TIDMMDY
RNS Number : 3480X
MDY Healthcare PLC
14 February 2012
MDY Healthcare plc
("MDY Healthcare" or the "Company")
PROPOSED REDUCTION OF SHARE PREMIUM ACCOUNT AND CAPITAL AND
RETURN OF CAPITAL TO SHAREHOLDERS
PROPOSED CANCELLATION OF ADMISSION OF ORDINARY SHARES TO TRADING
ON AIM PROPOSED RE-REGISTRATION AS A PRIVATE LIMITED COMPANY
PROPOSED ADOPTION OF NEW ARTICLES OF ASSOCIATION and NOTICE OF
EXTRAORDINARY GENERAL MEETING
14 February 2012: MDY Healthcare plc (AIM: MDY), the strategic
investor in healthcare companies, is pleased to announce the
following:
-- The proposed return of capital to Shareholders of 52 pence
per ordinary share on 10 April 2012
-- The proposed capital reduction in order to facilitate the return of capital
-- The proposed cancellation of admission of the Company's
ordinary shares to trading on AIM, and the intention to establish
alternative arrangements for dealings in the ordinary shares
following such cancellation
-- The proposed re-registration of the Company as a private
limited company and the associated adoption of new articles of
association
-- An extraordinary general meeting of the Company to be held in
connection with the above proposals at the offices of Berwin
Leighton Paisner LLP, St. Magnus House, 3 Lower Thames Street,
London EC3R 6HA at 11.00 a.m. on 8 March 2012
These proposals are conditional on shareholder approval; the
reduction of capital and the return of capital are also subject to
Court approval.
A circular setting out details of the proposals and containing a
notice of extraordinary general meeting will be sent, or made
available, to shareholders today. The full circular will be
available on the Company's website: www.mdyhealthcare.com.
Grahame Cook, Chairman, said:
"The proposed capital return of 52 pence per ordinary share is
significantly more than the share price of 25.5 pence at the time
of the appointment of the current Board. We anticipate at least one
further return to shareholders in the next 18 months from the
Medivance consideration retention and the proceeds from any sale of
our investment in Stanmore."
For further information, please contact:
MDY Healthcare plc
Grahame Cook, Chairman +44 (0) 203 178 5925
Zeus Capital (Nomad)
Ross Andrews, Andrew Jones +44 (0) 161 831 1512
Notes for editors:
About MDY Healthcare
MDY Healthcare plc is a healthcare sector investing company
quoted on AIM (ticker symbol: MDY). Further information can be
found on the website www.mdyhealthcare.com.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication date of the Circular 14 February 2012
Latest time and date for receipt of 11.00 a.m. on 6 March
completed Forms of Proxy 2012
Time and date of Extraordinary General 11.00 a.m. on 8 March
Meeting 2012
Expected Record Time 6.00 p.m. on 30 March
2012
Expected date of Court hearing to confirm 3 April 2012
the Capital Reduction*
Expected effective date for the Capital 4 April 2012
Reduction*
Expected last day for trading of the 5 April 2012
Ordinary Shares on AIM
Expected date for return of 52 pence 10 April 2012
per Ordinary Share to Shareholders registered
on the register of members of the Company
at the Record Time*
Expected date that admission to trading 10 April 2012
of the Ordinary Shares on AIM will be
cancelled
Earliest date that the Company will 10 April 2012
be re-registered as a private company**
*The Capital Reduction will not take place unless Court approval
is obtained. These dates are dependent on, inter alia, the date
upon which the Court confirms the Capital Reduction. The Court
hearing date is provisional.
**Assumes that there is no application for cancellation of the
Re-registration.
References to time in this announcement are to Greenwich Mean
Time. Each of the times and dates in the above timetable is subject
to change. If any of the above times and/or dates change, the
revised times and/or dates will be notified to Shareholders by
announcement on a Regulatory Information Service.
PROPOSED REDUCTION OF SHARE PREMIUM ACCOUNT AND CAPITAL AND
RETURN OF CAPITAL TO SHAREHOLDERS
PROPOSED CANCELLATION OF ADMISSION OF ORDINARY SHARES TO TRADING
ON AIM PROPOSED RE-REGISTRATION AS A PRIVATE LIMITED COMPANY
PROPOSED ADOPTION OF NEW ARTICLES OF ASSOCIATION and NOTICE OF
EXTRAORDINARY GENERAL MEETING
1 Introduction
On 29 November 2011, the Company announced that C.R. Bard, Inc.
