Posting of Circular and notice of General Meeting

RNS Number : 4157K

Vane Minerals PLC

30 July 2013

 



VANE Minerals plc (AIM:VML)

("VANE" or the "Company")

Proposed Waiver of Rule 9 of the Takeover Code

Proposed change of name

Notice of General Meeting

Appointment of Non-Executive Director

Further to the announcement by the Company on 26 June 2013, VANE has posted to shareholders a notice of general meeting ("General Meeting") of the Company to be held at 10am on 15 August 2013 at the offices of Allenby Capital Limited, 3 St. Helen's Place, London EC3A 6AB, along with a circular (the "Circular"), in connection with the intention to raise £1,399,000 by way of a conditional subscription ("Subscription") to new ordinary shares in the Company ("Ordinary Shares") and a proposed waiver of Rule 9 of the Takeover Code.  Extracts from the letter from the Chairman contained in the Circular are set out below, which includes the background to and reasons for the Subscription. A copy of the Circular is available for download from the Company's website, www.vaneminerals.com.

In order to facilitate the Subscription, shareholder approval is required of a number of resolutions to be proposed at the General Meeting. At the same time it is proposed to change the name of the Company to Rose Petroleum plc, as further explained below. At the General Meeting, the following resolutions (the "Resolutions") will be proposed:

Resolution 1 - grant a waiver of Rule 9 of the Takeover Code

Resolution 2 - grant of authority to allot shares for cash, disapplying statutory pre-emption rights

Resolution 3 - to change the name of the Company to Rose Petroleum plc

In addition, it is proposed that on completion of the Subscription, Philip Edward Jeffcock (aged 44) be appointed to the Board as a non-executive director. Philip Jeffcock is a founder and Managing Partner of Cew Capital LLP, a boutique commercial real estate investment manager for family offices and private clients. Prior to that Mr. Jeffcock worked as Global Head of Commercial Real Estate at Barclays Wealth (from April 2008 to January 2011), having been the Co-Head of the UK Real Estate Debt Origination team for Barclays Capital between 2005 and 2008. Prior to that, Mr Jeffcock worked at Goldman Sachs International, The Royal Bank of Scotland, Abbey National Treasury Services, 3Legs Venture Capital Plc, Charterhouse Bank and Drivers Jonas.  Philip Jeffcock is currently a director of Darley Energy plc and Lorne Capital Ltd.

For further information, please contact:

VANE Minerals Plc	[phone]
Matthew Idiens
Allenby Capital	[phone]
Jeremy Porter/Alex Price
Bankside	[phone]
Simon Rothschild

The information below has been extracted from and should be read in conjunction with the Circular, a copy of which can be downloaded from the Company's website, www.vaneminerals.com.

Dear Shareholder

1.   Introduction

As announced on 26 June 2013, your Board is seeking the approval of Independent Shareholders of a waiver proposed to be granted by the Panel of any obligation on the part of the Concert Party, to make a general offer to Shareholders under Rule 9 of the Takeover Code which might otherwise arise upon the Concert Party's participation in the Subscription to raise £1,399,000 (before expenses) by way of a conditional subscription of the Subscription Shares at the Subscription Price.  The Waiver is also sought for the Director Options. The purpose of this document is to explain the background to the Subscription and the Waiver and to seek your approval for the Resolutions which are being proposed at the General Meeting to be held at 10am on 15 August 2013 at the offices of Allenby Capital at 3 St Helen's Place, London EC3A 6AB, notice of which is set out at the end of this document.

In order to conclude the Subscription it is necessary to seek an extension to the existing shareholder authorities obtained at the recent Annual General Meeting to enable the Directors, amongst other matters, to allot the Subscription Shares for cash on a non pre-emptive basis.

It is also proposed to change the name of the Company to Rose Petroleum plc, subject to approval of Shareholders at the General Meeting.

