Guild Acquisitions plc
LSE : GAQO

November 15, 2010 10:31 ET

Proposed Subscription, Rule 9 Waiver and Notice of EGM

                                                     
                             GUILD ACQUISITIONS PLC ("Guild or "the Company")
                                                     
                      PROPOSED SUBSCRIPTION OF NEW ORDINARY SHARES AT 0.2P PER SHARE
                                                     
              PROPOSED APPROVAL OF WAIVER OF RULE 9 OF THE CITY CODE ON TAKEOVERS AND MERGERS
                                                    AND
                                  NOTICE OF EXTRAORDINARY GENERAL MEETING
 
 
 
 Guild  Acquisitions  plc announces that it is proposing to raise £150,000 through a subscription  from  Mr
 Bruce Rowan comprising 75,000,000 Ordinary Shares at a price of 0.2p per share.
 
 Introduction and background
 
 Over  the last three years Guild has had insufficient funds to increase its investment portfolio  and  the
 annual cost of being traded on PLUS Markets has used up its free cash. Of its seven investments since  the
 Company was formed in 2006, today only two of these are materially significant- V22 PLC is quoted on  PLUS
 but  is  not easily saleable and Descalu SLR, the Company's Romanian property investment, is not going  to
 be realisable for another three years.
 
 The  Company's  latest working capital projection shows its cash running out in April  2011.  Without  new
 funds  the  Company  would eventually have to sell V22, leave PLUS Markets and in  due  course  apply  for
 voluntary  liquidation.  Bruce Rowan has come up with a proposal to inject a  further  £150,000  into  the
 Company,  by means of a subscription for 75 million Ordinary Shares at 0.2 pence per share in  cash.  This
 would  enable  the  Company to make a number of additional investments at around £25,000  per  investment.
 Such  a  subscription  is conditional upon a waiver of Rule 9 of the City Code on  Takeovers  and  Mergers
 being granted.
 
 A  circular has been posted to Shareholders today setting out the proposals with a notice of Extraordinary
 General  Meeting  convened for 1 December 2010 to consider the resolutions regarding  Mr Rowan's  proposed
 subscription and the proposed waiver of Rule 9 of the City Code.
 
 The Concert Party
 
 The Concert Party comprises Mr Rowan, Starvest plc and Mr Watkins.
 
 Mr  Rowan  currently  holds  9,650,000 Ordinary Shares in the Company in a  personal  capacity.  If  the
 subscription is completed Mr Rowan would hold 84,650,000 Ordinary Shares, being approximately  63.1%  of
 the Enlarged Voting Rights of the Company.
 
 In  addition, Mr Rowan and John Watkins are both directors of Starvest plc and Mr Rowan is the  holder  of
 approximately 26.1% and Mr Watkins is the holder of 1,035,000 of the Ordinary Shares of Starvest plc.  The
 Concert  Party  is  accordingly deemed to be interested in Starvest plc's holding of  6,000,000   Ordinary
 Shares  and  Mr  Watkins'  holding of 250,000 Ordinary Shares so that the Concert Party's  total  interest
 would amount to 90,900,000 Ordinary Shares being 67.80% of the Enlarged Voting Rights of the Company.
 
 
 City Code
 
 Following  completion of the Subscription, the Concert Party will control more than 50 per  cent.  of  the
 voting  rights  and therefore the Subscription gives rise to certain considerations under the  City  Code.
 Brief details of the City Code and the protections it affords to Shareholders are described below.
 
 The  City Code is issued and administered by the Panel. The City Code applies to all takeovers and  merger
 transactions,  however  effected, where the offeree company is, inter alia, a listed  or  unlisted  public
 company  resident  in  the  UK and to certain categories of private limited companies.  Guild  is  such  a
 company and its Shareholders are therefore entitled to the protections afforded by the City Code.
 
 Under  Rule 9 of the City Code ("Rule 9") where (i) any person acquires shares which, when taken  together
 with  shares already held by him or shares held or acquired by persons acting in concert with  him,  carry
 30  per  cent. or more of the voting rights of a company subject to the City Code or (ii) any person  who,
 together  with persons acting in concert with him, holds not less than 30 per cent but not  more  than  50
 per cent of the voting rights of a company subject to the City Code and such person, or persons acting  in
 concert  with  him,  acquires  any additional voting rights, that person is normally  obliged  to  make  a
 general offer to all Shareholders to purchase, in cash, their shares at the highest price paid by him,  or
 any person acting in concert with him, within the preceding 12 months.
 
