DDD Group PLC Notice of AGM and Proposed AIM Cancellation) (9355Y)

TIDMDDD

RNS Number : 9355Y

DDD Group PLC

23 May 2016

RNS: 23 May 2016

Time: 7:01am GMT

Headline: AGM Notice and Proposed AIM Cancellation

23 May 2016

DDD Group plc

Notice of Annual General Meeting and Proposed AIM Cancellation

Los Angeles, California: DDD Group plc (AIM: DDD; OTCQX: DDDGY), the advanced imaging and 3D solutions company, announces that the Annual General Meeting will be held on 29 June 2016 at 10.30am at the offices of Norton Rose Fulbright LLP, 3 More London Riverside, London and will include a special resolution to approve the cancellation of trading on AIM of all of the Ordinary Shares of the Company pursuant to Rule 41 of the AIM Rules for Companies

The notice of AGM will be posted to shareholders on 24 May 2016. Edited extracts of Part I of the Company's circular to Shareholders are reproduced below. Electronic copies of the circular are now available on the Company's website: www.dddgroupplc.com.

Under the AIM Rules the Cancellation can only be effected by the Company after the passing of a resolution of the Shareholders in a general meeting passed by a majority of not less than 75 per cent. of the votes cast, and the expiry of a period of twenty business days from the date upon which notice of the Cancellation is given in accordance with AIM Rules. In addition, a period of at least five business days following the passing of the resolution approving the Cancellation is required before the Cancellation may be put into effect. The notice of Cancellation has been submitted to the AIM team and, subject to the Cancellation resolution being passed by the requisite majority, it is expected that the Cancellation will become effective from 7.00 a.m. on 7 July 2016.

The Company intends to put in place a matched bargain settlement facility to serve as a limited platform for shareholders and other persons who seek to buy or sell shares following Cancellation.

Enquiries

 
 DDD Group 
  Chris Yewdall, President 
  & CEO 
  Victoria Stull, CFO               [phone] 
 Peel Hunt LLP (UK Nomad/Broker) 
  Richard Kauffer / Euan 
  Brown                             [phone] 
 Beaufort Securities (Joint 
  broker) 
  Elliot Hance                      [phone] 
 Berns & Berns (US PAL) 
  Michael Berns, esq.               [phone] 
 

APPIX I - EXCERPT FROM AGM NOTICE - LETTER FROM THE CHAIRMAN OF DDD GROUP PLC

TO THE REGISTERED HOLDERS OF THE ORDINARY SHARES

Dear Shareholder

Proposed AIM Cancellation and Annual General Meeting

   1.   Introduction 

The purpose of this letter is to provide you with information on the proposals to be put to the Annual General Meeting, to explain why your Board considers them to be in the best interests of the Company and Shareholders as a whole, and to recommend that you vote in favour of the Resolutions to be proposed at the Annual General Meeting.

Your specific attention is drawn to Resolution 10, which relates to the proposal to cancel the trading of the Ordinary Shares on AIM.

   2.   Background 

The Company has been quoted on AIM since January 2002. The Directors' rationale for seeking the original admission of the Company's Ordinary Shares to trading on AIM included engendering a level of interest in the Company that would gain support for its growth plans, access to equity capital markets to fund business growth, an enhanced corporate profile and a mechanism to provide a market in the Company's Ordinary Shares.

The interest in DDD Group's solutions for consumer 3D products was positive, however following the decline of the 3D consumer market, the Company has seen a decline in its turnover in the last two years, making it much harder to generate profits at the present time. This has caused a substantial price decrease and reduction in the liquidity of the stock making it difficult for the Company to raise sufficient capital to fully fund its growth plans for products and applications beyond the 3D market.

In addition, the Board has taken significant steps to reduce its cost base each year but the task is being made much more difficult by the additional expense of being an AIM listed company. The listing expense has become excessive for the size of the business and more importantly does not help to generate any additional revenue or profit.

The Board has reached the view that the Company is not receiving the benefits for which the AIM listing was originally sought, nor is there any possible chance of the situation changing in the foreseeable future. Accordingly the Board has concluded that in their opinion, it is in the best interests of the Company and its shareholders to seek a cancellation of trading from the AIM market. This will cut significant expense and enhance the possibility of potential dividends in the future.