(a New York Stock Exchange listed company) had completed the
acquisition of Medivance, a company in which MDY Healthcare held a
minority equity interest, for a total cash consideration of
approximately US$250 million. Following the Company's divestment of
this interest, the Company has one remaining investment, being that
in Stanmore. The Board has previously stated that it intends to
return the majority of the funds received from the realisation of
its investment in Medivance to Shareholders and has subsequently
been in discussions with its advisers on the most efficient and
timely way to achieve this. As a result of these discussions, the
Company today announces that it intends to make an initial return
of 52 pence per Ordinary Share (or such other lesser amount as the
Court may permit) to Shareholders on the register of members of the
Company at the Record Time and that it is seeking Shareholder
approval for a reduction of capital to facilitate such return. It
is expected that the return to Shareholders will be made on 10
April 2012.
The Company continues to pursue a strategy of managing its
investment in Stanmore with a view to maximising value to
Shareholders by divesting this investment at the appropriate time.
The Company does not intend to make any new investments. Additional
returns to Shareholders are anticipated, following the realisation
of the Company's investment in Stanmore, and any receipt of further
consideration relating to the realisation of the Company's
investment in Medivance. This further consideration is currently
held in escrow (as described in paragraph 2 below) and is expected
to be received by the Company by the end of May 2013, subject to
any warranty and indemnity claims.
In conjunction with the proposed Capital Reduction and return of
capital to Shareholders, the Company also proposes the cancellation
of admission of the Ordinary Shares to trading on AIM, the
re-registration of the Company as a private limited company and the
adoption of the New Articles in connection therewith.
The Company also announced earlier today the preliminary results
for the reporting period ended 30 September 2011, a copy of which
can be found on the Company's website: www.mdyhealthcare.com.
2 Background to and reasons for the proposals
Disposal of investment in Medivance
MDY Healthcare held an equity interest of 10.4 per cent. in
Medivance, having invested approximately US$6 million through a
series of investments, the most recent of which was an investment
of US$1 million in June 2009.
On 26 October 2011, the Company announced that C.R. Bard, Inc.
had agreed to acquire Medivance for a total cash consideration of
approximately US$250 million. Following completion of the
acquisition, MDY Healthcare announced that it expected to receive
gross cash consideration of approximately US$21.8 million (GBP14.0
million) and on 28 November 2011, it received an initial payment of
US$20.0 million (GBP12.8 million). The balance of approximately
US$1.8 million is being held in escrow pending potential warranty
and indemnity claims and the Directors expect this to be received
by MDY Healthcare, subject to the receipt of any such claim, by the
end of May 2013.
Capital Reduction
In December 2011, the Company repaid all outstanding debt and
accrued interest of GBP1.7 million. The Company now intends,
subject to the requisite Shareholder and Court approvals, to return
GBP9.5 million or such lesser amount as the Court may permit (being
52 pence per Ordinary Share on a fully diluted basis) to
Shareholders registered on the register of members of the Company
at the Record Time, expected to be 6.00 p.m. on 30 March 2012, in
accordance with the indicative timetable set out above.
The Company proposes to implement the Capital Reduction in order
to facilitate a return of capital to Shareholders since the Company
no longer anticipates a need for this capital. Pursuant to the 2006
Act, in addition to obtaining the requisite Shareholder approval at
the EGM, Court approval is necessary to carry out a capital
reduction while the Company is a public limited company.
The Company will retain sufficient cash reserves to cover
administrative expenses, including any potential liability to its
previous landlord as guarantor following assignment of the lease of
its former head office, whilst it awaits receipt of the balance of
the Medivance consideration held in escrow and whilst it looks to
realise its one remaining investment in Stanmore and, to meet the
expenses relating to the Proposals.
De-listing
In light of the disposal of the investment in Medivance and the
strategy of the Company, the Board has considered the suitability
of the Company remaining on AIM, given that it has only one
remaining investment in Stanmore and given the costs associated
with maintaining the trading facility on AIM and complying with the
continuing obligations of AIM companies. The Board, having
consulted its advisers, has concluded that it is not in the best
interests of Shareholders as a whole to maintain the trading
facility on AIM. The Board therefore proposes the De-listing.
The principal effects that De-listing will have on the Company
are as follows:
-- Shareholders will no longer be able to buy and sell shares in
the Company through AIM or any other public stock market and
therefore liquidity and marketability of the Ordinary Shares will
be reduced. However, in order to provide a measure of liquidity in
the Ordinary Shares after De-listing, the Company intends to set
up, and maintain, a matched bargain trading facility;
-- the Company will no longer be required to announce price
sensitive information or other material developments or interim
results; and
-- the Company will cease to have a nominated advisor and will
no longer be required to comply with the AIM Rules.
Following De-listing, the Board intends to continue to update
Shareholders as to material developments in the progress of the
Company through the Company's website, www.mdyhealthcare.com.
