|Toye & Co
||EPS - Basic
||Market Cap (m)
Real-Time news about Toye & Co. (London Stock Exchange): 0 recent articles
|redman991: I have sent the following to the Toye Directors and Brian Toye's advisors City and Merchant. No response as yet. Had hoped to publish as an RNS but LSE won't allow...
"Open letter To Bryan Toye
17th July 2014
Mr Toye, I note that you are proceeding with a mandatory offer for Toye & Co at 35p per share.
The response of the independent directors of our company (i.e. those not part your concert party) is as follows:
That letter includes the following:
"The price of 35 pence in cash for each Toye Share represents a discount of 30 per cent. over the Closing Price of 50 pence per Toye Share on 12 June 2014, being the last business day prior to the commencement of the Offer Period"
"a 70 per cent. discount to the audited net asset value per share as at 31 December 2013"
"Many loyal and long standing Toye Shareholders will share our view that the Offer Price undervalues the Company, and therefore the Independent Directors are not recommending that Toye Shareholders accept the Offer."
I agree with the independent directors and call on you to make a significantly better offer, or alternatively to use our company's facilities to make a tender offer for shares at a price significantly above your 35p offer price. The independent directors have indicated a pro forma cash balance of £480,000 at 28th July 2014.
Bryan Toye Limited ("BTL") is a special purpose limited liability company wholly controlled by you and was incorporated specifically to make the takeover offer. On 13 June 2014, the Company announced that BTL had acquired 272,000 Toye shares from Harris Rodriguez Limited at a price of 35 pence per share. The RNS release on that day suggested to me that this was the triggering event that required you (via BTL) to make a mandatory offer for our company.
Mr Toye, you said at our company's AGM on 19th June 2014 that you knew nothing about Harris Rodriguez Limited other than that they had contacted you to offer you a block of shares. However the now published formal offer document states that "On 31 March 2014, Harris Rodriguez Limited, a company connected to Bryan Toye (Chairman of the Company) acquired 272,000 shares in the Company at 35p per share. As a result, an offer under Rule 9 of the Code is required to be made for the remaining shares of Toye not already owned by him and his concert parties."
My understanding of the above is that it was the purchase by Harris Rodriguez Limited of those 272,000 shares that was the triggering event that required you to make a mandatory offer for our company (and not the purchase of shares by BTL from Harris Rodriguez Limited as suggested (to me at least) in the 13th June RNS).
The takeover code states in Rule 2.2 (b) that "An announcement is required:" "immediately upon an acquisition of any interest in shares which gives rise to an obligation to make an offer under Rule 9.1."
Perhaps there is an error in your offer document or maybe this was all just an administrative oversight, but if not, and if my understanding is correct, then why did you not announce your intention to make a mandatory offer immediately after the acquisition of those shares by Harris Rodriguez Limited (on 28th March 2014) rather than wait until 17th June 2014, the date that you did first announce your offer?
I shall be asking the takeover panel about the implications of this apparent breach (as I see it) of the takeover code. For the sake of complete clarity could you please explain in what way are you "connected" to Harris Rodriguez Limited?
I personally (as well, presumably, as a number of other investors) purchased Toye shares at a price significantly above 35p in the period between the acquisition of shares by Harris Rodriguez Limited and the announcement of your intention to make a mandatory offer. Clearly I would not have done so if your intention to make an offer had been announced earlier (as required by the takeover code). Will you compensate me, and other investors in a similar position, for this?
On 28th March 2014 Mr N K S Wills announced to the market that he had sold 272,000 shares in our company.
As there were no other trades of this size reported (and they would have to be reported as 272,000 represents c. 12% of the issued shares) it seems reasonable to assume that Mr Wills sold his shares to Harris Rodriguez Limited, a Gibraltar registered company (which gave its contact details as Formaco@gibraltar.gi when it notified the market of its acquisition of 272,000 shares).
Mr Wills had previously been a non-executive director of our company and his retirement was announced on 2nd January 2014:
The takeover code states that:
"An offer made under Rule 9 must, in respect of each class of share
capital involved, be in cash or be accompanied by a cash alternative at
not less than the highest price paid by the offeror or any person acting
in concert with it for any interest in shares of that class during the 12
months prior to the announcement of that offer"
So it seems that it is your acquisition of shares, originally owned by Mr Wills (a former colleague), and temporarily owned by Harris Rodriguez Limited (a company "connected" to you) that has set the price at which you have tabled your takeover offer. I shall be asking the takeover panel to review whether the takeover code, in its current form, does enough to protect minority shareholders - specifically where the offer price is set by an off market transaction(s) between colleagues (or, as in this case, former colleagues).
Compounding the, in my opinion, difficult decision faced by minority shareholders are the following issues:
a) from the offer document "It is anticipated that any cancellation of admission to trading on AIM would take effect no earlier than 20 clear business days after BTL has acquired or agreed to acquire 75 per cent of the voting rights attaching to the Toye Shares. The cancellation would significantly reduce the liquidity and marketability of Toye Shares not assented to the Offer at that time because following such cancellation, Toye would be re-registered as a private company under the relevant provisions of the Act and there would be no dealing facility for buying or selling Toye Shares". Why can you not provide such a facility? Many companies delist from the AIM market and it is my perception that the majority provide an on-going service for dealing the company shares, for those investors that wish to remain shareholders.
b) from the independent directors' letter "Even if BTL does not reach 75 per cent. as a result of this Offer, as its interest in Toye is greater than 50 per cent., there will be nothing to prevent BTL, notwithstanding its current intention, requisitioning a general meeting of the Company at any time with the purpose of seeking Shareholder's approval for cancelling the admission to the trading on AIM of Toye Shares. Such a resolution would require a vote in favour by 75 per cent. of the votes cast by Toye Shareholders and BTL would be able to vote its interest at that general meeting. Notwithstanding BTL's holding being below 75 per cent., the resolution may still be passed if insufficient shareholders do not vote against the proposal at the meeting". In other words if just a handful of independent shareholders were unable, unaware or simply too lazy to vote against such a proposal at that meeting, the resolution would be passed. I imagine you and your advisors are well aware of this, and how this will make it likely that your attempts to delist the company's shares will ultimately succeed - even if it is very much against the wishes of a significant majority of minority shareholders.
In summary Mr Toye, I call on you to do the following:
a) First and foremost to make a revised offer that more reasonably reflects the value of our company, or alternatively to use our company's facilities to make a tender offer for shares at a price significantly above your 35p offer price.
b) To clarify in what way you are "connected" to Harris Rodriguez Limited.
c) To clarify why your intention to make a mandatory offer for our company was not announced immediately after the purchase of shares by Harris Rodriguez Limited.
d) To compensate me, and others in my position, for any losses that will be incurred as a result of your apparent failure to adhere to the takeover code (by not launching your offer immediately after the acquisition of shares by Harris Rodriguez).
e) To guarantee that even if your plan to delist Toye shares is successful, that you put in place a dealing facility for those not wishing to accept your offer.
Toye & Co share price data is direct from the London Stock Exchange