Stockcube PLC
LSE : SKC

March 31, 2010 02:00 ET

Proposed tender offer,waiver of Rule 9 and cancellation from trading on AIM

                                                         - 1 -
                                                     STOCKCUBE PLC
                                              ("Stockcube" or "Company")
             PROPOSED TENDER OFFER, WAIVER OF RULE 9 OF THE CITY CODE AND CANCELLATION FROM TRADING ON AIM

The  directors  of  Stockcube ("Directors") have concluded that for the reasons outlined below, the admission  of  the
Company's  ordinary  shares of 10 pence each ("Ordinary Shares") to trading on AIM ("Listing")  does  not  fulfil  the
Company's  aim  of  conferring  liquidity to the Ordinary Shares or providing  a  means  of  expanding  the  Company's
activities:

*        since  the  Listing, the Directors have been seeking acquisitions which would have synergy  with  Stockcube's
      businesses, would enhance shareholder value and would be available at what the Directors consider appropriate values.
      The Directors have now concluded that such acquisitions are very unlikely to be achieved;

*        the Directors have also concluded that the niche nature of the Company's methodologies and services regarding
      investment analysis and the method of their distribution are more suited to organic growth rather than growth by
      acquisition;

*        this  means that a key justification for the Listing, to provide a currency for growth by acquisition, is  no
      longer considered applicable by the Directors and is aggravated by poor levels of share liquidity;

*        the market capitalisation of the Company is considerably below the level when it floated in May 2000 and  the
      Ordinary Shares have traded in the last three months at a discount to net tangible assets and to cash and investment
      holdings of between 40% and 51%;

*        the  Ordinary  Shares suffer from a lack of liquidity and in practical terms a relatively small  free  float,
      which the Board believes reduces demand. Trades in small volumes of Ordinary Shares tend to have a disproportionate
      effect on the share price and hence market capitalisation of the Company;

*        low  liquidity  is  coupled  with high costs associated with the Listing relative  to  the  Company's  market
      capitalisation (approximately £143,000 per year); and

*        recent  and  current uncertainty within the investment community has led to a significant  reduction  in  the
      income of Stockcube and its subsidiaries (the "Group") particularly from institutional customers and the Directors
      believe that this necessitates a reorganisation of the Group's products and operational structure to remove surplus
      costs so that its cost base is more in line with the lower growth environment the Directors see for the investment
      industry.

In  the  light  of  a  number of these factors, the Company repaid £2,402,657.50 of surplus  cash  (in  aggregate)  to
shareholders in 2007 and 2008.

The  Directors  have formed the view that for the foreseeable future any benefits to the Company of  the  Listing  are
outweighed by the cost and resources required (i) to manage the Company in the public arena; and (ii) for an entity of
its current size, to comply with increasingly complex financial reporting requirements.

Accordingly,  the  Directors now firmly believe that the Company should seek cancellation  of  the  admission  of  the
Ordinary Shares to trading on AIM ("De-listing").

Strategy

Group turnover for the year ended 31 December 2009 showed a net decrease of 13% from that for the year ended 31
December 2008.  Profit before tax for the year ended 31 December 2009 decreased by 89% compared with the year ended 31
December 2008.  The Group's costs are largely fixed and so its operating profitability is highly sensitive to
variations in turnover.  The Directors believe that the trading outlook for the immediate future is unclear, but do
foresee further reductions in turnover particularly with regard to the Group's institutional customer base.

The  Directors  recognise  that the impact of the recession has been particularly severe in  the  investing  community
customer base that the Group serves and whilst close attention has always been paid to cost control they now recognise
that the Group needs to re-focus its operations.

Following De-listing it is the intention of the Board to review more closely the extensive instrument coverage and the
number of services that the Group offers.

