Share Buy-Back
Safeland PLC
17 July 2000
AUTHORITY TO MAKE MARKET PURCHASES OF SHARES AND APPROVAL
OF THE WAIVER GRANTED BY THE PANEL ON TAKEOVERS AND
MERGERS ('the Panel')
In common with a number of other listed property
companies, Safeland's shares continue to trade at a
discount to their underlying net asset value. The
Directors already have limited authority to make market
purchases by virtue of the authority which was given to
the Company at the annual general meeting held on 24
August 1999.
The Directors consider that it would be in the interests
of all shareholders for the Company to be able to
purchase up to approximately 10 per cent of its own
shares in the market, which should improve attributable
net asset value per share. Approval at the Annual
General Meeting is now being sought from shareholders for
that authority. Approval is also being sought from
shareholders to avoid the Directors and persons connected
with them and/or members of the Lipman Concert Party (as
defined below) being required to make a general offer for
the Company's shares under Rule 9 of the City Code on
Takeovers and Mergers (the 'Code') as a result of the
implementation of that authority.
Buy-Back Authority
The Board obtained authority from shareholders at the
annual general meeting held on 24 August 1999 to purchase
up to 4,308,049 ordinary shares of the Company in the
market of which 100,000 ordinary shares (representing
0.35 per cent of the Company's shares then in issue) were
purchased. The Board is now seeking general authority
for the Company to have the ability to purchase up to a
further 2,872,033 ordinary shares in the market
(representing approximately 10.0 per cent of the issued
share capital of the Company now in issue). The terms of
the authority will provide that the Company will be
required to pay not less than 5p for each share (being
the nominal value of the Company's shares) nor more than
105 per cent of the average middle market price for the
five days immediately preceding such purchase.
The Directors will only exercise the power to make market
purchases of the Company's shares if they believe that it
is in the best interests of the shareholders generally.
In exercising this authority, the Directors will neither
be encouraging nor recommending shareholders to buy or
sell shares in the Company nor in any way suggesting that
it is an appropriate time to deal in such shares.
Furthermore, the power will only be exercised if the
Directors are satisfied that the Company has sufficient
financial resources to enable it to carry out the
intended purchases. Purchases would be made out of the
Company's retained reserves and accordingly the purchase
and cancellation of shares will result in a reduction of
the Company's retained reserves which might otherwise be
available for distribution to shareholders of the
Company. As at 31 March 2000 those reserves amounted to
£12,345,000. The Board does not foresee that the
exercise, either partially or fully, of the authority to
buy back shares will restrict, to any practical extent,
its future ability to recommend dividends.
Rule 9 of the Code
Under Rule 9 of the Code, any person or group of persons
acting in concert who acquires shares which, when taken
together with shares already held, carry 30 per cent or
more of the voting rights of a company, or who holds not
less than 30 per cent but not more than 50 per cent of
the voting rights of a company and acquires any
additional shares carrying voting rights of that company,
is normally required by the Panel to make a general offer
to all shareholders of that company. Under Rule 37.1 of
the Code, when a company redeems or purchases its own
voting shares, a resulting increase in the percentage of
voting rights carried by shareholdings of the directors
and persons acting in concert with them will be treated
as an acquisition for the purpose of Rule 9.
The Directors and persons connected with them (which
includes Safeland Holdings Corporation) beneficially hold
a total of 12,997,355 ordinary shares in the Company
representing 45.41 per cent of the current issued share
capital. Messrs R Lipman, L G Lipman, S R Lipman and E A
Lipman ('the Lipman Directors') and Safeland Holdings
Corporation (together 'the Lipman Concert Party') who the
Panel have deemed to be acting in concert, beneficially
hold a total of 12,821,637 ordinary shares in the Company
representing 44.80 per cent of the current issued share
capital. The Lipman Directors (other than R Lipman) have
a one third beneficial interest in the issued share
capital of Safeland Holdings Corporation. Accordingly,
any increase in the aggregate percentage shareholding of
such persons, whether as a result of the purchase of
shares by any such person or as a result of the
implementation of the buy-back authority would, prima
facie, have the effect of triggering Rule 9.
The Panel has, however, agreed to waive the requirement
for the Directors and persons connected with them and/or
the members of the Lipman Concert Party, both
individually and collectively, to make a general offer to
all shareholders in circumstances where, following
purchases by the Company in the market of ordinary
shares, the aggregate percentage holding of the Directors
and/or the members of the Lipman Concert Party increases
provided this is approved by a vote of independent
shareholders of the Company on a poll in general meeting.
If the Company was to repurchase (and thereby cancel) the
full amount of ordinary shares for which it is now
seeking authority, namely, 2,872,033 shares, then
assuming no further change in the issued share capital of
the Company and no change in the number of ordinary
shares held by the Directors and persons connected with
them, the voting rights attributable to the ordinary
shares held by the Directors and persons connected with
them would increase from 45.42 per cent to 50.48 per cent
and the voting rights attributable to the ordinary shares
held by the Lipman Concert Party would increase from
44.80 per cent to 49.79 per cent.
Controlling shareholding
Shareholders should be aware that, as stated above, the
aggregate holdings of both the Directors and persons
connected with them and the members of the Lipman Concert
Party, following implementation of the buy-back
authority, could exceed 50 per cent of the voting rights
in the Company. In this circumstance both the Directors
and members of the Lipman Concert Party would then be
entitled to purchase shares in the Company without
incurring any further obligation under Rule 9 of the Code
to make a general offer, provided no such person
individually comes to hold 30 per cent or more of the
issued share capital of the Company.
Annual General Meeting and Extraordinary General Meeting
An Annual General Meeting of the Company has been
convened for 11.00am on 15 August 2000 at 144 Great North
Way, Hendon, London NW4 1EG.
At the meeting the following resolution, inter alia, will
be proposed:
-a special resolution seeking general authority for the
Company to purchase up to 2,872,033 ordinary shares in
the capital of the Company in the market.
An extraordinary general meeting of the Company has also
been convened for 11.30am on 15 August 2000 at 144 Great
North Way, Hendon, London NW4 1EG. At the meeting the
following resolution will be proposed:
-an ordinary resolution to approve the waiver by the
Panel of any Rule 9 obligation which may otherwise arise
on the Directors and/or members of the Lipman Concert
Party, both individually or collectively, as a result of
any increase in their aggregate holding of voting rights
as a result of the implementation of the buy-back
authority referred to above.
As the Directors and Safeland Holdings Corporation are
interested in the outcome of the ordinary resolution,
they have undertaken that they will not vote on that
resolution. The ordinary resolution will be taken on a
poll.
A circular containing a recommendation and independent
advice to shareholders to vote in favour of the
resolutions and further information will today be posted
to shareholders together with the 2000 Annual Report &
Accounts.