Disposal

RNS Number:0193W
Newmarket Investments PLC
21 December 2005





                            Newmarket Investments plc

                      Disposal and Capital Reorganisation



21 December 2005



The Company today announces that it has entered into an agreement for the sale,
subject to Shareholder approval, of the entire issued share capital of its
subsidiary, Goalstriker, to Ross Reason and that it is also proposing to effect
the Capital Reorganisation. The Company has also announced the appointment,
immediately following the EGM, of Tony Gadsby Peet and Philip Reid to the Board
with the aim of developing the Group's existing business primarily based around
horse racing and sports services.  The Board's strategy for the Group is
explained in more detail in the 'Future prospects of the Company' paragraph
below.



The Group has entered into, subject to Shareholder approval, the Sale Agreement
under which Ross Reason would acquire Goalstriker upon payment of the
Consideration to the Company.  In addition, Ross Reason has indicated that he
will gift 750,000 of his Ordinary Shares to the Company.  The Board intend to
cancel these shares in due course which will not reduce the Company's net assets
but will increase earnings per share.



In addition to seeking Shareholder approval for the disposal of Goalstriker, the
Board unanimously recommends that Shareholders approve the Capital
Reorganisation.  The Capital Reorganisation will reduce the nominal value of
each Ordinary Share to 1 penny, allowing further shares to be issued in the
future.  Currently, the Company is prevented from issuing new shares as the
market price is below the Ordinary Shares' nominal value.  This process is
outlined in more detail below.



The Directors have convened an Extraordinary General Meeting for 11 a.m. on 18
January 2006, at which Shareholders will be asked to consider, and if thought
fit, approve the Resolutions in order to implement the Proposals.  Details of
the Extraordinary General Meeting and the Resolutions are contained in the
Notice of EGM set out at the end of the Circular.



Background to the Disposal of Goalstriker



The Board has agreed, subject to Shareholder approval, to dispose of
Goalstriker. Goalstriker, which was acquired in April 2002, has not developed
under the Group umbrella as anticipated. The Directors believe Goalstriker's
growth and the development of Goalstriker's roll-out program has been restricted
by the broader underperformance of theme parks and wider global leisure sectors
in recent years which has presented particularly challenging trading conditions.



Given the continuing uncertainties in the theme parks sector, the Board is
unable to predict the future growth opportunities and ongoing funding
requirements necessary for this business with any degree of certainty.  The
Independent Directors, who have consulted with Charles Stanley, the Company's
nominated adviser, believe that the terms of the proposed disposal of
Goalstriker are fair and reasonable insofar as the Shareholders are concerned.



For the year to 31 March 2005, the audited turnover attributable to Goalstriker
was #621,000 with a loss of #789,000 before the allocation of central running
costs. The disposal of Goalstriker will, if approved by Shareholders, reduce the
indebtedness of the Company.



The financial Information on Goalstriker including management accounts for the
six-month period to 30 September 2005 and extractions without material
adjustment from the report and accounts for the years ending 31 March 2005 and
31 March 2004 are as follows:


                                 6 months to                  Year to                   Year to
                              30 September 2005            31 March 2005             31 March 2004
                                    #'000                      #'000                     #'000
                                  Unaudited                   Audited                   Audited

Turnover                             398                        621                       284
Loss before Tax                     (232)                      (789)                     (938)




Remaining businesses of the Company



Subject to Shareholder approval, the racing businesses will be the remaining
trading businesses of the Group. The racing businesses are made up of The
British Bloodstock Agency (U.K.) Limited which will continue its trading
activities as a bloodstock agent and B.B.A Insurance Services Limited which will
also continue trading; both are wholly owned Group subsidiaries.  As such
Directors do not consider that the Company will be classed as an investing
company under rule 15 of the AIM Rules.



For the year to 31 March 2005 the audited turnover attributable to the racing
businesses of Newmarket was #157,000 with a loss of #31,000 before the
allocation of central running costs.



Appointment of new directors



The Board today announces the appointment, immediately following the EGM, of
Tony Gadsby Peet (age 51) and Philip Reid (age 56) to the Board with the aim of
developing the Group's existing business, primarily based around horse racing
and sports services, the traditional core businesses of the Group.



The Board has been actively seeking acquisitions based around these core
businesses that will offer synergistic benefits and a positive cash flow in the
short term.  Messrs Gadsby Peet and Reid have identified a number of
opportunities which the Board is actively considering.