   3.   Rationale for the AIM Cancellation 

The Directors have concluded that a resolution should be put to Shareholders to approve the AIM Cancellation for the following reasons:

-- the costs associated with maintaining a listing on AIM (including professional legal, accounting, broking and nominated advisory costs and the costs and fees of the London Stock Exchange) are now disproportionate to the value provided by the listing. Management of the Company expects that the savings arising from the AIM Cancellation will amount to more than GBP250,000 per annum;

-- like many other small listed companies, the Company suffers from a lack of demand for its shares and, in practical terms, has a small free float. As a result, the Board believes that there is currently no reasonable prospect of the Company being able to use the listing to raise money from other investors;

   --      the low liquidity in the Company's shares tends to lead to a volatility in the share price; 

-- there is a disproportionate amount of time spent by senior management to ensure compliance with the AIM Rules and other related regulatory requirements including corporate governance, reporting and disclosure obligations; and

-- the AIM Cancellation will provide the board with significant flexibility to progress the strategy and potentially return capital to shareholders in the future.

   4.   Process for and principal effects of the AIM Cancellation 

Under the AIM Rules, the Cancellation can only be effected by the Company after the passing of a resolution of the Shareholders in a general meeting passed by a majority of not less than 75 per cent. of the votes cast, and the expiry of a period of twenty Business Days from the date upon which notice of the Cancellation is given in accordance with the AIM Rules. In addition, a period of at least five Business Days following the passing of the Cancellation Resolution is required before the Cancellation may be put into effect. Subject to the passing of the Cancellation Resolution at the General Meeting, it is expected that trading on AIM in the Ordinary Shares will cease at close of business on 6 July 2016 with the Cancellation becoming effective from 7:00am on 7 July 2016.

The principal effects of the Cancellation are that:

-- there will no longer be a formal market mechanism enabling Shareholders to trade their Ordinary Shares through AIM or any other public stock market;

   --      the Company will not be obliged to announce material developments or interim results; 

-- the Company will no longer be required to comply with the AIM Rules, or to have a nominated adviser; and

-- the Company will no longer be bound to comply with the corporate governance requirements for companies with shares admitted to trading on AIM.

The Company will, however, remain a public limited company and will remain subject to the Takeover Code. Shareholders will benefit from those provisions of the Takeover Code, including in the case of an offer for all of the shares of the Company, whereby all shareholders will need to be treated equally. Shareholders will also continue to benefit from the relevant provisions of the Act, which contains various provisions for the protection of minority shareholders. No changes are currently proposed to be made to the Company's Articles.

The Directors shall keep Shareholders informed of the Company's progress from time to time as may be required and remain committed to high standards of corporate governance. As such the Directors will:

-- continue to provide Shareholders with copies of the Company's audited accounts in accordance with the applicable statutory requirements;

   --      continue to hold general meetings in accordance with applicable statutory requirements; 

-- keep shareholders updated in respect of certain matters concerning the Company through announcements on the Company's website and through an opt-in email distribution list; and

   --      retain at least one non-executive director on the Board for the foreseeable future. 

Whilst the Board believes the Cancellation is in the interests of the Shareholders as a whole, it recognizes that the Cancellation will make it more difficult for Shareholders to buy and sell Ordinary Shares should they wish to do so. Accordingly the Board will set up a matched bargain settlement facility to enable Shareholders to trade their Ordinary Shares, and further notification will be made once this is implemented. Under this settlement facility, it is intended that Shareholders, or persons wishing to trade shares, will be able to leave an indication with the provider of the service that they are prepared to buy or sell shares at an agreed price. In the event that the matched bargain settlement facility is able to match that indication with an opposite buy or sell instruction, they will contact both parties to effect the bargain.

The Board intends to monitor the popularity of this arrangement amongst Shareholders and will review it at regular intervals to consider whether it remains cost effective. Information relating to the facility will be put on the Company's website. The Company's CREST trading facility will remain in place for so long as it remains economic to do so.