In  addition  the  Directors  believe that the nature of the Group's business, with an  over-riding  reliance  on  the
ability, skills and commitment of its staff, is better suited to a partnership structure with lower basic salaries and
a  simple  operating  structure  with  greater emphasis on performance-related  remuneration.  Accordingly,  once  the
operational reviews have been concluded, it is intended that new commission and profit sharing arrangements which  the
Directors believe to be more appropriate to the size and volatility of the Group's revenue generating capacity will be
implemented.  The  Directors believe that such a structure is not likely to be complementary to  the  need  to  reward
external shareholders with dividends.

Under  Rule  41  of  the AIM Rules, an AIM company which wishes the London Stock Exchange to cancel admission  of  its
shares to trading on AIM must notify such intended cancellation and separately inform the London Stock Exchange of its
preferred  cancellation date at least 20 business days prior to such date. The cancellation is  conditional  upon  the
consent of not less than 75% of votes cast by shareholders given at general meeting.

Resolution  1 contained in the notice of a general meeting to be held on 23 April 2010 ("General Meeting") being  sent
to  shareholders today ("Notice") seeks shareholder approval for the De-listing.  De-listing is not conditional on any
approval  of  any of the other resolutions to be proposed at the General Meeting. The Company has received irrevocable
undertakings from holders of 6,531,315 Ordinary Shares, representing 68.0% of the issued ordinary share capital of the
Company,  to vote in favour of the De-listing.  Assuming that the shareholders approve this resolution, it is proposed
that the De-listing would take place after the Capital Reduction outlined below, by 3 June 2010.

Dividend policy

Under the current circumstances the Directors believe that their policy hitherto of active dividend distribution is no
longer  supportable and have concluded that it would be imprudent to pay a dividend in respect of the  year  ended  31
December 2009.

While  they  remain confident about the quality of the services that the Group provides and its underlying  commercial
viability  they are unable to predict a return to significant profit under the current structure and so are unable  to
say when, or if, dividends might be resumed.

TENDER OFFER

The  Directors recognise that many shareholders will not be able or willing to continue to own shares in  the  Company
following  De-listing,  particularly  in  view  of  the Directors' intention  of  increasing  the  emphasis  on  staff
incentivisation  by  results-driven  remuneration, coupled with a nil dividend  policy  for  the  foreseeable  future.
Therefore, the Directors are arranging for Astaire Securities Plc ("Astaire") to make a tender offer ("Tender  Offer")
giving shareholders the opportunity to sell Ordinary Shares.

The Tender Offer is to be effected by Astaire purchasing Ordinary Shares as principal and then selling such shares  to
the  Company  for  cancellation.   Under the Tender Offer, a maximum of 4,071,465 Ordinary  Shares  may  be  purchased
representing 42.4% of the issued ordinary share capital of the Company.  A shareholder may tender all or none, but not
part, of their holding.

The  Company  and  Astaire  have received irrevocable undertakings from Directors, employees  and  other  shareholders
holding  5,539,165  ordinary shares in aggregate at the date of this document, representing  57.6%  of  the  Company's
ordinary  share capital, that they will not accept or procure the acceptance of the Tender Offer in respect  of  their
holdings of Ordinary Shares.  Accordingly, the scope of the Tender Offer will allow for all other shareholders to sell
their entire interest in the Company.

Completion of the Tender Offer is conditional upon, inter alia, shareholder approval and the approval by the Court  of
the  proposed  Capital Reduction, as outlined below.  In view of the expense and management time needed  to  make  the
Tender Offer the Directors do not currently have any intention of making a second or subsequent offer in the future.

Under the terms of the Tender Offer the price to be paid for each Ordinary Share subject to the Tender Offer shall  be
17.5  pence, representing a premium of 30% over the closing mid-market price of an Ordinary Share as derived from  the
AIM  section  of  the  London  Stock Exchange Daily Official List on 19 February 2010 (the  Business  Day  before  the
announcement  of  the  Company's trading update which included reference to a review of the Company's  future  capital
structure and its status as a publicly traded entity).  The maximum aggregate cash consideration will be £712,506.


