Notice of AGM & posting of ci

RNS Number : 2926R

Begbies Traynor Group PLC

20 August 2010

 



Begbies Traynor Group PLC

("Begbies" or the "Company")

Notice of Annual General Meeting ('AGM')

Proposed approval of a waiver granted by the Panel on Takeovers and Mergers (the "Panel") under Rule 9 of the Takeover Code in relation to the purchase of its own Ordinary Shares

Authority to make purchases of its own Ordinary Shares

The Board of Begbies Traynor Group plc, the specialist professional services organisation, announces that a circular (the "Circular") has today been posted to shareholders convening the Company's AGM to be held at 11 a.m. on 30 September 2010.

The purpose of the Circular is to give details to Shareholders regarding the special business to be considered at the AGM including a share purchase authority (the "Share Purchase Authority") to allow the Company to purchase in the market up to 25 per cent. of the Company's issued share capital, and to seek approval by Independent Shareholders of a waiver, which has been granted by the Panel, subject to the approval by independent Shareholders on a poll, of any obligation on the part of Richard Traynor to make a general offer to Shareholders under Rule 9 of the Takeover Code which might otherwise arise upon any exercise by the Company of the Share Purchase Authority (the 'Waiver' or together, the "Proposal").

The Circular also sets out the background to and reasons for the Proposal, including why the independent directors (being, the directors of the Company other than Richard Traynor (the "Independent Directors")), who have been so advised by Shore Capital, consider the Proposal to be fair and reasonable and in the best interests of the Company and its Shareholders as a whole and unanimously recommend that Independent Shareholders vote in favour of the Waiver Resolution as they intend to do in respect of their own shareholdings of 938,204 Ordinary Shares, representing approximately 1.0 per cent. of the Ordinary Shares in issue at today's date.

The Company's annual report and accounts for the year ended 30 April 2010 has also been posted to Shareholders today.

Background to and reasons for the proposed Share Purchase Authority

On 8 July 2010 the Company announced its results for the year ended 30 April 2010. During that year, Group net assets increased to £67.2m (2009: £63.7m) of which cash represented £3.1m (2009: £0.2m). Group net assets amounted to £0.75 per Ordinary Share (2009: £0.71).  During the financial year, Group revenue from continuing operations increased by 11 per cent. to £69.1m (2009: £62.1m) and Group profit before tax for the year from continuing operations was up 20 per cent. to £8.7m (2009: £7.2m). Basic and fully diluted EPS from continuing operations increased by 17 per cent. to 6.3p (2009: 5.4p) and adjusted basic and diluted EPS from continuing operations increased to 7.8p (2009: 7.7p).

The Group's strategy is to develop a specialist professional services group by means of both organic growth and acquisition.  The Group intends to:

(i)         maintain overall focus on our core activities of mid-market business insolvency and pre-insolvency work;

(ii)         increase focus on international insolvency opportunities; and

(iii)        consider opportunities to invest in existing and additional professional services.

The Independent Directors believe that the current share price (closing mid market price of 63.75p as at 16 August 2010) does not reflect the Group's favourable prospects and is lower than Group net assets per share. The intention therefore is to use the distributable reserves of the Company to purchase Ordinary Shares in the market and any Ordinary Shares bought back by the Company would either be cancelled or held in treasury.

Background to and reasons for the Panel Waiver

Rule 9 stipulates, inter alia, that if (a) any person acquires, whether by a series of transactions over a period of time or not, an interest (as defined in the Takeover Code) in shares which (taken together with shares in which persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company; or (b) any person, together with persons acting in concert with him, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with him, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which he is interested; such person or persons acting in concert with him will normally be required to make a general offer to shareholders of that company to acquire the balance of the equity share capital of that company not held by such person or persons acting in concert with him. An offer under Rule 9 must be made in cash (or be accompanied by a full cash alternative) and be at not less than the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

Under Rule 37 of the Takeover Code, when a company redeems or purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purpose of Rule 9 (although a shareholder who is neither a director nor deemed to be acting in concert with a director will not normally incur an obligation to make an offer under Rule 9). 

Current shareholding of Richard Traynor

Richard Traynor's shareholding interest in the Company as at 16 August 2010, being the last practicable date prior to the posting of the Circular was 26,561,697 Ordinary Shares, carrying 29.67 per cent. of the voting rights of the Company. Richard Traynor's shareholding could be increased above 30 per cent. as a result of:

(i)         the waiver granted by the Panel in relation to the Share Purchase Authority being approved by the Independent Shareholders; and

(ii)         the Share Purchase Authority is utilised by purchasing Ordinary Shares from Independent Shareholders.

Dispensation from Rule 9 of the Takeover Code in relation to the repurchase by the Company of its own Ordinary Shares

An increase in the percentage of Ordinary Shares carrying voting rights in which Richard Traynor is interested would, should it exceed 30 per cent. absent a waiver of Rule 9, trigger a requirement for him to make a general offer to Shareholders under the Takeover Code.

If the Company were to repurchase the maximum number of Ordinary Shares authorised pursuant to the Share Purchase Authority from Independent Shareholders, Richard Traynor's interest in the issued Ordinary Shares would (assuming no other Ordinary Shares were issued) increase to 39.57 per cent. of the voting rights of the Company. 

Panel Waiver

Following an application by the Independent Directors, the Panel has agreed, subject to the approval of the Waiver Resolution on a poll by Independent Shareholders at the AGM, to grant the Panel Waiver. The effect of the Panel Waiver, if approved by Independent Shareholders, would be that Richard Traynor would not be required to make a general offer under Rule 9 of the City Code that would otherwise arise in the event that his aggregate holding increases above 30 per cent. resulting from the purchase by the Company of its own Ordinary Shares pursuant to the Share Purchase Authority.

The Waiver Resolution to approve the Panel Waiver is subject to the approval of the Independent Shareholders on a poll and each Independent Shareholder will be entitled to one vote for each Ordinary Share held. The Independent Shareholders are the Shareholders other than Richard Traynor.

AGM

The AGM of the Company will be held at Begbies' head office at 340 Deansgate, Manchester, M3 4LY on 30 September 2010 at 11.00 a.m.

Document availability

Copies of the Notice of AGM, associated proxy forms, and the Begbies' Annual Report are available on the Investor Relations (shareholder services) section of the Group's website www.begbies-traynorgroup.com.

Proxy forms should be returned to the Group's registrar, Computershare Investor Services PLC (CREST ID 3RA50) at The Pavilions, Bridgwater Road, Bristol, BS99 6ZY by no later than 11.00am on Wednesday 28 September 2010.

Enquiries please contact:

Begbies Traynor Group PLC	0161 837 1700
Ric Traynor - Executive Chairman
Shore Capital & Corporate Ltd	020 7408 4090
Andrew Raca/Edward Mansfield
Hogarth	020 7357 9477
Reg Hoare / Katie Hunt

 

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