   5.   Risks associated with retaining an interest in the Company following the AIM Cancellation 

The Directors draw to the attention of Shareholders the following factors which should be taken into account in assessing how to vote on the AIM Cancellation and whether or not to retain their interests in Shares in the event that the AIM Cancellation is approved by the Shareholders and becomes effective:

-- as indicated in paragraph 4 above, there will be no public market facility for dealing in the Shares and no price will be publicly quoted for the Shares. As such, interests in Shares are unlikely to be readily capable of sale and where a buyer is identified, it may be difficult to place a fair value on any such sale;

-- as an unquoted company, it will no longer be subject to the AIM Rules and Shareholders will only be able to rely on the protections afforded to shareholders under applicable English law and the City Code;

-- the Company will no longer be subject to the rules relating to disclosure of interests in Shares set out in the Disclosure and Transparency Rules, such that it may be difficult to ascertain the ownership of Shares from time to time;

-- the levels of transparency and corporate governance within the Company are unlikely to be as stringent as for a company quoted on AIM;

   --      there may not be sufficient demand to enable sale of Shares prior to the Cancellation; and 
   --      there may be personal tax consequences for Shareholders (see below). 

The above considerations are non-exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the AIM Cancellation on them.

Taxation

Upon AIM Cancellation, certain tax benefits applicable to Shares which are traded on AIM will cease to be available. If you are in any doubt about your tax position, and/or are subject to tax in a jurisdiction other than the UK, you should consult an appropriate independent professional adviser. You or your tax advisor should note that following AIM Cancellation the Company's Shares will no longer be quoted on AIM or any other public market.

   6.   Resolutions 

We will be seeking your approval of the AIM Cancellation at the forthcoming Annual General Meeting. Details of all the Resolutions to be proposed at the Annual General Meeting, including routine business, are set out below. Resolutions numbered 1-8 (inclusive) will be proposed as ordinary resolutions; this means that for each of those Resolutions to be passed, more than half of the votes cast must be in favour of the Resolution. Resolutions numbered 9 and 10 will be proposed as special resolutions; this means that for each of those Resolutions to be passed, at least three-quarters of the votes cast must be in favour of the Resolution.

Annual report and audited accounts (Resolution 1)

The Directors are required to present to Shareholders at the AGM the annual report and accounts together with the Directors' reports and the Auditor's report, for the year ended 31 December 2015 (the Annual Report) and Shareholders will be asked to receive these.

Re-appointment of Directors (Resolutions 2 to 5)

Under the Company's Articles of Association, one third of the Directors are required to retire by rotation each year. In addition, no Director may serve for more than three years without being re-elected by shareholders and any Non-Executive Director serving more than nine years must be re-elected by shareholders annually (such Non-Executive Directors are not taken into account when determining which other Directors are to retire by rotation).

Victoria Stull will retire by rotation in accordance with the Articles of Association. Nicholas Brigstocke, Sanji Arisawa and Hans Snook, all of whom are non-executive directors who have served for more than nine years, are standing for re-election in accordance with the Articles of Association. These Directors are being proposed for re-election through separate resolutions numbered 2 to 5 inclusive. Details of the directors, including those standing for re-election, appear on page 14 of the Annual Report. Paul Kristensen has decided not to stand for re-election. I would like to thank him for his long and valuable service to the Company.

Victoria Stull is an Executive Director and the Chief Financial Officer of the Group. Victoria was appointed to the Board in July 2012 following a review by the Board and Nomination Committee given her integral role in the Company through her assistance to the executive team in developing and executing the strategic direction as well as her role in the financial planning, record-keeping and reporting.

Nicholas Brigstocke is a Non-Executive Director and currently the Chairman of the Board as well as of the Remuneration and Nomination Committee. Nick also serves on the Audit and Corporate Governance Committee. Nick's experience in the financial industry brings a strong skill-set for strategic and financial planning as well as knowledge of public markets and companies.

Dr. Sanji Arisawa is President and CEO of Arisawa Manufacturing Company, which is the Company's largest corporate shareholder. As such, the Board has determined that Dr. Arisawa cannot be classified as an "independent" non-executive director. However, Dr. Arisawa brings significant knowledge and experience to the Board regarding business practices in Asia, where many of the Company's customers are based, and thoughtfully challenges the strategy of the Group to facilitate its success.