CAPITAL REDUCTION

As  at 31 December 2009 the Company had a share premium account of £1,294,227. The Directors are seeking shareholders'
authority  to  reduce  the  share  premium account to £nil ("Capital Reduction")  and  transfer  the  full  amount  to
distributable  reserves.  These distributable reserves will be used to fund the purchase of the Company's  own  shares
from Astaire after Astaire's purchase of them pursuant to the Tender Offer.

The  reduction  of  the  Company's share premium account to £nil and transfer of £1,294,227 to distributable  reserves
would  leave  the  Company's total capital, reserves and net assets unchanged and the underlying  book  value  of  the
Company would be unaffected.

In  addition to the approval of at least 75% of the shareholders by special resolution, the Capital Reduction requires
the  approval of the Court.  Accordingly, following approval of the Capital Reduction by shareholders, an  application
will be made to the Court to confirm and approve the Capital Reduction.

In  any  application to the Court of this nature, the Court is concerned to ensure that the applicant's creditors  are
adequately  protected.  If the Company cannot satisfy the Court that the Company's creditors are adequately protected,
the Capital Reduction will not be approved by the Court and will not take place.

In  the  normal  course  of  its business, the Company only incurs material debts to its professional  advisors.   The
Directors  intend that all such debts will be paid in preparation for the Capital Reduction, and that at the  time  of
the Capital Reduction the Company will have no debts other than to Group companies.  The Company has intra-Group debts
totalling  £1,855,537.  The other Group companies to which these sums are owed are expected to consent in  writing  to
the  proposed  reduction and to the postponement of their debts.   On this basis the Court will be invited  to  direct
that no further creditor protection is required.

RULE 9 OF THE TAKEOVER CODE

Under  Rule  9 of the City Code on Takeovers and Mergers ("Code"), any person who acquires an interest (as defined  in
the Code) in shares which, taken together with shares in which he is already interested and in which persons acting in
concert with him are interested, carry 30% or more of the voting rights of a company which is subject to the Code,  is
normally required to make a general offer to all the remaining shareholders to acquire their shares.

Similarly,  when any person, together with persons acting in concert with him, is interested in shares  which  in  the
aggregate  carry not less than 30% of the voting rights of such a company but does not hold shares carrying more  than
50%  of  such voting rights, a general offer will normally be required if any further interests in shares are acquired
by any such person.

An  offer under Rule 9 must be made in cash and at the highest price paid by the person required to make the offer, or
any  person  acting in concert with him, for any interest in shares of the company during the 12 months prior  to  the
announcement of the offer.

The  Burney  Concert  Party (comprising those set out in the Table below) is deemed to be acting in  concert  for  the
purpose  of the Code and as at the date of this document held an aggregate interest of 38.6% of the voting  rights  of
the  Company.  On  completion  of  the Tender Offer, the members of the Burney Concert  Party  will  between  them  be
interested in a maximum of 3,671,565 issued Ordinary Shares, representing approximately 66.3% of the Company's  issued
voting  share  capital. A table showing the respective individual interests in Ordinary Shares of the members  of  the
Burney Concert Party at the close of business on 25 March 2010 and on completion of the Tender Offer is set out below:

 Name                                  No. of Ordinary      Percentage of           Number of    Maximum percentage of
                                                Shares       issued share     Ordinary Shares          Ordinary Shares
                                                                  capital    following Tender   following Tender Offer
                                                                                        Offer
 Julian Burney                               2,697,416               28.1           2,697,416                     48.7
 The Sir Cecil Burney Will Trust               824,149                8.6             824,149                     14.9
 Lucy, Lady Burney                              42,150                0.4                   0                      0.0
 The Cecil Trust                               150,000                1.6             150,000                      2.7
 Total                                       3,713,715               38.6           3,671,565                     66.3