Immediately following the EGM, Tony Gadsby Peet will join the Board as chief
executive and Philip Reid will join as executive chairman, replacing Piers
Pottinger who will remain as a non-executive director.  Under the terms of their
respective service agreements with the Company Tony Gadsby Peet will be paid
#75,000 per annum and Philip Reid will be paid #30,000 per annum.  The service
agreements for Messrs Gadsby Peet and Reid are respectively subject to review
following the completion of a reverse takeover (as defined by the AIM Rules)
resulting from an acquisition identified and implemented by either of them.



Philip Reid has considerable experience in developing quoted companies by
identifying, acquiring and making investments in a wide range of businesses,
most recently with Mavinwood plc where he is the non executive chairman and
Harbinger Capital plc where he is executive chairman. He holds several
directorships with quoted and unquoted companies.  He has been involved within
the investment banking industry for the last 30 years.  During that time, he has
held senior positions in stockbroking, venture capital, asset management and
corporate finance with organisations that included The National Research
Development Corporation, Merrill Lynch and Continental Trust.  Between 1989 and
1999, he helped found and grow Custom House Asset Management Limited, an
independent adviser and administrator to third party investment funds in the
Dublin International Financial Services Centre.  More recently, Philip Reid has
acted as a consultant to Insinger de Beaufort, the Anglo-Dutch investment bank.



Tony Gadsby Peet worked between 1989 and 2004 for International Management Group
(IMG) in London where he most recently held the position of Senior International
Vice President, Licensing.  He developed a leading business strategy for IMG
licensing which previously had no presence in Europe.  He was involved in the
overhaul of the licensing strategy for the NFL in Europe, recruited Major League
Baseball as a client world wide and since 1993 developed the licensing of the
Rugby World Cup. He also negotiated the Nike sponsorship and kit supply for the
RFU, at the time, the largest deal of its kind in rugby.  He has in his time
held several directorships most notably as European Licensing Director at Marvel
Licensing, UK, Licensing Director at Hanna Barbera Licensing as well as being a
Licensing Executive for ATV Licensing.



Further information required by Schedule 2 (g) of the AIM rules is disclosed in
the Notes towards the end of this announcement.



Future prospects of the Company



Messrs Gadsby Peet and Reid arrive with the intention to position Newmarket as a
leading provider of sports related services. Initially they anticipate that
these services will be focussed within the horse racing world, in the longer
term they expect Newmarket will provide services in other sports sectors.



The first objective will be to review the two existing businesses, the
bloodstock and insurance agencies, and to identify what opportunities there are
for growth in these sectors. In the medium term they will aim to expand the
business by the acquisition of complimentary businesses within the world of
horse racing.  They envisage that the activities of the expanded group would
cover the following range of services: owner services (including syndication),
racecourse services, travel, publishing, editorial, sponsorship, public
relations and corporate hospitality.  These are broadly service businesses which
will provide synergistic benefits to the existing Newmarket businesses.



It will be the intention of the Company in the longer term to expand into other
sports where the expertise within the Group can be easily transferred.  For
example, a travel business that takes clients overseas to horse races would also
be able to provide those services for major events in other sports (cricket,
football, rugby and the Olympics being obvious examples).



Terms of the disposal of Goalstriker



Under the terms of the Sale Agreement, which is conditional upon the passing of
Resolution 1 by Shareholders, Newmarket will dispose of its shares in
Goalstriker to Ross Reason.  The aggregate amount payable to the Company by Ross
Reason on completion of the Sale Agreement will be effected by Ross Reason:



*  Setting off the loan from him to the Company of #260,595 (as at 30
November 2005), and any interest payable thereon up to completion of the Sale
Agreement;



*  Cancelling the Debenture; and



*  Surrendering #44,000 of salary and pension monies owed to him by the
Company (as at 30 November 2005) and any subsequent salary and pension monies
owed to him in this respect up to the completion of the Sale Agreement.



In addition, Ross Reason will gift 750,000 of his Ordinary Shares to the Company
following completion of the Sale Agreement.  The Company intend to cancel such
surrendered shares in due course.



The Directors also draw Shareholders' attention to the following consequences of
the disposal of Goalstriker:



*  Messrs Reason and Foster will resign as directors of Newmarket
pursuant, respectively, to the terms of a compromise agreement and a deed of
resignation with effect from the date of the Sale Agreement;



*  Options currently held by Messrs Reason and Foster over 731,250
Ordinary Shares will lapse upon their resignations becoming effective following
the EGM; and



*  100,000 options currently held by Nigel Stanton, a director of
Goalstriker, will be surrendered upon completion of the Sale Agreement.