Hans Snook has served as a Director of the Company since 2006 and is considered, after review by the other Directors, to continue to demonstrate independence in character and judgement. His background and knowledge as an entrepreneur and businessman are valuable in determining the strategic direction of the Company, particularly his expertise in consumer brand establishment.

Auditors (Resolutions 6 and 7)

The Company is required at each general meeting at which accounts are presented to appoint auditors to hold office until the next such meeting. Grant Thornton UK LLP have indicated their willingness to continue in office. The audit committee has reviewed auditor independence, effectiveness and cost, and the Directors recommend the reappointment as a result of that review. Accordingly, Resolution 6 re-appoints Grant Thornton UK LLP as auditors of the Company and Resolution 7 authorises the Directors to fix their remuneration.

Authority of Directors to allot shares (Resolution 8)

The authority given to the Directors to allot further shares in the capital of the Company requires the prior authorisation of the shareholders in general meeting under section 551 of the Act. Upon the passing of Resolution 8, the Directors will have authority to allot shares up to an aggregate nominal amount of GBP628,900 which is approximately thirty three (33) per cent of the current issued ordinary share capital of the Company as at 20 May 2016 (being the latest practicable date before publication of this notice).

This authority, if given, will expire at the conclusion of the Annual General Meeting of the Company to be held in 2017. The Directors intend to continue to seek to renew this authority at each Annual General Meeting in accordance with current best practice.

Disapplication of pre-emption rights (Resolution 9)

If the Directors wish to exercise the authority under Resolution 8 and offer shares for cash, the Act requires that, unless shareholders have given specific authority to waive their statutory pre-emption rights, the new shares must be offered first to existing shareholders in proportion to their existing shareholdings. In certain circumstances, it may be in the best interests of the Company to allot new shares (or to grant rights over shares) for cash without first offering them to existing shareholders in proportion to their holdings.

Resolution 9, if passed, will authorise the Directors to do this by allowing the Directors to allot shares for cash (i) by way of a rights issue, open offer or other offer of securities in favour of existing shareholders in proportion to their shareholdings (subject to certain exclusions), (ii) in accordance with any share option scheme adopted by the Company and (iii) otherwise than pursuant to (i) and (ii) up to an aggregate nominal value of GBP381,200 which is equivalent to approximately twenty (20) per cent of the issued ordinary share capital of the Company as at 20 May 2016 (being the latest practicable date before publication of this notice).

This authority, if given, will expire at the conclusion of the Annual General Meeting of the Company to be held in 2017. The Directors intend to continue to seek to renew this authority at each Annual General Meeting in accordance with current best practice.

Cancellation of Admission to trading on AIM (Resolution 10)

Following careful consideration at a meeting of the Board held in May 2016, the Directors concluded that it is no longer in the best interests of the Company to maintain the Admission and so resolved to notify the London Stock Exchange pursuant to Rule 41 of the AIM Rules of their intention to cancel (subject to the passing of this Resolution 10 at the Annual General meeting) the Admission of the Company's securities.

As set out at paragraph 3 above, the Company would benefit from substantial cost savings as a result of the AIM Cancellation. After careful consideration, the Board believes it is in the best interests of the Company and Shareholders generally to seek the AIM Cancellation at the earliest opportunity.

In accordance with Rule 41 of the AIM Rules, the Company has notified the London Stock Exchange of the Cancellation. The Cancellation is conditional upon the approval of not less than 75 per cent. of the votes cast by shareholders (whether present in person or by Form of Proxy) at the Annual General Meeting. Accordingly, Resolution 10 seeks the Shareholders' approval to the AIM Cancellation. The Resolution approving the AIM Cancellation is not conditional on the passing of any other Resolution. Subject to the Resolution approving the AIM Cancellation being passed at the Annual General Meeting, it is anticipated that trading in the Ordinary Shares on AIM will cease at close of business on 6 July 2016 with the AIM Cancellation expecting to take effect on 7 July 2016. As a result, the Company will no longer be required to comply with the AIM Rules and will not be required to retain a nominated adviser.

Shareholders should note however that the Company will nevertheless remain subject to the provisions of the City Code following the AIM Cancellation.

