Capital Reduction Proposals

RNS Number:2147A
Alexon Group PLC
21 August 2002


For Immediate Release                                            21 August 2002


                                ALEXON GROUP PLC

PROPOSED CANCELLATION AND REPAYMENT OF PREFERENCE SHARES, PROPOSED NEW
PERFORMANCE SHARE PLAN, AMENDMENT TO THE 1995 OPTION SCHEME AND APPROVALS AND
AUTHORISATIONS RELATING TO THE PURCHASE OF ORDINARY SHARES


The Board of Alexon announces that the Company intends, subject to the approval
of Ordinary Shareholders, Preference Shareholders and Convertible Shareholders
and the confirmation of the Court, to cancel and repay all of the 100,000
Preference Shares in issue at a price of #1.15 per share, plus accrued unpaid
dividends to the date of repayment.

The Company also proposes, subject to the approval of Ordinary Shareholders, to
adopt a new Performance Share Plan and to amend the existing 1995 Option Scheme.
In addition, the Company is seeking approval of Shareholders for a general
authority to make market purchases of Ordinary Shares and to cancel, by way of a
capital reduction, 3,805,377 Ordinary Shares acquired between June 2000 and
October 2001.

An Extraordinary General Meeting of the Company and two separate Class Meetings
of the Preference Shareholders and the Convertible Shareholders are being
convened on 19 September 2002 for the purpose of considering and, if thought
fit, passing the resolutions necessary to effect the above proposals.


Background to and reasons for the Capital Reduction

The Company currently has four types of share in issue, each with different
rights.  The Directors believe that this structure is over-complicated and
should be simplified.

The Preference Shares constitute a very small part of the Company's total share
capital, whether by reference to nominal or market value, and are in excess of
the Company's capital requirements.  The administrative inconvenience and costs
associated with the Preference Shares, such as maintaining their listing on the
Official List, are disproportionate to the benefit that the Preference Shares
provide to the Company.  The last time any Preference Shares were traded on the
London Stock Exchange was in March 1995.

Under the Company's articles of association, it does not have the right to
redeem the Preference Shares.  Accordingly, in order to simplify the Company's
capital structure, the Board considers it appropriate to cancel and repay all
the Preference Shares by way of a reduction of share capital.  To do this, the
Company requires the approval of its Ordinary Shareholders, Preference
Shareholders and Convertible Shareholders and the transaction must be confirmed
by the Court in accordance with the Companies Act.

In addition, the cancellation of the Preference Shares would allow the Company
to redeem the Convertible Shares should the Board believe it to be in the
Company's best interests to do so.  The Convertible Shares are redeemable at the
option of the Company from 30 September 2003. However, they cannot be redeemed
whilst any Preference Shares remain in issue.



Terms of the Capital Reduction

It is proposed that, in consideration of the cancellation and repayment of their
Preference Shares, Preference Shareholders will receive #1.15 per Preference
Share. The price of #1.15 represents a premium of 67.9 per cent. over the
Preference Share middle market closing price on 20 August 2002 (being the latest
practicable date prior to the date of this announcement) of 68.5p, as derived
from the Daily Official List. In addition, Preference Shareholders will receive
the accrued but unpaid fixed dividend entitlement on the shares up to the date
of repayment.

The repayment amount represents the prior ranking fixed amount each Preference
Share would be entitled to receive under the articles of association of the
Company on a return of assets to shareholders. Although this amount would not
ordinarily be expected to be paid to the Preference Shareholders until a winding
up of the Company, the Board considers its payment now under the Capital
Reduction to be justified for the reasons set out above.

The cost to the Company of the cancellation and repayment, before expenses, will
be #115,000, plus accrued dividends, and will be funded from the Company's
existing resources.

The amount to be repaid to the Preference Shareholders will be paid out of
distributable reserves.



Purchases of Ordinary Shares by the Company in 2000/2001

The Company has recently been advised that certain purchases of Ordinary Shares
made by it between June 2000 and October 2001 were not effectively carried out
because, although they had been approved by Ordinary Shareholders, they had not
been approved by separate class meetings of the Convertible Shareholders and
Preference Shareholders and were therefore made in breach of the Act.  These
purchases of 3,805,377 Ordinary Shares were made at prices of between #0.75 and
#1.37.  Given that the Company's share price is currently above these amounts,
the Directors consider that it is in the interests of the Company to take the
necessary steps to prevent any possibility of these purchases being unwound in
the future.  Those steps, for which Shareholders' approval is sought, include
the cancellation by way of a capital reduction of the Ordinary Shares concerned,
the discharge of each vendor of such shares from any obligation to repay the
purchase price for the shares to the Company and the release of the Directors
(current and past) from any liability arising as a result of the unauthorised
purchases of the Ordinary Shares concerned.