Related party transaction and disposal resulting in a fundamental change of
business



As Ross Reason is a director of the Company and Goalstriker, and will be
interested in the acquisition of Goalstriker, the transaction will be a related
party transaction for the purposes of Rule 13 of the AIM Rules and a substantial
property transaction for the purposes of section 320 of the Companies Act.
Consequently, the disposal of Goalstriker is conditional upon the approval of
Shareholders.   In addition, approval of Shareholders is required as the
disposal of Goalstriker amounts to a fundamental change of the business of the
Company for the purposes of Rule 15 of the AIM Rules.



Ross Reason has a beneficial interest in 2,457,000 Ordinary Shares  representing
25.9 per cent. of the issued share capital of the Company (of which 830,313
Ordinary Shares are owned by Ross Reason's wife).  As regards his personal
shareholding in the Company (being 1,626,687 Ordinary Shares), Ross Reason has
irrevocably undertaken to abstain from voting on Resolution 1.



The Independent Directors, who are all independent for the purposes of the AIM
Rules, having consulted with Charles Stanley, the Company's Nominated Adviser,
consider the terms of the disposal of Goalstriker to be fair and reasonable
insofar as the Company's Shareholders are concerned.



Terms of the Capital Reorganisation



The Directors wish to have the ability to issue ordinary shares in the future to
investors.  In order for them to be able to do so it is necessary to implement
the Capital Reorganisation.  This is because the Companies Act does not permit
the issue of shares at a price below their nominal value and currently the
market value of an Ordinary Share is lower than its nominal value.  The
Directors feel the Company should have ordinary shares that have a more
appropriate nominal value in light of the market value of the Ordinary Shares.



At present the authorised share capital of the Company is #4,250,000, divided
into 17,000,000 Ordinary Shares of which 9,500,000 Ordinary Shares are currently
in issue.  It is proposed that each of the existing Ordinary Shares be
subdivided into one New Ordinary Share and one Deferred Share.  The New Ordinary
Shares will have the same rights as those attributable to the Ordinary Shares.
The Deferred Shares will have no rights to vote or to participate in dividends
and carry limited rights on any return of capital (whether on a liquidation or
otherwise).  The Capital Reorganisation requires the approval of Shareholders to
be sought by way of Resolutions 2 and 4 outlined in the Circular.



On the passing of Resolutions 2 and 4 a holder of one Ordinary Share would as a
result hold one New Ordinary Share and one Deferred Share.  The Company does not
propose to issue new share certificates in respect of the New Ordinary Shares as
the number of shares held will be identical and therefore existing share
certificates will continue to be valid.



Application will be made for the New Ordinary Shares to be admitted to trading
on AIM where the Ordinary Shares are currently traded.  It is expected that
Admission will take place and dealings in the New Ordinary Shares will commence
on 19 January 2006.  It is not expected that the Proposals will, of themselves,
have an effect on the market price of your shareholding as although the nominal
value of the New Ordinary Shares will be lower than that of the Ordinary Shares,
the number of ordinary shares in the capital of the Company that you hold will
not change.



No such application will be made in respect of the Deferred Shares and the
Deferred Shares will not be dealt in on any stock exchange.  In due course, the
Board may consider the cancellation of the Deferred Shares.  Such a process
would require the approval of the High Court in addition to Shareholder
approval.  The effect of such a cancellation would be that the reserve resulting
from it could be applied in eliminating a deficit on the Company's profit and
loss account.



The creation of Deferred Shares will require the Company's articles of
association to be amended in order to establish the rights they will carry.
Such amendments will require the approval of Shareholders to be sought by way of
Resolution 4.  The full rights to be attached to the Deferred Shares are set out
in the proposed new articles of association of the Company.



Broadly, the Deferred Shares will carry no right to attend and vote at general
meetings of the Company and they will carry no right to receive any dividend or
distribution.  On a return of capital on liquidation, but not otherwise, they
will be entitled to receive their 24 pence nominal amount but only after the
holder of each New Ordinary Share shall have received the nominal amount of that
New Ordinary Share and a payment of #100 per share.  It will also be a term of
the issue of the Deferred Shares that they shall be deemed to confer irrevocable
authority on the Company at any time to cancel them in accordance with the
Companies Act without making any payment to the holders of the Deferred Shares.
Thus, the Deferred Shares have no economic value and accordingly no certificates
of title will be posted to shareholders.



