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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Creative Educ | LSE:CEC | London | Ordinary Share | GB0032667916 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.10 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:9389P Creative Education Corp Plc 10 August 2005 THE CREATIVE EDUCATION CORPORATION PLC Notice of Extraordinary Meeting The Creative Education Corporation Plc ("CEC" or the "Company") is pleased to announce that it has entered into an agreement to acquire the entire issued share capital of Conduit Square Limited ("Conduit") and the freehold interest in the Primary Steps Nursery at Upper Richmond Road, East Sheen from Iron Founders and Allied Trade Nominees Limited ("IFAT"), together ("the Acquisitions"). A circular providing details of the Acquisitions and to convene an EGM to take place on 7 September 2005 at which the requisite resolution will be put to the Company's shareholders to approve the acquisition of Conduit pursuant to the requirements of S320 of the Companies Act 1985 is today being sent to shareholders. Background On 28 February 2005, shareholder consent was obtained for the acquisition of Conduit but on slightly different terms than those now proposed. Conduit is a company wholly owned by Laurence Davis, John Baker and Frank Mountain (the " Vendors") who are shareholders in CEC. Laurence Davis is also deputy chairman of CEC. IFAT is a company wholly owned by John Baker. As such the acquisitions of Conduit and IFAT are related party transactions (as defined) under the AIM Rules. Laurence Davis, John Baker and Frank Mountain are also deemed to be acting in concert, and may be deemed to be acting in concert with others, for the purposes of the City Code on Takeovers and Mergers. In order for the Vendors to avoid any requirement for them to make a bid for the entire issued share capital of the company under the rules of the City Code on Takeovers and Mergers, the consideration for Conduit and IFAT is now to be satisfied by the issue to the Vendors of loan notes ("Loan Notes"). Information on Conduit Conduit owns the following eight freehold premises which are currently leased by the Company. Nursery Premises Primary Steps Squirrels 6 Lindon Road, Bedford, Bedfordshire MK40 2DA Primary Steps Clarence House 41 Clarence Avenue, Ilford, Essex IG2 6JH Primary Steps Gosford Babies 200 Beehive Lane, Ilford, Essex IG4 5EE Primary Steps Gosford House 229-231 Beehive Lane, Ilford, Essex IG4 5EB Primary Steps Montessori Foster Road, Boxmoor, Hemel Hempstead, Herts HP1 1EL Primary Steps Milton Keynes Baron Close, Bletchley, Milton Keynes, Bucks MK2 2UP Happy House Reading 22 Fartherson Road, Reading RG1 4PL Happy House Crowthorne 59-61 Dukes Ride, Crowthorne RG45 6NS The amount payable by the Company for the Conduit shares shall be #2,936,472 payable in Loan Notes, subject to downwards only adjustment as below, of which #2,536,609 is in respect of the properties with the balance being #181,500 in respect of Conduit's holding of the Company's shares plus the debt due to Conduit from the Company as more particularly detailed below. The quantum of the consideration for Conduit is partly based on the valuations prepared by Dunlop Heywood Lorenz on (a) 18 March 2005 in respect of the six Primary Steps properties and (b) 24 May 2005 in respect of the two Happy House properties, which show that the aggregate value of all the properties owned by Conduit to be #8,575,000. The amount of debt owed by Conduit to the Nationwide Building Society in respect of the Conduit properties is currently #6,038,391 and this debt will be refinanced by the Company on completion of the transaction. The consideration payable by the Company for Conduit will not be increased in any event, but if the amount of the debts owed by Conduit to the Nationwide Building Society (including break costs) are in excess of #6,038,391 at completion the consideration will be reduced on a pound for pound basis accordingly. Conduit currently owns 5,000,000 of the Company's shares which, based on a mid market share price of 3.63p, as at 30 June 2005 being the date of approval by the independent directors, are valued at #181,500. Conduit also has the benefit of a debt of #218,363 owed by the Company to Conduit. Thus on the purchase of Conduit such debt will become an inter-company liability and effectively be eliminated from the Company's consolidated balance