Notice of AGM and Proposed Return of Cash

RNS Number : 0824N

Spark Ventures PLC

26 August 2011

 



SPARK Ventures plc

("SPARK" or the "Company")

Notice of AGM, Proposed Return of Cash to Shareholders and Posting of Circular

On 7 August 2009, SPARK received the approval of Shareholders to an alteration to the Company's investing strategy so that no more investments would be made into new businesses and that existing investments would be sold, when appropriate, with a view to all existing investments being realised over the period to 31 March 2014.

Further to the return of cash made following the 2010 Annual General Meeting, SPARK is pleased to announce that a further Return of Cash will be made of an amount equivalent to one penny per Existing Ordinary Share (in aggregate approximately £4.1 million). This represents approximately:

·      11.8 per cent. of the Company's closing middle-market share price of 8.5p pence per Existing Ordinary Share on 25 August 2011 (the dealing day immediately prior to this announcement); and

·      6.9 per cent. of the Group's net asset value as at 31 March 2011, being the date of the last published net asset value of the Group.

The implementation of the Return of Cash is conditional upon approval by Shareholders at the Annual General Meeting, to be held on Wednesday 28 September 2011 at 10.00 a.m. at the offices of Bracher Rawlins LLP, Second Floor, 77 Kingsway, London, WC2B 6SR, and upon Admission.

It is proposed that the Return of Cash will be effected by means of the issue to Shareholders of B Shares and/or C Shares, which are intended to give Shareholders, where eligible under their prevailing tax regime (such as the UK), the flexibility to treat the Return of Cash as either capital or income for tax purposes, or a combination of the two.

The implementation of the Return of Cash involves a number of steps, which are all subject to approval of the Shareholders at the Annual General Meeting:

·      each Existing Ordinary Share in issue at the Record Time will be sub-divided into one New Ordinary Share together with either one C Share or (at the election of the Shareholders of such Existing Ordinary Shares) one B Share. The B Shares will be purchased by Collins Stewart Europe Limited ("Collins Stewart") as principal pursuant to the Tender Offer for one penny per B Share and the C Shares will entitle their holders to receive the Special Dividend of one penny per C Share;

·      Shareholders will automatically receive C Shares unless they elect for B Shares;

·      Shareholders (except for Non-United Kingdom Shareholders who will be deemed to have elected for C Shares) who elect to participate in the Tender Offer will have their B Shares purchased by Collins Stewart as principal for one penny per B Share. Collins Stewart has a put option to sell such B Shares off-market to the Company for cancellation pursuant to the Repurchase Agreement;

·      Shareholders (including Non-United Kingdom Shareholders who will be deemed to have elected for C Shares) who elect to receive a Special Dividend will be paid a Special Dividend of one penny per C Share held and, following such payment, each C Share shall automatically convert into a 2011 Deferred Share; and

·      the New Ordinary Shares will be traded on AIM in the same way as Existing Ordinary Shares and will be equivalent in all other respects to the Existing Ordinary Shares, with the exception of the difference in nominal value and subject to the rights of the B Shares, C Shares, existing D Shares and 2011 Deferred Shares (as applicable).

If the Return of Cash is approved by Shareholders at the Annual General Meeting, it is expected that CREST accounts will be credited, or cheques despatched, in respect of the Tender Offer for the B Shares and the Special Dividend on the C Shares, by 7 October 2011.

Further details of the steps required to implement the Return of Cash are set out in Part 2 of the circular which will be posted to Shareholders on 31 August 2011 (the "Circular").

The Alternatives

The Alternatives for the Return of Cash available to Shareholders are summarised below and explained in further detail in Part 4 of the Circular. Shareholders may split the aggregate amount to be returned to them between the Alternatives.

Shareholders who do not make a valid election and Non-United-Kingdom Shareholders will be deemed to have elected for the Dividend Alternative in respect of ALL of their Share Entitlement.

The general guidance on the UK tax treatment included below is only a summary, is based on current UK law and practice as at the date of this announcement and applies only to Shareholders who are resident and, if they are individuals, ordinarily resident in the UK for tax purposes and who hold their Existing Ordinary Shares, B Shares and/or C Shares beneficially as investments and not on trading account. UK tax resident Shareholders should read Part 5 of the Circular as the Alternatives will have different UK tax consequences.

Shareholders who are in any doubt as to their tax position, or are subject to tax in a jurisdiction other than the United Kingdom, should consult an appropriate professional adviser without delay.

·      Alternative I - Capital Alternative (B Shares)

Shareholders who elect for the Capital Alternative in respect of their Share Entitlement will receive one B Share (in addition to one New Ordinary Share) for each Existing Ordinary Share they hold at the Record Time.

It is intended that the B Shares will be purchased pursuant to the Tender Offer by Collins Stewart as principal and the amount paid pursuant to the Tender Offer will be one penny for each B Share purchased. Proceeds will be sent to relevant Shareholders by 7 October 2011. The terms and conditions of the Tender Offer are set out in paragraph 5 of Part 2 of the Circular. Collins Stewart has a put option to sell such B Shares off-market to the Company for cancellation pursuant to the Repurchase Agreement.

The amounts received under the Capital Alternative should generally be taxed as capital for UK tax purposes. UK tax resident Shareholders should read Part 5 of the Circular for further information.

The attention of Non-United Kingdom Shareholders is drawn to paragraph 4 of Part 2 of the Circular.

·      Alternative 2 - Dividend Alternative (C Shares)

Shareholders who elect or are deemed to have elected for the Dividend Alternative in respect of their Share Entitlement will receive one C Share (in addition to one New Ordinary Share) for each Existing Ordinary Share they hold at the Record Time. A Special Dividend of one penny will become payable on each such C Share and will be paid to relevant Shareholders by 7 October 2011. Immediately after payment of the Special Dividend, the C Shares will automatically convert into 2011 Deferred Shares with negligible value. The 2011 Deferred Shares arising on conversion of the C Shares will not be listed and will have extremely limited rights. The Company will have the right to purchase all of the 2011 Deferred Shares for an aggregate sum of one penny. If the Company purchases the 2011 Deferred Shares, this will be treated as a disposal of the 2011 Deferred Shares by the Shareholders. In view of the negligible amount of this consideration, Shareholders' entitlements will not be paid.

The amounts received under the Dividend Alternative should generally be taxed as income for UK tax purposes. UK tax resident Shareholders should read Part 5 of the Circular for further information.

The attention of Non-United Kingdom Shareholders is drawn to paragraph 4 of Part 2 of the Circular.

SPARK Share Option Schemes

Participants in the SPARK Share Option Schemes are not, by virtue of the options they hold, entitled to participate in the Return of Cash. However, the schemes contain provision for adjusting the terms of options where there is a variation of capital. The Return of Cash constitutes such a variation of capital.

2001 Plan

In accordance with the rules of the 2001 Plan, the Board must adjust options in such a manner as the Board thinks fit in the event of a variation of capital. All options outstanding under the 2001 Plan are currently exercisable with an exercise price per share of 2.5 pence. In light of the fact that all option holders therefore have the opportunity to exercise their options and participate in the Return of Cash, the Board has determined that no adjustment to options under the 2001 Plan should be made. The intention is that any exercise of options will be satisfied by the transfer of shares currently held by the trustees of The NewMedia SPARK plc 2001 Employee Benefit Trust (the "EBT"). To the extent that shares held in the EBT are not transferred in this way prior to the Record Time, the trustees of the EBT will be treated in the same way as other holders of Existing Ordinary Shares.

2005 Plan

Under the 2005 Plan, 8,090,909 share options are in issue over ordinary shares, all with an exercise price of 8 pence per share and all of which are vested. In 2009, it was agreed between the remuneration committee of the Board and the holders of share options, that the rules of the 2005 Plan relating to variations of capital be amended to allow the vested options to be adjusted by a reduction in the exercise price with no adjustment to the number of shares under option. Furthermore, it was agreed that the adjustment to options made in respect of any subsequent returns of cash will be on the same basis (subject to the overriding requirement that the exercise price per share may not be reduced below the nominal value of such share). Consequently, in accordance with the current rules, the exercise price of the share options under the 2005 Plan will be reduced to 7 pence per ordinary share after the Annual General Meeting.

Notice of Annual General Meeting

The Company confirms that the Circular will be posted to Shareholders on 31 August 2011. The Company's Annual Report is available on the Company's website from http://www.sparkventures.com.  Notice of the Annual General Meeting, which is to be held on Wednesday 28 September 2011, is included in the Circular.

An Election Form for use by Shareholders (with the exception of Non-United Kingdom Shareholders and Shareholders who hold their Existing Ordinary Shares in CREST) in connection with the Alternatives and a Form of Proxy for use in connection with the Annual General Meeting are enclosed with the Circular.

The Circular will be posted to Shareholders on 31 August 2011 and will be available from that date on the Company's website at http://www.sparkventures.com.

For further information, please contact:

SPARK Ventures plc	Andrew Betton /  David Potter	020 7851 7777
Collins Stewart	Matt Goode / Sebastian Jones	020 7523 8350

Capitalised terms used in this announcement have the meaning given to them in the Circular dated 31 August 2011.

 Collins Stewart Europe Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for SPARK Ventures plc and is acting for no-one else in connection with the Return of Cash and will not be responsible to anyone other than SPARK Ventures plc for providing the protections afforded to clients of Collins Stewart nor for providing advice in connection with the Return of Cash or any other matter referred to herein.

 

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