Proposed delisting from AIM (7864I)

TIDMDL.

RNS Number : 7864I

Dealogic (Holdings) PLC

21 June 2011

21 June 2011

Dealogic (Holdings) plc

Dealogic announces intention to cancel admission to trading on AIM

Dealogic (Holdings) plc (LSE DL, "Dealogic" or "the Company"), announces that it is seeking approval for the cancellation of admission to trading of its ordinary shares on AIM ("the Delisting"). A shareholder meeting will be held on 7 July 2011 to seek approval for the Delisting with the Delisting effective, subject to that approval, on 19 July 2011.

Background to the delisting

The Company was admitted to trading on AIM in May 2004. Since that time, the Company has performed well, with revenues increasing from $59.1 million in 2004 to $103.6 million in 2010 and profit before tax increasing from $19.2 million in 2004 to $38.6 million in 2010 (an increase of 100.7 per cent.). On its admission to trading on AIM, the market value of the Company was GBP153.9 million. The Company's market value now stands at GBP156.5 million, although it has returned capital of GBP50.3 million to Shareholders since admission to AIM. The equivalent increase in value therefore (taking into account the current market value and the capital returned compared to the original market value) is approximately 34.3 per cent.

The Directors believe that much of the lack of improvement in the value of the Company, given the improvement in performance, is due to the limited liquidity of the Ordinary Shares. For example, during the last 12 months, trading in the Ordinary Shares has occurred on only 131 days out of a possible 252 trading days and the 30 day average traded volume is 8,915 Ordinary Shares. The Company estimates that the free float (that is Shareholders who are not Directors, employees or former employees) currently comprises less than 10 per cent. of the issued share capital.

In preparing their recommendation in favour of the Delisting, the Directors have taken into account the following considerations:

-- the AIM listing does not, in itself, offer investors meaningful liquidity or marketability of the Ordinary Shares or the opportunity to trade in meaningful volumes or with frequency. Further, the difference (the "spread") between the prices being quoted to buy Ordinary Shares (the "bid price") and sell Ordinary Shares (the "ask price") is currently nearly 5 per cent. of the bid price. This means the cost of buying and selling Ordinary Shares is relatively expensive for investors;

-- given the Company's cash and borrowing capacity, it is unlikely that the Company will need to raise money through a new share issue (even for a significant acquisition) or to issue shares in connection with an acquisition and, therefore, there is no expectation of a material increase in the number of shares in free float;

-- the lack of correlation between the Company's share price and its operating performance is reducing the overall effectiveness of the Company's employee share incentive plans; and

-- the ongoing costs and regulatory requirements of maintaining an AIM listing are not a justifiable expense.

Given the above, the Directors believe that greater shareholder value will ultimately be derived by operating the Company's business off-market and consider it to be in the best interests of the Company and its Shareholders to seek a Delisting at this time.

The Company appreciates that many Shareholders may not want, or be able, to hold shares in an unlisted company. Therefore the Company will communicate with major Shareholders to ascertain their interest in a buy back of Ordinary Shares. Once interest levels have been established and the Company has arranged appropriate financing, the Company proposes to make an offer to Shareholders to buy back their Ordinary Shares. The Company intends to offer Shareholders a price of 330 pence per share, representing a premium of 4 per cent. over the mid market closing price of an Ordinary Share on 20 June 2011, the day before the announcement of the Delisting. This price also represents a premium to the all time high share price. Whilst the Company proposes to make this offer to buy back shares, it also welcomes any Shareholder who wishes to continue to hold their Ordinary Shares in the Company once delisted.

Current trading and prospects

The Company's performance in 2011 is ahead of the Directors' expectations. Revenue for the first half of the year is expected to be approximately 19 per cent. ahead of the first half of 2010, in part due to increased transaction revenues resulting from increased market activity.

Normal operating costs will increase by 22 per cent., with staff numbers increasing by 14 per cent. since this time last year, as the Company continues to invest in the business. As a result, underlying operating profit will increase by approximately 16 per cent. In addition, the Company incurred non-recurring expenses of approximately $2 million related to participation in an acquisition auction in which the Company was not the winning bidder. These expenses are not deductible for tax purposes, thereby increasing the effective tax rate, and resulting in a reduction in profit after tax of approximately 4 per cent. compared to the same period in 2010.

The weighted average number of shares in issue has reduced by 24.8 per cent. due to the full effect in the current period of the reduced number of shares in issue since the tender offer in June 2010, which has a consequent positive effect on diluted earnings per share.