   7.   Annual General Meeting 

As explained above, the Resolutions are subject to the approval of Shareholders in a general meeting. A notice convening the Annual General Meeting of the Company to be held on 29 June 2016 at 10:30 am at the offices of Norton Rose Fulbright at 3 More London Riverside, London SE1 2AQ is set out at the end of this document.

   8.   Action to be taken 

You will find enclosed a Form of Proxy for use in connection with the AGM. Whether or not you intend to be present at the AGM, you are requested to complete and return the Form of Proxy in accordance with the instructions printed on it as soon as possible and, in any event, so as to be received by the Company's registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom, not later than 2 working days before the time appointed for the AGM, that is to say, no later than 10.30 a.m. on 27 June 2016. Alternatively, you may prefer to register the appointment of a proxy for the meeting electronically. If so, please access the website www.investorcentre.co.uk/eproxy which is operated by Computershare, where full details of the procedure are given. The proxy appointment and instructions must be received electronically by Computershare not less than 2 working days before the time appointed for the AGM.

Completion and return of the Form of Proxy will not preclude a shareholder from attending the AGM and voting in person.

   9.   Recommendation 

The Directors consider that all the Resolutions to be put to the meeting are in the best interests of the Company and its shareholders as a whole and recommend shareholders to vote in favour of all the resolutions, as they intend to do (other than in relation to their own appointments as Directors) in respect of their holdings of in aggregate 14,865,909 ordinary shares, representing approximately 7.8 per cent of the Company's issued ordinary share capital as at 20 May 2016 (being the latest practicable date before publication of this notice).

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
 Publication of this document             23 May 2016 
 Latest time and date for receipt     10:30 am BST on 
  of Forms of Proxy for the General      27 June 2016 
  Meeting 
 Annual General Meeting               10:30 am BST on 
                                         29 June 2016 
 Expected last day of dealings            6 July 2016 
  in Ordinary Shares on AIM 
 Cancellation of admission to          7:00 am BST on 
  trading on AIM of the Ordinary          7 July 2016 
  Shares 
 

Notes:

(1) Each of the times and dates set out in the above timetable and mentioned in this document is subject to change by the Company, in which event details of the new times and dates will be notified by an appropriate announcement to a Regulatory Information Service.

   (2)     References to times in this document are to London BST times unless otherwise stated. 

DEFINITIONS

The following definitions apply throughout this document unless the context otherwise requires:

 
 Act                      the Companies Act 2006, as 
                           amended 
 Admission                the admission to trading on 
                           AIM of the Ordinary Shares 
 AIM                      a market operated by London 
                           Stock Exchange 
 AIM Cancellation         the proposed cancellation of 
                           Admission 
 AIM Rules                the London Stock Exchange AIM 
                           Rules for Companies 
 Annual General Meeting   the annual general meeting 
  or AGM                   of the Company to be held at 
                           10:30 am on 29 June 2016 (or 
                           any adjournment of it), notice 
                           of which is set out at the 
                           end of this document 
 Articles or Articles     the articles of association 
  of Association           of the Company in force at 
                           the date of this document 
 Board or Directors       the board of directors of the 
                           Company 
 Business Day             any day upon which the London 
                           Stock Exchange is open for 
                           business and any reference 
                           to business days shall be to 
                           clear business days 
 City Code or Takeover    City Code on Takeovers and 
  Code                     Mergers 
 Company                  DDD Group plc (company number 
                           04271085) 
 CREST                    the relevant system (as defined 
                           in the CREST Regulations) for 
                           the paperless settlement of 
                           share transfers and the holding 
                           of shares in uncertificated 
                           form in respect of which Euroclear 
                           UK & Ireland Limited is the 
                           operator (as defined in the 
                           CREST regulations) 
 CREST Regulations        the Uncertificated Securities 
                           Regulations 2001 (SI 2001/3855), 
                           as amended 
 London Stock Exchange    London Stock Exchange plc 
 Notice                   the notice convening the Annual 
                           General Meeting at the end 
                           of this document 
 Ordinary Shares or       ordinary shares of 1 pence 
  Shares                   each in the capital of the 
                           Company 
 Resolutions              the resolutions set out in 
                           the Notice and Resolution shall 
                           mean any of them 
 Shareholders             the holders of the Ordinary 
                           Shares 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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