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Share Name | Share Symbol | Market | Type |
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Synlogic Inc | TG:MIN | Tradegate | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.00 | - |
RNS Number:4269H Medi@Invest PLC 12 February 2003 EMBARGOED FOR 7.00AM 13 February 2003 Medi@Invest PLC ("Medi@Invest" or "the Company") Proposed Change in Investment Strategy Proposed Acquisition of Universal Consumer Products ("UCP") and Suspension of trading on AiM pending publication of Circular Introduction The Board of Medi@Invest is pleased to announce a change to its existing investment strategy and that it has entered into a conditional agreement for the acquisition of Universal Consumer Products Limited ("UCP"). UCP is a trading company which specialises in the purchase and resale principally of branded consumer electronics at discounted prices to reflect the fact that they are surplus stocks or customer returns. These proposals will result in a fundamental change in the Company's business and depart substantially from its existing published investment strategy and, in view of the size of UCP, will constitute a "Reverse Take-over" under the AiM Rules. Pending the publication of the Circular comprising an Admission Document under the AIM Rules, dealings in the Company's shares have been today suspended in accordance with the AIM Rules. Background to and reasons for the change in investment strategy and the Acquisition Since 1998, the Company's strategy has been to take stakes in media and internet related companies. Through a combination of management problems and rapidly deteriorating market conditions, two of the three principal investments, KZN Media Ltd and Creations Holdings Ltd, were unable to continue trading and the investments had to be written off in March 2001 and April 2002 respectively. At the present time, the Company's principal assets consist of its investment in its wholly-owned subsidiary, Andromeda Holdings Limited ("Andromeda"), a book packaging company, a small stake in Callserve Communications Limited ("Callserve") and its remaining net cash of approximately #2.1 million. The Directors have been seeking a significant new business to acquire for the past 18 months with the criteria that such a business should be profitable, cash generative and able to be purchased on a modest multiple of historic and projected earnings. Given that the overall objective is to increase Shareholder value, opportunities in a wide range of business sectors have been examined. It is the belief of the Directors that the purchase of UCP offers the Company an opportunity to build a viable and profitable group and thus to restore value in the shares. Business of Universal Consumer Products Limited ("UCP") UCP is a privately owned trading company based in Market Drayton, Shropshire. Its main business is the purchase and resale of branded consumer electronics goods (typically TVs, DVD players and hi-fi mini systems) and other selected durable consumer goods at discounted prices which reflect the fact that they are surplus stocks or customer returns. UCP purchases these in large quantities directly from its "buy-side" customers, usually supermarkets, high street multiple retailers and UK based operations of manufacturers, many of which are well-known household names. They are typically paid for and collected on the same day that agreement is reached for their purchase. The goods purchased are then stored at UCP warehouse at Market Drayton in racks of pallets until their onward sale to the "sell-side" customers. UCP does not have its own fleet of delivery trucks but uses independent third party hauliers. UCP is reliant on buying lines of stock at a substantial discount to retail prices. The exact level of discount depends on the condition of the goods; for example, refurbished and 'as new' goods cost more than customer returns which typically have a proportion that are faulty. UCP does not get involved in refurbishing or repairing any of the goods purchased but aims as quickly as possible to sell on to its network of discount retailers which in their turn sell to the high street customer. Most of these retailers have service departments and can repair any goods that need minor attention. The unaudited management accounts of UCP for the 7 months to 30 November 2002 show sales of #4.4 million and profit before tax of #0.61 million. In the year to 30 April 2002, UCP made sales of #7.2 million and profits before tax of #0.9 million. Details of the Acquisition Agreement Under the terms of the Acquisition Agreement, the Company has agreed to pay an initial purchase consideration of #2.5 million plus a deferred purchase consideration for the whole of the issued share capital of UCP to be satisfied in cash. The initial purchase consideration will be satisfied at completion of the Acquisition. The deferred purchase consideration is payable in the event that the aggregate net asset value of UCP at completion exceeds #1.05 million based on a balance sheet to be prepared as at completion of the Acquisition. If the aggregate net asset value of UCP at completion is less than #1.05 million, the Vendor is obliged to repay the shortfall to the Company. The finance for the Acquisition will be provided from a combination of the Company's existing cash resources and bank facilities. Future Strategy On the assumption that the Resolutions are passed at the EGM and that the Acquisition completes, the Company's principal focus will be on owning and managing UCP. The strategy of the Directors will be to build and grow sales and profits upon the solid base that the acquisition of UCP provides. Under the new investment strategy it is also possible that the Company will invest in other businesses or enter into transactions of a trading nature where the Directors believe that there are significant prospects for profits to be made. At the current time, the Directors are also examining investment opportunities in the property market as a result of having been approached by a successful private property trading company. Further Information A Circular relating to the proposals for the new group will be sent to Shareholders as soon as practicable. 13 February 2003 Enquiries Edward Adams, Medi@Invest PLC 0207 209 1324 Roland Cornish, Beaumont Cornish Limited 0207 628 3396 This information is provided by RNS The company news service from the London Stock Exchange END SRSEAPAAFEKDEFE
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