Furthermore,  the  Burney Concert Party also owns Options over a further 112,000 unissued Ordinary Shares  which  have
been  granted  to Julian Burney (the Company's Chief Executive).  These Options are not subject to a waiver  from  the
provisions of Rule 9. Consequently, for so long as the interests of members of the Burney Concert Party equate to  30%
or  more  of  the  voting  rights  of the Company, Julian Burney will not be able to exercise  these  Options  without
incurring  an  obligation to make a general offer to all shareholders in accordance with Rule 9 if, by exercising  the
Options,  the  percentage  holding of the Burney Concert Party was to be increased.  If  the  aggregate  interests  of
members of the Burney Concert Party equate to more than 50% of the voting rights of the Company, Julian Burney will be
able  to exercise these Options provided his personal interests equate to less than 30% or more than 50% of the voting
rights  of  the  Company.   If the proposed De-listing, Capital Reduction, purchase of own shares,  Tender  Offer  and
shareholder resolutions relating thereto ("Proposals") are approved and take place, it is the Directors' intention  to
buy out the rights of optionholders for the independently advised valuation and wind up the Company's option schemes.

The  Panel  on Takeovers and Mergers ("Panel") has agreed to waive the obligation to make a general offer  that  would
otherwise  arise as a result of the Tender Offer, subject to the approval of the shareholders who are not  members  of
the  Burney  Concert Party ("Independent Shareholders"). Accordingly a resolution to approve such  a  waiver  ("Waiver
Resolution") is being proposed at the General Meeting to be held on 23 April 2010, and will be taken on a  poll.   The
members of the Burney Concert Party will not be entitled to vote on the Waiver Resolution.

Following  approval and completion of the Proposals and depending on the level of acceptance of the Tender Offer,  the
Burney  Concert Party may, in aggregate, potentially be interested in Ordinary Shares representing up to 66.3% of  the
Company's  voting  share  capital.   If  the Burney Concert Party's interest in the  Company  following  approval  and
completion  of  the Proposals represents between 30% and 50% of the voting share capital it and its  members  will  be
prohibited  under  the  Code from acquiring additional shares in the Company without making  an  offer  to  all  other
shareholders to acquire their interests.  If the Burney Concert Party's interest in the Company following approval and
completion of the Proposals represents more than 50% of the voting share capital it will be able to acquire  interests
in  shares  in  the Company which increase the percentage of shares carrying voting rights in which it is  interested,
without being obliged to extend an offer to other shareholders.

Following  approval  and completion of the Proposals and depending on the level of acceptance  of  the  Tender  Offer,
Julian  Burney,  who  currently holds Ordinary Shares representing 28.1% of the Company's voting  share  capital,  may
potentially  be  interested in Ordinary Shares representing up to 48.7% of the Company's  voting  share  capital.   If
Julian Burney's interest in the Company following approval and completion of the Proposals represents between 30%  and
50%  of  the voting share capital he will be prohibited under the Code from acquiring additional shares in the Company
without making an offer to all other shareholders to acquire their interests.

Astaire  is making the Tender Offer as principal (rather than as agent of the Company).  In the event that the  Tender
Offer  takes  place,  but  the Company fails to repurchase the Ordinary Shares purchased by Astaire  pursuant  to  the
technical  process  of  the  Tender Offer (in breach of its contractual obligations  under  the  Repurchase  Agreement
relating  thereto), Astaire could potentially be left with interests equating to 30% or more of the voting  rights  of
the  Company.   The Panel has agreed to waive any obligation that may arise on Astaire in such a situation  under  the
Code to make a general offer to all the remaining shareholders to acquire their Ordinary Shares.

RECOMMENDATION

The Independent Directors (being the Directors except Julian Burney), as required by the provisions of the Code, who
have been so advised by Astaire, consider that the Proposals are fair and reasonable and in the best interests of the
Company and the Independent Shareholders as a whole.  Accordingly, the Independent Directors unanimously recommend
that shareholders vote in favour of the resolutions to be proposed at the General Meeting ("Resolutions") as they (and
persons connected with them) intend to do in respect of their own beneficial holdings amounting, in aggregate, to
77,600 Ordinary Shares (representing approximately 0.8% of the issued ordinary share capital of the Company as at the
date hereof).  Two of the Independent Directors, Edward Forbes and Dennison Veru, have undertaken not to accept the
Tender Offer (in Edward Forbes' case, through Pendulum Ventures Limited, a company he controls) for the reasons noted
below.

Julian Burney, who has been so advised by Astaire, considers that the Resolutions (excluding the Waiver Resolution
"Primary Resolutions") are fair and reasonable and in the best interests of the Company and the shareholders as a
whole. Accordingly, Julian Burney recommends that shareholders vote in favour of the Primary Resolutions as he (and
persons connected with him) intends to do in respect of his own beneficial holdings amounting, in aggregate, to
2,697,416 Ordinary Shares (representing approximately 28.1% of the issued ordinary share capital of the Company as at
the date hereof).  Julian Burney has undertaken not to accept the Tender Offer for the reasons noted below.

The Directors, who have been so advised by Astaire, consider the terms of the Tender Offer to be fair and reasonable.
In providing their financial advice to the Company, Astaire have taken into account the commercial assessments made by
the Directors.

The Directors are proposing the Tender Offer as they believe that it represents the best opportunity in the short to
medium term for shareholders to realise value for their interest in the Company and acknowledge that shareholders may
also wish to divest their Ordinary Shares for the reasons set out above.  They therefore unanimously recommend that
such shareholders accept the Tender Offer.

Three of the Directors, Julian Burney, Edward Forbes and Dennison Veru, have decided not to accept the Tender Offer,
as they do not intend to divest their Ordinary Shares in the short to medium term, and accept the risks set out above.

The Tender Offer is conditional upon, inter alia, the Capital Reduction being approved by the Court and taking effect
by 5.00 pm on 30 June 2010.  If for any reason the Capital Reduction does not become effective by 5.00 pm on 30 June
2010 the Tender Offer will not proceed.  Shareholders should note that if for any reason the Tender Offer does not
take place, the De-listing will still occur if approved at the General Meeting.

MARKET IN ORDINARY SHARES FOLLOWING DE-LISTING

In accordance with the AIM Rules, cancellation of the admission of the Ordinary Shares to trading on AIM will not take
effect  until at least 5 Business Days have passed following the passing of the resolution to approve the  De-listing.
If the resolution to approve the De-listing is passed at the General Meeting, it is proposed that De-listing will take
effect on 3 June 2010.

In  the event that the De-listing proceeds, there will be no market facility for dealing in the Ordinary Shares and no
price will be publicly quoted for Ordinary Shares as from De-listing.  The Directors do not intend to provide, seek or
support  any  arrangements  whereby  Ordinary Shares can be bought and sold on a  matched  bargain  basis.   As  such,
interests  in Ordinary Shares are unlikely to be readily capable of sale and where a buyer is identified, it  will  be
difficult to place a fair value on any such sale.


ANTICIPATED TIMETABLE OF EVENTS

23 April 2010        General Meeting

17 May 2010          Record Date for Tender Offer

19 May 2010          Court hearing to confirm Capital Reduction

By 21 May 2010       Effective date for Capital Reduction

By 1 June 2010       Purchase of Tender Offer Shares under Tender Offer

By 2 June 2010       CREST Account credited with Tender Offer proceeds

By 2 June 2010       Dispatch of cheques for Tender Offer proceeds

By 3 June 2010       Ordinary Shares de-listed from AIM

FURTHER INFORMATION

Stockcube plc                     Julian Burney                      020-7352-4001
                                  Shirley Yeoh
                                                                     
Astaire Securities plc            William Vandyk                     020-7448-4400


Contact Information

  • Stockcube PLC