2.   Background to and reasons for recommending the Waiver and proposed change of name

The Company proposes to raise £1,399,000 (before expenses) through the issue of the Subscription Shares at the Subscription Price.  The Subscription Price represents a discount of approximately 6 per cent. to the closing mid-market price of 0.425 pence per Ordinary Share on 25 June 2013, being the last dealing day prior to the announcement of the Subscription on 26 June 2013, and represents a premium of approximately 23 per cent. to the closing mid-market price of 0.325 pence per Ordinary Share on 26 July 2013, being the last dealing day prior to the publication of this document. Having considered the price at which the Ordinary Shares are currently traded, and other market factors, the Directors have resolved that the Subscription Price is appropriate. The Subscription Shares will represent approximately 44.12 per cent. of the Company's issued share capital as enlarged by the Subscription. 

The Subscription has been arranged by Matthew Idiens following his recent appointment as CEO of VANE. In view of the fact that the subscription by the Concert Party constitutes the majority of Subscribers (those representing 82.13 per cent. of the Subscription and who will hold 44.03 per cent. of the Enlarged Issued Share Capital), who are viewed to be "acting in concert" pursuant to the Takeover Code, the Subscription is conditional, inter alia, upon the Takeover Panel giving approval to a waiver of Rule 9 of the Takeover Code, together with the approval of a "whitewash" circular setting out full details of the proposed waiver of the obligation under Rule 9 of the Takeover Code, that would otherwise require the Concert Party to make a general offer to the Independent Shareholders to acquire their shares in the Company. Accordingly, the Subscription is also conditional on the passing of the Resolutions and on Admission.  As a result of the subscription by the Concert Party, the Waiver is also sought for the Director Options (which were granted in September 2011), which would otherwise require the Concert Party to make a general offer to the Independent Shareholders to acquire their shares in the Company if they were exercised after the Subscription.  Further details of the Takeover Code and the Concert Party and why they are considered to be acting in concert are set out below.

The Directors believe that there is currently an opportunity to raise funds from a small number of institutional and other investors rather than by offering all shareholders the opportunity to acquire further shares and that this opportunity may not be present in the future given the current uncertain market conditions. The Directors believe that the additional cost and delay incurred in connection with any such offer would not have been in the best interests of the Company.

The proceeds of the Subscription will enable the Company to investigate possible asset acquisitions, in particular those associated with conventional and unconventional oil and gas.  The Company therefore plans to build a team of experienced individuals, particularly those of shale gas background, to help seek such acquisitions and take advantage of the current opportunities in unconventional gas.  The Company has already identified and entered into discussions with possible candidates in this regard.  It is also therefore proposed to change the name of the Company to Rose Petroleum plc to more accurately reflect the new focus of the Company, subject to approval of Shareholders at the General Meeting. 

At the same time the Directors believe that the Subscription will give the Company sufficient working capital for the next 12 months. However, exploration costs are difficult to predict and if they prove to be higher than anticipated, or in the event of unforeseen circumstances, further capital may be required.  There can be no certainty as to the terms or availability of such funding.

Furthermore, although the Company's available cash balances are sufficient for its immediate needs, they are insufficient to enable it to continue in operation for the longer term or to fund its preliminary activities under its proposed new strategy. This has partly been due to recent fluctuations in gold and silver prices which have put pressure on the Company's financial resources.  Shareholders are therefore urged to approve the Resolutions to complete the Subscription. Should the Resolutions not be approved at the General Meeting, the Company would face an uncertain future due to lack of working capital.  There can be no certainty as to the availability or terms of any other sources of funding, particularly in the timescale required. 

Application will be made to the London Stock Exchange for the Subscription Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Subscription Shares will commence on 16 August 2013.

The Subscription Shares will rank pari passu in all respects with the existing Ordinary Shares currently in issue in VANE, including the right to receive all dividends and other distributions declared following Admission.

3.   The Takeover Code requirements

Under Rule 9 of the Takeover Code, when (i) a person acquires an interest in shares which, taken together with shares in which he and persons acting in concert with him are interested in, carry 30 per cent. or more of the voting rights of a company subject to the Takeover Code, or (ii) any person who, together with persons acting in concert with him, is interested in shares which in 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 the voting rights of the company subject to the Takeover Code, and such person, or any persons acting in concert with him, acquires an interest in any other shares which increases the percentage of the shares carrying voting rights in which he is interested, then in either case, that person together with the persons acting in concert with him, is normally required to make a general offer in cash, at the highest price paid by him, or any persons acting in concert with him, for shares in that company or an interest in shares in that company within the preceding 12 months, for all the remaining equity share capital of that company.