 Should  the  Subscription  be  approved  by  the Shareholders, immediately  following  completion  of  the
 Subscription,  the  shareholding of the Concert Party will be, in aggregate, 90,900,000  Ordinary  Shares,
 representing approximately 67.80 per cent. of the Enlarged Voting Rights.
 
 At  the date of this announcement the Concert Party holds 15,900,000 Ordinary Shares in the capital of the
 Company.
 
 The  Panel  has  agreed,  subject to resolution number 2 set out in the notice  of  Extraordinary  General
 Meeting  being  passed on a poll by the Shareholders at the Extraordinary General Meeting,  to  waive  the
 obligation  on  the Concert Party to make a general offer to Shareholders under Rule 9 of  the  City  Code
 which would otherwise arise on Completion.
 
 Following completion of the Subscription, the Concert Party will between them hold more than 50 per  cent.
 of  the  Company's  voting  share capital and, for so long as they continue to be  treated  as  acting  in
 concert,  may  accordingly  increase their aggregate interests in Ordinary Shares  without  incurring  any
 obligation under Rule 9 to make a general offer although individual members of the Concert Party will  not
 be  able  to increase their percentage interests in Ordinary Shares through or between  a Rule 9 threshold
 without  Panel  consent. Therefore members of the Concert Party will be free to acquire  further  Ordinary
 Shares without incurring an obligation to make an offer for the Company.
 
 Should  this resolution and the Subscription by Mr Rowan be approved, the directors have every confidence
 of  developing the Company's share value. In time, this should enable us to raise further capital in  the
 market, and in so doing could dilute Mr Rowan's own shareholding.
 Resolution 1 - Subscription
 
 At  the  EGM  the company is seeking approval to issue 75 million shares to Mr Rowan at a  price  of  0.2
 pence  per  share.  Mr  Rowan has agreed with the Company and its directors to  invest  £150,000  in  the
 Company by subscribing for 75 million New Ordinary Shares, dependent on resolutions 1 and 2 being  passed
 at  the EGM. The directors do not wish to undertake a full entitlement offer to all Shareholders as  they
 do  not  believe  the  likely  take-up  in  such an offer would  justify  the  costs  of  such  exercise.
 Consequently the directors believe that it is in the best interest of the Company and Shareholders  as  a
 whole that Mr Rowan subscribes for the New Ordinary Shares.
 
 
 Resolution 2 - Waiver of Rule 9 of the City Code
 
 The  company  is accordingly seeking approval of the Independent Shareholders (the Shareholders  excluding
 the  Concert Party) on a poll of the waiver of the obligations which may arise under the City  Code  as  a
 result of any exercise of the Subscription.
 
 The  Directors, having been so advised by Beavis Morgan LLP, unanimously consider the Subscription and the
 Waiver  to  be  fair  and reasonable and in the best interests of the Company and its  Shareholders  as  a
 whole.
 
 Financial Information:
 
 Financial  Information  on the Company for its year ended 31 December 2009 is set  out  in  the  Financial
 Statement  mailed to all Shareholders on 2 July and a working capital projection, dated 13 July  2010  are
 available  for  inspection.The Circular to Shareholders and the information incorporated by  reference  to
 other    sources    in    such    document   have   been   published    on    Starvest    Plc's    website
 http://www.starvest.co.uk/guild/  and  may be viewed and/or downloaded  by  going  to  that  page  of  the
 Company's website.
 
 "Deferred A Shares" means the 3,000,000 deferred A shares in issue on the date hereof and having  a  right
 to vote in general meetings of the Company.
 
 "Deferred B Shares" means the 3,000,000 deferred B shares in issue on the date hereof and having  a  right
 to vote in general meetings of the Company.
 
 "Enlarged  Voting  Rights"  means the rights to vote in general meeting of the Company  conferred  on  the
 holders  of the Existing Ordinary Shares, the New Ordinary Shares, the Deferred A Shares and the  Deferred
 B Shares.
 
 "Existing  Ordinary Shares" means the 53,061,002 Ordinary Shares in issue immediately prior to  the  issue
 of New Ordinary Shares.
 
 "New  Ordinary  Shares" means the new Ordinary Shares to be issued pursuant to the Subscription,  each  of
 the £0.001 (or 0.1 pence) in nominal value.
 
 "Subscription" means the conditional subscription of 75 million new Ordinary Shares by Mr Rowan.
 
 The Directors of Guild accept responsibility for the contents of this announcement.
 
 Dated 15 November 2010
 
 Enquiries to:
 
 Brett Armitage, Guild Acquisitions plc, 01624 676716.
 
 Dominic Traynor, Ronaldsons LLP, 020 7580 6075.
 
 
 

Contact Information

  • Guild Acquisitions plc