Under the AIM Rules, the De-listing can be effected following
the expiry of twenty business days from the date on which notice of
the De-listing is given to the London Stock Exchange provided that
the De-listing must be approved by not less than 75% in value of
votes cast by Shareholders and can only become effective once five
business days have passed since the date on which the requisite
Shareholder approval is given.
In order to assist Shareholders and other persons wishing to
deal in the Ordinary Shares if the De-listing is approved, the
Company is making arrangements with Sharemark to make a Share
Dealing Facility available to Shareholders, further details of
which will be set out in paragraph 6 of the Circular.
Re-registration
If the De-listing is approved, the Ordinary Shares will no
longer be admitted to trading on AIM. In this event, the Board
proposes that the Company be re-registered as a private limited
company as this will reduce both the costs and complexities of
operating the Company, and in particular, will facilitate future
returns of capital to Shareholders, without the need to apply to
the Court.
It is also proposed to adopt New Articles of association with
effect from Re-registration so as to reflect the Company's status
as a private limited company. A summary of the principal effects of
the Re-registration and adoption of the New Articles will be set
out in the Circular.
Implementation
To implement the Proposals, the Extraordinary General Meeting
has been convened to consider the resolutions as set below.
3 Extraordinary General Meeting
An extraordinary general meeting of the Company is to be held at
the offices of Berwin Leighton Paisner LLP, St Magnus House, 3
Lower Thames Street, London EC3R 6HA at 11.00 a.m. on 8 March 2012
at which the following special resolutions will be proposed for the
following purposes:
-- Resolution 1: to seek Shareholder approval for the Capital
Reduction by cancellation of the Share Premium Account and the
Deferred Shares;
-- Resolution 2: to seek Shareholder approval for the De-listing; and
-- Resolution 3: to seek Shareholder approval for the
Re-registration, adoption of the New Articles and the granting of
general authority to the Company's directors to allot Ordinary
Shares.
4 Recommendation
The Board is of the opinion that the Resolutions are in the best
interests of Shareholders as a whole and, accordingly, unanimously
recommends Shareholders to vote in favour of the Resolutions to be
proposed at the EGM.
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context requires otherwise:
"2006 Act" the Companies Act 2006
"AIM" a market operated by the London Stock
Exchange
"AIM Rules" the AIM Rules for Companies as amended
and published by the London Stock Exchange
from time to time
"business day" a day (excluding Saturday, Sunday and
public holidays in England and Wales)
on which banks are generally open for
business in London for the transaction
of normal banking business
"Capital Reduction" the proposed cancellation of the Share
Premium Account and the Deferred Shares
"Circular" the document dated 14 February 2012,
including the notice of EGM, addressed
to Shareholders
"Company" or "MDY MDY Healthcare plc
Healthcare"
"Court" the Court of Session in Edinburgh
"De-listing" the proposed cancellation of admission
of the Ordinary Shares to trading on
AIM
"Directors" or "Board" the board of directors of MDY Healthcare
"Existing Articles" the articles of association of the Company
as at the date of this document
"Extraordinary General the extraordinary general meeting of
Meeting" or "EGM" MDY Healthcare convened for 11.00 a.m.
on 8 March 2012 (or any adjournment of
it)
"Form of Proxy" the form of proxy enclosed with the Circular
for use by Shareholders in connection
with the EGM
"London Stock Exchange" London Stock Exchange plc
"Medivance" Medivance, Inc.
"New Articles" the articles of association proposed
to be adopted at the EGM pursuant to
Resolution 3
"Notice" the notice of EGM
"Ordinary Shares" the ordinary shares of 1 penny each in
the capital of the Company
"Proposals" the Capital Reduction, De-listing, Re-registration
and adoption of New Articles
"Record Time" 6.00 p.m. on the date that is two business
days immediately prior to the final hearing
of the Court to confirm the Capital Reduction
"Re-registration" the proposed re-registration of the Company
as a private limited company
"Resolutions" the resolutions set out in the Notice
and "Resolution'" shall mean any of them
"Shareholders" holders of Ordinary Shares
"Share Dealing Facility" the matched bargain settlement facility
to be made available to Shareholders
following De-listing to enable them to
sell the Ordinary Shares owned by them
in the market, further details of which
are set out in the Circular
"Share Premium Account" the share premium account of the Company
"Stanmore" SIW Holdings Limited
All references to legislation in this announcement are to the
legislation of the United Kingdom unless the contrary is indicated.
Any reference to any provision of any legislation shall include any
amendment, modification, re-enactment or extension thereof.
Words importing the singular shall include the plural and vice
versa, and words importing the masculine gender shall include the
feminine or neutral gender and vice versa.
In this announcement, the exchange rates used are the rates
prevailing at the date of the relevant transaction.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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