278 |36,000,000 |20.53% |
+--------------------------------------+-------------+-----------+-------------+
|Luigi Fogliani (who is not a Director)| |29,401,304 |8.89% |
+--------------------------------------+-------------+-----------+-------------+
Professor Gardin has indicated that he would like to convert further amounts of
his outstanding £207,808.33 worth of Loan Stock into shares and raise his
personal shareholding to 29.99%.
However, the Panel on Takeovers & Mergers ('the Panel') has indicated that,
because Mr. Fogliani is a relative of Professor Gardin by marriage, they should
be treated as acting in concert and therefore if either acquires shares so that
they jointly hold in excess of 30%, they would be required to make a cash bid
under Rule 9 of the Takeover Code (a 'Rule 9 Offer').
Rule 9 of the Takeover Code is designed to prevent the acquisition of control of
a company to which the Takeover Code applies without a general cash offer being
made to all shareholders of that company. Under Rule 9, a person who acquires,
whether by a series of transactions over a period of time or not, shares which
(taken together with shares held or acquired or acquired by persons acting in
concert with him) carry 30 per cent. or more of the voting rights of a company
is normally required by the Panel to make a general offer to all the
shareholders of that company to acquire the balance of the shares not held by
such person, or group of persons acting in concert, at the highest price paid by
him or them or any person acting in concert.
In the case of Professor Gardin and Mr. Fogliani, the highest price paid in the
last 12 months was effectively 0.46p per share (being the price determined by
dividing the amount of Loan Stock subscribed for by the relevant party by the
number of shares received or due to be received) .The market price at the close
of business on 7 March, 2006 was 0.875p, being, the latest practicable dealing
date prior to the release of this announcement.
The Loan Stock is convertible at Professor Gardin's option at any time prior to
its repayment and at any time prior to 31 March 2006 at the Company's option.
The Company and Professor Gardin have agreed that neither will exercise its
right to demand conversion on or before 31 March 2006 (which could result in a
mandatory offer obligation arising under Rule 9 at substantially less than the
prevailing market price), that the repayment date for the Loan Stock will be
postponed to 31 December 2007 and that the rights of either party to demand
conversion will be extended to the same date. The Loan Stock will remain
interest free.
The Directors (other than Professor Gardin who is a related party under the AIM
Rules), having consulted with the Company's Nominated Adviser, believe that the
terms of the transaction described above are fair and reasonable insofar as the
Company's shareholders are concerned.
Further information
Dennis Bailey 01628 477785
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