TIDMDIAM
RNS Number : 1935G
Diamond Circle Capital Plc
26 June 2012
26 June 2012
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE
UNITED STATES, CANADA, JAPAN, AUSTRALIA, NEW ZEALAND OR SOUTH
AFRICA OR IN OR INTO ANY OTHER JURISDICTION IF TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
Diamond Circle Capital Plc ("Diamond Circle Capital" or the
"Company")
Notice of Extraordinary General Meeting
The Company announces that it will today post a circular to
Shareholders (the "Circular") including a notice of an
Extraordinary General Meeting of the Company ("General Meeting"),
to be held at 11.00 a.m. on 12 July 2012 at IOMA House, Hope
Street, Douglas, Isle of Man, IM1 1AP at which an ordinary
resolution (the "Resolution") will be proposed to amend the
Company's Investment Policy, to reflect the Board's intention to
effect a managed portfolio realisation comprising a sale of the
Company's diamond portfolio and the return of the net proceeds to
Shareholders (the "Proposal").
The Proposal is subject to Shareholder approval at the General
Meeting. The purpose of the Circular is to provide Shareholders
with details of the Proposal and of the Resolution and to recommend
that Shareholders vote in favour of that Resolution.
Background
On 8 May 2012, Abdallah Chatila made a cash offer (the "Offer")
for Diamond Circle Capital at US$3.50 per ordinary share of US$0.01
each in the capital of the Company (the "Shares"). The Board
considered the merits of the Offer from Mr. Chatila and concluded
that it was not in the interests of Shareholders to accept the
Offer as it fundamentally undervalued the Shares. The Board also
stated that it believed that if it were to undertake the Proposal,
it would be possible to realise and return to Shareholders greater
value than that which was on offer from Mr. Chatila.
The Board therefore resolved that it would, subject to the Offer
lapsing and subsequent further Shareholder consultation, convene a
General Meeting of the Company as soon as practicable following the
lapsing of the Offer, in order to put to Shareholders proposals for
the managed realisation of the Company's portfolio of diamonds and
the distribution of such proceeds to Shareholders.
On 15 June 2012, being the date on which the Offer closed, Mr.
Chatila announced that he had received valid acceptances in
relation to the Offer which, taken together with the Shares
acquired by him before or during the Offer, resulted in him holding
approximately 62.29 per cent. of the voting rights exercisable at
general meetings of the Company. Notwithstanding the level of
acceptances, the Board continued to believe that it would be
possible to realise and return to Shareholders greater value
through a managed portfolio liquidation than was available under
the Offer despite the Offer having become unconditional.
Mr. Chatila had previously indicated an intention to consult
with the Company's Board and Investment Adviser (AUM Asset
Management Limited) immediately after the Offer becoming
unconditional and to that end the Board entered into constructive
discussions with Mr. Chatila with a view to maximising Shareholder
value in the short term. As a result of those discussions, Mr.
Chatila has indicated to the Board his intention to support the
Board's proposal to return value to Shareholders by way of the
Proposal and his intention to vote in favour of the Proposal if and
when put to Shareholders at a General Meeting.
The Proposal
The investment objective of the Company as set out in the
prospectus issued on launch (the "Prospectus") "is to seek to
produce long-term appreciation of its portfolio of diamonds. To
achieve this objective, the Company intends to create a portfolio
of polished diamonds for long-term investment. It is intended that
diamonds within the Company's diamond portfolio will be traded only
when the Directors believe that there is a profitable opportunity
to make a sale or purchase." The Company's investment policy, as
set out in the Prospectus, includes provisions in respect of cost,
colour, clarity, certification and laser inspection and sources of
diamonds to be acquired by the Company.
The Board believes that it is in the best interests of the
Company and its Shareholders as a whole for the Company's existing
investment objective and policy to be amended to reflect the
commitment made in response to the Offer which would allow for the
Proposal. It is therefore proposed that the existing investment
objective and policy be replaced by the following:
"The Company will be managed with a view to realising its
existing portfolio of diamonds in an orderly and timely manner and
returning the net proceeds of sale to Shareholders at such times
and in such manner as the Board may in its absolute discretion
determine."
If the Resolution is passed, the Company will thereafter adhere
to the investment objective and policy set out above unless and
until such time as any amendments thereto are approved by
Shareholders.
The Board has not yet decided the precise manner in which
capital will be returned to Shareholders but currently envisages
that this may be by way of dividends, share buybacks, tender
offers, capital reductions, a liquidation of the Company or a
combination thereof. Details of any such proposals and any
resolutions required to be passed by Shareholders in order to
implement them will be circulated by the Board as and when it
considers, at its sole discretion, that it is appropriate to do so.
No liquidator or other similar officer will initially be appointed
and the diamond portfolio will continue to be managed by the
Company's Investment Adviser.
During the period in which the managed portfolio realisation is
carried out, as envisaged by the Proposal, it is expected that the
Shares will continue to be admitted to the Official List and to
trading on the London Stock Exchange until such time as the Company
no longer meets the eligibility requirements of the Listing Rules.
The cost efficiency of retaining the listing of the Shares during
the managed portfolio realisation period will continue to be
monitored and reviewed by the Board on an ongoing basis.
Resolution at the General Meeting
The Proposal is subject to the approval of the Resolution by
Shareholders at the General Meeting.
In order for the Resolution to be passed, it must be approved by
more than 50 per cent. of the votes cast or, if on a poll, by
Shareholders representing more than 50 per cent. of the votes cast,
by those Shareholders present in person or by proxy and being
entitled to vote.
The Company has received an irrevocable undertaking from Mr.
Chatila who, as at 25 June 2012 (the latest practicable date prior
to the publication of this document), is the beneficial owner of
Shares representing approximately 62.29 per cent. of the Company's
issued share capital. Mr. Chatila has undertaken to vote (or
procure that the registered holder votes) in favour of the
Resolution at the General Meeting.
RECOMMENDATION
The Board considers the Proposal to be in the best interests of
the Company and its Shareholders as a whole. The Board therefore
recommends that Shareholders vote in favour of the Resolution as
each member of the Board (to the extent that he holds shares in the
Company) intends to do in respect of his own beneficial holdings,
amounting in aggregate to 5,000 Shares, which represents
approximately 0.0673 per cent. of the Company's issued ordinary
share capital.
For further information please contact:
Numis Securities Limited
Tel: 020 7260 1000
David Benda / Nathan Brown
Redleaf Polhill
Tel: 020 7566 6700
Emma Kane/Rebecca Sanders-Hewett
Numis Securities Limited, which is authorised and regulated by
the Financial Services Authority, is acting exclusively for Diamond
Circle Capital Plc and for no-one else in connection with the Offer
and will not be responsible to anyone other than Diamond Circle
Capital Plc for providing the protections afforded to clients of
Numis Securities Limited, or for providing advice in relation to
the Offer or any other matters referred to herein.
Forward Looking Statements
This document contains statements that are or may be
forward-looking with respect to the financial condition, results of
operations and businesses of DCC. These forward-looking statements
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, valuation, performance or
achievements of DCC, or the industry in which it operates, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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