sheet. The Vendors will warrant that save for loans from the Nationwide Building Society, Conduit will have no liabilities on completion and the Company will retain #120,000 of consideration to cover any liabilities. Loans to the Vendors from Conduit amounting to #51,050 will be novated by Conduit to the Company on completion and will be deemed repaid and offset against the consideration. After completion of the Acquisition it is proposed that Conduit will dispose of its shareholding in the Company in the market place in due course or redeem such shares in accordance with the provisions of the Companies Act 1985. Information on IFAT In addition to the acquisition of Conduit the Company also intends to purchase the freehold interest in the Primary Steps Nursery at Upper Richmond Road, East Sheen ("Nursery") which is currently leased to the Company by IFAT. John Baker, a substantial shareholder and ex-director of the Company, is the sole director and shareholder of IFAT. Shareholder approval for the acquisition of the property was obtained on 3 March 2004 but is no longer required under the Companies Act 1985 as John Baker is no longer a director of the Company. The Company will refinance borrowings of #583,546 in connection with the acquisition of the property. The consideration payable is based on a valuation prepared by Dunlop Heywood Lorenz on 24 May 2005 for the Nationwide Building Society which values the Nursery at #800,000. Additional expenditure on fixtures and fittings of approximately #35,000 (plus VAT) has been carried out on the Nursery since the date of the valuation. The consideration will therefore be not more than #257,579 to be reduced on a pound for pound basis by which the secured debt owed to the Nationwide Building Society (including any break costs) exceeds #583,546 at completion payable in Loan Notes The consideration payable by the company for the property will not be increased in any event. The Loan Notes Interest will accrue on the Loan Notes at 5 per cent. per annum but will not be payable until redemption. The loan notes will be repayable in 3 years after the date of their issue or earlier if there is an event of default (i.e. or insolvency event of company). The Company may prepay the Loan Notes at any time but only with the consent of 75 per cent of the loan note holders. The Loan Notes will be unsecured and freely transferable. Certain of the Company's shareholders, as set out below, who may be deemed to be acting in Concert are currently interested in an aggregate 93,791,698 ordinary shares in the Company, representing approximately 30.1 per cent. of the Company's issue share capital. Due to their interests in the Company, they have all undertaken not to vote on the resolution and to procure that their associated companies, including Conduit, will not vote on the resolution. Shareholder Number of ordinary shares in the Percentage of issued Company ordinary share capital Laurence Davis 32,241,468 10.3% John Baker 32,150,230 10.3% Frank Mountain 3,000,000 1.0% David Alexander 14,000,000 4.5% James Sterling 4,200,000 1.3% Ronald Sterling 3,500,000 1.1% Ray Harris 2,600,000 0.8% Tony Lynch 2,100,000 0.7% Recommendation The Acquisitions constitute related party transactions for the purposes of the AIM rules. The directors of the Company, with the exception of Laurence Davis who is interested in Conduit as shareholder and director and David Alexander, who may be acting in concert with him, having consulted with Corporate Synergy Plc, the Company's nominated adviser, consider that the terms of the Acquisitions are fair and reasonable insofar as the Company's shareholders are concerned. The Directors, other than Laurence Davis and David Alexander, who may be acting in concert with him, therefore recommend shareholders to vote in favour of the resolution and intend to do so themselves in respect of 580,000 ordinary shares, representing approximately 0.2 per cent. of the Company's issued share capital. Copies of the circular will be available free of charge to public at the offices of Corporate Synergy Plc at 30 Old Broad Street, London EC2N 1HT, for a period of one month from the date of this announcement. Enquiries: Chris Phillips - Chairman 020 7487 1960 Olly Cairns - Corporate Synergy Plc 020 7748 4400 This information is provided by RNS The company news service from the London Stock Exchange END ACQBGGDIDXBGGUG
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