Proposed cancellation of trading on AIM

RNS Number : 6007L

Baydonhill PLC

06 September 2012

 

6 September 2012

Baydonhill PLC

("Baydonhill" or the "Company")

Proposed cancellation of admission of the Company's shares to trading on AIM

Baydonhill announces that it has today sent a circular to shareholders convening a General Meeting of the Company at which a resolution will be proposed to cancel the admission of the Company's shares to trading on AIM. The General Meeting will be held at the Company's offices at 160 Brompton Road, Knightsbridge, London, SW3 1HW on 28 September 2012 at 9.15 a.m. or as soon as possible thereafter following the Annual General Meeting of the Company to be held at 9.00 a.m. on 28 September 2012.

Following a review of the benefit of the Company's shares continuing to be traded on AIM, the directors (other than Charles McLeod) have concluded that is in the best interests of the Company and its shareholders as a whole and is most likely to promote the success of the Company for the benefit of its shareholders as a whole, if the admission of the Company's shares to trading on AIM is cancelled.

The current economic situation has led to significant falls in the values of the global stock markets, which have been exaggerated in small cap, low liquidity stocks. It is the opinion of the directors that, in the current market, the Company's market capitalisation has become disassociated with the inherent value of the Company. The directors also believe that a stagnant or falling share price has had a de-motivating effect on the business and its employees and also a potentially adverse impact on customer and supplier perception.

The directors also believe that: the ongoing costs of the Company's shares being admitted to trading on AIM now outweigh the benefits to the Company - the proposed cancellation is expected to reduce the overheads of the Company by approximately £100,000 per annum and the directors consider that these funds could be better utilised in growing the business; a lower level of public scrutiny will enable the Company to develop new commercially sensitive business areas and perform better without increasingly onerous disclosure requirements and the pressure a quoted company faces in focusing on short term performance, rather than long-term growth; and in light of the current performance of the Company's share price and limited trading in the shares, the Company's continued admission to trading on AIM may no longer serve a useful function in terms of access to capital or the ability to use the shares to effect acquisitions.

The principal effects of the proposed cancellation would be: there would no longer be a formal market mechanism enabling shareholders to trade their shares in the Company; the Company would not be bound to announce material events, nor to announce interim results; and the Company would no longer be required to comply with any of the corporate governance requirements for quoted companies.

The Directors' intention is that the Company should remain a public limited company but without having its shares admitted to trading on a regulated public market.  The Board intends to continue to include at least one independent non-executive director on the Board for the time being, to ensure appropriate independent judgement on issues of strategy, performance, resources and corporate governance that they consider vital to the continued success of the Company. 

Notwithstanding the proposed cancellation, the Company will continue to publish annual reports and accounts and hold Annual General Meetings and other General Meetings in accordance with the applicable statutory requirements and the Company's articles of association. Where the Board considers it to be in the interests of the Company to do so, it will continue to post certain additional information relating to the Company on its website. In addition, the City Code on Takeovers and Mergers will continue to apply to the Company for at least ten years following the date of the cancellation.

The directors are aware that, if the proposed cancellation is approved, shareholders may still wish to acquire further shares or dispose of their shares and, accordingly, intend to use reasonable endeavours to create and maintain a matched bargain settlement facility. The Company has held initial discussions with London Matched Markets Limited to provide such a facility.  Under such a facility shareholders or persons wishing to acquire shares will be able to leave an indication with the matched bargain settlement facility provider that they are prepared to buy or sell at an agreed price. In the event that the matched bargain settlement facility provider is able to match that order with an opposite sell or buy instruction, the matched bargain settlement facility provider will contact both parties and then affect the order. Shareholders who do not have their own broker may need to register with a broker as a new client. This can take some time to process and, therefore, shareholders who consider they are likely to avail themselves of this facility are encouraged to commence it at the earliest opportunity. The contact details of the matched bargain settlement facility provider, once arranged, will be made available to shareholders on the Company's website.

If the resolution to cancel the admission of the Company's shares to trading on AIM is approved at the General Meeting, it is proposed that trading of the Company's shares on AIM will be cancelled at 7.00 a.m. on 26 October 2012.

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Enquiries:

Baydonhill PLC
Eric Peacock, Chairman Wayne Mitchell, Chief Executive	[phone]
Merchant Securities Limited
Simon Clements/David Worlidge	[phone]
Square1 Consulting Limited
David Bick/Mark Longson	[phone]

 

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