While the Board remains cognisant that the current political and economic turmoil could potentially impact the capital markets in which the Company operates in the short term, the Board remains confident in the long term prospects of the business.

Effect of the Delisting on Shareholders

The principal effects of the Delisting would be that:

-- there would no longer be a formal market mechanism enabling Shareholders to trade their Ordinary Shares on AIM;

-- the Company would not be bound to announce material events, administrative changes or material transactions, nor to announce interim or final results;

-- the Company would no longer be required to comply with any of the additional specific corporate governance requirements for companies admitted to trading on AIM;

-- the Company will no longer be subject to the AIM Rules and Shareholders will no longer be required to vote on certain matters as provided in the AIM Rules; and

-- upon the Delisting becoming effective, the Company's CREST facility will be cancelled and Shareholders who hold Ordinary Shares in uncertificated form prior to Delisting will receive share certificates.

Shareholders should note, however, that the Company will nevertheless remain subject to the provisions of the City Code on Takeovers and Mergers for a period of up to ten years after the delisting.

Immediately following the Delisting, there will be no market facility for dealing in the Ordinary Shares and no price will be publicly quoted. As a result, the Board recognises that the Delisting will make it more difficult for the Shareholders to buy and sell Ordinary Shares should they want to do so. In view of this, and in order to assist Shareholders, the Board intends, at an appropriate time following the Delisting, to facilitate a dealing arrangement to enable Shareholders to trade the Ordinary Shares. Once the facility has been arranged, details will be made available to Shareholders.

In addition, the Delisting might have either positive or negative taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent adviser.

The Board intends, however, to continue to:

-- hold general meetings in accordance with the applicable statutory requirements and the Company's articles of association; and

-- provide copies of the Company's annual report and audited accounts to Shareholders.

Following the Delisting

The Company will continue to work at maximising value for its Shareholders which the Directors believe will be easier to achieve if the Delisting is approved as management time can be focussed on driving the business forward.

The Company intends to continue paying dividends generally in line with the Company's financial results.

Carl Anderson and Joan Beck have agreed to remain as independent non-executive directors on the Board.

Process for Delisting

In accordance with Rule 41 of the AIM Rules, the Company has notified the London Stock Exchange of the intention to delist subject to Shareholder approval. Under the AIM Rules, it is a requirement that the Delisting is approved by the requisite majority of Shareholders voting at the General Meeting (being not less than 75 per cent. of the votes cast).

The Company will send a circular to Shareholders shortly convening a General Meeting. The Resolution set out in the Notice of General Meeting in the circular seeks Shareholders' approval of the Delisting. Subject to the Resolution approving the Delisting being passed at the General Meeting, it is anticipated that trading in the Ordinary Shares on AIM will cease at the close of business on 18 July 2011 with Delisting taking effect at 7.00 a.m. on 19 July 2011.

Irrevocable Undertakings

The Company has received irrevocable undertakings from each of the directors of the Company and Simon Hessel, who together hold 38,457,472 Ordinary Shares, representing 78 per cent. of the current Issued Ordinary Share Capital, that they will vote in favour of the Resolution.

Exchange Rights Agreement

Thomas Fleming does not currently hold any Ordinary Shares but instead has a right to exchange his interest in the Company's US subsidiary, Dealogic LLC, for up to 9,083,748 Ordinary Shares. The Company, Thomas Fleming and others have entered into the ERA Deed of Amendment pursuant to which the Exchange Rights Agreement will be amended so as to remove the obligation for the Company to provide shares which are traded on AIM on the exercise of the exchange right.

Existing Share Options

The rights of Optionholders under the Share Option Schemes will remain unaffected by the Delisting. In particular, the Delisting will not cause any options which are not currently exercisable to become exercisable.

General Meeting

The General Meeting of the Company will be held at Thanet House, 231-232 Strand, London WC2R 1DA at 3.00 p.m. on 7 July 2011. At the General Meeting, the Delisting will be proposed.

The Directors unanimously recommend that you vote in favour of the Resolution as they have undertaken to do so in respect of their own beneficial holdings of 31,553,573 Ordinary Shares, representing 64 per cent. of the existing Issued Ordinary Share Capital.

Enquiries

 
 Dealogic (Holdings) PLC        Tel: [phone] 
 Rick McHattie, CFO 
 
 J.P. Morgan Cazenove (NOMAD)   Tel: [phone] 
 Andrew Hodgkin 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCDDGDLCUDBGBG