Tender Offer (8006E)

TIDMDBAY

RNS Number : 8006E

Douglasbay Capital PLC

12 April 2011

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, SOUTH AFRICA OR JAPAN

DOUGLASBAY CAPITAL PLC

Proposed return of cash to shareholders by way of a Tender Offer

and

notice of Annual General Meeting

HIGHLIGHTS

-- Shareholders are invited to tender up to 89 out of every 100 Ordinary Shares held

-- Tender Price of 16.35 pence per Ordinary Share

-- Total cash distribution of up to GBP200m (GBP198.6m after adjusting for management whom will not participate in full in the Tender Offer)

-- The Tender Offer is being made available to all Shareholders who are on the register a 5.30 p.m. on 9 May 2011

-- The Circular in connection with the Tender Offer, Notice of EGM and Tender Forms are being posted to Shareholders today

Quotes:

Alex Paiusco, Chief Executive stated

We are now pleased to be in the position to reward the investors who have supported us since the IPO. We will continue to work hard assessing new opportunities with a view to returning to the market to raise new funds for new specific investments, with the support of our seed investor Laxey Partners. 2010 has been a notable year but it's only the start of our journey.

For further information please contact:

 
 DouglasBay Capital plc          Peel Hunt LLP ((Nominated Adviser 
                                  & Broker) 
 Alex Paiusco, Chief Executive   Guy Wiehahn 
 Tel: [phone]               Tel: [phone] 
 

Peel Hunt LLP is authorised and regulated by the FSA in the United Kingdom and is acting exclusively as nominated adviser and broker to the Company (for the purposes of the AIM Rules for Companies) and no one else in connection with the Tender Offer. Peel Hunt LLP will not regard any other person as its customer or be responsible to any other person for providing the protections afforded to customers of Peel Hunt LLP nor for providing advice in relation to the Tender Offer. Peel Hunt LLP is not making any representation or warranty, express or implied, as to the contents of this document. The responsibilities of KBC Peel Hunt as the Company's nominated adviser are owed solely to the London Stock Exchange.

Expected timetable of principal events

Date

Tender Offer opens 12 noon on 13 April 2011

Latest time and date for receipt of signed Tender Forms and TTE instructions 1.00 pm on 9 May 2011

Record Date for the Tender Offer 5.30 pm on 9 May 2011

Latest time and date for valid receipt of Form of Proxy 12 noon on 10 May 2011

Annual General Meeting 12 noon on 12 May 2011

Announcement of results of the Tender Offer 12 May 2011

Dispatch of cheques for Tender Offer proceeds for certificated Ordinary Shares 17 May 2011

Creation of assured payment obligations for Tender Offer

proceeds for uncertificated Ordinary Shares 17 May 2011

Dispatch of balance share certificates for certificated Ordinary Shares Week commencing 16 May 2011

The above times and/or dates may be subject to change and in the event of any such change, the revised times and/or dates will be notified to Shareholders by an announcement through a Regulatory Information Service.

Proposed invitation by the Company to Shareholders to tender up to 89 out of every 100 Ordinary Shares held for buy back by the Company at a Tender Price of 16.35 pence per Ordinary Share ("Tender Offer") and notice of Annual General Meeting

Introduction

Further to the announcement dated 29 November 2010 wherein the Board notified Shareholders of the disposal of its

largest investment, the logistics business TDG Limited ("TDG") by way of the sale of TDG's holding company, Laxey Logistics

Limited ("LLL") (the "TDG Disposal"). The TDG Disposal was conditional only on competition clearance by the European

Commission, which has now been obtained. The Board is therefore pleased to confirm that the TDG Disposal closed on

29 March 2011 and total consideration received by the Company in respect of the TDG Disposal amounted to GBP206,390,467,

which was comprised of the consideration for the shares held by the Company in LLL and the repayment of a shareholder

loan from the Company to LLL. This figure is net of consideration payable to management shareholders in LLL and does not

include other cash resources in the Group from recent property disposals.

Background to and reasons for the Tender Offer

As a consequence of the TDG Disposal the Company is now in a strong cash position and the Directors believe that it is an

appropriate time for the Company to return up to GBP198.6 million to Shareholders by way of the Tender Offer.

The Directors are of the opinion that the Tender Offer benefits the Shareholders and that the terms of the Tender Offer

are fair and reasonable to the Company and the Shareholders and are in the best interests of the Shareholders as a whole.

The Tender Offer

The Company's articles of association ("Articles") permit the Company to agree to buy back Ordinary Shares in certain

prescribed circumstances, including pursuant to an offer to all Shareholders which, if accepted, would leave the relative

rights of Shareholders unaffected and which affords Shareholders 14 days within which to accept the offer.

The Company is proposing to return up to GBP198.6 million surplus cash to Shareholders by way of the Tender Offer at a price per Ordinary Share of 16.35 pence per Ordinary Share. Once purchased by the Company, the Ordinary Shares will automatically be cancelled.

The Tender Offer will constitute a "distribution" for the purposes of the Act and the Directors are satisfied that, after the completion of the Tender Offer, the Company will be able to pay its debts as they become due in the normal course of the Company's business and that the value of the Company's assets will exceed the value of its liabilities.

The Tender Offer is being made on the terms and subject to the conditions set out in the Circular and the Tender Form in respect of up to 89 out of every 100 Ordinary Shares in issue on the Record Date.

The Tender Offer is only available to Shareholders and in respect of up to 89 out of every 100 Ordinary Shares registered in the name of each Shareholder, rounded down to the nearest whole Ordinary Share.

Shareholders can choose whether they wish to offer Ordinary Shares for purchase by the Company. Shareholders are not obliged to offer any of their Ordinary Shares if they do not wish to do so. Shareholders may choose to offer less than 89 out of every 100 Ordinary Shares if they so wish.

Shareholders who choose not to participate in the Tender Offer and who therefore do not offer a proportion of their Ordinary Shares for purchase by the Company will not receive any cash proceeds under the Tender Offer but will own a greater percentage of the Ordinary Shares in issue after cancellation of the Ordinary Shares to be purchased by the Company. This may give rise to a notification obligation under the DTR - please see "Notification of Interests" below.

The Articles currently restrict the price which can be paid by the Company pursuant to a purchase of Ordinary Shares. Shareholder approval will be required in the form of a Special Resolution to amend the Articles to remove this restriction and allow for the purchase of Ordinary Shares at the Tender Price. Unless the Special Resolution is passed at an Annual General Meeting there is no guarantee that the Tender Offer will take place.

The following Directors intend to exercise all of their share options over Ordinary Shares ("Share Options") prior to the

Record Date and tender the following Ordinary Shares for buy back under the Tender Offer:

Number of Ordinary Shares Number of Share Options Number of Ordinary Shares currently held at the date currently held at the date Percentage participation held on completion

Director of the Circular of the Circular in the Tender Offer of the Tender Offer

Mr A Paiusco 2,786,585 42,696,255 75% 11,370,710

Mr G Bicknell 390,244 21,348,128 80% 4,347,675

Mr M Haxby 197,736 7,116,043 75% 1,828,445

Mr H Lehtonen - - - -

Mr D Panter 3,787,805 - 89% 416,659

Mr D Blackler 2,987,805 - 89% 328,659

Mr A Boyd 70,000 - 89% 7,700

Mr A Collins - - - -

Mr C Kingsnorth 168,570 - 89% 18,543

Laxey and funds under management of Laxey own 90.05% of the Ordinary Shares in issue and accordingly is a related party in terms on the AIM Rules. The Impartial Directors consider, having consulted with its Nominated Adviser, that the terms of the Tender Offer are fair and reasonable insofar as its shareholders are concerned.

The following is a summary of the principal terms of the Tender Offer:

-- The Company is inviting Shareholders to tender up to 89 out of every 100 Ordinary Shares held, rounded down to the nearest whole Ordinary Share, for buy back by the Company at the Tender Price.

-- Were all shareholders and option holders to exercise, the Company would purchase up to a maximum of 1,224 million Ordinary Shares for an aggregate purchase value of up to a maximum of GBP198.6 million representing approximately 89% of the Company's fully diluted share capital as at 13 April 2011 (assuming full take up of the Tender Offer).

-- Shareholders who hold Ordinary Shares in certificated form and who wish to participate in the Tender Offer must return a completed Tender Form, together with any shares certificate(s) and/or other document(s) of title so as to be received by the Company's receiving agent, Capita Registrars, by no later than 1.00 pm on 9 May 2011. Shareholders who hold their Ordinary Shares in uncertificated form (that is, in CREST) who wish to participate in the Tender Offer should not complete a Tender Form but should instead arrange for any uncertificated Ordinary Shares they wish to tender to be transferred into escrow.

-- Shareholders do not have to tender any Ordinary Shares if they do not wish to, but once submitted, a Tender Form and/or a TTE instruction (as appropriate) is irrevocable and cannot be withdrawn. Shareholders should note that, once tendered, Ordinary Shares may not be sold, transferred, charged or otherwise disposed of.

-- A tender by a Shareholder of Ordinary Shares in excess of the number offered to be bought back by the Company under the Tender Offer (but which would otherwise be valid) will be deemed to be a tender of the maximum 89 out of every 100 Ordinary Shares held by that Shareholder as at the Record Date, rounded down to the nearest whole Ordinary Share (the "Maximum Tender"). In addition, a tender by a Shareholder where the number of Ordinary Shares to be tendered is not stated in the Tender Form (but which would otherwise be valid) will also be deemed to be a tender of the Maximum Tender.

-- To the extent that the total aggregate consideration payable to a Shareholder under the Tender Offer would require that Shareholder to be paid a fraction of a penny, the amount of that consideration shall be rounded down to the nearest whole penny.

-- The decision of the Board as to the results of the Tender Offer shall be final and binding on all Shareholders.

-- The Tender Offer will remain open from 12 noon on 13 April 2011 until 1.00 pm on 9 May 2011.

-- Full details of the Tender Offer, including the terms and conditions on which it is made, are set out in the Circular which is being posted to Shareholders today.

-- Ordinary Shares will be purchased by the Company free of commissions and dealing charges.

Annual General Meeting - Proposed amendment of Articles

The Articles permit the Company to agree to buy back Ordinary Shares in certain prescribed circumstances, including

pursuant to an offer to all Shareholders which, if accepted, would leave the relative rights of Shareholders unaffected and

which affords Shareholders 14 days within which to accept the offer.

The implementation of the Tender Offer will require the Articles to be amended to remove the restriction on the price which can be paid by the Company in consideration for a buy back of Ordinary Shares. Shareholder approval will be required in the form of a Special Resolution to amend the Articles to remove this restriction.

The Special Resolution will require a majority of 75% or more of votes cast in order to be passed. Unless the Special

Resolution is passed at the Annual General Meeting there is no guarantee that the Tender Offer will take place.

The majority Shareholder in the Company is Laxey Partners Ltd ("Laxey"). As at the Record Date, Laxey, and the funds under management of Laxey, holds 91.05% of the Ordinary Shares in issue. Laxey has provided an undertaking to the Company that it will attend the Annual General Meeting and vote in favour of the proposed amendment to the Articles.

No significant change and pro-forma statement of net assets

The Company published their consolidated annual audited accounts for the year ended 31 December on 11 April 2010.

The Company disposed of TDG (its largest investment) on 29 March 2011. This transaction is disclosed as a post balance

sheet event in the consolidated annual audited accounts for the year ended 31 December announced on 11 April 2010.

The pro-forma statement of net assets set out in the Circular reflects pro-forma Group unaudited net assets as at 31 December 2010 of GBP33.2m after adjusting for the disposal of TDG, the sale of certain property assets which took place after year end, the proceeds from options to be exercised and the impact of the Tender Offer as if they occurred on 31 December 2010. The unaudited pro-forma statement of net assets has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and therefore does not, and will not, represent the Group's actual financial position or results.

Save as set out above there has been no significant change in the financial or trading position of the Group since 31 December 2010.

Recommendation in relation to the Tender Offer

The Directors are of the opinion that the Tender Offer benefits the Shareholders and that the terms of the Tender Offer

are fair and reasonable to the Company and the Shareholders and in the best interests of the Shareholders as a whole.

Accordingly, the directors unanimously recommend that Shareholders vote in favour of the Special Resolution to amend

the Articles to be proposed at the Annual General Meeting.

The Directors are making no recommendation to Shareholders in relation to participation in the Tender Offer. Whether or not Shareholders decide to tender their Ordinary Shares will depend, amongst other things, on their own individual circumstances, including their own tax position. Shareholders are recommended to consult their appropriately authorised independent advisers in determining whether or not to participate in the Tender Offer and the extent of any such participation.

The Directors are intending to tender 63.2 million Ordinary Shares (following the exercise of options they have been granted) in the Tender Offer which comprises the majority of the Ordinary Shares that they have a beneficial interest in.

Recommendation in relation to the Annual General Meeting

The Directors believe that the adoption of the resolutions to be proposed at the Annual General Meeting are in the best

interests of the Shareholders as a whole and accordingly unanimously recommend that Shareholders vote in favour of the

resolutions to be proposed which they intend to do in respect of their own shareholdings.

Definitions

In this Announcement the following definitions apply unless the context requires otherwise:

"Act" the Isle of Man Companies Act 2006 (as amended)

"Annual General Meeting" the annual general meeting of the Company at which, amongst other resolutions, the

Special Resolution will be considered, notice of which is enclosed with the Circular

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

"Capita Registrars" the Company's receiving agent, Capita Registrars, of The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU

"Circular" the document relating to the Tender Offer posted to Shareholders today

"Company" DouglasBay Capital plc

"Form of Proxy" the Form of Proxy to be used in connection with the Annual General Meeting and which accompanies the Circular

"Fully diluted share capital" all Ordinary Shares in issue together with any Ordinary Shares that would be issued if existing Share Options were fully exercised

"Impartial Directors" H Lehtonen and A Collins (whom are the only Directors whom are not tendering

Ordinary Shares in the Tender Offer)

"Ordinary Shares" ordinary shares of 5 pence each in the capital of the Company

"Overseas Shareholders" Shareholders who are citizens or nationals of, or resident in, jurisdictions outside the

Isle of Man and the United Kingdom

"participant ID" the identification code or membership number used in CREST to identify a particular

CREST member or other CREST participant

"Record Date" 5.30 pm on 9 May 2011

"Shareholders" holders of Ordinary Shares

"Special Resolution" the Special Resolution to amend the Articles, as more particularly described in the notice of

Annual General Meeting enclosed with the Circular

"Tender Form" the tender form accompanying the Circular for use in connection with the Tender Offer by Shareholders

"Tender Offer" the invitation by the Company to Shareholders to tender Ordinary Shares for conditional purchase by the Company on the terms and subject to the conditions set out in the Circular and the Tender Form

"Tender Price" 16.35 pence per Ordinary Share, being the price at which a Shareholder tenders some of his Ordinary Shares for purchase by the Company under the Tender Offer

"UK" the United Kingdom of Great Britain and Northern Ireland

This information is provided by RNS

The company news service from the London Stock Exchange

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