Posting of Circular

Further details regarding all of the above proposals are contained in the
Circular to be posted to shareholders shortly, together with notices convening
the Extraordinary General Meeting and the Class Meetings.  Additional copies of
the Circular will be available at the Financial Services Authority, 25 The North
Colonnade, London, E14 5HS and at the offices of Alexon, 40-48 Guildford Street,
Luton, Bedfordshire LU1 2PB.



Expected Timetable

Extraordinary General Meeting and Class Meetings of     19 September 2002
Preference Shareholders and Convertible Shareholders

Record Date and expected last day for dealing in        16 October 2002
Preference Shares

Expected date for the hearing by the Court of the       16 October 2002
petition to confirm the Capital Reduction

Expected date of cancellation of listing of the         Close of business on 
Preference Shares                                       business date 
                                                        immediately preceding 
                                                        the Effective Date

*Expected Effective Date (on which the Capital          17 October 2002
Reduction becomes effective)

Posting of settlement cheques                           As soon as practicable 
                                                        following the Effective 
                                                        Date




* This date will depend, inter alia, on the date on which the Court sanctions
the Capital Reduction.



Enquiries


Alexon Group plc                                                01582 723131
Robin Piggott, Group Finance Director

Buchanan Communications                                         020 7466 5000
Richard Darby / Nicola Cronk



APPENDIX



DEFINITIONS



The following definitions apply throughout this announcement, unless the context
requires otherwise:


"1995 Option Scheme"                     the Alexon Group 1995 Executive Share Option Scheme


"Board" or "Directors"                   the directors of the Company


"Capital Reduction"                      the proposed cancellation and repayment of the Preference Shares
                                         under the Companies Act as more fully described in this announcement


"Class Meeting of Convertible            the separate class meeting of the Convertible Shareholders, notice
Shareholders"                            of which is attached to the circular to be posted shortly to
                                         Shareholders


"Class Meeting of Preference             the separate class meeting of the Preference Shareholders, notice of
Shareholders"                            which is attached to the circular to be posted shortly to
                                         Shareholders


"Class Meetings"                         the Class Meeting of Preference Shareholders and the Class Meeting
                                         of Convertible Shareholders


"Convertible Shareholders"               holders of Convertible Shares


"Convertible Shares"                     6.25p convertible cumulative redeemable preference shares of 10p
                                         each in the share capital of the Company


"Companies Act" or "Act"                 the Companies Act 1985 (as amended)


"Company" or "Alexon"                    Alexon Group plc


"Court"                                  the High Court of Justice of England and Wales


"Daily Official List"                    the Daily Official List published by the London Stock Exchange


"Effective Date"                         The day on which the Capital Reduction becomes effective for the
                                         purposes of the Companies Act and references to the Capital
                                         Reduction taking effect or becoming effective shall be construed
                                         accordingly


"Extraordinary General Meeting" or "EGM" the extraordinary general meeting of the Company, notice of which is
                                         attached to the circular to be posted shortly to Shareholders


"London Stock Exchange"                  London Stock Exchange plc


"Official List"                          the Official List maintained by the UK Listing Authority pursuant to
                                         Part VI of the Financial Services and Markets Act 2000


"Ordinary Shareholders"                  holders of Ordinary Shares


"Ordinary Shares"                        ordinary shares of 10p each in the share capital of the Company


"Performance Share Plan" or "Plan"       Alexon Performance Share Plan


"Preference Shareholders"                holders of Preference Shares


"Preference Shares"                      five per cent. cumulative preference shares of #1 each in the share
                                         capital of the Company


"Record Date"                            The business day immediately preceding the Effective Date


"Shareholders"                           Ordinary Shareholders, Preference Shareholders and Convertible
                                         Shareholders


"UK Listing Authority"                   the Financial Services Authority as the competent authority for
                                         listing in the United Kingdom under Part VI of the Financial
                                         Services and Markets Act 2000






                      This information is provided by RNS
            The company news service from the London Stock Exchange

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