The Concert Party is currently interested in (in aggregate) 61,782,425 Ordinary Shares representing approximately 13.95 per cent. of the current issued share capital of the Company and the Director Options (which are held by Matthew Idiens who is a member of the Concert Party) representing a further approximately 1.35 per cent. of the current issued share capital of the Company.   Following the completion of the Subscription, the Concert Party's interest in shares would (assuming no other allotments of Ordinary Shares) be approximately 44.03 per cent. of the Enlarged Issued Share Capital by virtue of such Subscription.  In addition, if the Director Options are exercised in full after the Subscription, the Concert Party's interest in shares would (assuming no other allotments of Ordinary Shares) be approximately 44.45 per cent. of the Enlarged Issued Share Capital by virtue of such exercise.  The latest date for exercise of the Director Options, pursuant to their terms, is 30 September 2021.  Accordingly, an increase in the percentage of the shares carrying voting rights in which the Concert Party is interested would prima facie have the effect of triggering Rule 9 of the Takeover Code and result in Concert Party being under an obligation to make a general offer to all Shareholders.  The remaining amount of the Subscription, namely £250,000, is from certain institutional and other investors not connected with the Concert Party.

The Company has applied to the Panel for a waiver of Rule 9 of the Takeover Code in order to permit the Subscription and any subsequent exercise of Director Options without triggering an obligation on the part of Concert Party to make a general offer to Shareholders.  The Panel has agreed, subject to Independent Shareholders' approval on a poll, to waive the possible requirement for the Concert Party to make a general offer to all Shareholders where such an obligation would arise as a result of the Subscription and exercise of Director Options.

The Waiver granted by the Panel relates only to any increase in the percentage of Ordinary Shares held by Concert Party as a result of the Subscription and exercise of Director Options and is conditional on the passing of Resolution 1 (as set out in the General Meeting Notice) by Independent Shareholders of the Company on a poll.  The Subscription is also conditional on the passing of Resolution 2.

Following the Subscription, the Concert Party will be interested in shares which carry more than 30 per cent. but will not hold more than 50 per cent. of the Company's voting share capital and, save for the exercise of Director Options, any further increase in the number of shares in which it is interested will be subject to the provisions of Rule 9 of the Takeover Code.

4.   Information about the Concert Party

The Concert Party have an established long-standing relationship and a history of investing in companies together over many years.

The Concert Party has confirmed to the Board that other than the appointment of Philip Jeffcock, it is not presently proposing any other changes to the Board or changes to the employment rights of employees of the Company. The Company has previously announced that David Newton will leave the Board on 31 July 2013. 

The Concert Party has also confirmed its intention, following completion of the Subscription, for the Company to utilise the contacts of the Board and the Concert Party to seek to re-focus the business of the Company through the acquisition of new assets in the resources sector, as set out in more detail above in paragraph 2, and that otherwise the business of the Company should continue to be run in the same manner as at present. The Concert Party has confirmed that it does not intend to redeploy the Company's fixed assets.

There are no relationships, arrangements or undertakings between the members of the Concert Party and the Independent Directors or Allenby Capital.

The effect on the Concert Party of subscribing for the maximum number of Subscription Shares is that its interest will rise from 13.95 per cent. of the current issued share capital of the Company to approximately 44.03 per cent. of the Enlarged Issued Share Capital of the Company and to approximately 44.45 per cent. if the Director Options are exercised in full.

5.   Recommendation

The Independent Directors, who have been so advised by Allenby Capital, consider that the Resolutions are fair and reasonable and in the best interests of the Independent Shareholders and the Company as a whole.  In providing advice to the Independent Directors, Allenby Capital has taken account of the Independent Directors' commercial assessments.  Accordingly, the Independent Directors unanimously recommend that Independent Shareholders vote in favour of the Resolutions. 

The Independent Directors have irrevocably undertaken to the Company that they intend to vote their own beneficial shareholdings in the Company, amounting to 20,254,043 Ordinary Shares (in aggregate), which represents approximately 4.58 per cent. (in aggregate) of the voting rights of the Company, in favour of the Resolutions. In addition, Matthew Idiens has irrevocably undertaken to the Company that he intends to vote his own beneficial shareholding in the Company, amounting to 16,805,880 Ordinary, which represents approximately 3.79 per cent. of the voting rights of the Company, in favour of Resolutions 2 and 3.

Yours faithfully
The The Rt Hon the Earl of Kilmorey PC, Chairman

EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication and posting to Shareholders of this document and Forms of Proxy	29 July 2013
Latest time for receipt of completed Forms of Proxy	10am on 13 August 2013
General Meeting	10am on 15 August 2013
Admission of Subscription Shares to trading on AIM	16 August 2013

SUBSCRIPTION STATISTICS
Number of ordinary shares in issue at the date of this document	442,923,658
Subscription Price	0.4 pence
Number of Subscription Shares being issued by the Company	349,750,000
Number of ordinary shares in issue following Admission of the Subscription Shares	792,673,658
Number of Subscription Shares as a percentage of the Enlarged Issued share Capital	44.12%
Number of Ordinary Shares held by the Concert Party as a percentage of the Enlarged Issued Share Capital	44.03%
Estimated net proceeds receivable by the Company	£1,340,000

DEFINITIONS

The following definitions apply throughout this announcement (and the Circular), unless the context otherwise requires:

"2006 Act"	Companies Act 2006
"Admission"	admission of the Subscription Shares to be issued pursuant to the Subscription to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules
"Allenby Capital"	Allenby Capital Limited, the Company's nominated adviser and broker pursuant to the AIM Rules for Companies
"AVEN"	AVEN Associates LLC, a wholly owned subsidiary of the Company
"Company" or "VANE"	VANE Minerals plc, a company incorporated in England and Wales with registered number 04573663, whose registered office is at 145-157 St John Street, London EC1V 4PW
"Concert Party"	the members of the concert party, further details of which appear in Part I of this document
"Directors" or "Board"	the directors of VANE
"Director Options"	the Share Options over 6,000,000 Ordinary Shares granted to Matthew Idiens, details of which are set out in paragraph 3.2.2 of Part III of this document.
"Enlarged Issue Share Capital"	the issued share capital of the Company as enlarged by the Subscription
"FCA"	The UK Financial Conduct Authority
"Form of Proxy"	the form of proxy for use by Shareholders at the General Meeting
"FSMA"	the Financial Services and Markets Act 2000
"General Meeting"	the general meeting of the Company convened for 10am on 12 August 2013 at the offices of Allenby Capital at 3 St Helen's Place, London EC3A 6AB
"General Meeting Notice"	the notice convening the General Meeting appearing at the end of this document
"Independent Directors"	the Directors other than Matthew Idiens
"Independent Shareholders"	Shareholders other than the members of the Concert Party
"Official List"	the official list of the UK Listing Authority
"Ordinary Shares"	ordinary shares of 0.1 pence each in the capital of the Company
"Panel"	the Panel on Takeovers and Mergers
"Resolutions"	the ordinary resolution ("Resolution 1") and special resolutions ("Resolution 2" and "Resolution 3") set out in the General Meeting Notice
"Shareholders"	holders of Ordinary Shares
"Share Options"	options to subscribe for Ordinary Shares under the Share Option Plan
"Share Option Plan"	the share option plan of the Company
"Subscribers"	the subscribers who are participating in the Subscription, including the Concert Party
"Subscription"	the proposed subscription for the Subscription Shares at the Subscription Price
"Subscription Price"	0.4 pence per Subscription Share
"Subscription Shares"	349,750,000 new ordinary shares of 0.1 pence each to be issued in the Company
"Takeover Code"	the City Code on Takeovers and Mergers
"UK Listing Authority"	the UK Listing Authority, being the FCA acting as competent authority for the purposes of Part VI of FSMA
"Waiver"	the waiver granted by the Panel (subject to the passing of Resolution 1 as set out in the General Meeting Notice) in respect of the obligation of the Concert Party to make a mandatory offer under Rule 9 of the Takeover Code in connection with the Subscription and Director Options, as more particularly described in Part I of this document

 

END

 

 

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