New Star Seeks Bids As Delisting, Restructuring Goes Ahead

New Star Asset Management Group PLC (NSAM.LN) said Thursday it is sill looking for possible bidders despite continuing with plans to delist its shares and restructure the business as a private company.

The fund manager has been badly hit by the financial crisis and in December was taken under the control of five banks after agreeing to swap GBP240 million of debt for a 75% equity stake and a tranche of preference shares.

Earlier this month New Star said it was weighing several "indicative proposals" that could include a full takeover of the company. According to press reports the U.K. asset manager Schroders PLC (SDR.LN) and other financial groups had submitted bid proposals.

The Schroders bid was said to be worth at least GBP100 million, making it the front-runner to take over the company.

New Star said Thursday it will today post a circular to its shareholders setting out the background of the de-listing.

"New Star's board of directors is actively pursuing possible alternatives to the restructuring with third parties, including an offer for the company or a sale of the company's business, but there can be no certainty that any such alternative transaction will be forthcoming, nor whether any such transaction (if forthcoming) would lead to a significant return, if any, to shareholders," the company said.

It said shareholders will vote on the delisting and restructuring plan on Feb. 10.

"New Star's board considers the restructuring to be in the best interests of the company and shareholders as a whole and unanimously recommends that shareholders vote in favor of the de-listing at the general seeing," the company said.

New Star shares last traded at 3 pence, having lost around 98% of their value.

Company Web site: www.newstaram.com

-By Digby Larner, Dow Jones Newswires; [phone]; [e-mail]

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