Extraordinary General Meeting



A notice convening an Extraordinary General Meeting to consider and, if thought
fit, pass the Resolutions is set out in the Circular.



Action to be taken



Shareholders will find a Form of Proxy accompanying the Circular for use at the
EGM.  Whether or not you intend to be present at the EGM, you are requested to
complete and return the Form of Proxy in accordance with the instructions
printed thereon as soon as possible.  To be valid, completed Forms of Proxy must
be received by the Company's registrars Capita Registrars, The Registry, 34
Beckenham Road, Beckenham, Kent BR3 4TU not later than 11 a.m. on 16 January
2006, being 48 hours before the time appointed for holding the EGM.  Completion
of the Form of Proxy will not preclude you from attending the meeting and voting
in person if you so wish.



Recommendations



Disposal of Goalstriker

Your Independent Directors believe that the disposal of Goalstriker is in the
best interests of the Company and Shareholders as a whole.  Accordingly, the
Independent Directors unanimously recommend that you vote in favour of
Resolution 1 to be proposed at the EGM as they intend to do so in respect of
their own aggregate holdings of 836,746 Ordinary Shares, representing
approximately 8.9 per cent. of the existing ordinary share capital of the
Company.



Capital Reorganisation

Your Board believes that the Capital Reorganisation is in the best interests of
the Company and Shareholders as a whole.  Accordingly, the Board unanimously
recommend that you vote in favour of Resolutions 2, 3, 4 and 5 to be proposed at
the EGM as they intend to do so in respect of their own aggregate holdings of
3,293,746 Ordinary Shares, representing approximately 34.8 per cent. of the
existing ordinary share capital of the Company.





Yours faithfully





Piers Pottinger

Non-executive Chairman





Expected Timetable


Latest time and date for receipt of Forms of Proxy                             11 a.m. on 16 January 2006
Extraordinary General Meeting                                                  11 a.m. on 18 January 2006
Admission takes place                                                                     19 January 2006
Dealings in the New Ordinary Shares                                                       19 January 2006







Enquiries



Simon Hayes
Tel: [phone]
Newmarket Investments plc



Freddy Crossley
Tel: [phone]
Charles Stanley & Co. Limited





Notes to the Announcement



Philip Reid holds or has held the following directorships in the past five
years:


Current Directorships                                    Past Directorships
Air Club Limited                                  Adorian plc (Formerly PrimeEnt plc)
Concierge Property Services Limited               Caplay plc
Douris UK Limited                                 Custom House Associates (UK) Limited
Exchange Limited                                  Custom House Investment Partners Limited
                                                  Frictionless Hinges and Joints

                                                  (dissolved 26 December 2000)
Harbinger Capital plc                             IFEX Innovation Finance & Equity Limited
Mavinwood plc                                     Java Property Securities Limited
Movo plc                                          Next Generation Sports plc
Multisport Services plc                           Next Generation Sports Events Limited
Study Abroad UK Limited                           Oakgate plc
                                                  Portman Entertainment Group Limited
                                                  Portman Entertainment Limited
                                                  Portman Media Assets Limited
                                                  Portman Productions Limited
                                                  Visual Corporation Limited



Philip Reid was a director of the following companies:



i)    Buckingham Communications PR Limited ('Buckingham'), which was
compulsorily wound up on 3 November 1993;



ii)   Warringtons plc, which had an administrative receiver appointed on  9 May
1991. The administrative receiver ceased to act on 27 April 1998;



iii)  Custom House Associates (UK) Limited, which was compulsorily wound up on
13 October 1999;



iv)   Visual Corporation Limited ('Visual'), which entered into a creditors
voluntary liquidation on 9 January 2002.



v)    PrimeEnt plc entered into a company voluntary arrangement ('CVA') with its
creditors on 26 June 2002.



In the case of Buckingham, Philip Reid believes that he resigned as a director
more than twelve months prior to the event referred to above.



In the case of Visual, Philip Reid believes he resigned from the parent company,
Oakgate plc on 1 October 2001, and believes that he had also resigned from
Visual.





Tony Gadsby Peet holds or has held the following directorships in the past five

Years:


Current Directorships                                            Past Directorships
Capital Land Management Limited                                  N/a
Multisport Services plc
Richmond Football Club Limited

There are no other matters which are to be announced as required under paragraph
(g) of Schedule 2 of the AIM Rules.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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